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Posts Tagged ‘regulations’

WHAT DID WE EXPECT WITH LEADERS LIKE THIS?

Brief review of why it’s about time Summers says goodbye. – Ilene 

WHAT DID WE EXPECT WITH LEADERS LIKE THIS?

Courtesy of The Pragmatic Capitalist 

It’s no secret that the economic recovery in the United States has been meager at best (and that’s assuming you believe this is not just one ongoing recession). While there is plenty of blame to go around for our current plight the buck ultimately stops with the most influential people in this economy – the leaders that help frame the regulations and policies that help to keep the U.S. economy running smoothly. I don’t think these men and women (mostly men) have been held accountable over the years. I personally believe many of these men have flawed models (Alan Greenspan has admitted as much and Ben Bernanke has essentially rehashed his flawed model) and continue to help promote and implement economic policy in the U.S. that is counterproductive, ineffective and at times downright destructive.

I’ve been highly critical of Obama’s economic team over the years because many of them were key players in helping cause the financial crisis. Tim Geithner was the head of the NY Fed when the banks were busy turning themselves into casinos. Ben Bernanke (who Obama should have never reconfirmed) failed to even acknowledge the potential existence of problems in the U.S. economy leading up to the financial crisis and then implemented his great monetarist gaffe which has now been proven to be what I called it from the very beginning – a bailout of Wall Street and a slap in the face for Main Street. He receives endless praise for helping to avoid a supposed second Great Depression. This is like the man who sees a fire in his front yard, ignores it, then when it’s finally becoming a widespread danger decides to save his own house from burning (the banks), lets all of the surroundings houses burn to the ground (Main Street) and then receives endless praise for his courage under fire.

But there have been few people in power over the last 25 years that have been more misguided and downright destructive than Larry Summers. This is a man who believes that women are intellectually inferior (I’ll tell you one thing – this economy wouldn’t be such a mess if it wasn’t run primarily by arrogant, narcissistic males) and has done more to help


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US money supply plunges at 1930s pace as Obama eyes fresh stimulus

US money supply plunges at 1930s pace as Obama eyes fresh stimulus

The M3 money supply in the United States is contracting at an accelerating rate that now matches the average decline seen from 1929 to 1933, despite near zero interest rates and the biggest fiscal blitz in history.

By Ambrose Evans-Pritchard, Telegraph 

The M3 figures – which include broad range of bank accounts and are tracked by British and European monetarists for warning signals about the direction of the US economy a year or so in advance – began shrinking last summer. The pace has since quickened.

The stock of money fell from $14.2 trillion to $13.9 trillion in the three months to April, amounting to an annual rate of contraction of 9.6pc. The assets of insitutional money market funds fell at a 37pc rate, the sharpest drop ever.

"It’s frightening," said Professor Tim Congdon from International Monetary Research. "The plunge in M3 has no precedent since the Great Depression. The dominant reason for this is that regulators across the world are pressing banks to raise capital asset ratios and to shrink their risk assets. This is why the US is not recovering properly," he said.

The US authorities have an entirely different explanation for the failure of stimulus measures to gain full traction. They are opting instead for yet further doses of Keynesian spending, despite warnings from the IMF that the gross public debt of the US will reach 97pc of GDP next year and 110pc by 2015.

Larry Summers, President Barack Obama’s top economic adviser, has asked Congress to "grit its teeth" and approve a fresh fiscal boost of $200bn to keep growth on track. "We are nearly 8m jobs short of normal employment. For millions of Americans the economic emergency grinds on," he said.

Read more here.>>

****

Jr. Deputy Accountant notes:

That’s THIRD Stimulus, Not Second

 nope, you’re not getting a check this time either…

Remember standing by the mailbox waiting for Bushy Jr’s stimulus? So let’s keep that in perspective when discussing an additional stimulus measure – proposed by cheeseburger addict and serial maniac Larry Summers. Don’t credit Obama with making this statement, he was busy here in my home base of San Francisco this week trying to whore himself out for the sake of Barbara Boxer’s reelection campaign. Sexy.

The FT is reporting that
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Merkel to the Banks and Speculators: Sprechen Sie Deutsche? Then Droppen Sie Dead

Droppen Sie Dead?  I think that means drop dead. 

Merkel to the Banks and Speculators: Sprechen Sie Deutsche? Then Droppen Sie Dead

German Chancellor Merkel delivers speech at DGB congress in Berlin

Courtesy of JESSE’S CAFÉ AMÉRICAIN

There is much surprise that the German government has declared a ban on naked short selling, including CDS, as of midnight tonight, with no prior notice or the niceties demanded by the banks when government chooses to act. This action seems to have perturbed some and confused many.

The reason for this may be quite simple.

After tonight, when hedge funds and the NY and London Banks call upon German financial firms and European governments to make payments on Credit Default Swaps or other financial instruments that are subject to the ban, the Germans will have a great big hammer in hand to help them to negotiate the terms.

Since the CDS will be deemed to be no longer legal, the option to default on them with the backing of the government may be an option. This seems quite similar to the stance that the Chinese government took on behalf of some Chinese firms that were caught on the wrong side of energy derivatives.

I have heard that there was a general disappointment in Europe and in parts of Asia at the lack of progress being made in the US Congress towards creating meaningful reforms in their financial system. In fact, there is a widespread belief that Washington is being dictated to by the Banks, and that their lobbyists are directing the conversation, and in many cases writing the actual legislation. The final straw was when the Obama Administration itself sought to water down and block key provisions of the legislation to limit the power and size of the Banks.

"To some degree this is a battle between the politicians and the markets," she said in a speech in Berlin. "But I am firmly resolved — and I think all of my colleagues are too — to win this battle….The fact that hedge funds are not regulated is a scandal," she said, adding that Britain had blocked previous efforts to do this. "However, this will certainly have taken place in Europe in three weeks," she said, without giving more details." Reuters, 6 May 2010

"German Chancellor Angela Merkel accused the financial industry of playing dirty. ‘First the banks failed, forcing states to


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Regulations Alone Are Never Enough, But Here’s How They Can Easily Be Made Pointless

Regulations Alone Are Never Enough, But Here’s How They Can Easily Be Made Pointless

Courtesy of JESSE’S CAFÉ AMÉRICAIN

Obama holds a naturalization ceremony at the White House in Washington

Mr. Obama’s speech at the Cooper Union today was remarkably unsatisfying. It seemed to be given from weakness, and almost obsequious as the American President politely asked his largest campaign contributors to please stop flouting the law, defrauding the people and their customers, and spending millions per day lobbying the Congress to buy changes in the reform legislation to provide them with the ‘right regulators’ of their choice and convenient loopholes to render it ineffective.

The reform making its way through the Congress is unlikely to be effective given the process in place, despite the political kabuki dancebeing conducted by the Congress and the Banks.

The solution is to put simple and effective regulations in the hand of stronger, independent, ad highly capable regulators to bear on the financial services industry, and to understand that the regulations must evolve with a dynamicly evolving business. The idea that you can erect some impregnable and unchanging Maginot line against bank fraud is laughable, a farce.

As William K. Black disclosed in his testimony the other day, the regulators always had the power to shut down the frauds, and to resolve the financial crisis without having to give away billions. They lacked the will, and the motivation.

Banking CEO's Testify Before House On Use Of TARP Funds

You want to wipe that smirk off Lloyd Blankfein’s face? Nominate Eliot Spitzer or Elizabeth Warren to be the head of the SEC, or the CFTC, and provide them with a adequate budget and a staff of financial experts and a few experienced prosectors.

Even with strong regulations, unless you have capable and motivated regulators, there are always ways to evade the rules, especially if they are complex and provide exceptions. The simpler they are, the stronger the regulations will be, provided they are flexible enough to be amended and expanded efficiently to match the changing and dynamic nature of the industry that they are overseeing.

This is not that difficult, and these jokers are not that smart, although part of their con is to paint themselves as the smartest, the best, and practically unstoppable.

The root of the US financial crisis is always and everywhere regulatory capture, political cronyism, and fraud. It really is that simple.

Barack Obama should to listen…
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Hollywood for CFPA

Hollywood for CFPA

Courtesy of Eric at FALKENBLOG

A bunch of legendary comedians got together to make a sketch, where the punchline is: "establish a Consumer Financial Protection Agency". It’s kinda a funny, but mostly because of the Darrell Hammond’s imitation of Clinton making sexual innuendos, and Fred Armisen’s impersonation of Barack Obama. It seems director Ron Howard was trying to find something to ‘do good’, so he chatted with the earnest and overeducated Elizabeth Warren, and decided consumer financial regulation was the kind of smart idea that would obviously work. After all, who’s against consumer protection? 


Funny or Die’s Presidential Reunion from Will Ferrell

I am! This is the same government that goaded banks to lower standard to lend more to historically damaged communities, and then when those borrowers defaulted, blamed such lending on the banks. Avoiding the poor is redlining, targeting the poor is predatory, which means, whatever goes wrong can be blamed on the banks. Government always wants to have its cake and eat it too: low taxes & high spending, high growth and union-type work rules, banks lending more today and raising their capital. 

The CFPA tries to do what most regulators try to do: improve efficiency, eliminate waste, consolidate regulations,simplify regulations, protect consumers, and protect jobs! It seems banks are greedy and basically uregulated, leading directly to the 2008 housing crisis. There are seven government bodies already regulating banks, highlighting how incredibly naive this proposal is. If there’s a magic bullet for improving efficiency, etc., share it with existing regulators…unless you think that all the regulators have been captured by some interest group, which if true just means we are bringing in one more interest group to advocate why they should get a better deal.

More importantly, if your concern is about the irrational poor people easily duped by huckster bankers, lower prices and penalties on the poor doesn’t help them, it enables them. Life has carrots and sticks, and one definition of a vice is that which generates bad outcomes in the long run. If you are constantly overdrafting your account, don’t have enough money to make a 20% down payment on a property, you need better financial discipline. Helping the poor from being trapped by debt should try to minimize they amount of debt they have, say by increasing rather than lowering prices on credit cards.…
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Fraud and Failure: Bo Cutter’s Indictment of the Finance Industry (Part 1)

Fraud and Failure: Bo Cutter’s Indictment of the Finance Industry (Part 1)

By William Black, courtesy of New Deal 2.0

money-noose-150Bill Black explains how Bo Cutter’s defense of Tim Geithner reveals the fraud and failure that plagued the financial sector long before the crisis.

Bo Cutter has presented the best possible defense of Treasury Secretary Geithner.

It is a remarkable defense because it is premised on a scathing indictment of Wall Street, theoclassical economics, modern finance, and the sycophants that the financial community installed as anti-regulators. Indeed, Bo’s account is sometimes particularly credible because it is a confession. Bo was a managing partner of Warburg Pincus, a major global private equity firm and led President Obama’s Office of Management and Budget (OMB) transition team. His defense of Geithner provides so rich a vein of ore that I will mine it in three installments: (1) Bo’s indictment of the finance industry, Greenspan, Geithner, Paulson and Bernanke, (2) the martyrdom of Geithner, and (3) Geithner as Bo’s Last Action Hero.

Bo’s explanation of Geithner’s unique virtues begins the indictment.

It comes down to this: the combination of brains, guts, calmness, and a willingness to act are virtually non-existent in Washington in any era, but particularly in this one. When you find the combination in a significant cabinet level job, you should value it.

[T]his crisis was long in coming and it was a totally integrated failure of intellectual traditions, global macro-economic imbalances, government policy making, regulatory supervision, financial sector greed, incomprehensible boards of directors, absences without leave, and breath-taking management short-sightedness. No one and no institution put together an understanding of the set of factors that triggered this particular debacle. Tim [Geithner] is included in this “no one”, but so is everyone else.

I think the last two years have revealed the single largest failure of senior management in the financial sector, and of the board system in American history. I think I am correct in saying that there was not a single independent director in America who stood up on this issue. I do not understand why every board of every institution that failed was not asked to resign immediately.

Bo’s indictment is compelling, but his logic proves a deeper failure. There is no reason to restrict his indictment to “the last two years.” The senior managers’ and directors’ failure did not begin with the recession.…
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Phil's Favorites

Valuations: Maybe I am Crazy

Courtesy of Mish.

Relative vs. Absolute Value

As I watch valuations on stocks soar higher and higher into the stratosphere, I keep asking "where is the value?"

The problem for most is confusing "relative" value vs. absolute value. Stocks may be "cheap vs. bonds" but what does that matter if bonds are ridiculously overpriced?

Fair Value Has Three Digits

John Hussman has an interesting post this week entitled Fair Value on the S&P 500 Has Three Digits.

The last time I quoted Hussman, a manager for a prominent investment firm emailed something on the lines of "Mish, please do yourself a favor and stop referring to Hussman".

Actually, that was likely be good advice. The problem I have with the advice is simple: I happen ...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker.

Please review a collection of WWW browsing results.Date Found: Tuesday, 13 January 2015, 01:43:37 PM

Click for popup. Clear your browser cache if image is not showing. Comment: Ouch! See the last point of demand between $60 and $70 In Dec at resistance, now strong selling, Large pattern forecast sees a price under $40

Date Found: Tuesday, 13 January 2015, 06:54:16 PM

Click for popup. Clear your browser cache if image is not showing. Comment: Coffe ETF bounces off support, minor spring, if get some strength to $40, a trade may be on!

Date Found: Friday, 16 January 2015, 01:03:56 PM

Click for popup. Clear your browser cache if image is not showing. Comment: Apple forming a continuation stepping sto...



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Insider Scoop

Benzinga's M&A Chatter for Monday April 27, 2015

Courtesy of Benzinga.

The following are the M&A deals, rumors and chatter circulating on Wall Street for Monday April 27, 2015:

Swedish Orphan Biovitrum AB Confirms Receipt of Preliminary and Conditional Non-binding Proposal for Acquisition of All Shares Issued by Company

The Proposal:
Swedish Orphan Biovitrum AB (OTC: SWTUY) confirmed Monday, that it has received a preliminary and conditional non-binding proposal in relation to a possible offer for all shares issued by the company. The company issued statemetn in repsonse to media reports.

...



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Zero Hedge

Charting American Oligarchy: How The 0.01% Contributes 42% Of All Campaign Cash

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

This is an economic fight, but this is also a political fight. The biggest financial institutions aren’t just big – they wield enormous political power. Last December, Citibank lobbyists wrote an amendment to Dodd-Frank and persuaded their friends in Washington to attach it to a bill that had to pass or the government would have been shut down. And when there was pushback over the amendment, the CEO of JPMorgan, Jamie Dimon, personally got on the phone...



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Sabrient

Sector Detector: Sector rotation model stays bullish, but neutral rankings and technical resistance flash caution

Reminder: Sabrient is available to chat with Members, comments are found below each post.

Courtesy of Sabrient Systems and Gradient Analytics

Last week, stocks cycled bullish yet again. In fact, the S&P 500, NYSE Composite, and NASDAQ each closed at record highs as investors positioned for the heart of earnings season in the wake of strong reports from some of the Tech giants. Notably, Utilities stocks got some renewed traction as yield-starved investors returned to the sector. Although our trend-following sector rotation model remains bullish, strong overhead technical resistance and neutral rankings in our SectorCast quant model indicate that caution is in order, and this might not be the moment for a major upside breakout, particularly given the expected softne...



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Kimble Charting Solutions

Apple weekly breakout in play, $150 remains upside target

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

Apple closed last week at an all-time weekly closing high at (1) in the chart above. Apple recently broke above its 4-year rising channel, came back to test old resistance and pushed higher, setting this new record high.

In November of last year, when Apple was trading below $110 per share, the Power of the Pattern shared that Apple’s upside target stood at $150. (See post here) 

Below is a long-term update on Apple

...



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OpTrader

Swing trading portfolio - week of April 27th, 2015

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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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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Digital Currencies

Why Bitcoin's male domination will be its downfall

Here's an interesting argument by Felix Salmon, although I think he is taking two correct observations and mistakenly attributing a cause-and-effect relationship to them: Bitcoin is going nowhere because women are not involved.

More likely, in my opinion, women are not involved in bitcoin because bitcoin is going nowhere (and they know it). Or maybe, simply, bitcoin is going nowhere and women are not involved. 

Why Bitcoin's male domination will be its downfall 

By Felix Salmon

Nathaniel Popper’s new book, Digital Gold, is as close as you can get to being the definitive account of the history of Bitcoin. As its subtitle proclaims, the book tells the story of the “misfits” (the first generation of hacker-l...



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Promotions

Watch the Phil Davis Special on Money Talk on BNN TV!

Kim Parlee interviews Phil on Money Talk. Be sure to watch the replays if you missed the show live on Wednesday night (it was recorded on Monday). As usual, Phil provides an excellent program packed with macro analysis, important lessons and trading ideas. ~ Ilene

 

The replay is now available on BNN's website. For the three part series, click on the links below. 

Part 1 is here (discussing the macro outlook for the markets) Part 2 is here. (discussing our main trading strategies) Part 3 is here. (reviewing our pick of th...

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Market Shadows

Kimble Charts: South Korea's EWY

Kimble Charts: South Korea's EWY

By Ilene 

Chris Kimble likes the iShares MSCI South Korea Capped (EWY), but only if it breaks out of a pennant pattern. This South Korean equities ETF has underperformed the S&P 500 by 60% since 2011.

You're probably familiar with its largest holding, Samsung Electronics Co Ltd, and at least several other represented companies such as Hyundai Motor Co and Kia Motors Corp.

...



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Mapping The Market

S&P 500 Leverage and Hedges Options - Part 2

Courtesy of Jean-Luc Saillard.

In my last post (Part 1 of this article), I looked at alternative ETFs that could be used as hedges against the corrections that we have seen during that long 2 year bull run. Looking at the results, it seems that for short (less than a month) corrections, a VIX ETF like VXX could actually be a viable candidate to hedge or speculate on the way down. Another alternative ETF was TMF, a long Treasuries ETF which banks on the fact that when markets go down, money tends to pack into treasuries viewed as safe instruments. In some cases, TMF even outperformed the usual hedging instruments like leveraged ETFs. There could of course be other factors at play since some of 2014 corrections were related to geopolitical events which are certain...

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Pharmboy

2015 - Biotech Fever

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

PSW Members - well, what a year for biotechs!   The Biotech Index (IBB) is up a whopping 40%, beating the S&P hands down!  The healthcare sector has had a number of high flying IPOs, and beat the Tech Sector in total nubmer of IPOs in the past 12 months.  What could go wrong?

Phil has given his Secret Santa Inflation Hedges for 2015, and since I have been trying to keep my head above water between work, PSW, and baseball with my boys...it is time that something is put together for PSW on biotechs in 2015.

Cancer and fibrosis remain two of the hottest areas for VC backed biotechs to invest their monies.  A number of companies have gone IPO which have drugs/technologies that fight cancer, includin...



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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!




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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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