by ilene - April 19th, 2015 3:46 pm
China’s central bank Governor Zhou Xiaochuan said the world’s second-largest economy has scope compared with other nations to ease its monetary policies though won’t necessarily take advantage of it. (Read more)
The European Central Bank shouldn’t extend Emergency Liquidity Assistance for Greece beyond summer, Governing Council member Vitas Vasiliauskas said.
“The situation in Greece means that we should have a limit until summer for ELA,” Vasiliauskas said in an interview in Washington on Saturday. “Everyone understands what ELA means, it’s a temporary measure to give the banks liquidity. We will have to have discussions about the issue liquidity provision versus monetary financing. We will certainly have these discussions before summer.” (Read here)
California has proposed rules calling for mandatory reductions in water use by municipal agencies as a historic drought drags into a fourth year.
The state’s 411 urban water suppliers would have to cut use by as much as 36 percent, with those that conserved less facing tougher restrictions, the California State Water Resources Control Board said in the proposed rules released Saturday. The board will meet May 5 and 6 to finalize the rules, which would take effect by June 1. (More)
Behind the accounting errors that knocked $4 billion off American Realty Capital Properties Inc.’s market value was a hidden scheme that generated more than $900 million in managers’ fees and bonuses, investors said in a lawsuit against the company.
Ex-Chairman Nicholas Schorsch turned a small real estate investment trust into a massive engine of payments for himself and cronies, adding $20 billion of assets in two years and charging for services rendered by 47 entities he controlled, according to court documents filed this week. (Continue)
by phil - April 19th, 2015 7:53 am
That's how much our bearish Short-Term Portfolio is now up as of Friday's close. In just three weeks of trading since our last Portfolio Review on March, 30th, where we very wisely cashed out the majority of our long positions ahead of the coming correction, we've added $19,055 in virtual gains.
Even better, in our Long-Term Portfolio, we left our "losing" positions in the materials space in the energy and material space and, without any changes since other than adding a couple of new positions (we had a lot of cash, so why not), our larger Long-Term Portfolio has jumped $43,237 (6.1%) during the same period. We could not have picked a more perfect combination of long and short positions to ride out the last 3 weeks of the market!
That has driven the Primary Trading Strategy that we teach our Members at PSW (of keeping a Long-Term Bullish Portfolio with a Short-Term Bearish Portfolio) to a new record of $968,512, up $368,512 (61.4%) from our $600,000 start right after Thanksgiving in 2013 (17 months). We have these gains, at the moment, because our timing was PERFECT. But, our timing wasn't perfect by accident – it's the design of the Long/Short strategy that we are able to hold onto our positions when our timing is NOT perfect UNTIL it is. It makes us look a lot smarter than we actually are!
We were off track into the end of the year because we flipped bearish a bit too early but being off track wasn't so painful in the Short-Term Portfolio because we still had our long positions in the very bullish and much bigger Long-Term Portfolio. More importantly, because we had a goal of making 20% a year, when the Long-Term Portfolio hit the 40% mark on March 30th, we decided it was ahead of schedule and cashed out our winners, letting the losers we still had faith in ride.
by ilene - April 19th, 2015 3:31 am
Courtesy of Joshua Brown, The Reformed Broker
The Chinese stock market has effectively doubled over the past year and a full-scale mania has gotten underway with mainland individual investors opening millions of brokerage accounts a month. This is a good thing, not a bad thing, as the remaining phase of China’s economic rebalancing must include a consumer component to offset the declining growth from infrastructure and state-sponsored real estate development.
But even good things can go too far.
As of last month, Chinese stock market investors (traders?) had built up $375 billion in margin loans, a massive increase over the levels just six months ago. The Chinese securities regulators aren’t sitting back and watching, they’re acting. They’re cutting out some of the more extreme forms of margin lending and leverage and making it easier for short-sellers to come into the markets.
Allowing funds to lend their stock holdings will expand the pool of equities available to short sellers, who have relied primarily on brokerages to supply them with the stock needed to execute the bearish bets.
While short selling on the Shanghai bourse climbed more than threefold in the past nine months and reached a record 7.46 billion yuan last week, the amount still pales in comparison to China’s $7.3 trillion market capitalization. The CSRC said Friday it also expanded the number of stocks available for short selling to 1,100.
China should cool off a bit but this does not mean investor enthusiasm needs to be completely crushed. Instead, we’re simply watching a market mature and become sophisticated enough to keep expanding. This is in-line with similar moves to rein in wild behavior by the new Chinese president Xi Jinping, such as the corruption crackdown and the cooling off of the Macau casino boom. It’s smart.
by ilene - April 18th, 2015 12:35 pm
From Around the Web:
Not All Macro Models Failed to Predict Crisis (MultiplierEffect)
Noah Smith has a post on the failure of macro theory to predict the crisis. He concedes that DSGE models did very badly on this score, but, he continues, “There are no other models out there that did forecast the crisis” and there is nobetter alternative. (More)
6 Illegal Cocktails Banned in the U.S. and the United Kingdom (HuffingtonPost)
It's human nature to want to raise the bar. If your car has 300 horsepower, you want 400. If you have a 2,000-square-foot house, you want 3,000. So why should it be any different when it comes to booze? These six cocktails upped the alcoholic ante--then ended up getting slapped by the long arm of the law. (Continue reading)
The Cozy Suite by independent seating manufacturer Thompson Aero Seating of Northern Ireland is a brilliant idea that rethinks economy seating without sacrificing the passenger experience for anyone — including the person stuck in the middle seat. (Read more)
Outsmart Your Own Biases (HBR)
Suppose you’re evaluating a job candidate to lead a new office in a different country. On paper this is by far the most qualified person you’ve seen. Her responses to your interview questions are flawless. She has impeccable social skills. Still, something doesn’t feel right. You can’t put your finger on what—you just have a sense. How do you decide whether to hire her? (Full article)
The long, loving gazes. The ritualized, often high-pitched, expressions of affection. The heroic self-sacrifice one would readily endure for the other.
What is it about the bond between human and dog that is not like the relationship between parent and child?
Now science offers a new explanation for the similarity. When our dogs gaze into our eyes with that “you are everything to me” look, our
by ilene - April 18th, 2015 1:13 am
Greece’s major creditors are not ready to let the country drop out of the euro as long as Prime Minister Alexis Tsipras shows willingness to meet at least some key demands, according to two people familiar with the discussions.
Chancellor Angela Merkel will go a long way to prevent a Greek exit from the single currency, though only so far, one of the people said. Every possibility is being considered in Berlin to pull Greece back from the brink and keep it in the 19-nation euro, the person said. (Read more)
It just keeps getting hotter.
March was the hottest month on record, and the past three months were the warmest start to a year on record, according to new data released by the National Oceanic and Atmospheric Administration. It's a continuation of trends that made 2014 the most blistering year for the surface of the planet, in to records going back to 1880. (More)
Those who want to buy tickets for next month’s fight between Floyd Mayweather and Manny Pacquiao may soon need to confront the possibility that there will be no public sale.
While promoters from both sides have said fewer than 1,000 tickets would be sold to the public for face value, multiple dates have passed and no official announcement has been made. With about two weeks remaining until the May 2 bout, and a secondary market that has been quiet in anticipation of the public sale, it’s possible that resale will be the only option, according to Chris Matcovich, a spokesman for aggregator TiqIQ. (Read here)
Near California’s Success Lake, more than 1,000 water wells have failed. Farmers are spending $750,000 to drill 1,800 feet down to keep fields from going fallow. Makeshift showers have sprouted near the church parking lot.
“The conditions are like a third-world country,” said Andrew
by Option Review - April 17th, 2015 5:50 pm
Courtesy of Caitlin Duffy of IB
Traders exchanged more than one million option contracts on Apple (Ticker: AAPL) today amid a 1.2% dip in the price its shares. The 1.04 million contracts traded so far in the session compares to an average daily options volume for Apple over the past 10 days of roughly 750,000 contracts. The below snapshot displays the day’s option volume split out into call and put options across active strike prices. The chart includes monthly expiration options, while excluding weeklys. The 125.0 strike April 17 ’15 expiry calls and puts are most active today, but cease trading as markets close out another week this afternoon.
by Option Review - April 17th, 2015 5:49 pm
Courtesy of Caitlin Duffy of IB
by phil - April 17th, 2015 7:30 am
They are pulling out all the guns this morning and firing blanks. As you can see from the front page of the WSJ, our friendbuddypal Jon Hilsenrath (aka "The Fed Whisperer") has poked his head out like a groundhog and, scared of the economic shadows he sees – has proclaimed 6 more weeks of FREE MONEY for all!
That gave us a nice little pop early this morning BUT, over in Europe, they are FLEEING into bonds, sending Germany's 10-year notes down to 0.07% – a new all-time low. This is coming on the heels of Greece's Finance Minister accusing Europe's creditor powers of trying to force his country to its knees by "liquidity asphyxiation".
"Toying with Grexit, or amputating Greece, is profoundly anti-European. Anybody who says they know what will happen if Greece is pushed out of the euro is deluded," he said. The warnings were echoed by Eric Rosengren, head of the Boston Federal Reserve, who said Europe risks sitting off uncontrollable contagion if it mishandles the Greek crisis, even though Greece may look too small to matter.
"I would say to some European analysts who assume that a Greek exit would not be a problem, people thought that Lehman wouldn't be a problem. If you measured the size of Lehman relative to the size of the US economy it was quite small," he told a group at Chatham House.
Greek bonds, of course, went flying higher. Up to about 13% this morning. Watch that 15% line, which is where Europe begin to melt down back in 2011. The 4-year bonds already jumped 4.5% this morning and are now hovering around 27% and the 2:1 inverted yield curve indicates investors are once again seeing a very high possibility of default.
Even worse, the last time Greek yields were flying there were two rounds of bailouts to help stem the tide. This time, the ECB and the IMF are demanding PAYMENT instead of offering a hand. Greece simply cannot afford to pay out money and be forced to borrow more short-term money at 27% – even an economoron understands that much, don't they?
by ilene - April 17th, 2015 12:52 am
From Around the Web:
In his 1987 letter to investors, Warren Buffet made the following observation: “the heads of many companies are not skilled in capital allocation, and … it is not surprising because most bosses rise to the top because they have excelled in an area such as marketing, production, engineering, administration or, sometimes, institutional politics.” (More here)
After more than four years of orbiting Mercury, NASA’s Messenger spacecraft is about to end its mission with a bang. After more than 4,100 orbits around the closest planet to the sun, the satellite will crash into Mercury’s crater-pocked surface April 30.
NASA officials gave tribute in a briefing Thursday to the Messenger spacecraft, which was the first to orbit Mercury and which they say has fundamentally altered our understanding of this scorched little world. (Read here)
The watch may be the talk of the town, but it’s the phone brings in the big bucks.
The earnings report forApple’s second fiscal quarter is less than two weeks away, and much as we like to obsesses about the new Watch, it hasn’t earned Apple a penny yet. (Continue reading)
Citigroup's Gold "Expert" Demands A Cash Ban (ZH, Tyler Durden)
Late last year, Grexit "expert" Willem Buiter decided that he was a greater expert on the topic of monetary metals than on geopolitics by stating that "Gold Is A 6,000 Year Old Bubble." Now, he has decided that after gold, it is best to just do away with any physical currency altogether and the time to ban cash has arrived. (Full article)
Whatever you may have heard to the contrary, Chip Wilson is not an idiot. The founder and former CEO and Chairman of Lululemon Atheltica is, in point of fact, a highly successful entrepreneur, philanthropist, innovator, and self-made billionaire. Idiots