by ilene - October 17th, 2014 4:53 pm
Apple didn't just unveil its new iPads on Thursday — it announced a separate, less advertised product that could mean trouble for wireless carriers.
With its new iPad Air 2, Apple customers will have the option of buying a cellular version loaded with the company's new "Apple SIM" card, as Dan Frommer at Quartz points out.
A SIM card is that tiny piece of plastic in your phone that allows you to connect to a carrier's wireless network.
Typically, a SIM card is programmed to work with one specific carrier. So, if you buy a phone on a two-year contract from AT&T, it'll come with an AT&T SIM card inside. If you wanted to use that same phone on Verizon, you would have to buy a SIM card from Verizon and put it in that phone.
But Apple wants to change how that model works. Apple's SIM card works with multiple carriers, so you wouldn't have to purchase an iPad or SIM card from a carrier. To be clear, this isn't like simply buying an AT&T SIM card directly from Apple instead of AT&T. With Apple's SIM card, you can switch carriers whenever you please without having to commit to a two-year contract or make any purchases directly through the carrier.
Here's how Apple explains it on its website:
"The new Apple SIM is preinstalled on iPad Air 2 with Wi-Fi + Cellular models. The Apple SIM gives you the flexibility to choose from a variety of short-term plans from select carriers in the U.S. and UK right on your iPad. So whenever you need it, you can choose the plan that works best for you — with no long-term commitments. And when you travel, you may also be able to choose a data plan from a local carrier for the duration of your trip."
Keep reading Apple SIM Card For iPad Air Announced – Business Insider.
by phil - October 17th, 2014 8:26 am
Nothing came of yesterday's Ebola hearings.
Here's a picture of President Obama hugging it out with one of the nurses that treated one of the Ebola patients – a strong image for the people as calmer voices begin to prevail – on that front at least.
Markets were also boosted by dovish talk from the usually hawkish Jimmy Bullard, of the St. Louis Fed, who said the Fed should consider delaying plans to end its bond-buying program at the end of this month to halt a decline in expected inflation. This is what it sounds like when Doves cry at the Fed and, like Prince's mother, the markets are never satisfied but, for this morning at least – we're taking back those weak bounce levels that we told you we'd take back by Friday.
“The recovery from the lows after Bullard spoke yesterday is another reminder how addicted markets still are to liquidity,” said Deutsche Bank strategist Jim Reid. “The Fed can certainly help markets but perhaps we really need the ECB to step up a gear for a true recovery,” he added.
Still, manipulated or not, this gives us two nice reversal days on strong volume and we couldn't be happier as we flipped very bullish in our Short-Term Portfolio and should be able to take full advantage of this rapid recovery.
Whether or not we maintain that bullish stance into the weekend depends on how our bounce levels hold up today (see Tuesday morning's post for our amazingly accurate predictions of the week's action).
Keep that in mind when I tell you there is nothing particularly bullish about hitting the weak bounce on the Friday of a drop week – it's merely better than the alternative of FAILING to make those weak bounce lines. That would have been BAD!!! Meanwhile, those of you who took our FREE Trade Idea from yesterday's morning post to go long the Russell at 1,050 (the same line we were watching on Tuesday) are now sitting on $4,000 PER CONTRACT gains and I do so hope you are not greedy and set your stops at the 1,090 line.
by ilene - October 17th, 2014 1:37 am
Courtesy of Tim Richards of PsyFi Blog
Markets are tumbling. It's because the Fed is about to push up interest rates. Or maybe because the German economy is weak. Or perhaps it's Ebola, about to decimate global populations. Or it's geopolitical conflict – Ukraine, Syria, Iraq … take your pick. It's a perfect storm. Head for the hills and don't spare the horses. And remember the shotgun.
Of course, it's none of these. Markets are falling because they were a bit overpriced and investors were ignoring the fact because they'd got themselves into a typical feeding frenzy, ignoring the risk and ambiguity that are always present. Now that they have recognized the issue they're fighting each other to get out the door. Which is why all of the explanations for market weakness are entirely plausible and entirely wrong – they're an example of what Nassim Taleb calls "the narrative fallacy."
Investors find it really hard to believe that stock prices can move for no real reason at all – and we have an entire industry of pundits whose job it is to produce those explanations and feed those beliefs. Yet the reality is that shares often do have a life of their own, and if they randomly start to move in a certain direction then that can cause a cascade effect.
In fact, as we saw in Volatility, The Last Anomaly, Robert Shiller has found that there's up to thirteen times the expected volatility in markets – stock prices move around far, far more than can be explained by fundamentals. Yet we can't just accept this – we need some story that explains why each and every market fluctuation happens – it's the modern equivalent of the volcano god, spewing lava everywhere because it's had a bad day at the office.
Eli Ofek and Matthew Richardson have argued, in The Valuation and Market Rationality of Internet Stock Prices that it's heterogeneity of beliefs among investors that causes this cascade effect and, with it, the excess volatility in the system. In essence, if everyone is operating on the same set of values and expectations then everyone will tend to react in the same the way to the…
by ilene - October 16th, 2014 3:25 pm
Courtesy of SAM RO at Business Insider
Wal-Mart management sees 'somewhat slower growth' in the years to come.
This is how CFO Charles Holley characterized his outlook for the retail giant during the company's Annual Meeting for the Investment Community on Wednesday.
Holley forecasted fiscal 2015 sales would reflect 2% to 3% year-over-year growth. This is down from previous guidance of 3% to 5% growth.
This follows an announcement earlier today that the company would open just 60-70 supercenters in fiscal 2016, down from 120 in fiscal 2015.
"It's important for us to really think about these big boxes," Wal-Mart US CEO Greg Foran said.
Holley expects online sales growth to remain robust, surging a healthy 25% in fiscal 2016.
Thanks to Yahoo's Jeff Macke for the headline.
by ilene - October 16th, 2014 2:06 pm
By Casey Research
The Fed claims that signs of economic stress are very low, but savvy investors feel otherwise. With geopolitical unrest expanding and central banks doing the opposite of the right things, is a currency crisis barreling toward us? See what Mish Shedlock had to say about the state of world finance at the 2014 Casey Research Summit:
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by ilene - October 16th, 2014 12:36 pm
By John Mauldin
A note has been circulating among economists, calling into question the wisdom of another group of economists who wrote an open letter to the Federal Reserve a few years ago suggesting that one of the risks of their quantitative easing program was increased inflation. Since we have not seen CPI inflation, this latter group is calling upon the former to admit they were wrong, that quantitative easing does not in fact cause inflation. To no one’s surprise, Paul Krugman has written rather nastily and arrogantly about the lack of CPI inflation.
Cliff Asness has responded with a thoughtful letter, with his usual tinge of humor, pointing out that there has been inflation, it just hasn’t been in the CPI. We’ve seen it in assets instead. That money did go someplace, and it has disrupted markets. So why is Cliff’s letter a candidate for Outside the Box, when the markets seem to be bouncing all over heck and gone?
Because, come the next crisis, there is going to be another move for yet another round of massive quantitative easing. And the justification will be that increases in the money supply clearly don’t have much to do with inflation.
I should note that while I did not agree with the original letter. I thought we were in an overall deflationary environment, and I wrote that the central banks of the world would be able to print more money than any of us could possibly imagine and still not trigger inflation – views came in for considerable pushback. My reasons for believing QE2 and QE3 were problematic dealt with other unintended consequences. And ultimately, as global debt gets restructured (which will take many years) inflation will become a problem. Did you notice how Greek debt spreads blew out yesterday? It’s not just about oil. And trust me, France is going to be the new Greece before we know it. The people who think they can control markets and direct investors like sheep are going to be in for a huge surprise, but the nightmare is going to be visited upon the participants in the market.
by phil - October 16th, 2014 7:32 am
It's going to be another wild one!
As you can see from Dave Fry's S&P chart, we dropped all the way to 1,820 on the S&P yesterday, before recovering just after 1pm on an report from Bloomberg that indicated:
Federal Reserve Chair Janet Yellen voiced confidence in the durability of the U.S. economic expansion in the face of slowing global growth and turbulent financial markets at a closed-door meeting in Washington last weekend, according to two people familiar with her comments.
That's TWO people who were familiar with her comments from LAST WEEKEND – that's certainly worth 40 points (2%) on the S&P isn't it? The people, who asked not to be named because the meeting was private, said Yellen told the Group of 30 that the economy looked to be on track to achieve growth of around 3 percent going forward. She also saw inflation eventually rising back up to the Fed’s 2 percent target as unemployment falls further, according to the people.
Well, as long as the people say so, that's good enough for us, right? It seemed good enough that we began to cash out out short positions in our aggressively bearish Short-Term Portfolio but this morning it seems we may have gotten a bit ahead of ourselves as the Futures are right back to yesterday's lows, dragged down by another massive sell-off in Europe.
As we caught a great bounce from 1,040 on /TF (Russell Futures) back to 1,070 (+$3,000 per contract) on yesterday's rally we've been going back to that well at 1,050 this morning but, so far, only picking up $200-400 as /TF bounces between 1,050 and 1,054. Still, as long as that line holds – I like it for bounces and, if that fails, we tightly stop out and go back to 1,040 BUT, if that fails – RUN AWAY!!!