Posts Tagged ‘regulations’


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


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


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


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? 

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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Zero Hedge

Desperate? - Democrats Sue RNC Over Trump's "Rigged Election" Comments Alleging "Minority Voter Intimidation"

Courtesy of ZeroHedge. View original post here.

In a move that wreaks of desperation, and certainly beneath a campaign that is apparently coasting toward a 12-point blowout victory in just over a week, the DNC has sued the RNC over efforts to "ensure ballot integrity" alleging "intimidation of minority voters."  Since when did working with "secretaries of states all over the country to ensure ballot integrity" become a crime?  And, why exactl...

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Reich Takes On Alan Simpson - And We Do The Fact Checking

By Advisor Perspectives. Originally published at ValueWalk.

Robert Reich, a prominent Democrat, and Alan Simpson, a distinguished Republican, engaged in a friendly debate to discuss issues that they said were not addressed during this campaign season. But on crucial subjects, both relied on out-of-date and inaccurate reasoning.

Image source: Wikimedia CommonsAlan Simpson

The debate, which took place yesterday, was a keynote presentation at the Schwab IMPACT conference, held in San Diego. It is the largest conference in the industry, attracting approximately 2,000 advisor attendees.

Reich is a political commentator, economist, professor and author. He served in the administrations of Presidents Gerald Ford and Jimmy Carter, and was Secretary of Labor under President Bill Clinton fro...

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Kimble Charting Solutions

London- 4th attempt to breakout in 16-years, results different this time?

Courtesy of Chris Kimble.

Four months ago the world seemed scared that the Brexit vote would be negative for Europe and potentially around the world. Four months later, almost the polar opposite deserves discussion.

Below updates the FTSE -100 Index on a monthly basis over the past few decades.


FTSE Index is now testing a resistance zone for the 4th time in the past 16-years at (1), as well as testing the underside of line (3) at the same time.

Monthly MACD has created a series of ...

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Market News

News You Can Use From Phil's Stock World


Financial Markets and Economy

Oil Companies Shift Exploration Tactics, Curb Spending (The Wall Street Journal)

In June, oil giant BP PLC announced what it deemed an “important” new discovery in Egypt.

It turned out to be a modest natural-gas find that didn’t even rank in the top 50 discoveries since 2012.

Gundlach Says ‘Look Out’ for...

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Phil's Favorites

Now it's an avalanche


Picture via Pixabay

Courtesy of Joshua Brown, The Reformed Broker

Reuters on the last week’s fund flows:

Mutual fund investors flooded stockpickers with redemption orders during the latest week, cashing out the most money in five years, Investment Company Institute data showed on Wednesday.

The investors pulled $16.9 billion from stock mutual funds in the seven days through Oct. 19, more than in any other week since August 2011, the trade group’s data showed.

By contrast, stock exchange-traded funds took in $2.4 billion. ETFs most...

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Digital Currencies

Bitcoin Soars As China Launches Crackdown On Wealth-Management Products

Courtesy of ZeroHedge. View original post here.

After trading in a tight range for much of the summer, coiled within a $100 range around the mid-$500s, over the past several weeks bitcoin has once again started to push higher, closely tracking the decline in the Chinese Yuan as shown below.

However, the most recent burst in bitcoin activity, which sent it surging by over $20 overnight, has little to do with any moves in the official Chinese currency, which recently...

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Members' Corner


Courtesy of Nattering Naybob.


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

  • Rising Libor and Bond Yields
  • Negative Swap Spreads, Eurodollar Curve, Repo Effects
  • Compliance, Expectations, Liquidity, Fed Action

Last Time Out

"25-54 yr old prime earners peaking at 101083 in Nov 2007; today at 97628, for a net decline of 3.5M prime earning jobs during this "recovery". No real jobs, just McJobs for McPay."

"Above note, 55yrs+ in Nov 2007 at 26376, now at 34353, for a net increase of 8 million employed. Not for sheer enjoyment and mostly out of economic necessity. The above attests to no real jobs, just McJobs for McPay and work till you die?" - 08...

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Chart School

Tech Hold Breakout,.but S&P Wedge Bound

Courtesy of Declan.

It was a mixed day for indices. Large Caps remain bound by wedge support/resistance, but Tech broke upside yesterday from similar wedges and held those breakout today.

There was little change for the S&P over the last couple of days. The one technical change was the MACD trigger 'buy' as other technicals stayed on the bearish side.

Meanwhile, the Nasdaq cleared wedge resistance yesterday, and was able to hang on to the breakout despite today's loss. It too enjoyed a MACD trigger 'buy', but had an On-Bal...

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Swing trading portfolio - week of October 24th,2016

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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Mapping The Market

The Most Overlooked Trait of Investing Success

Via Jean-Luc

Good article on investing success:

The Most Overlooked Trait of Investing Success

By Morgan Housel

There is a reason no Berkshire Hathaway investor chides Buffett when the company has a bad quarter. It’s because Buffett has so thoroughly convinced his investors that it’s pointless to try to navigate around 90-day intervals. He’s done that by writing incredibly lucid letters to investors for the last 50 years, communicating in easy-to-understand language at annual meetings, and speaking on TV in ways that someone with no investing experience can grasp.

Yes, Buffett runs an amazing investment company. But he also runs an amazing investor company. One of the most underappreciated part of his s...

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Epizyme - A Waiting Game

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

Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer.  One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."

Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.  

Genetic components are the DNA sequences that are 'inherited.'  Some of these genes are stronger than others in their expression (e.g., eye color).  Yet, some genes turn on or off due to external factors (environmental), and it is und...

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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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We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more! features the most important and most interesting news items from around the web, all day, every day!

News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

If you are looking for non-mainstream, provocatively-narrated news and opinion pieces which promise to make you think -- we feature Zero Hedge, ...

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