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Posts Tagged ‘currency reserves’

China, Cleverly Dumping US Dollars

Quite interesting - consider this together with Phil’s post "China Pays Too Much for Oil in Iraq – $16 A Barrel!" - Ilene

China, Cleverly Dumping US Dollars

Courtesy of Financial Ninja, Ben

FN: China is dumping dollars, but far more cleverly than you might think.

Immobilienblasen has noticed a rather curious tendency for China to overpay in "China Inc." Deal Premiums. What exactly is that all about?

Well, imagine you had a bunch of money… err… US dollars for example. You’ve also got a bunch more of these US dollars coming in daily. You don’t believe they will hold their value. So you don’t really want them. That is quite a problem.

The first trick is to get rid of them… without actually seeming to get rid of them. The second trick is to get rid of them in such as way as to not destroy their value…. yet.

The single best way to do this of course is to use your US dollars to buy hard assets. This looks "normal". It isn’t nearly as obvious as "diversifying" your currency reserves. China is doing exactly that. The "China recovery" story is nothing of the sort. The Chinese demand for commodities is not a function of economic growth but rather a function of hoarding. There are Consequences to this Phantom Commodity Bull Market which will become apparent soon enough.

China has been buying into oil with size and at a premium. This has analysts puzzled:

"Sinopec’s offer is equivalent to $34 a barrel of proved reserves and $14 a barrel of proved and probable reserves. The African transaction average in 2007, when the average crude price is similar to current prices, was $14.40 a barrel for proved reserves and $9.90 for proved and probable reserves, respectively. On a proved basis, the 2007 average suggests $3.1 billion total value for the deal. Therefore, $7.2 billion implies a 135% premium."

But when it becomes obvious to investors the world over that a US dollar devaluation is the only possible way to manage the kind of debt burden the US has accumulated, those premiums will vanish instantly. Oil quoted in US dollars could easily make new highs beyond $147 in such a scenario. China will not only have safe guarded the wealth of its


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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!

 
 

Zero Hedge

The Silver Paradox In One Chart

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

As gold and silver prices tumble to multi-year lows, an odd thing is happening in the 'paper' precious metals ETF markets. Demand remains high for silver ETF exposure as 'someone' is aggressively unwinding gold ETF positions.. and yet the prices for both are falling rapidly. It appears the retail investor is taking advantage of the lower prices in silver to accumulate additional exposure as Credit Suisse notes, "the perception is that silver will do well, and should outperform gold as the economic recovery strengthens," adding that "belief in silver’s dual properties, as a financial asset and also as an industrial metal, appears to remain strong."

  • *SPDR GOLD HOLDINGS TUMBLE 1...


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Chart School

Getting Technical: Weekend Update

Courtesy of Doug Short.

Here's the latest weekend update from Serge Perreault, a Chartered Professional Accountant and market technician located near Montreal, Canada. Serge has been following the U.S. market in a series of weekly charts. Here is his update on the S&P 500.

This week, the S&P 500 remains neutral near a resistance, on above-average volume and on improving momentum.

Click for a sharper image

Note: For newcomers to technical analysis, here are brief explanations for the two key indicators that Serge features:

  • ...


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Phil's Favorites

Idiotic Proposals for Fed to Give Away Money

Courtesy of Mish.

A Fiscal Times, Yahoo Finance article by by John Grgurich claims that Instead of QE, Fed Could Have Given $56,000 to Every Household in America .

Grgurich formulated his article after reading "an intriguing piece just published in Foreign Affairs, Brown University political economist Mark Blyth and London-based hedge fund manager Eric Lonergan argue the Fed could have done better by pursuing a far different type of grand policy experiment."

The "intriguing piece" is Print Less but Transfer More, Why Central Banks Should Give Money Directly to the People.

Sheer Idiocy

  • Fir...



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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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Option Review

IV Implodes On 4-hour YHOO Options As BABA Commences Trading

Investors are dumping shares in Yahoo, sending the stock down 5.0% to $40.08 after shares in Alibaba made their debut on the floor of the NYSE just before midday. Shares in BABA for their part initially traded up to a high of $99.70, a near 47% increase over the IPO price of $68.00. Typically, one would expect put options that are 5% out of the money with roughly 4-hours left to trade to see waning implied volatility. But, at the start of the trading session and ahead of the first trade for BABA, the Sep 19 ’14 40.0 strike put options were trading with 271% volatility or $0.30 per contract amid uncertainty as to how the start of trading for Alibaba would take shape.

...

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Market Shadows

Selling PVD

Selling PVD

Administradora de Fondos de Pensiones Provida S.A. (PVD) shares will not be trading on the NY Stock Exchange after today. Tomorrow, shares will be harder to sell. Strangely, I wasn't able to find information on the internet, but Paul just sent me a copy of the email he received from Interactive Brokers.

We're selling PVD out of the Virtual Portfolio today at $87.18. 

More details:

From: Interactive Brokers   dated July 18, 2014

Holders of AFP Provida S.A. American Depository Receipts (ADR) are advised that the Company has elected to terminate the Deposit Agreement effective 2014-09-18.

As of the te...



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Promotions

Last Chance! See The 'Google-Like' Trading Algorithm 'Live' TODAY

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In fact, it has an 82% win rate…

And had you only traded the conservative alerts recommended by the algorithm since inception, you would have experienced portfolio gains of more than 200%!

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When you register for the webinar, you’ll also get instant access to following trading videos:

  • Instant access to FOUR Quick-Start Expectancy...


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Sabrient

Sector Detector: Bulls go down swinging, refusing to give up much ground

Courtesy of Sabrient Systems and Gradient Analytics

Although the stock market displayed weakness last week as I suggested it would, bulls aren’t going down easily. In fact, they’re going down swinging, absorbing most of the blows delivered by hesitant bears. Despite holding up admirably when weakness was both expected and warranted, and although I still see higher highs ahead, I am still not convinced that we have seen the ultimate lows for this pullback. A number of signs point to more weakness ahead.

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 offer up some actionable trading ideas, including a sector rotation strategy using ETFs and an enhanced version using top-r...



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OpTrader

Swing trading portfolio - week of September 15th, 2014

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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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 the latest Stock World Weekly. Enjoy!

[Sign in with your PSW user name and password, or take a free trial here.]

Image courtesy of Business Insider, Jay Yarow's This Is The Best Description Of How Apple's Business Works Right Now.

 

...

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Digital Currencies

Making Sense of Bitcoin

Making Sense of Bitcoin

By James Black at International Man

Despite the various opinions on Bitcoin, there is no question as to its ultimate value: its ability to bypass government restrictions, including economic embargoes and capital controls, to transmit quasi-anonymous money to anyone anywhere.

Opinions differ as to what constitutes "money."

The English word "money" derives from the Latin word "moneta," which means to "mint." Historically, "money" was minted in the form of precious metals, most notably gold and silver. Minted metal was considered "money" because it possessed luster, was scarce, and had perceive...



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Pharmboy

Biotechs & Bubbles

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

Well PSW Subscribers....I am still here, barely.  From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.

First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices.  Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment.  Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer.  For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...



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