The IMF, like many other international institutions, asserts that it has a “preferred creditor status”, and this has been a practiced convention in the past. Thus, IMF has de facto seniority rights over private creditors despite the fact that there is no legal or treaty-based foundation to support this claim and this seniority of rights for IMF will continue under the recent EU rescue plan announced as well as it has not been noted otherwise implicitly nor explicitly. This is the reason why Sarkozy said it is a said day when the EU has to accept a bailout from the IMF (aka, the US). The EU now, and truly, contains a significant parcel of debtor nations.
To add fuel to this global macro tabloidal fire, the Euro members’ loan will be pari passu with existing sovereign debt i.e. it will not be considered senior. Although there is no written, hard evidence to support this claim, it is our view that otherwise there will be no incentive for investors to hold the debt of troubled countries like Greece, which will ultimately defeat the whole purpose of the rescue package. Moreover, there are indications that support this idea. As per Dutch Finance Minister Jan Kees de Jager, “We are not talking about a special preference for the eurogroup loans, that’s not possible because then you would have the situation that already-existing rights of creditors at the moment would be harmed.” (reference http://www.businessweek.com/news/2010-04-16/netherlands-excludes-senior-status-for-greek-aid-update1-.html). Of course, if more investors did their homework and ran the numbers, that same disincentive can be said to exist with the IMF’s super senior preference given the event of a default and recoverable collateral after the IMF has fed at the trough.
IMF’s preferred creditor status coupled with the expensive Euro members’ loans which are part of the rescue package can create a public debt snowball effect that could push the troubled countries towards insolvency when the IMF debt becomes repayable in three years time. This could be seen particularly in case of Greece (subscribers, please reference Greece Public Finances Projections). Even if all the spending cuts and revenue raising are achieved as planned for Greece, its debt will peak to 149.1% of the GDP in 2013. Please keep…
With Goldman proclaiming that half the recent downturn in US macro data is due to "weather" and the rest of the hockey-sticking sell-side extrapolators fully entrenched on the Spring-will-save-us-all bandwagon (despite the manifold examples of the worst macro data misses being from regions that simply were unaffected by the winter storms), we thought the following chart would be of interest.
RBC finds only a mere 19% of those surveyed "spent less" due to the weather - and 27% spent more!
Like yesterday, there was little economic news to influence the market. The S&P 500 opened fractionally higher, dipped briefly into the red and hit its 0.28% intraday high shortly before 11 AM. The index then sold off in a couple of waves to its -0.71% intraday low shortly after 3 PM. It trimmed its decline by the close to finish down 0.51, which puts it 0.55% below its record high on Friday. Tomorrow is another day of no significant US economic news, although the Eurozone's Industrial Production will be announced before the US markets open.
The yield on the 10-year note closed at 2.77%, down 2 bps from yesterday's close. The interim high was 3.04% at the end of 2013.
Vincent “Vinnie” Viola, the founder of Virtu Financial Inc, is High Frequency Trading's (HFT) first billionaire. He has an impressive track record of just “one losing trading day” during a 1,238 trading-day period.
How does he do it? The same way other High-Frequency do it: front running trades and scalping countless billions and billions of fractions-of-pennies in the process.
Before discussing the first HFT billionaire, let's post some background for those who are not familiar with the process.
What Is HFT?
Wikipedia reports ... High-frequency trading (HFT) is a type of algorithmic trading, specifically the use of sophisticated technological tools and computer algorithms to rapidly trade securities. HFT...
Shares in McDonald’s are up the most in the Dow Jones Industrial Average today, rising nearly 4.0% to $98.92 and the highest level since November 26th during the first hour of the session. The rally in shares of the world’s largest restaurant chain today is more than making up for yesterday’s dip in the price of the underlying on the heels of a larger than expected dip in February same store sales. Options traders hungry for continued gains in the stock in the very near term appear to be snapping up weekly options across several striking prices today.
The most traded weekly options by volume are the 14 Mar ’14 $97 strike...
DAILY PRICE REPORT
Today’s AM fix was USD 1,348.00, EUR 973.57 and GBP 810.44 per ounce.
Yesterday’s AM fix was USD 1,334.25, EUR 961.55 and GBP 800.87 per ounce.
Gold rose $0.7 or 0.05% yesterday, to $1,339.90/oz. Silver dropped $0.08 or 0.38% to $20.81/oz.
Gold in US Dollars - 1 Year (Bloomberg)
Gold rose in all currencies again today and headed towards a four month high in dollar terms as the standoff between Russia and Ukraine led to demand for gold as a haven. Silver surged 1.4%, platinum added 0.3% to $1,481.60/oz and pal...
Today was the beginning of “spring break” for the market. At least it seemed that way with a very low trading volume of only 600M shares on the NYSE. Either the college crowd does more trading than we imagined or parents are taking the week off as well.
The market barely woke up for the session with the S&P 500 down 0.05% and the NASDAQ down 0.03%. However, the DJI must have gotten extra sleep this weekend as it was up 0.21%. Small caps took a bigger hit with the Russell 2000 dropping nearly 0.50% percent. There was nothing major in the news other than a disappointing trading figure from China. Indeed, the whole week will only include a meager four major economic reports with Wholesale Inventories tomorrow, Retail Sales and Jobless Claims on Thursday, and Producer Price In...
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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.
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Ladies and Gentlemen, hobos and tramps,
Cross-eyed mosquitoes, and Bow-legged ants,
I come before you, To stand behind you,
To tell you something, I know nothing about.
And so the circus begins in Union Square, San Francisco for this weeks JP Morgan Healthcare Conference. Will the momentum from 2013, which carried the S&P Spider Biotech ETF to all time highs, carry on in 2014? The Biotech ETF beat the S&P by better than 3 points.
As I noted in my previous post, Biotechs Galore - IPOs and More, biotechs were rushing to IPOs so that venture capitalists could unwind their holdings (funds are usually 5-7 years), as well as take advantage of the opportune moment...
Welcome to the fouth update of the IRA Virtual Portfolio. First I am going to summarize the current state of the Portfolio then I will get into all the activity we had during September expiration.
Profit and Loss – Net of closed positions the portfolio is up a total of $769
Market Commentary – Last expiration I said, "I would like to put a total of $20,000 to work by the end of SEP expiration. If the VIX pops up to around 20 I plan to put about $50,000 total to work." The market didn't quite reach the goal but I did manage to deploy $15,000 of buying power. I still feel the market is too high and expect a correction during October. If the vix pops up to around 20 I still plan to put about $50,000 to work. If a correction doesn't happen I still plan to have a total of $25,000 in buying power put to work by October expiration. Now on to the act...
Note: The material presented in this commentary is provided for
informational purposes only and is based upon information that is
considered to be reliable. However, neither MaddJack Enterprises, LLC
d/b/a PhilStockWorld (PSW) nor its affiliates
warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither PSW nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance, including the tracking of virtual trades and portfolios for educational purposes, is not necessarily indicative of future results. Neither Phil, Optrader, or anyone related to PSW is a registered financial adviser and they may hold positions in the stocks mentioned, which may change at any time without notice. Do not buy or sell based on anything that is written here, the risk of loss in trading is great.
This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities or other financial instruments mentioned in this material are not suitable for all investors. Any opinions expressed herein are given in good faith, are subject to change without notice, and are only intended at the moment of their issue as conditions quickly change. The information contained herein does not constitute advice on the tax consequences of making any particular investment decision. This material does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation to you of any particular securities, financial instruments or strategies. Before investing, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.