Posts Tagged ‘BOJ’

WTF Friday – Japan’s 80 TRILLION Yen Stimulus Dresses the Windows

She knows how hard her heart grows under the nuclear shadows

She can't just escape the feeling repeating in her head

When after all the urges some kind of truth emerges

We felt the deadly surges discovering Japan – Graham Parker 

Happy Halloween!

The shorts are certainly getting a scare this morning as the BOJ hands out another $124Bn (yes, we did the relative math in this morning's Alert to our Members) and that was more than enough to pop the Nikkei 5% in 90 minutes, with the /NKD Futures now testing 16,850 – almost catching up to the Dow for the 3rd time in 2 years.  

Unfortunately, each time the Nikkei has matched up with the Dow's gains, it's marked and overbought top and led to a sell-off so we were forced to officially reverse our long call on Russell Futures (/TF) from yesterday morning's post and flip short at 1,169 (with tight stops over 1,170).  That's OK though because a move from 1,132.50 to 1,169 on /TF is a profit of $3,650 per contract – not bad for a day's work, right?  

See, I told you we could pay for your trip to our Las Vegas Live Seminar next week with a Futures trade!  

Not that we advocate holding Futures positions overnight – it could just have easily gone the other way.  That's what Wednesday's TNA spread was for – the longer-term long position on the Russell, which will pop TNA well over our $80 goal this morning – that trade has a 316% profit potential in less than a month! 

Notice how we're popping out of the channel.  It would be one thing if we were doing it based on US earnings but doing on Japanese…
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FED EXTENDS USD SWAPS THROUGH SUMMER 2011

Courtesy of The Pragmatic Capitalist 

The Fed announced this morning that they will be extending U.S. dollar liquidity swaps through summer of 2011. This is basically their way of saying that they’re worried about the risk of a dollar funding crisis still.  That’s not unreasonable given the elevated risks in Europe (it’s nice to see a more proactive Fed), however, it does expose the USA to a risk that it should never have – foreign denominated debt risk.  They issued this useful primer on swaps along with the announcement:

Why has the Federal Reserve re-established temporary U.S. dollar liquidity swap facilities with foreign central banks?

The swap facilities announced in May 2010 respond to the re-emergence of strains in short term funding markets in Europe. They are designed to improve liquidity conditions in global money markets and to minimize the risk that strains abroad could spread to U.S. markets, by providing foreign central banks with the capacity to deliver U.S. dollar funding to institutions in their jurisdictions.

With which central banks has the Federal Reserve entered into swap facilities?

The Federal Reserve has established swap arrangements with the Bank of Canada (BOC), the Bank of England (BOE), the European Central Bank (ECB), the Swiss National Bank (SNB), and the Bank of Japan (BOJ).

How will the swap facilities function?

The swap lines with the ECB, BOE, SNB and BOJ will provide these central banks with the capacity to conduct tenders of U.S. dollars in their local markets at fixed local rates for full allotment, similar to arrangements that had been in place previously. The swap line with the Bank of Canada allows for drawings of up to $30 billion. The terms, structure, and operational mechanics of these swap agreements closely parallel the arrangements that expired on February 1, 2010. For reference please see the attached link.

http://www.federalreserve.gov/monetarypolicy/bst_swapfaqs.htm

For how long are the swap facilities expected to be operational?

These swap arrangements have been authorized through August 1, 2011. Central banks may request drawings on their swap lines up to the date of expiration.

Is the Federal Reserve exposed to foreign exchange or private bank risk in extending these lines?

No. Dollars provided through the reciprocal currency swaps are provided by the Federal Reserve to foreign central banks, not to the institutions obtaining the funding in these operations. The foreign central bank receiving dollars determines the terms on which it will lend dollars onward to


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Which Way Wednesday – So Long Summers!

Larry Summers is out!

Hopefully this portends a shake-up of the Administration’s economic policy but that will very much depend on who is appointed to replace him.  It is, once again, the economy stupid and Larry’s stint as Director of the National Economics Council has given us far too much of the same at a time where we really needed — change.  As Barry Rhitholtz points out:

He was one of the chief architects of the crisis. In addition to believing all of the usual foolishness about efficient markets, he bought into the radical deregulation arguments pushed by the free market absolutists.

Summers was Treasury Secretary when Glass Steagall was repealed. Instead of speaking out against the irresponsible Gramm–Leach–Bliley Act (Financial Services Modernization Act of 1999), he actively supported it. Instead of explaining to the public how Glass Steagall prevented Wall Street crises from spilling over into Main Street for 65 years, he rolled over for Citibank.  The repeal of Glass Steagall was not a cause of the crisis, but it allowed the net damage to be far, far worse than it would have otherwise been. And it was emblematic of the corporate takeover of the legislative process. For a fee (campaign donation) you could write your own regulations. How could that ever go wrong?

Even more ruinously, Summers oversaw the passage of Commodities Futures Modernization Act of 2000 that exempted financial derivatives from all regulatory oversight. The CFMA made the AIG collapse not only possible, but likely. It helped to set up both Lehman and Bear Stearns. CFMA allowed AIG FP to write over $3 trillion in derivatives, reserving precisely zero dollars in case an underwritten derivative needed to be paid.

Conservatives should not be celebrating the departure of Larry Summers, he was a guy who "played ball" with Big Business and it is very likely that his replacement will have a less friendly stance towards our Corporate Citizens, who made 60% of the income in this country in 2009 but paid just 6% of the taxes ($138Bn). 

Larry has to get out of town before the Administration goes after his meal-ticket and begins asking Big Business to pay their fair share, an issue that is very likely to shape the next election cycle.  The chart on the left is a measure of taxes paid in relation to GDP and you’ll notice that corporations…
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Zero Hedge

Will Thursday's Final TLTRO Finally Spark Carry Trades?

Courtesy of ZeroHedge. View original post here.

By Nick Kounis of ABN Amro

Euro Rates Watch – Will the TLTRO spark carry trades?

  • The last of the ECB’s TLTRO-II operations is expected to have a big take up, with the market expecting EUR 125bn, and some forecasts as high as EUR 300bn
  • From a rates perspective, what matters is whether these funds will trigger flows into the bond or swap markets as banks set up carry trades
  • Carry trades have certainly looked attractive and currently there is a pos...


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ValueWalk

Onset of a Global Trade War for People

By Mauldin Economics. Originally published at ValueWalk.

After World War II, we split the planet into East and West—with an Iron Curtain in between. Lesser barriers subdivided each side.

WikiImages / Pixabay

Time passed. Borders loosened. People and goods started flowing more freely.

This was okay at first, but eventually, it became too much. People yelled, “Enough!”

As I’ve written about before, we are now in a great debate over which visitors, immigrants, and goods can cross national borders—and on what terms.

It’s a debate worth having, but we can’t forget that ...



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Phil's Favorites

Pepsi Pulls 12-Packs, 2 Liter Bottles From Philadelphia Stores In Protest Over Soda Tax

Courtesy of Zero Hedge

Two weeks ago we reported that the latest unintended casualty from Philadelphia's soda tax would be at least 20% of Pepsi's 423 employees in the city of brotherly love. According to the Philadelphia Inquirer, with sales slumping as much as 40% because of the new Philadelphia sweetened beverage tax, in the last week of February, Pepsi said it will lay off 80 to 100 workers at three distribution plants that serve the city. And since Pepsi employs 423 people in the city, it means that as much as 20% of its employees will be out of job due to a disastrous ordnance that was meant to provide additional municipal funding and instead will ...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Record Number of Fund Managers Say U.S. Equities Are Overvalued (Bloomberg)

Fund managers now say stocks are the most overvalued they have been in nearly 20 years, according to a survey done last week by Bank of America Merrill Lynch.

For China’s Central Bank, an Increasingly Difficult Balancing Act (The Wall Street Journal)

China’s central bank faces an increasingly tough balancing act, trying to contain asset bubbles and steady the yuan without triggering a cash crunch and stifling economic growth...



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Kimble Charting Solutions

Banks Stocks could under perform for years (Update)

Courtesy of Chris Kimble.

90-days ago Joe Friday shared that if history was a guide, banks could under perform the broad market going forward. The chart below was shared on 12/23/16 (See Post Here). It highlighted that since the highs in 2007, when the Bank/SPY ratio became very over bought, banks lagged the broad market for a good while.

CLICK ON CHART TO ENLARGE...



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Chart School

Seniconductor Shorts Gifted Their Positions

Courtesy of Declan.

For those who took advantage of the resistance test in the Semiconductor Index; there was a picture perfect test of the hashed blue line resistance and secondary break of former rising channel support.  The Semiconductor Index finished bang on the 20-day MA so there may be a little (big?) bounce tomorrow. If buyers can't defend the 20-day MA then the 50-day MA is next.


The S&P did not experience the biggest loss, but it did undercut the recent swing low. In fact, the relative performance of the index against ...

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Members' Corner

Natterings

Check out some new posts from our friend The Nattering Naybob. 

The Big Lebowski Sequel?

Taking a "resp-shit" or "potty break" from "in the Toilet Thursday" or "Thursday's in the Loo"... One of our favorite scenes from the 1998 cult classic The Big Lebowski, the ash can scene where Walter Subchak (John Goodman) eulogizes the departed Donnie (Steve Buscemi) with Jeffrey Lebowski (Jeff Bridges) looking on.

Keep reading: ...



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OpTrader

Swing trading portfolio - week of March 20th, 2017

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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Digital Currencies

Bitcoin Tumbles Below Gold As China Tightens Regulations

Courtesy of Zero Hedge

Having rebounded rapidly from the ETF-decision disappointment, Bitcoin suffered another major setback overnight as Chinese regulators are circulating new guidelines that, if enacted, would require exchanges to verify the identity of clients and adhere to banking regulations.

A New York startup called Chainalysis estimated that roughly $2 billion of bitcoin moved out of China in 2016.

As The Wall Street Journal reports, the move to regulate bitcoin exchanges brings assurance that Chinese authorities will tolerate some level of trading, after months of uncertainty. A draft of the guidelines also indicates th...



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Mapping The Market

Congress begins rolling back Obama's broadband privacy rules

Courtesy of Jean Luc

I am trying to remember who on this board said that people wanted to Trump because they want their freedom back. Well….

Congress begins rolling back Obama's broadband privacy rules

By Daniel Cooper, Endgadget

ISPs will soon be able to sell your most private data without your consent.

As expected, Republicans in Congress have begun the process of rolling back the FCC's broadband privacy rules which prevent excessive surveillance. Arizona Republican Jeff Flake introduced a resolution to scrub the rules, using Congress' powers to invalidate recently-approved federal regulations. Reuters reports that the move has broad support, with 34 other names throwing their weight behind the res...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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Biotech

The Medicines Company: Insider Buying

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

I'm seeing huge insider buying in the biotech company The Medicines Company (MDCO). The price has already moved up around 7%, but these buys are significant, in the millions of dollars range. ~ Ilene

 

 

 

Insider transaction table and buying vs. selling graphic above from insidercow.com.

Chart below from Yahoo.com

...

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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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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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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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