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Posts Tagged ‘Federal Reserve Chairman’

Forecast 2010 – 2015: An Introduction

I’m really looking forward to Jesse’s next installment. – Ilene

Forecast 2010 – 2015: An Introduction

Wairarapa International Balloon Festival

Courtesy of Jesse’s Café Américain

I am in the midst of preparing a forecast for the next five to ten years for the United States economy, and by extension the world because of the intertwining effects of the dollar reserve currency and US consumption in the global economy. And of course the US position as the world’s sole superpower.

Before I do that, I thought it might be useful to see a recap of my last five year forecast, to set the playing field as it were, as a sort of an introduction. The next forecast will be similar in format and style, but may be a little more complex, because the US, and the world, are at a critical crossroads in history.

The greatest struggle in writing this sort of thing is to keep it brief, to prevent it expanding into a lengthy treatise that examines too many particulars, too many possibilities. Forecasters often succumb to the temptation to throw out many specific predictions and possibilities, in the hopes of ‘hits’ that will be remembered, with misses forgotten, without giving sufficient weight to the probabilities. In addition, clarity and consciences are always the challenge in writing non-fiction regarding complex subjects.

Please keep in mind that this forecast was published on my old website at the beginning of 2005, when optimism was running high, the maestro was still on his throne, black swans still an uncommon topic, and the US was in a fresh bull market in stocks with a growing housing bubble that very few would admit, and many would vehemently deny. This forecast is being written in darker hours, when some of the horsemen have already been unleashed.

I have edited out extraneous contemporary detail, and most of the charts which are dated, except for one. I edited out some grammatical errors and awkward phrasing. The timeframe has been ‘compartmentalized’ to five years, from a more open-ended original, because at the time I wrote in 2005 I did not imagine I would still be at this blogging effort five years later. I have also renumbered the footnotes and eliminated several for the sake of simplicity and relevance. 

`Humpty Dumpty sat on a wall:
Humpty Dumpty had a


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Throwing Bernanke under the bus

Here’s Edward Harrison’s take on the Bernanke hearings. – Ilene

Throwing Bernanke under the bus

throw under the busCourtesy of Edward Harrison at Credit Writedowns

In case you missed it, Federal Reserve Chairman Ben Bernanke was on Capitol Hill this morning making his case in regards to the Bank of America – Merrill Lynch deal.  The Chairman stated in unequivocal terms that he did not pressure anyone.  Rather, he stated that he cautioned Ken Lewis about the prudence of invoking a MAC clause and doubted whether Lewis could be successful in extracting himself from the deal (I agree that the MAC clause was not going to help BofA).

Whether Bernanke is justified in his defense is irrelevant at this juncture.  What is relevant, however, is that the Bank of America – Merrill Lynch deal has become a central episode for political recriminations and posturing.  As I said two weeks ago:

My take here is that the Bank of America case has become very political – and that means the blame game is going to be played. Someone — Bernanke, Lewis, Thain or Paulson — is going to take the fall.  The knives are out.

Indeed, the knives are out and it is looking increasingly likely that Bernanke will be the scapegoat.  Below is a Bloomberg News video with Rep. Edolphus Towns (D-NY), Chairman of the House Oversight Committee.  If you listen to what Towns is saying, it does not look very good for Ben Bernanke. 

Next on the hot seat: Hank Paulson.

 

Earlier today at Credit Writedowns, courtesy of Edward: 

Is Bernanke Toast? If he is, Summers is a shoo-in

conspiracy theoryHere’s a conspiracy theory for you.  As I am not much of a conspiracy theorist, I ill keep this one pretty simple. Here’s the chain of events.

Back in late September when the world was falling apart, Ben Bernanke, Tim Geithner and Hank Paulson were all desperate to keep things from unravelling.  As a result, they were pleased that Ken Lewis and Bank of America were willing to pony up  massive $44 billion to take over Merrill Lynch. They might even have encouraged the deal (i.e. we will smooth the way.  There will be no FTC hurdles. We will soft peddle investigation into Countrywide mortgage fraud, etc)

The problem, of course, was that Merrill Lynch was a bottomless pit of…
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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

French Unemployed Hits Record High, Hollande Demands EU Budget "Must Be Adapted"

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

France's President Francois Hollande states confidently that "everyone should respeoct treaties," then 'Junckers' it with this stunningly hypocritical bullshit, "budget rules must be adapted" to support growth and France "has done what it has to do" on its deficit... one glance at the following chart suggests that Hollande has done nothing and has been enabled by Draghi... What a farce!!

 

 

So:

  • *HOLLANDE SAYS `EVERYONE' SHOULD RESPECT TREATIES
  • *HOLLANDE SAYS FR...


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Chart School

ECRI Recession Watch: Weekly Update

Courtesy of Doug Short.

The Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) is at 131.9, down substantially from the previous week's 131.4. The WLI annualized growth indicator (WLIg) is at -0.1, down from 1.0 the previous week and its first negative print since August of 2012.

ECRI has been at the center of a prolonged controversy since publicizing its recession call on September 30, 2011. The company had made the announcement to its private clients on September 21st. ECRI's cofounder and spokesman, Lakshman Achuthan, subsequently forecast that the recession would begin in Q1 2012, or Q2 at the latest. He later identified mid-2012 as the start of the recession. Over the past two years he has been a frequent guest on...



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Insider Scoop

UPDATE: Morgan Stanley Reiterates On ResMed Following 1Q15 Earnings Report

Courtesy of Benzinga.

Related RMD Morning Market Movers Qualcomm Announces New Connected Health Collaborations at Connect 2014

In a report published Friday, Morgan Stanley analyst Sean Laaman reiterated an Equal-Weight rating on ResMed (NYSE: RMD), and raised the price target from $46.19 to $49.57.

In the report, Morgan Stanley noted, “Currency headwinds and part quarter release of the S10 downplayed expectations ahead of the result. Despite this, RMD beat on US revenue driv...



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Phil's Favorites

The Death of the Blue Chip

The Death of the Blue Chip

Courtesy of 

My title above is only half-kidding. Because everytime Wall Street pronounces “The Death Of” anything, that’s pretty much when it starts working again. But there is an important point being made in a new article at the Wall Street Journal about the current state of some of our biggest stalwart stocks and their underlying businesses, a point I made two days ago here

Here’s the Journal:

A third of the companies in the Dow Jones Industrial Average have posted shrinking or flat revenue over the past 12 m...



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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

LUV Options Active Ahead Of Earnings

There is lots of action in Southwest Airlines Co. November expiry call options today ahead of the air carrier’s third-quarter earnings report prior to the opening bell on Thursday. Among the large block trades initiated throughout the trading session, there appears to be at least one options market participant establishing a call spread in far out of the money options. It looks like the trader purchased a 4,000-lot Nov 37/39 call spread at a net premium of $0.40 apiece. The trade makes money if shares in Southwest rally 9.0% over the current price of $34.32 to exceed the effective breakeven point at $37.40, with maximum potential profits of $1.60 per contract available in the event that shares jump more than 13% to $39.00 by expiration. In September, the stock tou...



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Sabrient

Sector Detector: Sharp selloff in stocks sets up long-awaiting buying opportunity

Courtesy of Sabrient Systems and Gradient Analytics

Last week brought even more stock market weakness and volatility as the selloff became self-perpetuating, with nobody mid-day on Wednesday wanting to be the last guy left holding equities. Hedge funds and other weak holders exacerbated the situation. But the extreme volatility and panic selling finally led some bulls (along with many corporate insiders) to summon a little backbone and buy into weakness, and the market finished the week on a high note, with continued momentum likely into the first part of this week.

Despite concerns about global economic growth and a persistent lack of inflation, especially given all the global quantitative easing, fundamentals for U.S. stocks still look good, and I believe this overdue correction ultimately will shape up to be a great buying opportunity -- i.e., th...



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Digital Currencies

Goodbye War On Drugs, Hello Libertarian Utopia. Dominic Frisby's Bitcoin: The Future of Money?

Courtesy of John Rubino.

Now that bitcoin has subsided from speculative bubble to functioning currency (see the price chart below), it’s safe for non-speculators to explore the whole “cryptocurrency” thing. So…is bitcoin or one of its growing list of competitors a useful addition to the average person’s array of bank accounts and credit cards — or is it a replacement for most of those things? And how does one make this transition?

With his usual excellent timing, London-based financial writer/actor/stand-up comic Dominic Frisby has just released Bitcoin: The Future of Money? in which he explains all this in terms most readers will have no tr...



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OpTrader

Swing trading portfolio - week of October 20th, 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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Market Shadows

Falling Energy Prices: Sober Look takes a Sober Look

Falling Energy Prices: Sober Look takes a Sober Look

What do falling energy prices mean for the US consumer? Sober Look writes a brief yet thorough overview of the consequences of the correction in the price of crude oil. There are good aspects, particularly for the consumer, bad aspects, and out-right ugly possibilities. For more on this subject, read James Hamilton's How will Saudi Arabia respond to lower oil prices?  In previous eras, Saudi Arabia would tighten the supply to help increase prices, but in this "game of chicken," the rules m...



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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. Just sign in with your PSW user name and password. (Or take a free trial.)

#457319216 / gettyimages.com

 

...

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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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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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