Turn out the lights. The collapse of Venezuela is well underway. It will not be long before the country completely stops functioning, assuming you think Venezuela is functioning now.
Venezuela devalued its currency by half yesterday, the first such action since March 2005, as President Hugo Chavez seeks to pull the economy from recession amid falling oil revenue.
Chavez said the bolivar will be devalued to 4.3 per dollar from 2.15 per dollar for most imports. A second, subsidized peg of 2.60 bolivars per dollar will be used for importing food, medicine and machinery intended to boost the economy’s competitiveness.
The government, which restricted foreign currency trading in January 2003 following a two-month general strike intended to oust Chavez from power, last devalued the currency by about 11 percent in March 2005. The bolivar was also devalued in 2004.
Venezuelan President Hugo Chavez said that businesses have no reason to raise prices following the devaluation of the bolivar and that the government will seize any entity that boosts its prices.
Chavez said he’ll create an anti-speculation committee to monitor prices after private businesses said that prices would double and consumers rushed to buy household appliances and televisions. The government is the only authority able to dictate price increases, he said.
The government also will “attack” the so-called parallel exchange rate, which Chavez called “illegal.”
The bolivar traded at 6.25 per dollar on Jan. 8, traders said.
“They put the value of the dollar at more than 6 in an arbitrary and illegal manner,” Chavez said. “We have to organize to reduce and attack that speculative, illegal dollar that hurts the Venezuelan economy so much.”
Official Rate vs. Black Market Rate
Official Rate: 4.3 bolivar per dollar
Previous Official Rate: 2.15 bolivar per dollar
Black Market Rate: 6.25 bolivar per dollar
Virtually no one in private business will exchange at the rate of 4.3 bolivar per dollar. Banks will not do it either, otherwise there would be no need for a black market.
Every night Americans prove that they are willing to do absolutely horrible things to their fellow human beings. Most of the time, we never even hear about the sick and twisted things that happen on the side streets and dark alleys of America. Once in a while a particularly twisted story will get picked up by the news, but usually most Americans are pretty much able to isolate themselves from the depravity that is happening all around them. Unfortunately, the social decay that is eating away ...
MU - Micron Technology, Inc. – Options traders appear to be snapping up out of the money call options on Micron Technology this morning ahead of the company’s third-quarter earnings report after the closing bell today. Shares in the name kicked off the trading session in rally mode, rising as much as 2.6% to a six-year high of $14.11 in the early going, but have since turned negative to stand 0.15% lower on the day at $13.73 as of 11:10 a.m. ET. Micron’s shares are up roughly 130% since this time last year. July expiry call optio...
I've saved about three dozen atrociously allocated retirement portfolios in the last few years where gold holdings out-weighed productive assets (like stocks and bonds) by 2-to-1 or more. I've taken accounts away from every single hyper-inflationist and deflationist celebrity doomer you can name. I consider it my sacred duty to rescue investors from the revival tents and carnival midways whenever possible. But I can't save them all.
Let's get an update on the end-of-the-world trade that so many still have on, here's a GLD : SPY ratio chart over the last two years:
With nothing of international significance to predetermine US market direction, the trade from the opening bell was one of marking time in advance of the June FOMC press release at 2 PM and more importantly Chairman Bernanke's hour-long press conference at 2:30. Prior to 2 PM the S&P 500 traded in a narrow negative range and hit its intraday high at 2:01 PM, up 0.04%, Then began a three-stage selloff. The first was a brief knee-jerk sell when the Fed summary was released, one that was essentially reversed a few minutes later. The second started about 15-minutes into Bernanke's press conference, again one that was partially reversed. The third selloff came during the final 30 minutes with no reversal. The index closed down 1.39%, a microscopic 0.02 points off its in...
No change to the statement as expected and Ben is speaking now. Basically he is dovish – one takeaway which I mentioned quite a few months ago but he reiterated today. The 6.5% unemployment rate is a threshold NOT a trigger. What that means is if inflation is benign when 6.5% unemployment returns, the Fed will be in no rush to raise interest rates. i.e. the goalposts are soft, nor hard. The market rallied on that… but it's not new news really.
Also the majority of members do not anticipate selling MBS off the balance sheet – this is part and parcel with the view that the balance sheet will not...
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...
Finisar Corporation (NASDAQ: FNSR), a global technology leader for subsystems and components for fiber optic communications, today announced financial results for its fourth quarter and fiscal year ended April 28, 2013.
COMMENTARY
"I am pleased to report fiscal fourth quarter revenues of $243.4 million, which is $5.1 million, or 2.1%, greater than the prior quarter. Our growth in revenues came primarily from sales of 10G and 100G Ethernet transceivers and transponders for datacom applications. Our favorable product mix in the quarter enabled us to achieve gross margin and earnings per diluted share that exceeded our guidance range," said Jerry Rawls, Finisar's executive Chairman of the Board.
"During the quarter, we continued to invest significantly in techn...
The market responded well today to good economic news and to the positive and somewhat surprising response to the election of a moderate Iranian President. Some moderation in Turkey didn’t hurt either, and overnight positive markets in Asia and Europe gave bullish investors enough encouragement to buy equities broadly.
This drove all three major domestic indices up about 1% before a late small selloff left the S&P 500 Index up nearly 1% and the Nasdaq and Dow Jones Industrial Average both up well over 0.5%. We think it likely this week that the market will challenge highs set in late May.
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Click here for the latest Stock World Weekly. Sign in with your PSW user name and password, or sign up for a free trial. There's an interesting option trade on LULU presented in the newsletter this week.
Trivia on lululemon via Paul Price, article found in NYTimes.
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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
Reminder: Craigzooka is available to chat with Members regarding his virtual portfolio performance, comments are found below each post.
By Craigzooka
I am going to share with you how I manage my IRA and the power of reducing your cost basis. My goal each year is a 20% return in my IRA. Sometimes I make it and sometimes I don't, but I believe that all of my success is due to reducing my cost basis. To illustrate the power of reducing your cost basis here are some trades we did last year. These trades are taken from an educational portfolio we ran in a paper-trading account for a little more than a year.
We bought RIG on 5/15/2012 for $44.13, sold it on 1/18/2013 for $46 but booked a profit of $1,154.
We bought MT on 1/4/2012 for $19.24, sold it on 12/21/2012 for $15 but booked a profit of $454.
We bought CHK on 1/27/2012 for $21.93, sold it on 10/19/2012 for $18 b...
Stock market posts another record setting week, but the big news came after Friday’s close.
Courtesy of NASA
The stock market put on another record setting show with the Dow Jones Industrial Average (NYSEARCA:DIA) closing at a record high 15,118 and the S&P 500 (NYSEARCA:SPY) closing at 1633.70, another all time closing high.
For the week, the Dow Jones Industrial Average (NYSEARCA:DIA) gained 1%, the S&P 500 (NYSEARCA:SPY) climbed 1.2%, the Nasdaq Composite (NYSEARCA:...
Reminder: Pharmboy is available to chat with Members, comments are found below each post.
Well, well, well....it is good to know that there are others in the scientific arena who believed that YMI Bioscience's data (cough - Gilead) is a better drug than Incyte's Jakafi. Now, the definitive data are still unknown, but there was enough evidence from a Phase 2 trial to take a small risk for a huge reward. So, let's forget about Apple (AAPL), and do nothing but biotechs from now until Congress passes universal health care coverage for prescriptions....and drive the prices down so that research and development is no longer feasible to conduct in the US. Even Seattle Genetics (SGEN) has been on a tear as of late...
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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...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
(