Posts Tagged ‘Depression’



WSOP No-Limit Texas Hold 'em World Championship

Courtesy of The Pragmatic Capitalist 

Yesterday’s WSJ MarketBeat blog took David Einhorn to task for his op-ed in the NY Times titled “Easy Money, Hard Truths“.  They make the argument that Einhorn is simply pushing his massive gold position.  I fear Einhorn is doing something much worse – helping to scare us all into continued recession.

First off, I have no problem when someone talks their book.  In fact, I almost prefer for people to talk their book.  There’s a certain trust in someone who is willing to “put their money where their mouth is”.  It’s the primary reason why I believe the hedge fund business is such a wonderful advancement beyond traditional mutual funds – the manager’s interests are generally aligned with those of the investor.  If you can find a manager who is not only intelligent, but has a sound moral compass you’ve wandered upon quite a gem.  From all accounts David Einhorn appears to fit the mold.  But I take very serious issue with his recent comments which I believe are filled with half-truths and propaganda that we continually hear from the inflationistas (all of whom have been terribly wrong thus far in terms of their macroeconomic outlook) who are driving the country towards the edge of the cliff.

Einhorn is a great investor and clearly a brilliant man, but for two years I have watched policymakers and fear mongerers misdiagnose the problems that we confront and this is, in my opinion, why we are still wrangling with these issues. In 2008 I wrote a letter to the Federal Reserve saying that this was a classic “balance sheet recession” with problems rooted in the private sector – specifically the consumer.  I told them that saving banks was not the solution and that monetary policy would prove as fruitless in the U.S. as it has in Japan.  I was shocked to receive a friendly response to my letter but not shocked to see Mr. Bernanke implement his Friedman-like monetarist campaign of “saving the world”.  Obviously it hasn’t worked (unless you’re a banker) as we sit here two years later still discussing this wretched credit crisis and the ranks of the unemployed continue to climb.  If we cannot properly diagnose the problems we cannot find a proper cure.  Thus far, we have failed.…
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Courtesy of The Pragmatic Capitalist 

Investigating the

  • Just a few brief comments on the market at the current levels. I was relatively optimistic about the equity markets coming into the beginning of the year.  The themes that had dominated much of 2009 (better than expected earnings, accommodative Fed, continuing stimulus, etc) appeared to be largely intact.   To my surprise, the rally ran a bit farther than I expected, but Greece and the downturn in China were game changers in my opinion.  I was a few weeks early to lay my short positions, but the market ultimately came around to my thinking (better to be lucky than good).  Where are we now?  In my opinion, we have a global economy that ispre-Greece and a global economy that is post-Greece.  The dominoes appear to be lining up in an eerie fashion at this point in time – there are now dozens of negative catalysts in the coming 12 months (which I will detail in a soon to be released report).  Although the markets are once again oversold and at risk of a bounce the fundamentals are quickly deteriorating and my expectation of a weak second half appears to be right on cue.  I would continue to approach this market with a great deal of caution despite the current oversold conditions.
  • What do the Germans know? This short selling ban is very desperate looking.  I hate to speculate, but my gut tells me that they are beginning to realize how bad the situation is over there.  They now understand that the problems in the Euro cannot be solved through intra-country debt issuance and bailouts.  The short ban looks like one more act of desperation from a group of nations that have severely underestimated the problems they confront.  Unfortunately, I still don’t think they’ve realized that this is a currency crisis and not a solvency crisis.  That means they’ll continue to kick the can down the road and markets will battle with the turbulence.  This truly does have a very Bear Stearns feel to it.
  • Will we scare ourselves into a double dip or even a second great depression? Everyone and their mother appears to be in the same camp regarding all the very scary “money printing”.  I’ve never in my life heard the drumbeat so loud for fiscal austerity.  In fact,

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Why The World Is Headed For A Balance Sheet Recession

"Balance sheet recession" explained.  It characterized the Great Depression and Japan’s Lost Decade, and includes weak consumer spending and private sector deleveraging.  During this process, the three Ds come into play: debt deflation, deleveraging, and ultimately depression. – Ilene 

Why The World Is Headed For A Balance Sheet Recession

Courtesy of Edward Harrison at Credit Writedowns 

In my post Koo, White, Soros and Akerloff videos from inaugural INET conference I highlighted four speeches from the recent George Soros-sponsored pow-wow. I have already written up a post based on the one by William White in "The origins of the next crisis."

This post serves to give you some colour on another of those speeches, the one by Richard Koo and his balance sheet recession.


Koo believes the US, Europe and China are headed for a period of incredibly weak consumer spending not unlike what Japan has been through. Let me say a few words about this balance sheet recession theme, private sector deleveraging, and the related sovereign debt crises. Then, at the bottom, I have embedded a recent paper of his which has a bunch of graphs that explain what Japan has been through as a cautionary tale for the global economy.

I have described Koo’s thesis this way:

Nomura’s Chief Economist Richard Koo wrote a book last year called “The Holy Grail of Macroeconomics” which introduced the concept of a balance sheet recession, which explains economic behaviour in the United States during the Great Depression and Japan during its Lost Decade.  He explains the factor connecting those two episodes was a consistent desire of economic agents (in this case, businesses) to reduce debt even in the face of massive monetary accommodation.

When debt levels are enormous, as they are right now in the United States, an economic downturn becomes existential for a great many forcing people to reduce debt. Recession

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Eerie Line Chart Similarities between 1929 and 2009

Eerie Line Chart Similarities between 1929 and 2009

Courtesy of Corey Rosenbloom at Afraid to Trade  

Here’s another perspective on the comparison charts of the Dow Jones between the 1929 crash and recovery and the 2009 crash and recovery.

Let’s take a quick view of the line charts of the daily Dow Jones in 1929 structure and how it compares with today’s weekly Dow Jones structure.

First, the Daily Dow Jones:  1929 Crash and Recovery

I drew the numbers not so much as an Elliott Wave notation, but so that comparing key swing highs and lows would be easier.

The peak to trough crash lasted 72 days as the Dow Jones fell 47% (peaking in September 1929 at 386 and falling to 195 in November 1929).  It unfolded roughly in a 5-wave progression.

The rally began off the November lows and lasted 155 days, peaking up 47% at 295 during April, 1930.

This shows an important principle in investing and trading, namely that if your account (or an index) falls 50%, then it would take a full 100% rally off the lows to recapture the prior highs, and not a 50% rally off the lows as seen above.

The rally phase took twice as long as the ‘crash’ phase and also unfolded in a 5-wave affair (with smaller waves).

I found it interesting that the daily chart showed an almost identical head and shoulders reversal pattern that failed – which is similar to the June/July failed head and shoulders pattern in 2009.

Because the 2008-2009 crash and recovery took longer, I am showing the weekly line chart of the Dow Jones.

Finally, the Current Weekly Dow Jones 2008-2009 Crash and Recovery:

Again, we see a similar 5-wave slow-crash down to the final March 2009 lows.

Price peaked in October 2008 at 14,198 and then fell 52% to the March 2009 lows of 6,469 – 72 weeks (510 days).  The decline also fell in a similar 5-wave decline (with the 3rd wave ‘fractalizing’ into its own mini-five wave decline).

From the March 2009 lows, price has – so far – rallied 65% to the January high of 10,723 over the last 320 trading days… or almost all of 2009.

Again, despite the 65% rally, price is still 5,000 points lower than its 2007 peak.

The current rally also unfolded in a mini-five wave affair on a steeper…
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Iceland downgraded to junk as it heeds 70% of the electorate on Icesave debt

Iceland downgraded to junk as it heeds 70% of the electorate on Icesave debt

Courtesy of Edward Harrison at Credit Writedowns

Iceland, Jokulsarlon Lagoon with icebergs

The latest piece of big news in the sovereign debt crisis comes, remarkably, from Iceland. The country collapsed into depression after its experiment as an open economy with a large banking sector went pear shaped.

After a debt-fuelled boom and a huge influx of hot money due to high interest rates, its currency and banks collapsed under a fleeing of foreign money and huge losses. The government nationalized the bank’s debt only to find the banks were too big to bail. The Icelanders rioted on the streets, a sovereign crisis ensued, and the government was toppled.

Iceland was rescued and it seemed all was well. They was even talk of fast-tracking Iceland into the EU. Then, suddenly, the population balked at the prospect of bailing out the banks. Now, the sovereign debt crisis is on again. At issue is Icesave, an Icelandic bank that operated in the UK and the Netherlands whose bust caused great hardship amongst British and Dutch savers who were attracted by high interest rates.

See the video below on why Fitch is now downgrading the country’s debt status to junk despite the lack of immediate liquidity concerns.

I think this is big news and have a number of sources on this story below. Watch the Dutch and British stories for signs of European tensions as this is where the affected Icesave savers reside. The FT headline says it all. Ambrose Evans-Pritchard’s commentary is the most comprehensive and balanced in my view. The Norwegian headline, on the other hand, is “Iceland not on the verge of collapse” in huge typeface. The fault lines are definitely opening in Europe. I will discuss this later on the latest story on Greece and the likelihood of EU help.


Reykjavik warned of political isolation – FT

Iceland can refuse debt servitude – FT

Iceland faces crisis after Icesave rejection – Reuters

Iceland leader vetoes bank repayments bill – BBC News

Iceland’s president blocks £2.3bn Icesave deal to compensate the UK – Telegraph

Angry Iceland defies the world – Ambrose Evans-Pritchard, Telegraph

Icelanders to vote on whether to repay UK over bank bailout – Guardian

Poll: Should
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Asia tells the west to get off its high horse

Asia tells the west to get off its high horse

Courtesy of Edward Harrison of Credit Writedowns

Mature woman on horse back crossing river, others in background

You kind of saw this coming didn’t you. Asians remember the Depression that began there a decade ago all too vividly. Many still see the West to blame because of the draconian economic policy solutions meted out by the IMF, including now-US Treasury Secretary Tim Geithner amongst others.

Incongruously, the very same Tim Geithner of “deeply unpopular, deeply hard to understand” economic policy fame is part of an American economic policy making group now perpetrating perhaps the largest financial and economic bailout in history. I certainly doubt this policy will be effective over the long-term.  Even so, this hypocrisy has been noted in Asia. The political fallout is just now coming due.

Ronnie Chan, chairman of Hang Lung Properties in Hong Kong writes in the FT:

While the world debates the future of its financial system, global rebalancing or even power shifts along five dimensions are quietly taking place. Their implications are profound and may well lead to a more stable world.

The first is a rebalancing of moral authority. The system that the west touted as superior has failed. Why should developing countries blindly follow its model now? Remember the moral high ground that western leaders took during the Asian financial crisis? Hong Kong was bashed when its government intervened in August 1998 in the stock market to fend off the western investment banks and hedge funds bent on destroying the city’s currency.

Yet only a month later, the US government intervened in the market to bail out Long-Term Capital Management, a move that proved to be the harbinger of the western bail-outs of financial institutions in the past year. Hong Kong’s government was not allowed to save its citizens, yet by a double-standard the US could save its companies.

The waning of the west’s moral authority is also due to the many conflicts of interest inherent in investment banking as it is currently structured. The west turned a blind eye to them. What can developing economies do? Nothing, for the wealthy countries dictated the rules of the game, which became a licence to misbehave.

The moral superiority of the west was also expressed through its ideology. China was barred from being a member

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Key Theme In Interview With ShadowStats’ John Williams (You Guessed It) – Hyperinflation And The Death Of The US Economy

Key Theme In Interview With ShadowStats’ John Williams – (You Guessed It) Hyperinflation And The Death Of The US Economy

Courtesy of Tyler Durden

Money is worthless in

If you thought John Williams, who a month ago prophesied that the US could be facing hyperinflation as soon as 2010, has changed his tune, think again. In an interview conducted by Phil Maymin of the Fairfiled Weekly, the man who has made a business out of debunking the government’s data fabrication machine, dishes out some very hard to swallow truths about the US economy and where the fiat world is headed. As always, Williams’ perspectives are debate-worthy by all, whether inflationist or deflationist: in a field of media sycophants, JW is not afraid to speak what we all know, yet rarely wish to acknowledge.


Maymin: So we are technically bankrupt?

Williams: Yes, and when countries are in that state, what they usually do is rev up the printing presses and print the money they need to meet their obligations. And that creates inflation, hyperinflation, and makes the currency worthless.


Obama says America will go bankrupt if Congress doesn’t pass the health care bill.

Well, it’s going to go bankrupt if they do pass the health care bill, too, but at least he’s thinking about it. He talks about it publicly, which is one thing prior administrations refused to do. Give him credit for that. But what he’s setting up with this health care system will just accelerate the process.


Where are we right now?

In terms of the GDP, we are about halfway to depression level. If you look at retail sales, industrial production, we are already well into depressionary [territory]. If you look at things such as the housing industry, the new orders for durable goods we are in Great Depression territory. If we have hyperinflation, which I see coming not too far down the road, that would be so disruptive to our system that it would result in the cessation of many levels of normal economic commerce, and that would throw us into a great depression, and one worse than was seen in the 1930s.


What kind of hyperinflation are we talking about?

I am talking something like you saw with the Weimar Republic of the 1930s. There the currency became worthless enough that people used it…
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David Rosenberg’s 2010 Outlook “The Recession Is Really A Depression”

David Rosenberg’s 2010 Outlook "The Recession Is Really A Depression"

Courtesy of Tyler Durden

Basset hound in sunglasses and pink cap

With December almost done, and all the banks having already issued their rosy outlooks for 2010 (don’t ask us how the trading desks are axed, but you be sure a certain sense of "contrarianism" permeates Goldman’s traders), the objective third party strategists begin chiming in. We present Rosie’s 2010 outlook from Today’s Breakfast with Dave piece, courtesy of Gluskin Sheff

The credit collapse and the accompanying deflation and overcapacity are going to drive the economy and financial markets in 2010. We have said repeatedly that this recession is really a depression because the recessions of the post-WWII experience were merely small backward steps in an inventory cycle but in the context of expanding credit. Whereas now, we are in a prolonged period of credit contraction, especially as it relates to households and small businesses (as we highlighted in our small business sentiment write-up yesterday).

In addition, we have characterized the rally in the economy and global equity markets appropriately as a bear market rally from the March lows, influenced by the heavy hand of government intervention and stimulus. But in classic Bob Farrell form, 2010 may well be seen as the year in which we witness the inevitable drawn out decline that is typical of secular bear markets. There may be some risk in industrial commodities if global growth underperforms, but the soft commodities, such as agriculture, may outperform in the same way that consumer staple equities should outperform cyclicals in an environment where economic growth disappoints the consensus view. Gold is operating on its own particular set of global supply and demand curves and should be an outperformer as well, especially when the next down-leg in the U.S. dollar occurs. We are not alone in espousing this view — have a look at Why Consumes Are Likely to Keep on Saving on page C1 of today’s WSJ.

The defining characteristic of this asset deflation and credit contraction has been the implosion of the largest balance sheet in the world — the U.S. household sector. Even with the bear market rally in equities and the tenuous recovery in housing in 2009, the reality is that household net worth has contracted nearly 20% over the past year-and-a-half, or an epic $12 trillion of lost net worth,

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Can Dopamine Make Your Future Look Brighter?

Our choices are dramatically influenced by the chemicals circulating through our bodies – so how much free choice do we really have? Is free will just an illusion?  - Ilene

Can Dopamine Make Your Future Look Brighter?

By John Cloud, courtesy of TIME

Tourism In Florida Falls Almost 10 Percent During Second Quarter

Humans have expended a great deal of intellectual energy over the past few thousand years trying to understand the morality (or amorality) of seeking pleasure. Most of philosophy begins with the question of what defines the (or a) good life. But what if the answer to what makes us happy comes down to how much of a particular chemical is circulating in our brain at any particular moment?

(As with risk taking, romantic love, religousness…. – Ilene)

The neurotransmitter dopamine isn’t quite that powerful, but evidence has been mounting for the past 40 years that its activity is key to helping the brain recognize experiences that cause pleasure. The more dopamine a certain event (having sex or eating ice cream, say) triggers, the more strongly that event gets hard-wired in the brain, and the more intensely your brain drives you to revisit it.

That knowledge also helps the brain figure out how much pleasure it can expect from future experiences and, therefore, influences virtually any decision you make about what you might like or not like: whether you should buy the red shirt or black one, whether you’ll enjoy watching Top Chef over Mad Men, whether you should leave your job or whether you should move in with your boyfriend.

Now a new paper in the journal Current Biology shows for the first time that by tinkering with levels of dopamine in the brain, researchers were be able to influence people’s future decisions in a reliable, predictable way. Led by Tali Sharot and Tamara Shiner of the the Wellcome Trust Center for Neuroimaging at University College London, scientists presented 61 healthy volunteers with 80 different vacation locations, such as Brazil, Thailand and Greece, and asked the volunteers to rate how happy they thought they would be visiting each place. Later, 29 of the participants were given 100 mg of levodopa (or L-DOPA), a drug that increases dopamine in the brain; the other 32 were unwittingly given a sugar pill. Forty minutes later, each participant was given a questionnaire about their emotional state, then a list…
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Paranormal Activity to Another Black Monday?

Paranormal Activity to Another Black Monday?

Courtesy of Leo Kolivakis, publisher of Pension Pulse, h/t Zero Hedge

Simon Maierhofer of writes Whats Next – Minor Correction or Major Collapse?:

Over the past few months, every attempt by the bears to depress prices has been met with renewed buying pressure, resulting in even higher prices. What goes up, however, has to come down and some subtle signs are indicating that this decline might be more than a simple correction, much more.

It was after midnight on April 15th, 1912 when the unsinkable did the unthinkable. Built and labeled as unsinkable, the Titanic was the most advanced and largest passenger steamship of its time.

Even though the Titanic’s crew was aware of the fact that the waters were iceberg-infested, the ship was heading full-steam for a destination it would never reach.

Being aware of danger is one thing; acting prudently for protection is another.

Today, investors find themselves in an environment that is infested with symbolic icebergs. For savvy investors willing to pay attention and heed warnings, this doesn’t necessarily translate into a financial shipwreck, while others might soon be reminded of the Titanic when they look at their account balance.

Iceberg cluster #1: Lack of leadership

a life saver from the titanic

Throughout the financial meltdown financials, real estate, and homebuilders fell harder and faster than broad market indexes a la S&P 500 and Dow Jones. Beginning with the miraculous March revival (more about that in a moment), the broad market rose while financials, real estate, and homebuilders soared.

Those three sectors led the decline and led the subsequent (mock) recovery. Since it is reasonable to assume that those sectors will continue to lead the market throughout this economic cycle, it behooves investors to watch such leading sectors closely.

The S&P 500 recorded a closing high on October 19th at 1,097. The Financial Select Sector SPDRs reached their closing high a few days earlier on October 15th. Since their respective closing highs, the S&P 500 has dropped 2.82%, while XLF has already shed 5.64%.

A more pronounced performance slump is visible in the home builders sector. The SPDR S&P Homebuilders ETF peaked on September 16th and has fallen 9.97% since. Keep in mind that XHB’s lackluster performance comes on the heels of the biggest monthly increase in total

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Zero Hedge

Turkey Arrests Journalists Who Exposed Erdogan's Weapons Smuggling To Extremist Syrian Rebels

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

One of Turkish president Recep Erdogan's key contentions in the ongoing diplomatic spat with Russia is that everything that Russia has accused Turkey of doing, from funding the Islamic State's oil purchases, to providing weapons for Syrian "rebels" intent on eradicating the Assad regime, is unfounded slander without a shred of evidence.

Here is the problem: evidence does exist, as we showed two days ago, when we presented the role Erdogan's son Bilal has played in ISIS oil transit, and not only that but also proof that Turkey has been smuggling weapons...

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Phil's Favorites

Unbelievable Lie of the Day: Turkey Says It Had Not Recognized the Aircraft as Russian When it Shot it Down

Courtesy of Mish.

In the wake of conflicting flight path information with Russian and Turkey differing on the flight path of the Russian aircraft that Turkey downed over Syria, comes the incredulous claim that Turkey did not recognize the aircraft as Russian when it shot the aircraft down.

This unbelievable statement comes as Hollande and Putin Seek Common Ground but Remain at Odds Over Syrian Targets.
The leaders of France and Russia held more than three hours of talks at the Kremlin focusing on the fate of the Syrian president and on which parts of the armed opposition should be protected from air strikes.

The summit was part of Mr Hollande’s push for a broader coalition against Islamist radicals Isis after the attacks in Paris a ...

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Market News

News You Can Use From Phil's Stock World


Financial Markets and Economy

Rich Asians Mostly Stick With Dollar Rally UBS Sees Almost Done (Bloomberg)

UBS Group AG, the world’s largest private bank, is telling its wealthy clients that the U.S. dollar’s gains are set to be limited as the Federal Reserve will probably tighten policy gradually after liftoff next month.

Switzerland is about to launch a huge experiment in 'the war on cash' (Business Insider)

A huge economic experiment will begin in Switzerland and Sweden in 2016, and some people are calling it ...

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Chart School

Greatest risk to the stock market is?

Courtesy of Read the Ticker.

Nope it is not interest rates, nope it is not Donald Trump, it is!

It is the CRUDE OIL crash, simple!

Jim Willie has good comments in the first 40 min of this pod cast.

Energy company ...
- Debt is blowing up (See energy element of HYG).
- Hedging at oil $100 is coming to an end.
- Iran coming back to the market, more supply.
- Saudi still providing massive supply.
- Oil tankers holding oil parked in the ocean are coming in to harbor to unload
- US dollar strength supports lower oil prices
- World wide DEMAND slump for energy or deflation.
- More oil being sold outside the US Dollar
- The Oil futures can not be manipulated easily as folks actually ...

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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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Kimble Charting Solutions

S&P 500 – Dangerous for bull case, if prices turn weak here!

Courtesy of Chris Kimble.


The S&P 500 remains inside of a rising channel that has been in place since 2010. The 5-year trend is up.

The 5-month trend is a different story, at this time.

Over the past 5-months, the S&P 500 has created a series of “falling weekly closing highs,” which is represented by line (1) above.

The S&P is testing this falling resistance line at (2) above.

If weakness takes place at (2) above, at falling resistance, it would be concerning price action for the bullish case!


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Sector Detector: Bulls wrest back control of market direction, despite global adversity

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

Courtesy of Sabrient Systems and Gradient Analytics

Some weeks when I write this article there is little new to talk about from the prior week. It’s always the Fed, global QE, China growth, election chatter, oil prices, etc. And then there are times like this in which there is so much happening that I don’t know where to start. Of course, the biggest market-moving news came the weekend before last when Paris was put face-to-face with the depths of human depravity and savagery. And yet the stock market responded with its best week of the year. As a result, the key issues dominating the front page and election chatter have moved from the economy and jobs to national security and a real war (rather than police ...

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Swing trading portfolio - week of November 23rd, 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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Digital Currencies

Bitcoin's Computing Network is More Powerful than 525 Googles and 10,000 Banks!

Courtesy of ZeroHedge. View original post here.

Submitted by Reggie Middleton.

I've decided to build our startup - Veritaseum, a peer-to-peer financial services platform, directly on top of the Bitcoin Blockchain. Many queried why I would voluntarily give up a lucrative advisory and consulting business to chase virtual coins in cyberspace. That's exactly why I decided to do it. That level of misunderstanding of what is essentially the second coming of the Internet gave me a fundamental advantage over those who had deeper connections, more capital and more firepower. I was the first mover advantage holder.

You see, Bitcoin is not about coins, currency or price pops. It is a massive computing net...

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PSW is more than just stock talk!


We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more! features the most important and most interesting news items from around the web, all day, every day!

News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

If you are looking for non-mainstream, provocatively-narrated news and opinion pieces which promise to make you think -- we feature Zero Hedge, ...

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Whitney Tilson On LL, EXACT, And Martin Shkreli


Whitney Tilson On LL, EXACT, And Martin Shkreli

Courtesy of Value Walk

1) The shares of one of my largest short positions (~3%), Exact Sciences, crashed by more than 46% yesterday. Below is the article I published this morning on SeekingAlpha, explaining why I think it’s still a great short and thus shorted more yesterday. Here’s a summary:

  • The U.S. Preventative Services Task Force’s Colorectal Cancer Screening Draft Recommendation issued yesterday is devastating for Exact Sciences’ only product, Cologuard.
  • I think this is the beginning of the end for the company.
  • My price target for the stock a year from now is $3, so I shorted more yes...

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Baxter's Spinoff

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

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).

The Baxalta Spinoff

By Ilene with Trevor of Lowenthal Capital Partners and Paul Price

In its recent filing with the SEC, Baxter provides:

“This information statement is being ...

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Mapping The Market

An update on oil proxies

Courtesy of Jean-Luc Saillard

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. 


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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 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.

Thank you for you time!

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