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Financial Markets and Economy

ECB Hands Banks $51 Billion in Zero-Interest Loan Program (Bloomberg)

The European Central Bank handed 45.3 billion euros ($51 billion) to euro-area lenders at a zero interest rate, in the second round of its program to boost credit to the real economy.

Cash is king as correlations cloud asset allocation (Reuters)

Stocks and bonds are moving in lock-step more than at any time since the financial crisis, making life difficult for asset allocators and driving investors into the one asset guaranteed to bring zero return – cash.

Time is running out for Japan's economy (South China Morning Post)

Recently, Japan’s second quarter GDP growth was revised upwards, to 0.7 per cent, after four consecutive quarters of stagnation. But don’t set your hopes too high.

These housing markets are near the '7th inning stretch' before everything starts to crash (Business Insider)

The housing market has certainly made progress since 2008, when its crash nearly broke the global financial system. 

But it works in cycles. And while few economists are warning about existing 2008-type conditions, some housing markets are getting close.

ECB President Says Crowded Banking Sector Hurts Profits (The Wall Street Journal)

FRANKFURT—European Central Bank President Mario Draghi said Thursday that overcrowding in Europe’s banking sector is hurting profitability, pushing back somewhat against critics who blame the central bank for putting pressure on Europe’s banks.

Congressional Barbs Don’t Rattle Mylan Investors (The Wall Street Journal)

Washington D.C. has turned up the heat on a few companies recently, but Wall Street doesn’t seem to have much trouble keeping its cool. Mylan executives were under fire during Wednesday’s House Oversight Committee hearing over price hikes of Mylan’s lead product, EpiPen. 

Basic Income Might Be The Answer To Society's Productivity Crisis (Forbes)

With the decline of manufacturing jobs, and the onset of automation to take over almost all kinds of work, society is on the hunt for a long-term, scalable solution to our future productivity.

I listened to 82 finance startup pitches —
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Celebrating the One Percent: Is Inequality Really Good for the Economy?


Celebrating the One Percent: Is Inequality Really Good for the Economy?

Courtesy of 


To paraphrase Mark Twain, everyone complains about inequality, but nobody does anything about it.

What they do is to use “inequality” as a takeoff point to project their own views on how to make society more prosperous and at the same time more equal. These views largely depend on whether they view the One Percent as innovative, smart and creative, making wealth by helping the rest of society – or whether, as the great classical economists wrote, the wealthiest layer of the population consist of rentiers, making their income and wealth off the 99 Percent as idle landlords, monopolists and predatory bankers.

Economic statistics show fairly worldwide trends in inequality. After peaking in the 1920s, the reforms of the Great Depression helped make income distribution more equitable and stable until 1980. Then, in the wake of Thatcherism in Britain and Reaganomics in the United States, inequality really took off. And it took off largely by the financial sector (especially as interest rates retreated from their high of 20 percent in 1980, creating the greatest bond market boom in history). Real estate and industry were financialized, that is, debt leveraged.

Inequality increased steadily until the global financial crash of 2008. Since then, as bankers and bondholders were saved instead of the economy, the top One Percent have pulled even more sharply ahead of the rest of the economy. Meanwhile, the bottom 25 percent of the economy has seen its net worth and relative income deteriorate.

Needless to say, the wealthy have their own public relations agents, backed by the usual phalange of academic useful idiots. Indeed, mainstream economics has become a celebration of the wealthy rentier class for a century now, and as inequality is sharply widening today, celebrators of the One Percent have found a pressing need for their services.

A case in point is the Scottish economist Angus Deaton, author of The Great Escape: Health, Wealth, and the Origins of Inequality (2013). Elected President of the AEA in 2010, he was given the Nobel Economics Prize in 2015 for analyzing trends in consumption, income

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Comment by pstas

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  1. pstas

    Hey, let up a bit on all the negative fundamental news postings. People might begin to think that the markets should correct.

News You Can Use From Phil’s Stock World


Financial Markets and Economy

How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil (NY Times)

EL FURRIAL, Venezuela — One oil rig was idle for weeks because a single piece of equipment was missing. Another was attacked by armed gangs who made off with all they could carry. Many oil workers say they are paid so little that they barely eat and have to keep watch over one another in case they faint while high up on the rigs.

Get ready for the mother of all stock market corrections once central banks cease their money printing (The Telegraph)

Global stock and bond markets have been all over the place of late. Rarely have investors been so lacking in conviction. Confusion as to future direction reigns, and with good reason after the spectacular returns of recent years.

The Fed Put A 50% Tax On Your Retirement Plan (Forbes)

If a politician said he thought he should tax the income from your retirement plan, right now, at 50% (no matter where you are in the retirement process, that would certainly hurt the ability of your portfolio to compound), what would you think (other than that he was completely Looney Tunes)?

BOE’s Forbes Sees No Case for Additional Easing Yet After Brexit (Bloomberg)

Bank of England policy maker Kristin Forbes said the initial effect of the Brexit vote on the U.K. economy has been “less stormy” than expected and she doesn’t yet see a need for more stimulus.

S&P 500 Futures Signal More Stock Gains After Fed-Spurred Rally (Bloomberg)

U.S. index futures rose, with equities poised to add to a rally yesterday prompted by the Federal Reserve’s decision to leave interest rates unchanged.

Russian Bonds Rise as Fed Relief Outweighs Hawkish Central Bank (Bloomberg)

Russian bonds advanced, eliminating declines driven by hawkish comments from the country’s central bank last week, as the Federal Reserve’s decision to delay a rate increase spurred appetite for riskier assets.

China’s prudential housing bubble bind (Macro Business)

The spike in August home prices

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Comment by batman

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  1. batman

    Phil / CBI – thanks for the feedback on the role.  Are you at all worried about the 2.5B lawsuit by westinghouse?  This is old news but i don't see anything else, but has been coming steadily down since this came out.  Is it worth waiting to settle out, or role to 2018 s now as you suggested earlier?


Comment by lunar

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  1. lunar

    doesn't look like the time to short the market.

Comment by batman

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  1. batman

    Phil / CBI – thanks for the feedback on the role.  Are you at all worried about the 2.5B lawsuit by westinghouse?  This is old news but i don't see anything else, but has been coming steadily down since this came out.  Is it worth waiting to settle out, or role to 2018 s now as you suggested earlier?


News You Can Use From Phil’s Stock World


Financial Markets and Economy

Asian Stocks Rally With Won, Bonds After Fed as Crude Oil Gains (Bloomberg)

Asian stocks rallied for a sixth day, South Korea’s won strengthened and regional bonds rose after the Federal Reserve damped the outlook for U.S. interest-rate increases.

Dollar Drops After Fed Holds; Yen Approaches 100, Won Jumps 1.7% (Bloomberg)

The dollar fell against all its major peers, extending a slide toward its biggest annual decline in seven years, after the Federal Reserve delayed raising interest rates again, saying more time was needed to assess U.S. economic conditions.

SEC charges hedge fund manager Leon Cooperman, Omega Advisers with insider trading (CNBC)

Billionaire Leon Cooperman and his Omega Advisors hedge fund were charged Wednesday with insider trading, the Securities and Exchange Commission announced. 

Asian shares surge, dollar lags on slow-motion Fed (Reuters)

Asian shares surged on Thursday, taking their cue from Wall Street, after the Federal Reserve left U.S. interest rates unchanged and slowed the pace of future hikes, slugging the dollar and lifting commodity prices.

Divided Fed Holds Interest Rates Steady but Notes Improving Economy (NY Times)

WASHINGTON — A divided Federal Reserve, struggling to decide how soon to prune its economic stimulus campaign, said on Wednesday that it would wait at least a little longer.

Popular Quant Hedge Fund Strategy Is Suddenly Doing Terribly (Bloomberg)

Commodity trading advisers, the catch-all phrase for a breed of quantitative investors who use trends in asset prices and volatility as trading signals, posted some of the hedge fund industry’s worst losses in August — and it isn’t getting better. 

Fed leaves interest rates alone; dials down 2016 forecast (CNN Money)

Fed leaders decided not to increase the bank's key interest rate on Wednesday at the conclusion of a two-day meeting. The decision was largely expected by economists and investors who bet there was very little chance of a move.

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The BIS Warns on China


The BIS Warns on China

Courtesy of John Mauldin

I’ve been saying for the past couple years that the next recession here in the US will probably be triggered by an external macro event or cascade of events, coming out of Europe or China. Today’s Outside the Box sharpens our focus on China, which had already got quite a lot sharper with Michael Pettis’s piece in Outside the Box on Sept. 2.

Today’s post comes from Ambrose Evans-Pritchard of the London Telegraph. He is commenting on the recently released quarterly report of the Bank for International Settlements (“the central banks’ bank”), in which the BIS repeats Pettis’s warning that China faces escalating risk of a major debt and banking crisis.

The BIS is also rightly concerned about spillover from China to the global economy. After noting that outstanding loans in China have reached $28 trillion – as much as the commercial banking loan books of the US and Japan combined – Ambrose adds, “The scale is enough to threaten a worldwide shock if China ever loses control. Corporate debt alone has reached 171pc of GDP, and it is this that is keeping global regulators awake at night.”

Total Chinese debt reached 255% of GDP at the end of 2015, a jump of 107% in the past eight years – and still rising fast. Every year, China’s leadership promises to rein in debt growth, and every year the growth just keeps accelerating. That is because China’s GDP growth is fueled by debt, and that debt is becoming increasingly inefficient in producing GDP.

Does China still have the resources to deal with this issue? The answer is a qualified yes – but then there may not be the resources to deal with the other little items on China’s shopping list. The New Silk Road that China seems to be actually in the process of building is estimated to cost $1 trillion, and that’s without cost overruns. Plus, the Chinese leadership has promised massive spending on the interior part of the country to bring up the quality of people’s lives there.

One trillion here and one trillion there, and pretty soon you have run through your reserves and are getting into monetization problems; and then you have all sorts of…
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News You Can Use From Phil’s Stock World


Financial Markets and Economy

Hong Kong Leader Defends Decision to Scale Back Housing Project (Bloomberg)

Hong Kong’s leader, Leung Chun-ying, defended his decision to postpone two phases of a massive public housing project in the city’s northern outskirts, as he sought to address allegations that the government made the decision to benefit rural landlords.

Treasury Post-BOJ Selloff Pauses as Attention Switches to Fed (Bloomberg)

In a day dominated by two of the world’s premier central banks, bond traders are already turning their focus to the Federal Reserve after shrugging off the Bank of Japan’s policy tweaks.

Facing doubts over its firepower, Bank of Japan tries something new (CNN Money)

After years of failed efforts to pull Japan out of deflation, the country's central bank is trying something different.

The Bank of Japan said Wednesday that it's introducing a new long-term interest rate target of around zero.

South Africa Inflation Rate Falls Into Target Band in August (Bloomberg)

South Africa’s inflation fell below the upper end of the central bank’s target band in August for the first time this year, leaving room for policymakers to continue to pause their tightening cycle.

Coming Soon, Economists Hope: Big Spending on Roads, Bridges and Ports (NY Times)

OAKLAND, Calif. — The docks at the Port of Oakland are a tangle of cranes, shipping containers, railroad tracks and snaking lines of trucks waiting to load and unload cargo.

What does China’s ‘belt and road initiative’ mean for EU trade? (Bruegel)

Much has been written about the Belt and Road initiative since Xi Jinping made it Beijing’s flagship initiative in September 2013. There are many interpretations of the initiative’s ultimate objectives, but one objective is clear.

Russian Bonds Halt Drop as Global Stimulus Eclipses Local Policy (Bloomberg)

Ruble-denominated bonds halted four days of losses as oil prices rose and optimism global central banks won’t rush to dial back stimulus boosted appetite for Russian risk.

The state of macroeconomics is not good (The Washington Post)

Yesterday’s post

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Zero Hedge

"Hillary 2016" Caption Contest

Courtesy of ZeroHedge. View original post here.

As the source of this already viral photo simply exclaims "2016, ya'll."

h/t @victomato


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Phil's Favorites

The Wedge That's Driving Facebook's Stock

Courtesy of Dana Lyons

The stock of Facebook has been in a rising wedge pattern for most of its lifetime – and the pattern is nearing a resolution.

Today’s Chart Of The Day takes a rare detour into single stock territory. As we do not trade individual equities for our clients, it is typically not a focus of ours. But with Facebook (FB) in the news today (along with a dearth of exciting charts) we take a look at a chart pattern relevant to FB throughout most of its history – and in particular, right now.

A “rising wedge” pattern involves a series of higher highs and higher lows on a price chart – with the lows demonstrating a s...

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Chart School

Weekly Market Recap Sep 25, 2016

Courtesy of Blain.

The week that was…

It was all about the Federal Reserve as we noted it would be.  In last week’s recap we said:

From this perch there has been and continues to be zero expectation for a September rate hike as the Fed doesn’t want to be seen as “political” and trying to move the market ahead of November, but the Fed is at least trying to throw some bones out there to make the market a bit less complacent.


All eyes on the Federal Reserve with a meeting Tue/Wed and a press conference by Yellen Wednesday.   Since we expect nothing to happen Wednesday in terms of raising rates maybe the market will be in “relief” mode.  Unless there is strong language from Yellen hinting at a December rate hike....

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Mark Morey: Social Revolution

By PeakProsperity. Originally published at ValueWalk.

Largely out of the headlines, the ongoing protest on Standing Rock is shining a bright light on how the big-moneyed interests with political clout steamroll the disadvantaged in order to get what they need.

Photo by tomwieden (Pixabay)

But in a rare David-vs-Goliath standoff, the Sioux tribespeople of Standing Rock Reservation are learning that they are not powerless. Their refusal to roll over and allow an oil pipleline to be built on their lands is growing into one of the largest resistance movements in recent years, drawing supporters from all over the country, and forcing the discussion of “Where do we draw t...

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Market News

News You Can Use From Phil's Stock World


Financial Markets and Economy

Merkel Rules out Assistance for Deutsche Bank, Focus Reports (Bloomberg)

Chancellor Angela Merkel has ruled out any state assistance for Deutsche Bank AG in the year heading into the national election in September 2017, Focus magazine reported, citing unidentified government officials.

A divided town in Connecticut shows that finance is ruining Ame...

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Kimble Charting Solutions

Crude Oil attempting key breakout, says Joe Friday

Courtesy of Chris Kimble.

Below looks at Crude Oil on a “Monthly Closing” basis, since the early 1980’s.

Crude Oil started tanking in 2014 and its low earlier this year, took place at dual long-term support at (1) below.


Two support lines, that date back over a decade, came into play at (1) and so far have held. Crude remains in a down trend and this down trend is being tested at this time.

Joe ...

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Swing trading portfolio - week of September 19th, 2016

Reminder: OpTrader is available to chat with Members, comments are found below each post.


This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...

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Members' Corner

Market Liquidity and Macroeconomic Bullshit


Market Liquidity and Macroeconomic Bullshit

Courtesy of The Nattering Naybob

STJL - "Apparently macroeconomics is all bullshit – ROFL! Paging Naybob now… Famous Economist Paul Romer Says Macroeconomics Is All Bullshit."

The Nattering One muses... Macroeconomics as practiced by academics and those in charge is pure voodoo. Better to chant over goat blood, bird feathers and scattered entrails...

As for reality, overnight CNH HIBOR (...

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Mapping The Market

Here's a Cautionary Tale of Pension Privatization From Chile

Via Jean-Luc:

"When you let the free market take over, the little people get screwed and bankers get rich. Chile tried privatizing retirement plans and surprise, surprise, fund manager ate the profits… Pretty sure the results would be the same here..."  ~ Jean-Luc

Here's a Cautionary Tale of Pension Privatization From Chile

By KEVIN DRUM, Mother Jones

Among free-market fans, Chile's privatized pension plan has long been held up as a model for us to follow. The problem, as the Financial Times notes today, is ...

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Digital Currencies

Gold, Silver and Blockchain - Fintech Solutions To Negative Rates, Bail-ins, Currency Debasement and Cashless

Courtesy of ZeroHedge. View original post here.

By Jan Skoyles

I was so pleased yesterday by the announcement that I have joined the Research team at GoldCore as it meant that I could finally start talking about it and was back in a role that lets me indulge in my passion by researching and geeking out on all things gold, silver and money.


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Epizyme - A Waiting Game

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer.  One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."

Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.  

Genetic components are the DNA sequences that are 'inherited.'  Some of these genes are stronger than others in their expression (e.g., eye color).  Yet, some genes turn on or off due to external factors (environmental), and it is und...

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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.

To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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PSW is more than just stock talk!


We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more! features the most important and most interesting news items from around the web, all day, every day!

News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

If you are looking for non-mainstream, provocatively-narrated news and opinion pieces which promise to make you think -- we feature Zero Hedge, ...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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