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Posts Tagged ‘Currencies’

TOLDJA!! The Dollar Broke Lower—So Now What?

Courtesy of Gonzalo Lira

Excerpt:

If QE-2 ends in June like it’s supposed to, and interest rates rise in the face of a weakened dollar, what do you think Timothy Geithner will be looking at? He’ll have to issue Treasury debt for the trillion-plus fiscal year 2012 deficit, and additional Treasury debt for the interest on the FY 2012 deficit—and then even more Treasury debt to cover theinterest on the interest!
 
Tiny Timmy’s pin-head would explode into a million pieces, if interest rates were to rise. 
 
Benny and the Eccles Jackals are not unsympathetic to Tiny Timmy’s plight. But it’s not enough for the Federal Reserve to decree (via the Fed Funds Rate) that interest rates will not rise, in the face of rising Treasury yields. The Fed—in order to keep those yields low—has to dosomething. Something, in order to keep the Federal government funded. 
 
Therefore, here is another one of GL’s Fearless Predictions™: 

Once Quantitative Easing-2 ends this coming June, the Treasury bond purchases will be extended indefinitely—call it QE-3. The amount of each month’s purchase of Treasury bonds by the Federal Reserve will be at least $75 billion—but don’t be surprised if it’s as high as $100 billion to $125 billion. Per month. 

Yes.

This is the only way that the Federal Reserve and the Treasury department will be able to achieve their contradictory objectives of fully funding the Federal government’s debt, and maintaining low interest rates in order to “stimulate lending”. 
 
So to answer the question, How low will the dollar go?
 
This go-around? I don’t know, but in the near-term I’d guess 73.5 on the dollar index, the euro topping out at $1.47, the yen to ¥77.50, gold to $1,450, silver $39 maybe. Maybe in the next three to four weeks, but perhaps even sooner. 
 

In the long term? If the clowns running the circus remain in place, my guess is the dollar will soon enough hit The Big Bagel.  

Read the whole article here > 


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John Williams Discusses The Reasons For The Upcoming Dollar Dump

Courtesy of Tyler Durden

Lately, anywhere we look, there seems to be a pattern emerging: those economic thinkers who actually construct and run their own macro models (not the glorified powerpoint presenter variety) and actually do independent analysis and tracing of the money flow, instead of relying on Wall Street forecasts that have as much credibility as a Moody’s home price hockey stick from 2006, almost inevitably end up having a very dire outlook on the economy. One such person is and has pretty much always been Shadowstats‘ John Williams, whose "shadow" economic recreation puts the BLS data fudging dilettantes to shame. That said any reader of Zero Hedge who has been with us for more than a few weeks, knows all too well our eagerness to ridicule the increasingly more incoherent lies coming out of the US department of truth, so no surprise there. Yet another aspect over which there is much agreement is that no matter how one slices the data, the outcome for the US currency is a very grim one. Which is why Williams over the past several years has become a major fan of the shiny metal. Below we recreate portions of his latest observations on the upcoming currency collapse, courtesy of King World News.

John Williams today was dispatching information regarding gold, silver, M3, nearby massive selling of dollars and inflation.  Here is a portion from his commentary, “Despite November 9th’s historic high gold price of $1,421.00 per troy ounce (London afternoon fix) and the multi-decade high silver price of $30.50 per troy ounce (London fix) on December 7th, gold and silver prices have yet to approach their historic high levels, adjusted for inflation.”

Real Money Supply M3:  The signal of the still unfolding double-dip recession, based on annual contraction in the real (inflation-adjusted) broad money supply (M3), continues and is graphed (above).  Based on today’s CPI-U report and the latest estimate on the November SGS-Ongoing M3 Estimate, that annual contraction in November 2010 was 4.0%, narrower than October’s 4.5% contraction, and May’s post-World War II record annual decline of 7.9%.

Incidentally, if there is one thing we disagree with John on is that the broadest aggregate (M3 for Williams, Shadow Banking for Zero Hedge) is declining. That said, an expansion in the most critical broad money signal is merely the missing piece of the puzzle that we…
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Currency Wars: Debase, Default, Deny!

Currency Wars: Debase, Default, Deny! 

Hiker pausing at fork in path

Courtesy of Gordon T Long of Tipping Points

In September 2008 the US came to a fork in the road. The Public Policy decision to not seize the banks, to not place them in bankruptcy court with the government acting as the Debtor-in-Possession (DIP), to not split them up by selling off the assets to successful and solvent entities, set the world on the path to global currency wars.

By lowering interest rates and effectively guaranteeing a weak dollar through undisciplined fiscal policy, the US ignited an almost riskless global US$ Carry Trade and triggered an uncontrolled Currency War with the mercantilist, export driven Asian economies. We are now debasing the US dollar with reckless spending and money printing with the policies of Quantitative Easing (QE) and the expectations of QE II. Both are nothing more than effectively defaulting on our obligations to sound money policy and a “strong US$”. Meanwhile with a straight face we deny that this is our intention. 

It’s called debase, default and deny.

Though prior to the 2008 financial crisis our largest banks had become casino like speculators with public money lacking in fiduciary responsibility, our elected officials bailed them out. Our leadership placed America and the world unknowingly (knowingly?) on a preordained destructive path because it was politically expedient and the easiest way out of a difficult predicament. By kicking the can down the road our political leadership, like the banks, avoided their fiduciary responsibility. Similar to a parent wanting to be liked and a friend to their children they avoided the difficult discipline that is required at certain critical moments in life. The discipline to make America swallow a needed pill. The discipline to ask Americans to accept a period of intense adjustment. A period that by now would be starting to show signs of success versus the abyss we now find ourselves staring into.  A future that is now significantly worse and with potentially fatal pain still to come.

Unemployed Americans, the casualties of the financial crisis wrought by the banks, witness the same banks declaring record earnings while these banks refuse to lend. When the banks once more are caught with their fingers in the cookie jar with falsified robo-signing mortgage title fraud, they again look for the compliant parent to look the other way. Meanwhile the US debt levels and spending associated with protecting these failed…
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Federal Reserve Officials: Americans Are Saving Too Much Money So We Need To Purposely Generate More Inflation To Get Them Spending Again

Federal Reserve Officials: Americans Are Saving Too Much Money So We Need To Purposely Generate More Inflation To Get Them Spending Again

Courtesy of Michael Snyder at Economic Collapse 

Some top Federal Reserve officials have come up with a really bizarre proposal for stimulating the U.S. economy.  As unbelievable as it sounds, what they actually propose to do is to purposely raise the rate of inflation so that Americans will stop saving so much money and will start spending wildly again.  The idea behind it is that if inflation rises a couple of percentage points, but consumers are only earning half a percent (or less) on their savings accounts, then there will be an incentive for consumers to spend that money as the value of it deteriorates sitting in the bank. 

Yes, that is how bizarre things have gotten.  It is not as if U.S. consumers are even saving that much money.  Several decades ago, Americans typically saved between 8 and 12 percent of their incomes, but over this past decade the personal saving rate got down near zero a number of times as Americans were living far beyond their means. Once the recession hit, Americans very wisely started saving more money, and so now the personal saving rate has been hovering around the 5 to 7 percent range.  This is well below historical levels, but the folks at the Fed apparently are eager for Americans to pull that money out and start spending it again.

In an article entitled "Fed Officials Mull Inflation as a Fix", Wall Street Journal columnist Sudeep Reddy described this bizarre new economic approach that some over at the Federal Reserve are now advocating….   

"But as the U.S. economy struggles and flirts with the prospect of deflation, some central bank officials are publicly broaching a controversial idea: lifting inflation above the Fed’s informal target."

Does increasing inflation as a way to stimulate the economy sound like a good idea to any of you?…
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Currency War

Currency War

Courtesy of Michael Snyder at Economic Collapse 

Are you ready for a currency war?  Well, buckle up, because things are about to get interesting.  This week Japan fired what is perhaps the opening salvo in a new round of currency wars by publicly intervening in the foreign exchange market for the first time since 2004.  Japan’s bold 12 billion dollar move to push down the value of the yen made headlines all over the world.  Japan’s economy is highly dependent on exports and the Japanese government was becoming increasingly alarmed by the recent surge in the value of the yen.  A stronger yen makes Japanese exports more expensive for other nations and thus would harm Japanese industry.  But Japan is not the only nation that is ready to go to battle over currency rates.  The governments of the U.S. and China continue to exchange increasingly heated rhetoric regarding currency policy.  In Europe, there is growing sentiment that the euro needs to be devalued in order to help European exports become more competitive.  In addition, exporters all over the world are already loudly complaining about the possibility that the Federal Reserve is about to unleash another round of quantitative easing. 

Virtually all major exporting nations want the value of the U.S. dollar to remain high so that they can keep flooding us with lots of cheap goods.  The sad reality is that our current system of globalized trade rewards exporting nations that have weak currencies, and many nations have now shown that they are willing to take the gloves off to make certain that their national currencies do not appreciate in value by too much.

Some nations have been involved in open currency manipulation for some time now.  For example, Singapore is well known for intervening in the foreign exchange market in order to benefit exporters.  Also, the Swiss National Bank experienced losses equivalent to about 15 billion dollars trying to stop the rapid rise of the Swiss franc earlier this year.…
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The Last Half

The Last Half 

Courtesy of John Mauldin at Thoughts from the Frontline 

Financial Order

The Last Half
But It’s More Than the Deficit 
Not Everyone Can Run a Surplus 
Pity the Greeks 
The Competitive Currency Devaluation Raceway 
Amsterdam, Malta, Zurich, Mallorca, Denmark, and London

There are a number of economic forces in play in today’s world, not all of them working in the same direction, which makes choosing policies particularly difficult. Today we finish what we started last week, the last half of the last chapter I have to write to get a rough draft of my forthcoming book, The End Game. (Right now, though, it appears this will actually be the third chapter.) We will start with a few paragraphs to help you remember where we were (or you can go to www.investorsinsight.com to read the first part of the chapter).

But first, I recorded two Conversations yesterday, with the CEOs of two biotech firms that are working on some of the most exciting new technologies I have come across. I found them very informative, and we will post them as soon as we get them transcribed.

For new readers, Conversations with John Mauldin is my one subscription service. While this letter will always be free, we have created a way for you to "listen in" on my conversations (or read the transcripts) with some of my friends, many of whom you will recognize and some whom you will want to know after you hear our conversations. Basically, I call one or two friends every now and then; and just as we do at dinner or at meetings, we talk about the issues of the day, back and forth, with give and take and friendly debate. I think you will find it enlightening and thought-provoking and a real contribution to your education as an investor. Plus, we throw in a series I do with Pat Cox of Breakthrough Technology Alert, where we interview some of the leading up-and-coming biotech companies; and I also do a Conversation with George Friedman of Stratfor 3-4 times a year. Quite a lot for the low price.

I recently recorded a Conversation with Mohamed El-Erian, CEO and co-CIO of PIMCO, who is one of the smartest human beings I know, as well as one of the nicest. As you can see,…
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China’s yuan reform: back to the future

China’s yuan reform: back to the future

By MICHAEL SCHUMAN, the Curious Capitalist, courtesy of TIME 

After months of debate, denial and conflict, China finally announced a new policy on its controversial currency, the yuan (also known as the renminbi, or RMB). For the past two years, the yuan has (unofficially) been pegged to the U.S. dollar, sparking criticism from politicians in Washington, high-profile economists and China’s fellow developing nations that Beijing was pursuing a “beggar-thy-neighbor” agenda to keep Chinese exports artificially cheap to expand their market presence at the expense of competitors. China had stubbornly resisted the pressure to change its exchange rate policy, insisting that the yuan was valued exactly how it should be.

But over the weekend, in a surprise announcement, the People’s Bank of China signaled the peg would come to an end. Here’s what the central bank said in a statement:

In view of the recent economic situation and financial market developments at home and abroad, and the balance of payments (BOP) situation in China, the People´s Bank of China has decided to proceed further with reform of the RMB exchange rate regime and to enhance the RMB exchange rate flexibility.

What does that mean? Unfortunately, at least in the short run, probably not much.

While announcing the so-called reform, the People’s Bank also made it very clear that any change in the yuan’s value would come gradually at best. Its statement stated plainly that its priorities remained generally unchanged – to “maintain the RMB exchange rate basically stable at an adaptive and equilibrium level, and achieve the macroeconomic and financial stability in China.” The People’s Bank further signaled a return to the currency valuation system that existed before the peg was resumed in 2008 – a managed float in which the yuan traded in a narrow band against an unnamed basket of currencies. That process was put in place in 2005, and though it did result in yuan appreciation – by some 21% versus the dollar over three years – it also allows Chinese policymakers a degree of control over the exchange rate to prevent rapid movements.

In other words, we’re looking at a back-to-the-future scenario, with Beijing returning to an old policy that, though better than its peg, won’t produce the drastic overhaul of China’s currency regime that many critics would like to see. In fact, on Monday morning, the…
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Jim Rogers: “I Am Buying Gold For A Relief Rally” But All Fiat Currencies Are Doomed

Courtesy of Tyler Durden

Coins in a Cash Box

On one hand you have BNP revising their mid-term EURUSD forecast to 0.98, on the other you have such pessimists as Jim Rogers saying to buy the Euro. Who to trust anymore? Granted, Rogers’ thesis is only predicated on a a relief rally, pretty much the same as what we suggested when we saw the Goldman downgrade of the EURUSD, and immediately beckoned readers to get right back in. We consider the +50,000 pips picked in the ensuing week a direct gift from god (or at least his favorite worker). At this point the relief rally has likely fizzled, and the direction now is indeed down, at least until the next time the CFTC notes the net EUR shorts have hit a fresh record. Back to Rogers: in the long-term, Jim is just as bearish as always: "The European governments are not getting their act together, not at all. All paper money is flawed, nearly every currency in the world."

Rogers on European credibility: "If Greece went bankrupt it would send the signal to the world, and to the rest of Europe – ok, we’re not going to let people lie about their finance anymore, we are not going to let them spend money they don’t have, we are going to run a tight ship. That means the euro would be an extremely sound currency, it would the old Deutsche Mark." On Keynesianism: "You can’t keep spending money you don’t have because eventually the whole thing collapse in a house of cards." On the transition to reality: "I am not suggesting it is going to be a good time, don’t get me wrong. But if you wait 5 years from now, 10 years from now, when there is nothing you can do, and the whole system collapses, then you have real chaos in the streets, then you have Greece never recovering. In the US we have had states go bankrupt, cities go bankrupt, counties go bankrupt. It didn’t end the US, it didn’t end the US dollar." And on the flaws of our political system, which are just as applicable to our own president: "Greece is just trying to get through the next election, I am trying to figure out what’s good for country, what’s good for the world, what’s good for Europe, what’s good for the financial system."


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DALIO: RECESSION ON THE HORIZON, NO INFLATION

Ray Dalio was interviewed in this week’s Barrons. In case you missed my previous post about Ray Dalio’s life philosophy, Mark Ames wrote a scathing article "TOP BILLIONAIRE HEDGE FUNDER SEES HIMSELF AS A HYENA DEVOURING WILDEBEESTS" comparing Ray to a hyena. Ray fan, or not, Pragcap recommends reading the full interview (subscription required). Here are some important points, courtesy of The Pragmatic Capitalist. - Ilene 

DALIO: RECESSION ON THE HORIZON, NO INFLATION

Kenyan Safari

Great interview in this week’s Barrons with Ray Dalio of Bridgewater. For those who aren’t familiar with Dalio he is the founder of the largest hedge fund in the world with $75B in assets under management.  I highly recommend reading the interview in its entirety, but for those just looking for some highlights I’ve done the legwork for you:

On the stock market rally:

“It caused the stock market to retrace about 60% of its decline, and it caused the U.S. economy to retrace 40% of its decline. But it did not produce new financial assets. There has been very little new lending. The stimulus produced very little in the way of economic activity.”

On the bailouts and potential for recession:

“There is a lot of criticism about saving financial institutions and running a big budget deficit, but if the government didn’t do those things we would be in a terrible situation. It will be impossible to stimulate that way in the future because politically it is untenable. That’s a risk because, between now and 2012, the economy will probably go down again, and it will be important for monetary policy and fiscal policy to be able to be stimulative, and for the Federal Reserve to be able to purchase assets again.”

How soon will the recession occur?

“It will probably come sooner than most recessions do. Usually, there is about five years between recessions, but for various reasons related to the size of the debt, the next recession is going to come sooner.”

On the recovery:

“But it is a fragile recovery, and credit growth is not picking up very much, and it goes back to the fact we still have too much debt. We have not reduced our debt burdens in any way significantly. What we’ve done is to largely roll them to the vicinity of 2012 to 2014. Corporate balance sheets are much, much better because


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Twenty-first century competitive currency devaluations

Twenty-first century competitive currency devaluations

Courtesy of Edward Harrison at Credit Writedowns 

High angle view of a globe on a heap of Indian banknotes and Euro banknotes

Marshall Auerback was on BNN’s SqueezePlay yesterday talking about the crisis in Greece (this time without his banker’s pinstriped suit – but we all know he’s a fund manager anyway!). He made some interesting comments about currencies I wanted to run by you.

Greece is the Bear Stearns of sovereign debtors

I know you have already seen comments from me, Marc, Claus, and the other Edward on Greece today. But this is a very big deal. Marshall calls it the Bear Stearns event in the sovereign debt crisis, a line he got from me. Here’s the thinking:

Talk about Minsky moments. We are facing one right now.

It reminds me a little of the subprime crisis.  When it engulfed Bear Stearns, policy makers stepped in with bailout money.  The immediate problem of Bear Stearns’ collapse was solved, but the systemic issues remained. Yet, recklessly, policy makers did almost nothing in the few months afterwards to deal with those issues. This was a crucial error given that people like me were warning of impending calamity. I was mystified (see comments at the end of my Swedish crisis post). The Minsky moment came and policy makers missed it entirely.

In fact, many were incensed because they thought Bear should have failed. So when Lehman came around, it did fail.  And we all know how that turned out.

So, here we are again. The sovereign debt crisis has been building for three months now – ever since Dubai World announced it wanted to default on its loans. In my view, we have now reached a critical juncture. If Greece is allowed to default, all hell will break lose.  On the other hand, Greece has run a deficit for years. It’s ‘cheated’ to meet the standards set forth in its previously agreed-to treaties and it is unwilling to take austerity measures that Ireland, faced with similar circumstances, has taken. What should the EU do?

The dilemma is this: how do you eliminate moral hazard for perceived free riders while still credibly safeguarding against the destruction and contagion that a Eurozone sovereign default would create?

-Greek death spiral hits bank credit ratings. What should the EU do?, Feb 2010

Whether deficit hawk or dove, pro- or anti-bailout, these are the real issues we all see:…
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Zero Hedge

History Made: For The First Time Ever, US Consumers Spent More On Food In Restaurants Than In Grocery Stores

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Over the weekend, we mocked the WSJ for glorifying the US "wage recovery" by focusing on the "scarcity" of waiter and bartender jobs ("there is fierce competition" for restaurant workers the WSJ said), a concept well-explored on these pages: we have shown repeatedly that soaring number of waiters and bartenders have been the "backbone", so to say, of the US job recovery in recent years (alongside energy workers but th...



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Phil's Favorites

60 Minute Investigation shows Lumber Liquidators Laminate Flooring Contains Toxic Amounts of Formaldehyde; Democrats Want Federal Probe

Courtesy of Mish.

People in California complain their flooring is making them sick. The complaints have one source in common, Lumber Liquidators laminate flooring from China with toxic levels of Formaldehyde, up to 20 times the maximum amount in one test. US manufactured flooring does not have the same defects.

Health and Safety Violations

Please consider Lumber Liquidators Linked to Health and Safety Violations.
The following is a script from "Lumber Liquidators" which aired on March 1, 2015. Anderson Cooper is the correspondent. Katherine Davis and Sam Hornblower, producers.

Lumber Liquidators is the largest and fastest-growing retailer of hardwood flooring in North America, with over 360 stores in 46 states and reve...



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All About Trends

Mid-Day Update

Reminder: David 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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Chart School

Median Household Income Was Little Changed in January

Courtesy of Doug Short.

Summary: The Sentier Research monthly median household income data series is now available for January. The nominal median household income was down $49 month-over-month but up $1,672 year-over-year. That's a -0.1% MoM loss but a 3.2% YoY gain. Adjusted for inflation, the numbers were up $321 MoM and $1773 YoY. The real numbers equate to a 0.6% monthly increase and a 3.4% yearly increase, thanks to -0.68% MoM drop in the Consumer Price Index.

In real dollar terms, the median annual income is 4.6% lower ($2,600) than its interim high in January 2008 but well off its low in August 2011.

Background on Sentier Research

The traditional source of household income data is the Census Bureau, which publishes annual household income data in mid-September for ...



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Insider Scoop

The Bob Evans Farms Miss 'Just Doesn't Make Sense,' Says Oppenheimer

Courtesy of Benzinga.

Related BOBE Benzinga's Top #PreMarket Losers Keep an Eye on These 10 Stocks for March 4, 2015 BOB EVANS FARMS (Investor's Business Daily)

In a report published Tuesday evening, Oppenheimer analyst Brian Bittner commented that he is "perplexed" following Bob Evans Farms Inc's (NASDAQ: BOBE) third quarter results.

Acco...



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Sabrient

Sector Detector: Stocks break out again but may be running on fumes

Courtesy of Sabrient Systems and Gradient Analytics

Despite low trading volume, a strong dollar, mixed economic and earnings reports, paralyzing weather conditions throughout much of the U.S., and ominous global news events, stocks continue to march ever higher. The world remains on edge about potential Black Swan events from the likes of Russia, Greece, or ISIS (or lone wolf extremists). Moreover, the economic recovery of the U.S. may be feeling the pull of the proverbial ball-and-chain from the rest of the world’s economies. Nevertheless, awash in investable cash, global investors see few choices better than U.S. equities.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then ...



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OpTrader

Swing trading portfolio - week of March 2nd, 2015

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 Shadows

Kimble Charts: Coal

Kimble Charts: Coal

By Ilene 

Chris Kimble's chart for KOL shows a recently beaten down ETF struggling to pull itself up from the ashes. As the chart shows, KOL has recently drifted down to levels not seen since the financial crisis of 2008-9.

Bouncing or recovering with energy in general, coal prices appear to have stabilized in the short-term. Reflecting coal prices, KOL has traded between $13.45 and $19.75 during the past year. Bouncing from lows, KOL traded around 2% higher yesterday from $14.26 to $14.48 on high volume. It traded another 3.6% higher in after hours to $15, possibly related to ...



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Digital Currencies

MyCoin Exchange Disappears with Up To $387 Million, Reports Claim

Follow up from yesterday's Just the latest Bitcoin scam.

Hong Kong's MyCoin Disappears With Up To $387 Million, Reports Claim By  

Reports are emerging from Hong Kong that local bitcoin exchange MyCoin has shut its doors, taking with it possibly as much as HK$3bn ($386.9m) in investor funds.

If true, the supposed losses are a staggering amount, although this estimate is based on the company's own earlier claims that it served 3,000 clients who had invested HK$1m ($129,000) each.

...



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Pharmboy

2015 - Biotech Fever

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

PSW Members - well, what a year for biotechs!   The Biotech Index (IBB) is up a whopping 40%, beating the S&P hands down!  The healthcare sector has had a number of high flying IPOs, and beat the Tech Sector in total nubmer of IPOs in the past 12 months.  What could go wrong?

Phil has given his Secret Santa Inflation Hedges for 2015, and since I have been trying to keep my head above water between work, PSW, and baseball with my boys...it is time that something is put together for PSW on biotechs in 2015.

Cancer and fibrosis remain two of the hottest areas for VC backed biotechs to invest their monies.  A number of companies have gone IPO which have drugs/technologies that fight cancer, includin...



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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here's this week's Stock World Weekly.

Click here and sign in with your user name and password. 

 

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Option Review

SPX Call Spread Eyes Fresh Record Highs By Year End

Stocks got off to a rocky start on the first trading day in December, with the S&P 500 Index slipping just below 2050 on Monday. Based on one large bullish SPX options trade executed on Wednesday, however, such price action is not likely to break the trend of strong gains observed in the benchmark index since mid-October. It looks like one options market participant purchased 25,000 of the 31Dec’14 2105/2115 call spreads at a net premium of $2.70 each. The trade cost $6.75mm to put on, and represents the maximum potential loss on the position should the 2105 calls expire worthless at the end of December. The call spread could reap profits of as much as $7.30 per spread, or $18.25mm, in the event that the SPX ends the year above 2115. The index would need to rally 2.0% over the current level...



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Help One Of Our Own PSW Members

"Hello PSW Members –

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 jennifersurovy@yahoo.com 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.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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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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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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