Posts Tagged ‘Credit Line’

Tim Backshall On Europe: “Default Now Or Default Later” As EuroStat Complains That Greece Is Still Withholding Critical Data

Tim Backshall On Europe: "Default Now Or Default Later" As EuroStat Complains That Greece Is Still Withholding Critical Data

Courtesy of Tyler Durden

There is one major problem with putting houses of card back together – they tend to fall…over and over. And while abundant liquidity in May and June served as an artificial prop to return European core and PIIGS spreads to previous levels merely as mean reversion algos took holds, the second time around won’t be as lucky. CDR’s Tim Backshall was on the Strategy Session today, discussing the key trends in sovereign products over the past few months, noting the declining liquidity in both sovereign cash and derivative exposure (we will refresh on the DTCC sovereign data later after its weekly Tuesday update). Yet the most interesting observation by Backshall is the declining halflife of risk-on episodes, which much like the SNB’s (now declining) interventions, are having less of an impact on the market, as ever worsening fundamentals can only be swept under the carpet for so long before they really start stinking up the place, and indeed, as Tim points out at 5:30 into the interview, even the IMF now realizes that soon the eventual second domino will fall, and it is better the be prepared (via the previously discussed infinitely expanded credit line), than to have to scramble in the last minute as was necessary in May. In other words, the storm clouds are gathering and only fools will invest in risk asset without getting some additional clarity on what is happening in Europe. The bottom line as Backshall asks is: "do they default now or default later." And that pretty much sums it up. Buy stocks at your own peril.

Incidentally all this is happening as we read in an exclusive Bloomberg piece that "four months after the 110 billion- euro ($140 billion) bailout for Greece, the nation still hasn’t disclosed the full details of secret financial transactions it used to conceal debt" and that EuroStat still has not received the required disclosure about just how fake (or real) the Greek debt situation truly is. When one steps back and ponders just how bad (and unknown) the situation in Europe is, and that stocks are unchanged for the year, one must conclude, as Dylan Grice does every week, that the lunatics have truly taken over the asylum.


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IMF Eliminates Borrowing Cap On Rescue Facility In Anticipation Of Europe Crisis 2.0; US Prepares To Print Fresh Trillions In “Rescue” Linen

IMF Eliminates Borrowing Cap On Rescue Facility In Anticipation Of Europe Crisis 2.0; US Prepares To Print Fresh Trillions In "Rescue" Linen

Courtesy of Tyler Durden

Back in April, when we discussed the inception of the IMF’s then brand new New Arrangement to Borrow (NAB) $500 billion credit facility, we asked rhetorically, "If the IMF believes that over half a trillion in short-term funding is needed imminently, is all hell about to break loose." A month later the question was answered, as Greece lay smoldering in the ashes of insolvency, and the developed world was on the hook for almost a trillion bucks to make sure the tattered eurozone remained in one piece (leading to such grotesque abortions as Ireland, whose cost of debt is approaching 6%, funding Greek debt at 5%).

Well, if that was the proverbial canary in the coalmine, today the entire flock just keeled over and died: today the IMF announced it "expanded and enhanced its lending tools to help contain the occurrence of financial crises." As a result, the IMF has as of today extended the duration of its existing Flexible Credit Line (FCL) to two years, concurrently removing the borrowing cap on this facility, which previously stood at 1000 percent of a member’s IMF quota, in essence making the FCL a limitless credit facility, to be used to rescue whomever, at the sole discretion of the IMF’s overlords. Additionally, as the FCL has some make believe acceptance criteria (and with countries such as Poland, Columbia, and Mexico having had access to it, these must certainly be sky high), the IMF is introducing a brand new credit facility, the Precautionary Credit Line (PCL), which will be geared for members with "sound policies [which just happen to need an unlimited source of rescue funding] who nevertheless may not meet the FCL’s high qualification requirements." In other words everyone. In yet other words, the IMF as of today, has a limitless facility to bail out anyone in the world, without a maximum bound in how much is lendable. One wonders who would be stupid enough to take advantage of the gullibility of IMF’s biggest backers (the US), to borrow an infinite amount of money for any reason whatsoever… And just what all this means for the imminent explosion of the amount of money in circulation…Not to mention the brand new Ben Bernanke smokescreen of…
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Senate Expands FDIC Credit Line To $100 Billion

Courtesy of Tyler Durden

Senate Expands FDIC Credit Line To $100 Billion

As had been widely expected, today (a day before the stress test results finally stop leaking, compliments of the securities and exchange commission) the senate passed a measure approving the expansion of the credit line from the Treasury to the FDIC to $100 billion, from $30 billion previously. The vote passed 91 to 5. In addition, the FDIC will now have half a trillion credit limit that will expire by the end of 2010. As the senate has firmly decided that dollars are now not worth even their weight in zero-ply toilet paper, it makes sense to see just how quickly the FDIC has managed to eat through the Deposit Insurance Fund, of which it had roughly $19 billion at the end of 2008, and now has a couple of pennies above zero, which any way one looks at it is less than the statutory DIF reserve minimum of 1.15% of insured deposits (indicatively, the minimum balance in the DIF (at least according to existing laws: once can imagine these will be promptly "adjusted") should be $54 billion, or 1.15% of the $4.7 trillion in insured deposits. Once it falls below that amount the FDIC must come up with a restoration plan to raise the DIF to that level. Good luck with that) .

And all this was accomplished in a mere four months.

Oh, and by the way, advisor for the FDIC, in case you missed it before, is Perella Weinberg
(here is the link for the ongoing Zero Hedge FDIC-Perella Weinberg compensation FOIA initiative).

[click on table for larger image] hat tip Guillermo


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Zero Hedge

Truth... Hurts

Courtesy of ZeroHedge. View original post here.

What a difference one word can make...

Source: Townhall.com

...

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ValueWalk

Advanced Brain Science: Optogenetics and Expansion Microscopy | Ed Boyden

By Jacob Wolinsky. Originally published at ValueWalk.

Published on Feb 25, 2017

Despite library shelves sagging under the weight of neurology books, what we know about the brain so far is unfledged. MIT professor Edward Boyden explains how research teams are using expansion microscopy to map the densely packed neurons so we can understand how the brain is wired and apply that to human therapies. He also explains a technology called optogenetics (using light to control cells) that he hopes will do many things lik...



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Phil's Favorites

Cybersecurity of the power grid: A growing challenge

 

Cybersecurity of the power grid: A growing challenge

Courtesy of Manimaran Govindarasu, Iowa State University and Adam Hahn, Washington State University

Called the “largest interconnected machine,” the U.S. electricity grid is a complex digital and physical system crucial to life and commerce in this country. Today, it is made up of more than 7,000 power plants, 55,000 substations, 160,000 miles of high-voltage transmission lines and millions of miles of low-volta...



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Chart School

Buyers Keep Shorts At Bay

Courtesy of Declan.

Just when it looks like shorts may have something to attack, buyers step in to make up the lost ground. The rally is out on a limb, but not enough to place it at the outer extremes of historic price action. So while there hasn't been any big pullback since the election, there isn't much to suggest a pullback is coming soon either.

The weakest of the indices is the Russell 2000 as 2017 continues to see money rotate out of speculative stocks into more defensive Large Caps.  However, Friday did offer some healthy a backtest of former resistance turned support, and buyers have a relatively low risk opportunity to take advantage; helped by the proximity of 20-day and 50-day MAs.

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OpTrader

Swing trading portfolio - week of February 27th, 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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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

The story of the week is Trump, Russia and the FBI. The rest is a distraction (The Guardian)

Narrative switching. That is what the Trump administration is desperately trying to do around Russia right now. The White House reportedly interfered with the FBI in the middle of an active investigation involving counter-intelligence. This was not only foolhardy but also suspicious, as it directly undermined their apparent objective: distracting us.

On 14 February, the New York Times reported that advisers and associates of Donald Trump may have been in direct and cont...



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Mapping The Market

Why Facts Don't Change Our Minds

Courtesy of Jean Luc

Good article about facts and why we reject them:

WHY FACTS DON’T CHANGE OUR MINDS

New discoveries about the human mind show the limitations of reason.

By Elizabeth Kolbert

In “Denying to the Grave: Why We Ignore the Facts That Will Save Us” (Oxford), Jack Gorman, a psychiatrist, and his daughter, Sara Gorman, a public-health specialist, probe the gap between what science tells us and what we tell ourselves. Their concern is with those persistent beliefs which are not just demonstrably false but also potentially deadly, like the conviction that vaccines are hazardous. Of course, what’s hazardous is not being vaccinated; that’s why vaccines were created in the first place. “Immunization is one of the triumphs of modern medicine,” the Gormans no...



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Digital Currencies

As Bitcoin Surges To Record High, China Prepares Its Own Digital Currency

Courtesy of Mike Shedlock (Mish)

Bitcoin hit an all-time high over $1200 today.

Traders are happy because the SEC is expected to rule on a Bitcoin ETF by March 11.

Meanwhile, Bloomberg reports China Is Developing its Own Digital Currency.
 

After assembling a research team in 2014, the People’s Bank of China has done trial runs of its prototype cryptocurrency. That’s taking it a step closer to becoming one of the first major central...

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Kimble Charting Solutions

Crude Oil; Energy stocks suggesting its about to fall, says Joe Friday

Courtesy of Chris Kimble.

Below takes a look at the price action of Crude Oil, Energy ETF (XLE) and Oil & Gas Exploration ETF (XOP) over the past three years.

Could Energy stocks be suggesting the next big move in Crude Oil again? Which direction are they suggesting?

CLICK ON CHART TO ENLARGE

At this time the intermediate trend in Cru...



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Members' Corner

The Manchurian President

 

The Manchurian President

Courtesy of  at BillMoyers.com

As the Trump presidency unravels, unraveling the country along with it, there is no real political antecedent, no lessons from American history on which to draw and provide guidance. We are in entirely uncharted waters.

But there is an antecedent in our popular culture that provides a prism through which to view the contemporary calamity, especially the alleged collusion between Trump’s henchmen and Russian intelligence to deny Hillary Clinton the presidency. I am not the first observer who has ...



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Promotions

Phil's Stock World's Las Vegas Conference!

Learn option strategies and how to be the house and not the gambler. That's especially apropos since we'll be in Vegas....

Join us for the Phil's Stock World's Conference in Las Vegas!

Date:  Sunday, Feb 12, 2017 and Monday Feb 13, 2017            

Beginning Time:  9:30 to 10:00 am Sunday morning

Location: Caesars Palace in Las Vegas

Notes

Caesars has offered us rooms for $189 on Saturday night and $129 for Sunday night but rooms are limited at that price.

So, if you are planning on being in Vegas (Highly Recommended!), please sign up as soon as possible by sending...



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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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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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