Posts Tagged ‘innovative financial products’

“Wake Up, Gentlemen”

Paul Volcker’s message, passed along by Simon Johnson, with love. - Ilene  

“Wake Up, Gentlemen”

Paul Volcker Courtesy of Simon Johnson at The Baseline Scenario

The guiding myth underpinning the reconstruction of our dangerous banking system is: Financial innovation as-we-know-it is valuable and must be preserved.  Anyone opposed to this approach is a populist, with or without a pitchfork.

Single-handedly, Paul Volcker has exploded this myth.  Responding to a Wall Street insiders‘ Future of Finance “report“, he was quoted in the WSJ yesterday as saying: “Wake up gentlemen.  I can only say that your response is inadequate.”

Volcker has three  main points, with which we whole-heartedly agree:

  1. “[Financial engineering] moves around the rents in the financial system, but not only this, as it seems to have vastly increased them.”
  2. “I have found very little evidence that vast amounts of innovation in financial markets in recent years have had a visible effect on the productivity of the economy”

and most important:

     3. “I am probably going to win in the end”.

Volcker wants tough constraints on banks and their activities, separating the payments system – which must be protected and therefore tightly regulated – from other “extraneous” functions, which includes trading and managing money.

This is entirely reasonable – although we can surely argue about details, including whether a very large “regulated” bank would be able to escape the limits placed on its behavior and whether a very large “trading” bank could (without running the payments system) still cause massive damage. 

But how can Mr. Volcker possibly prevail?  Even President Obama was reduced, yesterday, to asking the banks nicely to lend more to small business – against which Jamie Dimon will presumably respond that such firms either (a) are not creditworthy (so give us a subsidy if you want such loans) or (b) don’t want to borrow (so give them a subsidy).  (Some of the bankers, it seems, didn’t even try hard to attend – they just called it in.)

simon johnsonThe reason for Volcker’s confidence in his victory is simple - he is moving the consensus.  It’s not radicals against reasonable bankers.  It’s the dean of American banking, with a bigger and better reputation than any other economic policymaker alive – and with a lot of people at his back – saying, very simply: Enough.

He


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ValueWalk

Turkmenistan: With Money In Short Supply, Cash-Free Seen As Answer

By EurasiaNet. Originally published at ValueWalk.

Turkmenistan has a plan to fix its ever-troubled domestic currency, the manat – and that plan is to dispense with cash as much as possible.

The desire to go cash-free is being spun as a nod to economic modernization, although all available evidence points to the move being motivated by a stubborn liquidity crisis that shows no sign of abating.

Etereuti / PixabayTurkmenistan

At a regular end-of-week government meeting, President Gurbanguly Berdymukhamedov on March 24 listened to one of his deputy prime ministers provide an update on planned improvements to the banking system.

Byashimmyrat Hojamammedov, the Cabinet’s point-man...



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Zero Hedge

Artist's Impression Of GOP Obamacare Repeal Negotiations

Courtesy of ZeroHedge. View original post here.

Mis-stakes were made...

Source: MichaelPRamirez.com

...

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Phil's Favorites

Investors Underperforming Their Own Investments

 

Investors Underperforming Their Own Investments

Courtesy of 

If a financial advisor could just accomplish one thing for clients – help them capture more of the returns that their own investments offer, then he or she has done something extremely worthy and valuable. This requires difficult work though: It’s easier to promise a client that they’ll be able to avoid drawdowns than it is to convince a client why they must learn to tolerate them. Every advisor’s client yearns to be able to say “My guy got me out” at the country club.

Steve Russolillo looks at the well-known phenomenon in which investors systematically underperform ...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

These Charts Show Alarm Bells Ringing on the Trump Trade (Bloomberg)

Investors on Monday further unwound trades initiated in November resting on the idea that the election of Donald Trump and a Republican Congress meant smooth passage of an agenda that featured business-friendly tax cuts and regulatory changes.

U.S. equity futures at six-week low after Trump healthcare setback (Reuters)

U.S. equity index futures fell to a six-week low on Sunday in a sign Wall Street would start the week defensively after Republicans pulled legislation to overhaul the U.S. healthcare system in a...



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OpTrader

Swing trading portfolio - week of March 27th, 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

Stocks and Bonds; Critical change of direction in play?

Courtesy of Chris Kimble.

Since the summer of 2016, stocks have done very well and bonds have been thumped, as rates have risen sharply. Is it time for these trends to take a break? Below compares the performance of the S&P 500, with the popular bond ETF TLT over the past 9-months.

CLICK ON CHART TO ENLARGE

The performance spread between stocks and bonds over the past 9-months is a big one! Rare to see the spread between the two...



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Chart School

Weekly Market Recap Mar 26, 2017

Courtesy of Blain.

Tuesday’s long overdue >1% selloff in the S&P 500 broke a very long and rare streak in the S&P 500.   The S&P 500?s streak without a 1% down day was the longest since May 18, 1995!  A marginal close lower Monday was followed by a 1.2% drop Tuesday (the NASDAQ fell 1.8% that day).

“I think that investors are kind of starting to discount the likelihood of the immediacy of [President Donald Trump’s] policies and the enthusiasm has come off the boil as a lot of his policies got mired in the legislative process,” said Jack Ablin, chief investment officer at BMO Private Bank. “Investors are not throwing in the towel but they are resetting their expectations.”

According to Bespoke, there have been only 11 instances since 1928 where the S&P 500...



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Members' Corner

More Natterings

Courtesy of The Nattering Naybob

[Click on the titles for the full articles.]

A Quick $20 Trick?

Summary

Discussion, critique and analysis of the potential impacts on equity, bond, commodity, capital and asset markets regarding the following:

  • Last time out, Sinbad The Sailor, QuickLogic.
  • GlobalFoundries, Jha, Smartron and cricket.
  • Quick money, fungible, demographics, QUIK focus.

Last Time Out

Monetary policy is just one form of policy that effects capital,...



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Digital Currencies

Bitcoin Tumbles Below Gold As China Tightens Regulations

Courtesy of Zero Hedge

Having rebounded rapidly from the ETF-decision disappointment, Bitcoin suffered another major setback overnight as Chinese regulators are circulating new guidelines that, if enacted, would require exchanges to verify the identity of clients and adhere to banking regulations.

A New York startup called Chainalysis estimated that roughly $2 billion of bitcoin moved out of China in 2016.

As The Wall Street Journal reports, the move to regulate bitcoin exchanges brings assurance that Chinese authorities will tolerate some level of trading, after months of uncertainty. A draft of the guidelines also indicates th...



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Mapping The Market

Congress begins rolling back Obama's broadband privacy rules

Courtesy of Jean Luc

I am trying to remember who on this board said that people wanted to Trump because they want their freedom back. Well….

Congress begins rolling back Obama's broadband privacy rules

By Daniel Cooper, Endgadget

ISPs will soon be able to sell your most private data without your consent.

As expected, Republicans in Congress have begun the process of rolling back the FCC's broadband privacy rules which prevent excessive surveillance. Arizona Republican Jeff Flake introduced a resolution to scrub the rules, using Congress' powers to invalidate recently-approved federal regulations. Reuters reports that the move has broad support, with 34 other names throwing their weight behind the res...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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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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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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FeedTheBull - Top Stock market and Finance Sites



About Phil:

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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About Ilene:

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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