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Posts Tagged ‘IOUs’

Preserve and Protect: Mapping The Tipping Points

Preserve and Protect: Mapping The Tipping Points

Courtesy of Gordon T Long of Tipping Points

The economic news has turned decidedly negative globally and a sense of ‘quiet before the storm’ permeates the financial headlines. Arcane subjects such as a Hindenburg Omen now make mainline news. The retail investor continues to flee the equity markets and in concert with the institutional players relentlessly pile into the perceived safety of yield instruments, though they are outrageously expensive by any proven measure. Like trying to buy a pump during a storm flood, people are apparently willing to pay any price.  As a sailor, it feels like the ominous period where the crew is fastening down the hatches and preparing for the squall that is clearly on the horizon. Few crew mates are talgking as everyone is checking preparations for any eventuality. Are you prepared?

What if this is not a squall but a tropical storm, or even a hurricane? Unlike sailors, the financial markets do not have the forecasting technology for protection against such a possibility. Good sailors before today’s technology advancements avoided this possibility through the use of almanacs, shrewd observation of the climate and common sense. It appears to this old salt that all three are missing in today’s financial community.

Looking through the misty haze though, I can see the following clearly looming on the horizon.

Since President Nixon took the US off the Gold standard in 1971, the increase in global fiat currency has been nothing short of breath taking. It has grown unchecked and inevitably has become unhinged from world industrial production and the historical creators of real tangible wealth.

Do you believe trees grow to the sky?
Or, is it you believe you are smart enough to get out before this graph crashes?

Apparent synthetic wealth has artificially and temporarily been created through the production of paper. Whether Federal Reserve IOU notes (the dollar) or guaranteed certificates of confiscation (treasury notes & bonds), it needs to never be forgotten that these are paper. It is not wealth. It is someone else’s obligation to deliver that wealth to the holder of the paper based on what that paper is felt to be worth when the obligation is required to be surrendered. It must never be forgotten that fiat paper is only a counter party obligation to deliver. Will they?…
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California Declares State Of Emergency Over State Finances, Or Arnie Is An Austrian After All (For The Wonks)

California Declares State Of Emergency Over State Finances, Or Arnie Is An Austrian After All (For The Wonks)

Total RecallCourtesy of Tyler Durden

Quite possibly this has something to do with the fact that Arnie just had a very vivid Total Recall from the future in which California had filed Chapter 66 (a brand new invention in honor of the famous route), mere months after he had decided to institute the latest round of furloughs and once again paying using IOUs.

From Reuters:

Increasing pressure on lawmakers to negotiate a state budget that closes a $19 billion shortfall, California Governor Arnold Schwarzenegger declared a state of emergency over the state’s finances on Wednesday.

In the declaration, Schwarzenegger ordered three furlough days per month beginning in August for thousands of state employees to preserve the state’s cash to pay the state’s debt obligations and for essential services.

California’s budget is several weeks overdue and Schwarzenegger and top lawmakers are at impasse over how to balance the state’s books. Analysts say it could be several more weeks before the Republican governor and leaders of the Democrat-led legislature reach an agreement, a delay that may threaten to lower the state’s already weak credit rating, now hovering just a few notches above "junk" status.


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California Students Protest 32% Tuition Hike; State Budget Gridlock II Coming; Massive Deficits In San Francisco

And it’s not like high-school graduates who can’t afford college have JOBS waiting for them…. – Ilene

California Students Protest 32% Tuition Hike; State Budget Gridlock II Coming; Massive Deficits In San Francisco

happy UC students, when it college was affordableCourtesy of Mish

Massive fiscal problems confront California once again. Let’s start with a look at California students hit with 32% hike in tuition.

California undergraduates and their parents just got hit with a 32% increase in tuition by next summer.

With hundreds of angry students chanting outside their meeting at UCLA, the California Board of Regents approved the $2,500, two-step fee hike, which will raise the basic tuition at the 10-campus University of California system to $10,300 a year. That’s three times what it cost a decade ago. Other fees, books, and room and board adds an additional $16,000.

With the state $21 billion in the hole and slashing funding for education, the regents said they had no choice. At the same time, UC is restricting new admissions in a bid to save money.

More increases seem inevitable.

UC President Mark Yudof has asked for $913 million more next year for the UC system and says he "can’t make any promises" to not raise fees again if the state doesn’t come through. "When you have no choice, you have no choice," Yudof said after a regents’ committee endorsed the fee plan Wednesday. "I’m sorry."

California Deficit Hits $21 Billion

California is back in another deep hole. A $21 Billion Fiscal Shortfall Could Mean More Cuts, Higher Taxes and the Return of IOUs to Meet Obligations. Please consider Budget Gap Widens in Sacramento.

California is deep in red ink again, according to a new report projecting that the cash-strapped state faces a $21 billion budget shortfall through June 2011.

Facing so much fiscal red ink, Californians could see another round of spending cuts and tax increases. Since September 2008, state lawmakers have enacted three budgets to close a cumulative $77 billion shortfall. They closed the gap largely through spending cuts and tax increases, but also with federal-stimulus funds and one-time accounting gimmicks. At one point, California was so close to insolvency it was forced to issue IOUs.

The report’s conclusions now raise the likelihood of another lengthy impasse among the state’s hyper-partisan legislators that could threaten California’s solvency and force officials to again


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IOU and State of Emergency

Joe Weisenthal at ClusterStock updating on California’s budget crisis drama.

IOU

schwarzenegger tbiYou know, all this time we’ve been saying that the difference between California and the Federal Government was that California couldn’t print currency to get out of a pinch.

But really, isn’t printing currency exactly what issuing IOUs is? Granted, it’s not the most solid currency given with the state you’re dealing with, but it’s something.

Anyway, we’ll get to find out, because California has missed (surprise!) its deadline for closing its budget gap and is now set to hand out IOUs instead of actual money.

Reuters: The notes will mark the first time in 17 years the most populous U.S. state’s government will have to resort to the unusual and dramatic measure.

Democrats who control the legislature could not convince Republicans late on Tuesday night to back their plans to tackle a $24.3 billion budget shortfall or a stopgap effort to ward off the IOUs. The two sides agree on the need for spending cuts but are split over whether to raise taxes.

The state still has some cash, but that will be reserved strictly for its bondholders and education spending (the kids!). But vendors, college students, state agencies will get some paper.

Please, please, please let there be an after-market in these IOUs. We’d love to see how they’re valued and how businesses will conduct exchange using them.

STATE OF EMERGENCY

Gov. Arnold Schwarzenegger has now declared a State of Emergency for the sunny state of California.

Meanwhile, former Gov. Grey Davis was on CNBC saying he wouldn’t expect most banks to take California IOUs.

Oh, if only the constitution Article 1 Section 10 didn’t prevent the state from declaring IOUs a legal tender.

See Also:

California, killing dogs

Bail Out California, Or They’re Going To Kill Dogs

***** 

Hotel California – Eagles

 


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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!

 
 

All About Trends

Mid-Day Update

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Chart School

Median Household Incomes after the Great Recession: Household Types and Educational Attainment

Courtesy of Doug Short.

Yesterday I posted my analysis of selected features in Sentier Research's new report on the general decline in median household incomes since the end of the Great Recession in June 2009. My focus was on real income change by age groups and by racial/ethnic categories (more here). Today I'll examine the real income changes by household type and educational attainment.

According to Sentier Research's latest press release (available as a PDF), real (inflation-adjusted) median household annual income ...



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Zero Hedge

Sorry, Angelo Mozilo Can't Be Sued: He Is Sick

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

After years of evading the tentacles of the US government, yesterday the crosshairs of American justice (the civil, not criminal variety) which may be blindfolded but certainly has an offshore bank account, finally locked onto the orange man who made over half a billion between 1999 to 2008, according to compensation-research firm Equilar, not to mention saddling Bank of America with the worst Easter egg M&A transaction in history. Well, it turns out the US government may not be able to sue the Moz after all. The reason? He is sick.

...



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Phil's Favorites

US Manufacturing PMI Surges To Over 4-Year High, Biggest Beat On Record

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Following July's drop in US Manufacturing PMI (and biggest miss in 11 months), August's Flash print hit 58.0 - its highest since April 2010, beating expectations of 55.7 and up from the 55.8 July final print. With China (biggest PMI miss on record) and Europe (13-month low PMI) both disappointing, the world needed some help and the US 'soft' survey offered it up in spades... Production levels surged, employment rose at the fastest pace since March 2013, and new orders picked up once again.

This was the biggest beat on record - well above even the highest economist's estimate. Mission Accomplished... ...



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Option Review

Elizabeth Arden Put Option Activity Revisited

It’s an ugly day for investors in Elizabeth Arden, with shares in the name losing roughly one-quarter of its value overnight after the retailer of beauty products and fragrances reported a wider than expected loss and sales that were lower than analysts anticipated. Shares in the name are down more than 23% in the final hour of trading to stand at $14.95.

On Friday of last week we wrote a short note about put option activity on the stock...



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Sabrient

Sector Detector: Bullish investors jockey for position as if the correction is over

Courtesy of Sabrient Systems and Gradient Analytics

As many investors enjoy the final weeks of summer, some optimistic bulls seem to be positioning themselves well ahead of Labor Day in anticipation of a fall rally. Indeed, last week’s action was impressive. After only a mere 4% correction, investors continued to brush off the disturbing violence both at home and abroad, and they took the minor pullback as their next buying opportunity. But was that really all the pullback we’re going to get this year? I doubt it. But I also believe that nothing short of a major Black Swan event can send this market into a deep correction.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then ...



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OpTrader

Swing trading portfolio - week of August 18th, 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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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.

The Stock World Weekly Newsletter is ready to go! View it here: Stock World Weekly. Just put in your user name and password, or take a free trial. 

 

#120692880 / gettyimages.com ...

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Market Shadows

Helen Davis Chaitman Reviews In Bed with Wall Street.

Author Helen Davis Chaitman is a nationally recognized litigator with a diverse trial practice in the areas of lender liability, bankruptcy, bank fraud, RICO, professional malpractice, trusts and estates, and white collar defense. In 1995, Ms. Chaitman was named one of the nation's top ten litigators by the National Law Journal for a jury verdict she obtained in an accountants' malpractice case. Ms. Chaitman is the author of The Law of Lender Liability (Warren, Gorham & Lamont 1990)... Since early 2009, Ms. Chaitman has been an outspoken advocate for investors in Bernard L. Madoff Investment Securities LLC (more here).

Helen Davis Chaitman Reviews In Bed with Wall Street. 

By Helen Davis Chaitman   

I confess: Larry D...



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Digital Currencies

BitLicense Part 1 - Can Poorly Thought Out Regulation Drive the US Economy Back into the Dark Ages?

Courtesy of Reggie Middleton.

An Op-Ed piece penned by Veritaseum Chief Contracts Officer, Matt Bogosian

This past weekend (despite American Airlines' best efforts), Reggie and I made it to the Second Annual North American Bitcoin Conference in Chicago. While there were some very creative (and very ambitious) ideas on how to try to realize the disruptive Bitcoin protocol, one of the predominant topics of discussion was New York Superintendent of Financial Services Benjamin Lawsky's proposed Bitcoin regulations (the BitLicense proposal) - percieved by many participants at the event as an apparent ...



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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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Promotions

See Live Demo Of This Google-Like Trade Algorithm

I just wanted to be sure you saw this.  There’s a ‘live’ training webinar this Thursday, March 27th at Noon or 9:00 pm ET.

If GOOGLE, the NSA, and Steve Jobs all got together in a room with the task of building a tremendously accurate trading algorithm… it wouldn’t just be any ordinary system… it’d be the greatest trading algorithm in the world.

Well, I hate to break it to you though… they never got around to building it, but my friends at Market Tamer did.

Follow this link to register for their training webinar where they’ll demonstrate the tested and proven Algorithm powered by the same technological principles that have made GOOGLE the #1 search engine on the planet!

And get this…had you done nothing b...



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