Posts Tagged ‘hoarding cash’

The Fallacy Of “Record Corporate Cash”

The Fallacy Of "Record Corporate Cash"

Lightning is an atmospheric discharge of electricity accompanied by thunder, which typically occurs during thunderstorms. There are approximately 16 million lightning storms in the world every year.

Courtesy of Karl Denninger of The Market Ticker 

How many times have you heard that: "Corporations are flush with cash; they have record amounts of free cash on their balance sheets"?

Dozens, right?

It’s touted as a positive thing.

Baloney.

Corporations hoard cash when they are convinced that things are going to get bad.  No corporation hoards cash if it has somewhere better to deploy it - that is, somewhere it is convinced it can invest and produce a return for the business.

So what does a "record level of cash" tell us about business prospects?  Simple: Business sucks today and forward prospects are deteriorating, not improving.

Simply put, businesses not only fear the need for all that cash, they have no compelling places to invest in the growth of the company’s revenues and profits.  They can’t make the argument for expanding their plant, hiring, an M&A deal or even a stock buyback.  They expect a hard rain or worse, an outbreak of tornadoes, not smooth sailing and fair skies.

Don’t be suckered by the mainstream media. 


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Meltup “Abysmal Volume” Summer Approaches, Even As Americans Now Openly Shun Stocks

Meltup "Abysmal Volume" Summer Approaches, Even As Americans Now Openly Shun Stocks

Courtesy of Tyler Durden

As algos now focus exclusively on gaming the EURJPY and other funding currency pairs, the stock market is completely dead and trades purely as a correlation and hedging pair. With under two hours into the trading day, we are already at 40% below average volume: don’t be surprised to see a 5%, 15% or 50% market up move if we drop to below 50% of cumulative.

In other news, the LA Times reports that Americans, for the most part, have now officially said goodbye to stocks. With a broken market such as what is evident every single day, who can blame them. Bernanke has officially failed to lead the lemmings into a risky asset reflation, as primary dealers, HFT algos and mutual funds will need to take profits occasionally, and every time this happens we will see another, ever flashier crash.

The amount Americans have in basic savings accounts at banks and thrifts rose to a record $5.06 trillion at the end of May, a jump of $209 billion since the start of the year.

But even as bond portfolios now hold a record $2.4 trillion, individuals and institutions still sit with $2.8 trillion in money market mutual funds that pay next to nothing. The average annualized fund yield is a barely detectable 0.04%.

The world’s richest people, too, are hoarding cash. You might imagine that they got wealthy by taking risks, not by playing it safe with their money. But they’re playing it safe now: The annual Boston Consulting Group report on the world’s millionaires, issued this week, estimated that those households (there are 11.2 million of them) overall hold 48% of their financial assets in cash accounts, up from 44% in 2007.

We all know where to affix the blame for this state of affairs. In the wake of the world’s worst financial crisis since the Great Depression, and the devastation it wrought on stocks and real estate values, fear has triumphed over greed. For many investors, capital preservation now trumps all else.

Some large portion of the population that was comfortable in 2007 having, say 60% of their money in stocks, 30% in bonds and 10% in cash now has significantly lowered the amount allocated to stocks. Watching the market drop 50% in six months


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Rebuilding the Caribbean will be pricey, but some are vying to finance its recovery

 

Rebuilding the Caribbean will be pricey, but some are vying to finance its recovery

Courtesy of Masao AshtineUniversity of the West Indies, Mona Campus

If Caribbean governments can’t afford to rebuild their islands, maybe big tech firms can?

November 20 marked the end of the Atlantic hurricane season, but for the Caribbean, it’s only the beginning of a painful recovery process.

In early September, Hurricane Irma largely destroyed Barbuda and several neighboring Lesser Antilles islands. Two weeks later, Maria took a final fatal...



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Zero Hedge

Bahamas Prime Minister Blasts US Cable News

Courtesy of ZeroHedge. View original post here.

Over the weekend, Bahamas Prime Minister Dr Hubert Minnis addressed the Third Annual Press Club Awards Banquet, where he blamed the collapse of journalism standards on 24-hour cable news shows in the United States. He said, the declining of standards “would not have been allowed in previous times” and urged local journalist not to be  “champions of any political party, business, group or interest in a country”.

...

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Digital Currencies

Bitcoin: An Unknowable Bubble?

Courtesy of ZeroHedge. View original post here.

"Whatever [Bitcoin] is, I missed it... It looks and smells like all the bubbles I have seen throughout history." - billionaire investor Jim Rogers

Authored by Constantin Gurdgiev via True Economics blog,

There is a much-discussed in the crypto-sphere chart making rounds these days, plotting Bitcoin price dynamics against the historical bubbles of the past:

...



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Insider Scoop

8 Stocks To Watch For November 22, 2017

Courtesy of Benzinga.

Related CRM 9 Stock's Moving In Tuesday's After Hours Session Salesforce Falls Despite Q3 Beat The Vetr co...

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Chart School

Russell 2000 and Semiconductor New Highs / S&P Breaks

Courtesy of Declan.

The S&P broke higher to confirm a 'bear trap' and also closed at a new all-time high. Volume climbed to register an accumulation day but there were further losses in relative performance and continued losses in the MACD.


The Nasdaq posted a gap-driven 1% gain to bring it ever closer to channel resistance. It hasn't yet tagged resistance but it looks well placed to do so by the end of the week. Technical are all bullish.

...

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Biotech

The two obstacles that are holding back Alzheimer's research

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

 

The two obstacles that are holding back Alzheimer's research

Courtesy of Todd GoldeUniversity of Florida

Family members often become primary caregivers for loved ones with Alzheimer’s disease. tonkid/Shutterstock.com

Thirty years ago, scientists began to unlock the mysteries regarding the cause of Alzheimer’...



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ValueWalk

Robert Mugabe Under House Arrest, Military Takes Control Of Zimbabwe

By Andjela Radmilac. Originally published at ValueWalk.

Zimbabwe’s head of state, 93-year-old Robert Mugabe, has been placed under house arrest after what seems to be a military coup took place in the nation’s capital.

By U.S. Navy photo by Mass Communication Specialist 2nd Class Jesse B. Awalt/Released [Public domain], via Wikimedia CommonsRobert Mugabe is safe

Following numerous reports on social media late Thursday night about the increased military presence in Harare, the capital of Zimbabwe, the country’s military took...



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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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Mapping The Market

Puts things in perspective

Courtesy of Jean-Luc

Puts things in perspective:

The circles don't look to be to scale much!

...

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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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