Which is why we were greatly troubled when we learned recently on good authority that Federal representatives may have opened multiple undisclosed-type accounts with none other than State Street Global Advisors over the past few months. All of these accounts are allegedly handled by one single trader, who is cocooned and isolated from interaction with other partners.
Zero Hedge can, as of yet, not vouch for this being 100% factual and is asking readers who may have additional knowledge of the situtation to please come forward and share their views (firstname.lastname@example.org). If, indeed, the Federal Reserve or other derivatives of the administration, are now directly involved in trading, managing repo terms, stock lending, collateral distribution and other liquidity-crucial aspects of what was once an efficient market, then indeed this rally could be written off not merely as the biggest short covering rally of all time, but one that has been explicitly orchestrated by those who should be most impartial to an efficiently working market.
Uh, there’s a bit more than just "writing off this rally" there.
If this is true and especially if The Fed is involved, there is a major problem with the law.
See, The Federal Reserve is explicitly not permitted to buy anything that doesn’t have the full faith and credit of The US Federal Government behind it. It is that fact (found in Sections 13 and 14 of The Act) that has led me to repeatedly rant about The Fed’s purchase of Fannie and Freddie paper – distinctly outrageous acts, given the plain language of the law. (Note that purchase of Ginnie Mae securities, which are fully guaranteed with full faith and credit, would be fine. Note also that Ginnie Mae didn’t get in trouble fiscally either. Hmmmm….)
The Fed’s charter and statement of operation is that liquidity operations are to be performed through the NY Fed dealing desk. That transparency is important. It is why I was able to detect the liquidity drain on September 24th and sound the alarm – even though it went unheeded – three days before the equity market collapsed.
This sort of transparency of open market operations
Five years after the 2008 financial market collapse, governments and central banks across the globe have still re-ignited a sustained global economic expansion. What growth there has been, has been localized, sporadic and anemic. Europe remains mired in recession. The expansion in the U.S. is episodic, with alternating quarters of growth and contraction. While China, seemingly rebounding, lacks the aggregate demand to pull other economies along in its wake.
How to put the global economy on an even keel remains a puzzle to be solved. But, a more profound worldwide economic stagnation looms on the horizon. How we tackle today's problems will determine in part our ability to navigate the secular dearth of growth we are soon to face.
According to United Nations' projections, several nations in the developed world will begin to experience a contraction...
Curious why in yesterday's FOMC minutes the following line "a few participants expressed concern that conditions in certain U.S. financial markets were becoming too buoyant" received special attention? Here is the reason: as the chart below shows, according to the census bureau, the average new home sale price just hit a new all time high, rising by a record 15.4% to a record $330,800. In a country in which ...
The market went through some gyrations on Wednesday in reaction to Fed Chairman Bernanke’s testimony before the Joint Economic Committee. He first defended continued quant easing by warning, “A premature tightening of monetary policy could lead interest rates to rise temporarily but also would carry a substantial risk of slowing or ending the economic recovery.” Stocks dutifully rallied and all major indexes hit new intraday highs.
But alas, consensus is apparently not a given over the longer term. The minutes hinted that a tapering off could start sooner, “A number of participants expressed willingness to adjust the flow of purchases downward as early as the June meeting if the economic information received by that time showed evidence of sufficiently strong and sustained growth.” So …...
Few stocks have attracted more news over the last six months than nutritional supplement maker Herbalife (NYSE: HLF).
Even casual market observers are aware of the circumstances surrounding the the initial bout of extreme volatility in the name back in December 2012. The shares went into free-fall at the end of the year after hedge fund manager Bill Ackman revealed in typical sanctimonious fashion that his firm Pershing Square Capital Management was short around $1 billion worth of the stock.
Amid much pomp and circumstance, Ackman laid out his short thesis at a New York investment conference and...
SKS - Saks, Inc. – Timely bullish bets initiated in Saks options just seconds prior to the closing bell on Tuesday are generating sizable gains for at least one trader today, with shares in the high-end retailer up at the highest level since 2008. The stock closed Tuesday up 11% on the day at $13.67 after the company reported first-quarter revenue above average analyst expectations. Within minutes of the close shares in SKS moved sharply to the upside after the New York Post, citing a source familiar with the matter, reported...
The indexes along with a host of stocks are putting in a bearish outside candle today (over yesterday's highs and below yesterday's lows). Typically this is … well bearish. But in the QE era when a technical signal screams bearish it has tended to be completely forgotten within a few days, causing those who follow it to get squeezed if you are short or left behind if you go to cash. This is the difficulty of the current market – QE causes it not to behave as normal. In the "old days" today would be a day to take major note of.
The RSI I noted at an extremely rare 75 this morning, is...
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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).
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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:...
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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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