Posts Tagged ‘global markets’

Credit Storm in Europe

Credit Storm in Europe

By MIKE WHITNEY writing at CounterPunch 

Munich Oktoberfest Preparations

Credit market turmoil in the Eurozone has ignited frenzied trading on global markets. On Tuesday, shares tumbled nearly 300 points on the Dow Jones before launching an unconvincing 257-point late-day comeback. Wednesday the mayhem continued; all the major indexes seesawed wildly as positive news on durable goods was nixed by  reports on wobbly EU banks. Erratic selling pushed the S&P down to 1,067 while the Dow slipped below 10,000 for the first time since February 7.  The rise in Libor (the London Interbank Offered Rate) is increasing volatility, a red flag indicating trouble in interbank lending. Banks are wary of each other’s collateral as Greece and other underwater Club Med members appear to be headed for debt-restructuring. Libor is not yet at pre-Lehman levels, but the rate that banks charge each other for short-term loans has rocketed to a 10-month high. Improving economic data have not eased fears of another meltdown or removed the rot at the heart of the system. The banks are still loaded with loans and assets that are losing value. The credit system is breaking down. 

When banks post collateral overnight for short-term loans, the collateral is effectively downgraded, limiting the banks’ access to capital. This is what triggered the financial crisis two years ago, a run on repo. Regulated "depository" institutions now rely on a funding system that operates beyond government oversight, a shadow banking system.  The banks exchange collateral, in the form of bundled securities and  bonds with institutional investors (aka—"shadow banks"; investment banks, hedge funds, insurers) via repurchase agreements (repo) for short-term loans. The repo market now rivals the  traditional banking system in terms of size but lacks the guard rails and stop signs that make the regulated system safe. The system is inherently unstable and crisis-prone as a recently released paper by the Federal Reserve Bank of New York  (FRBNY) admits. Moody’s rating agency summarized the paper’s findings like this: the tri-party repo market “will remain a major source of systemic risk, especially given the current market volatility and the fact that the Federal Reserve’s primary dealer emergency lending facilities are no longer in place…… the market remains structurally vulnerable to a repo run…… If cash investors pulled away in a stressed environment, the clearing banks would be faced with a choice (as they were several times in 2008)…
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The Only Thing Decoupling is Investors and their Money

The Reformed Broker Joshua Brown shatters any remaining signs of life in dying Decoupling myth. – Ilene

The Only Thing Decoupling is Investors and their Money

Hammer smashing plate of glass

Johnny Cash once ominously sang "you can run on for a long time" before reminding those whom he considered wicked that sooner or later, they’d be cut down.

US stocks were able to ignore the sovereign debt crises of southern Europe…until they weren’t. Now your Staples ($SPLS) and your Akamai Networks ($AKAM) are slaves to the macro once more. The "Decoupling Theory" fails again, just as it did in 2008 when asset prices around the world fell in tandem.

I’m gonna say this one time – Decoupling is a demonstrably false concept in the 21st century global economy. Sure, there are degrees of correlation but there is no decoupling. Everybody around the world owns pieces of everything, regardless of borders, currencies, languages or timezones.  The world has been ETF’d, we all reside in a bought-and-sold basket of instruments. China will eventually succumb to its export customers’ malaise just as surely as US and European exporters will ultimately feel the pinch of a China slowdown.

Russia, Australia, Brazil and Canada may be stronger than their ‘customer nations’ because of their vast raw materials but can they really sustain this strength should the ‘customer nations’ begin demanding less raw material from them?

Nothing is decoupled with anything anymore.  You may tell yourself that your Abercrombie & Fitch ($ANF) shares have no exposure to Spain or Portugal – but if the market decides to blow itself up over Spain and Portugal, Abercrombie’s gonna get slapped around.

By the way, the same principle is in effect on bounces and rallies.  How else to explain the 420 point Dow Jones Industrial Average rally on confirmation of the Euro TARP? How else to explain the fact that every stock was up, European exposure or not?

So the next time you hear Bob Pisani on CNBC emphasize "Europe’s Close", as though the closing of their markets is like the ‘all clear’ signal for US stocks to recover, remember that the macro has reasserted its influence on our market.  And this influence doesn’t wane for any market’s closing bell.

Recoupled. Adjust your expectations accordingly. 


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Zero Hedge

History In The Making: Amazon's First Fully-Automated Grocery Store Opens To The Public

 

History In The Making: Amazon's First Fully-Automated Grocery Store Opens To The Public

Courtesy of Zero Hedge

After nearly a year of testing - plus a few highly publicized practice runs involving reporters from a handful of influential tech media outlets like the New York Times - Amazon will open its small-format Seattle test store, dubbed “Amazon Go” on Monday.

The store will feature cashier-free checkouts, allowing customers who install the “Amazon Go” app to simply pick up an item and walk out with it. ...



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ValueWalk

Jeffrey Tarrant at the Fall 2017 Grant's Conference

By Akhlaqahmed9941. Originally published at ValueWalk.

Jeffrey Tarrant from Protege Partners speaks before the audience at Grant’s conference at The Plaza hotel.

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Chart School

Weekly Market Recap Jan 21, 2017

Courtesy of Blain.

Investors suffered through two whole days of losses in a shortened week – but the indexes still gained on the week!  Boo yah!  Even a sharp reversal Tuesday (gap up, close at the lows) – which is usually negative short term – couldn’t stop the freight train.  Earnings season kicked off in earnest.  The government shutdown put absolutely zero fear into markets.

“I would characterize a shutdown as just the kind of political news that the market has demonstrated, over the past year, a willingness to ignore,” said Hank Smith, co-chief investment officer at Haverford Trust, which manages $8 billion.

The S&P 500 gained 0.9% for the week, while the NASDAQ jumped 1.0%.

Peter Boockvar, chief investment officer at wealth manager Bleakley Financial G...



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Phil's Favorites

Donald Trump doesn't understand Haiti, immigration or American history

 

Donald Trump doesn't understand Haiti, immigration or American history

Courtesy of Chantalle F. VernaFlorida International University

 

After Haiti signed its Declaration of Independence from France, in 1804, the U.S. started a nearly 60-year political and economic embargo that hobbled the young nation’s growth. Wikimedia

Donald Trump’s denigrating comments about Haiti during a recent cong...



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Insider Scoop

34 Biggest Movers From Friday

Courtesy of Benzinga.

Gainers
  • Forward Industries, Inc. (NASDAQ: FORD) shares surged 137.9 percent to close at $2.95 on Friday after the company reported the acquisition of Intelligent Product Solutions.
  • NuCana PLC (ADR) (NASDAQ: NCNA) shares climbed 41.55 percent to close at $20.51 as the company announced plans to initiate a Phase 3 study of Acelarin in front-line advanced biliary tract cancer.
  • New Age Beverages Corporation (NASDAQ: NBEV) shares jumped 22.5 percent to close at $3.92 on Friday.
  • ...


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Digital Currencies

Bitcoin and cryptocurrencies are just the Beanie Babies of the moment

 

Bitcoin and cryptocurrencies are just the Beanie Babies of the moment

Courtesy of Vitaliy Katsenelson, Contrarian Edge

If you invested in the markets circa 1999, it is hard to observe the Bitcoin mania and not experience the feeling that you’ve seen this movie before and know how it will end – in losses and tears. The internet was a great idea that convinced a lot of great minds to invest capital and energy into businesses that have transformed the world – Amazon, eBay, Cisco, PayPal … the list is very long (though in fairness the list of non-survivors is even longer – but they are not here to remind us of their nonexistence).

R...



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Biotech

How Alzheimer's disease spreads throughout the brain - new study

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

 

How Alzheimer's disease spreads throughout the brain – new study

Courtesy of Thomas E CopeUniversity of Cambridge

Harmful tau protein spreads through networks. Author provided

Alzheimer’s disease is a devastating brain illness that affects an estimated 47m people worldwide. It is the most common cause of dementia in the Western world. Despite this, there are currently no treatments that are effective in curing Alzheimer’s disease or preventing its relentless progressio...



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Mapping The Market

Trump Admin Bans CDC From Using Words Like 'Science-Based,' 'Diversity'

By Jean-Luc

These are the policies of a theocracy, not a modern democracy:

Trump Admin Bans CDC From Using Words Like ‘Science-Based,’ ‘Diversity’

The Trump administration has prohibited the Centers for Disease Control and Prevention (CDC) from using words like “science-based,” “diversity,” and “transgender” in their official documents for next year’s budget, according to the Washington Post.

Senior CDC budget leader Alison Kelly met with the agency’s policy analysts on Thursday to announce ...



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Members' Corner

An Interview with David Brin

Our guest David Brin is an astrophysicist, technology consultant, and best-selling author who speaks, writes, and advises on a range of topics including national defense, creativity, and space exploration. He is also a well-known and influential futurist (one of four “World's Best Futurists,” according to The Urban Developer), and it is his ideas on the future, specifically the future of civilization, that I hope to learn about here.   

Ilene: David, you base many of your predictions of the future on a theory of historica...



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OpTrader

Swing trading portfolio - week of September 11th, 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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Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



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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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