Posts Tagged ‘El-Erian’

US Dollar About to Lose Reserve Currency Status – Fact or Fantasy?

Courtesy of Mish

A number of sites are commenting on a Bloomberg video in which El-Erian, PIMCO Co-CEO says "Dollar could lose its reserve currency status".


Bloomberg: "Mohammad what does a weak dollar signal to you, a dollar that can’t jump up here on a day like we’ve seen today?"

El-Erian: "It is a warning shot to America that we cannot simply assume flight to quality, flight to safety. That people are starting to worry about the fiscal situation in the U.S. They are starting to worry about the level of debt. They are starting to worry about what they hear about states and municipalities. So, I would take this as a warning shot that we cannot assume that we will maintain the standing of the reserve currency as we have in the past."

Reserve Currency Definition

Before we can debate whether or not the US will lose reserve currency standing, we must first define what it means.

Investopedia defines Reserve Currency as follows.

"A foreign currency held by central banks and other major financial institutions as a means to pay off international debt obligations, or to influence their domestic exchange rate."

I accept that definition. Unfortunately Investopedia rambles on with nonsense about the implications: "A large percentage of commodities, such as gold and oil, are usually priced in the reserve currency,causing other countries to hold this currency to pay for these goods."

That sentence is a widely believed fallacy. The reality is no country is obligated to hold dollars to buy goods denominated in dollars.

Currencies are Fungible

Currencies other that illiquid currencies with low or no trading volume (think of Yap Island stones or the Cuban Peso) are fungible. It is a trivial process to switch from one currency to another.

You can buy gold or silver in any country, and I assure you those transactions do not all take place in dollars. Thus, just because a commodity is widely priced in dollars does not mean it only trades in dollars.

That holds true for oil as well.

I keep pointing this out, unfortunately to no avail, that oil trades in Euros right now. There is no selling of Euros to buy dollars on the front causing the oil producers to trade dollars for euros on the back end. The oil states simply sell oil for a price in Euros and then hold Euros in their…
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PIMCO’s El-Erian: Stocks Have Hit A Wall

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PIMCO’s El-Erian: Stocks Have Hit A Wall

Courtesy of mohamed el-erian pimcoLawrence Delevingne at Clusterstock  

Mohamed El-Erian has called the recent Wall Street rally a "sugar high." Now, he says U.S. stocks have hit a wall.

The chief executive of bond-king PIMCO said on Reuters TV that U.S. stocks had topped out because valuations have shot up too quickly.

Reuters: Asked if U.S. stocks have hit a wall, El-Erian told Reuters Television: "I think we have, and I think what you are seeing is a massive tug of war going on."

World stock markets fell Monday, with the Dow Jones industrial average .DJI declining 2 percent and China’s Shanghai Composite Index .SSEC falling 5.8 percent, shaking off recent optimism amid doubts about the sustainability of a solid economic recovery.

"On the one hand, pushing stocks higher are powerful technicals, the fact that very low yields on the front end have pushed cash out of the money market segment and into the risk assets," El-Erian said. "But on the other hand, the fundamentals are such that valuations are ahead of fundamentals. What you have seen over the last couple of days is a recognition that fundamentals matter."

Watch the interview here.

See Also:

Mohamed El-Erian: July Rally Was A "Sugar High"

PIMCO’s El-Erian Explains The "New Normal"…And It Blows

PIMCO’s El-Erian Bristles At Being Called One Of The "Chosen Ones" (VIDEO)

 

 


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ValueWalk

Azerbaijan: Energy Hopes vs. Italian Olive Groves

By EurasiaNet. Originally published at ValueWalk.

The Trans-Adriatic Pipeline is a key element of Azerbaijan’s efforts to export its greatest source of wealth, its Caspian Sea natural gas deposits, to European markets. It is also a cornerstone of the European Union’s strategy to weaken Russia’s hold on European gas markets.

The pipeline’s route, however, passes through ancient olive groves and over pristine beaches in the Italian region of Puglia, which relies on that bucolic landscape for its major industry, tourism.

Azerbaijan

That has set up a standoff between global energy interests and local environmental activists. And with a December referendum in Italy that reinforced local governments’ auton...



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Zero Hedge

Billionaire Dem Donor Thinks His Party Needs A New Message - "No One Votes For Polar Bears"

Courtesy of ZeroHedge. View original post here.

Tom Steyer, the Billionaire founder of the hedge fund Farallon Capital, spent $87mm funding liberal campaigns and ballot measures all across the country in 2016 and got absolutely nothing in return but a Republican-controlled Congress and White House.  Something tells us the 2016 election cycle was one of the worst "investment" ROI's of Steyer's life.

But despite his stunning losses, like Obama, Steyer is convinced that Americans still overwhelming agree with liberal policies...it's just that those policies aren't being explained we...



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Phil's Favorites

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

OPEC and Friends Agree on Way to Monitor Oil Cut to End Glut (Bloomberg)

OPEC and other oil producers agreed on a way to monitor their compliance with last month’s historic supply deal, putting global markets on track to re-balance after more than two years of oversupply.

Wall Street stocks set to slip as Trump keeps investors on the back foot (Market Watch)

U.S. stock futures tilted south on Monday as global markets grappled with uncertainty over the policies of U.S. President Dona...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

OPEC and Friends Agree on Way to Monitor Oil Cut to End Glut (Bloomberg)

OPEC and other oil producers agreed on a way to monitor their compliance with last month’s historic supply deal, putting global markets on track to re-balance after more than two years of oversupply.

Wall Street stocks set to slip as Trump keeps investors on the back foot (Market Watch)

U.S. stock futures tilted south on Monday as global markets grappled with uncertainty over the policies of U.S. President Dona...



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OpTrader

Swing trading portfolio - week of January 23rd, 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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Kimble Charting Solutions

Post Christmas- Gold Miners & Metals the place to be!

Courtesy of Chris Kimble.

Christmas is now nearly one month ago, how time flies. Ole Santa has been taking a rest and so far over the past month, the S&P 500 has done the same. Not so much for a few other high flying assets!

CLICK ON CHART TO ENLARGE

Since the first day of trading after the Christmas break, the broad market has been pretty quiet, up .23%. Bonds (TLT) and the Euro (FXE) have made a little bit more than the broad markets.

The Metals Sector has done pretty well since Christmas, as Gold ...



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Chart School

Weekly Market Recap Jan 22, 2017

Courtesy of Blain.

The week that was…

This rally is getting long in the tooth so simply from a duration standpoint some caution is merited. There are other reasons which we will outline later. That said this particular week was a quiet group of sessions with mild gains and losses mixed in; the market was closed on Monday. Earnings were the focus of the week as was the Trump speech Friday where investors may begin to start pivoting off hope for everything to be perfect, and start looking at the reality of Washington D.C. doing Washington D.C. things. Even with 1 party controlling both major branches.

Overseas, the European Central Bank, as expected, left interest rates unchanged Thursday. The decision was expected after the ECB last month decided to extend its bond buying program through the end of 2017. ECB head Mario Draghi said...



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Digital Currencies

Bitcoin and Gold - Outlook and Safe Haven?

Courtesy of ZeroHedge. View original post here.

Bitcoin and Gold – Outlook, Volatility and Safe Haven Diversification

Recent performance of bitcoin and gold

What does the recent volatility and surging price of bitcoin mean for the future of the crypto-currency and does its recent outperformance mean that it may supplant gold as a safe haven currency? Can bitcoin rival gold as a safe haven? Do bitcoin’s recent price gains herald gains for gold in 2017?

...



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Members' Corner

How To Poop At Work?

Courtesy of Nattering Naybob.

Once again it's "in the Toilet Thursday" or "Thursday's in the Loo". 

In our last episode, How to Poop On A Date? we were graced with a delicate shituation: what ever to do when your finally back at her place, snuggling in for a little "brown chicken brown cow" and you get hit with "Love Potion #2".

This week in How to Poop At Work? ,what to do when your at a big fancy pants meeting, when out of nowhere, you need to download a brown load?



...

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Mapping The Market

If we try it enough, it will work.

Via Jean-Luc

Brownback wants Trump to emulate what he did in Kansas because it worked so well:

Sam Brownback Calls on Donald Trump to Mimic His Kansas Tax Plan

By RICHARD RUBIN and  WILL CONNORS

Sam Brownback, the Kansas governor whose tax cuts brought him political turmoil, recurring budget holes and sparse evidence of economic success, has a message for President-elect Donald Trump: Do what I did.

In 2013, Mr. Brownback set out to create a lean, business-friendly government in his state that other Republicans could replicate. He now faces a $350 million deficit when the Kansas legislature convenes in January and projections of a larger one in 2018. The state’s economy is flat and his party is fractured...

...

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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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Promotions

Phil's Stock World's Las Vegas Conference!

 

Come 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:  8:00 am Sunday morning

Location: Caesar's Palace in Las Vegas

Notes

Caesar's has tentatively offered us rooms for $189 on Saturday night and $129 for Sunday night. However, we have to sign the contract ASAP. We need at least 10 people to pay me via Paypal or we may lose the best rate for the rooms. (Once we are guaranteed ten attendees, I will put up instructions to call the hotel for individual rooms.)

The more people who sign up,...



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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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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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