From last Friday on BNN, Charles Biderman of TrimTabs talks about the odd goings on in U.S. equity markets last year where low volume and the lack of identifiable buyers have caused more than a few people to suspect that things are not as they appear.
Biderman says that in after-hours S&P500 futures markets, as little as $5 to $10 billion a month in buying could be responsible for a large part of last year’s gains and, when you think about it, $5 to $10 billion a month for the U.S. government in 2009 was "chump change".
TrimTabs CEO Charles Biderman continued his crusade against the government’s official stats and involvement in financial markets in an interview Friday with BNN. In it, he argues that the private demand — from companies, investors, hedge funds, and pensions — just isn’t there.
Is the Fed manipulating the stock market? TrimTabs CEO Charles Biderman seems to think so, and he makes a strong case for his theory in an article at zerohedge.com.
Biderman focuses his attention on the mystery surrounding the stock market’s 9-month rally and asks, "Where is the money coming from?" After all, the market cap has increased by more than $6 trillion since March 9. That amount of money should be fairly easy to trace; right?
Biderman: "The most positive economic development in 2009 was the stock market rally. (But) We cannot identify the source of the new money that pushed stock prices up so far so fast. For the most part, the money did not from the traditional players that provided money in the past."
Huh? So, this vast infusion of liquidity--which helped the banks to avoid painful deleveraging--did not come from the usual suspects?
That’s right. According to Biderman, the money did not come from (a) companies ("which were a huge net seller") (b) retail investor funds, (c) retail investors, (d) foreign investors, or (e) pension funds.
What about the hedge funds?
Biderman: "We have no way to track in real time what hedge funds do, and they may well have shifted some assets into U.S. equities. But we doubt their buying power was enormous because they posted an outflow of $12 billion from April through November."
Okay; so we’re back to Square One. Where did the money come from?
Biderman again: "As far as we know, it is not illegal for the Federal Reserve or the U.S. Treasury to buy S&P 500 futures. Moreover, several officials have suggested the government should support stock prices. For example, former Fed board member Robert Heller opined in the Wall Street Journal in 1989, “Instead of flooding the entire economy with liquidity, and thereby increasing the danger of inflation, the Fed could support the stock market directly by buying market averages in the futures market, thereby stabilizing the market as a whole.” In a Financial Times article in 2002, an unidentified Fed official was quoted as acknowledging that policymakers had considered buying U.S. equities directly, not just futures. The official mentioned that the Fed could “theoretically buy anything to pump money into the system.”
While Russia successfully bombs unidentified targets – either ISIS or U.S.-trained rebels – in Syria, China is planning to join Russia’s own emerging coalition by deploying Shenyang J-15, a carrier-based fighter aircraft.
Numerous reports have indicated that China is joining Russia’s airstrike campaign in Syria, which has killed at least 39 civilians, including eight children and eight women.
Earlier today, in its latest attempt to restore confidence in its brand and business model after suffering a historic stock price collapse, Glencore - whose CDS recently blew out to a level implying a 50% probability of default - released a 4 page funding worksheet which was meant to serve as a simplied summary of its balance sheet funding obligations and lending arrangements to equity research analysts who have never opened a bond indenture, and which among other things provided a simplied and watered-down estimate of what could happen if and when the company i...
Big U.S. companies are holding more than $2.1 trillion in profits overseas and are avoiding paying about $620 billion in U.S. taxes, according to a study released Tuesday.
The study by liberal groups Citizens for Tax Justice and the U.S. PIRG Education Fund found that nearly three-quarters of Fortune 500 companies had at least one tax-haven subsidiary in 2014. Bermuda and the Cayman Islands were the most popular tax-haven destinations.
Most of the gains were posted pre-market, but bulls were able to hold gains after a couple of days of bullish strength.
The S&P is on course to finish with a spinning top doji. The 50-day MA is just overhead and close to 2,000 psychological resistance. Technicals are close to turning net bullish.
The Nasdaq closed above 20-day MA and has room to run to overhead resistance. Like the S&P, it 's close to turning net bullish technically. Today was a typical consolidation, which given recent price action should be viewed as bullish.
Uncertainty about the health of the global economy led investors to flee U.S. equities during Q3, primarily driven by worries about China's growth prospects and the Federal Reserve’s decision to not raise rates. Sure, there are plenty of real and perceived headwinds, but on balance it seems that a recession here at home is not in the cards. And when you consider sentiment and the technical picture, it appears that a continuation of Friday’s bounce is in store. The question remains as to whether the seasonally strong Q4 will be able to propel the bulls through levels of resistance that have built up.
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Baxter Int. (BAX) is splitting off its BioSciences division into a new company called Baxalta. Shares of Baxalta will be given as a tax-free dividend, in the ratio of one to one, to BAX holders on record on June 17, 2015. That means, if you want to receive the Baxalta dividend, you need to buy the stock this week (on or before June 12).
Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself.
Kim Parlee interviews Phil on Money Talk. Be sure to watch the replays if you missed the show live on Wednesday night (it was recorded on Monday). As usual, Phil provides an excellent program packed with macro analysis, important lessons and trading ideas. ~ Ilene
The replay is now available on BNN's website. For the three part series, click on the links below.
Part 1 is here (discussing the macro outlook for the markets)
Part 2 is here. (discussing our main trading strategies)
Part 3 is here. (reviewing our pick of th...
This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible. Feel free to contact me directly at firstname.lastname@example.org with any questions.
Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
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