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Posts Tagged ‘zerohedge’

Will the Federal Reserve Cause a Civil War?

Will the Federal Reserve Cause a Civil War?

By STEPHEN GANDEL, courtesy of TIME

Bernanke critics are on the attack (Joe Raedle/Getty Images)

What is the most likely cause today of civil unrest? Immigration. Gay Marriage. Abortion. The Results of Election Day. The Mosque at Ground Zero. Nope.

Try the Federal Reserve. November 3rd is when the Federal Reserve’s next policy committee meeting ends, and if you thought this was just another boring money meeting you would be wrong. It could be the most important meeting in Fed history, maybe. The US central bank is expected to announce its next move to boost the faltering economic recovery. To say there has been considerable debate and anxiety among Fed watchers about what the central bank should do would be an understatement. Chairman Ben Bernanke has indicated in recent speeches that the central bank plans to try to drive down already low-interest rates by buying up long-term bonds. A number of people both inside the Fed and out believe this is the wrong move. But one website seems to believe that Ben’s plan might actually lead to armed conflict. Last week, the blog, Zerohedge wrote, paraphrasing a top economic forecaster David Rosenberg, that it believed the Fed’s plan is not only moronic, but "positions US society one step closer to civil war if not worse."

I’m not sure what "if not worse," is supposed to mean. But, with the Tea Party gaining followers, the idea of civil war over economic issues doesn’t seem that far-fetched these days. And Ron Paul definitely thinks the Fed should be ended. In TIME’s recent cover story on the militia movement many said these groups are powder kegs looking for a catalyst. So why not a Fed policy committee…
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FDIC on REO Sales: Keep’em in the Dark!

FDIC on REO Sales: Keep’em in the Dark!

Courtesy of Bruce Krasting

In October the FDIC held a large auction of properties it had acquired as a result of failed banks in Georgia. I thought this was an interesting story and wrote about it before the auction took place. It was my intention to write about it again after the results of the auction were released. No such luck. The FDIC has decided to keep us in the dark on this one. The following is an email I got from JP King, the auction house who ran the Georgia auction:

Unfortunately, FDIC has prohibited us from releasing any information regarding the auction. We’ve been trying to get them to let us release the results, but they have denied our requests. We aren’t allowed to release any details.”

I would have thought that the results of a pubic auction of properties owned by FDIC would have to be publicly disclosed. So why is the FDIC trying to cover this up?

The answer is that the REO problem for the D.C. lenders and the FDIC is reaching a crisis level. In spite of every effort to avoid foreclosures the fact is that the number of properties owned by the Feds is rising on a daily basis.

There are approximately 55 million mortgages outstanding today. At least 10% will/have gone into default before this is over. Of those half will result in foreclosure. These numbers create an estimate of the Federal share of REO at about 1.5 mm homes. Depending on unemployment and the economy going forward that number could be much higher. Before this is over the Feds could own up to 5% of all residential RE.

D.C. is struggling with this. The Treasury Department has created HAMP and HARP, two programs designed to restructure bad mortgages and keep homeowners in the house at all costs. So far the results from these programs have been terrible. More than half of the restructured loans re-default within nine months.

Fannie and Freddie are going into the rental business with their REO. They are charging “market rates” of rent to defaulted owners who are willing to stay in the home. Given that market rents today are equal to the costs of ownership I doubt that the new ‘Renters’ are going to be able to make the payments. So this program…
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Zero Hedge

Bank Of England Accidentally E-mails Top-Secret Brexit Plan To Newspaper

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

The first rule of “Project Bookend” is that you don’t talk about “Project Bookend.”

In retrospect, maybe the first rule should have been “you don’t accidentally e-mail ‘Project Bookend’ to a news agency”, because as the Guardian reports, one of its editors opened his inbox and was surprised to find a message from the BOE’s Head of Press Jeremy Harrison outlining the UK financial market equivalent of the Manhattan project. 

Project Bookend is a secret (or ‘was’ a secret) initiative undertaken by the BOE to study what the fallout might be from a potential ‘Brexit’, but if anyone asked what Sir Jon Cunliffe and a few senior staffers were up to, ...



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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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Phil's Favorites

CPI Shows Sharply Rising Medical Costs; Huge Obamacare Hikes Planned

Courtesy of Mish.

The CPI came in exactly in line with the Bloomberg Consensus option today.




It's the details, not the overall number that is worrying. Medical care and rents have been rising rapidly.

The Fed likes to ignore food and energy costs. They have their chance to prove it.

From Bloomberg ...
Pull forward that rate hike is what some of the hawks are thinking after reading today's consumer price report where a benign looking headline, up only 0.1 percent in April, masks rising pressure through many components.

Excluding food and energy, core prices rose 0.3 percent which doe...



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Kimble Charting Solutions

King Dollar & Crude Oil reversing ST trends, says Joe Friday

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

King Dollar and Crude Oil have been have had little correlation over the past year, as each has traded in pretty much opposite directions.

Over the past 9 months King Dollar has had a historical rally and the opposite is true for Crude Oil.

Of late Crude hit its 23% Fibonacci resistance line, based upon last summers weekly closing highs and weekly closing low on 3/13/15.

Joe Friday just the facts….Crude oil is making an attempt to break short-term steep rising support this week and King Dollar is attempting to break short-term steep falling resistance.

Crude oil just experienced its 7th largest 2-month rally in its...



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Chart School

A Long-Term Look at Inflation

Courtesy of Doug Short.

The Consumer Price Index for Urban Consumers (CPI-U) released this morning puts the year-over-year inflation rate at -0.20%. It is substantially below the 3.84% average since the end of the Second World War and its 10-year moving average, now at 2.19%.

For a comparison of headline inflation with core inflation, which is based on the CPI excluding food and energy, see this monthly feature.

For better understanding of how CPI is measured and how it impacts your household, see our Inside Look at CPI components.

For an even closer look at how the components are behaving, see this X-Ray View of the data for the past six months.

The Bureau of Labor Statistics (BLS) has compiled CPI data since 1913, and numbers ...



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Pharmboy

Big Pharma's Business Model is Changing

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

Understanding the new normal of a business model is key to the success of any company.  The managment of companies need to adapt to the changing demand, but first they must recognize what changes are taking place.  Big Pharma's business model is changing rapidly, and much like the airline industry, there will be but a handful of pharma companies left at the end of this path.

Most Big Pharma companies have traditionally done everything from research and development (R&D) through to commercialisation themselves. Research was proprietary, and diseases were cherry picked on the back of academic research that was done using NIH grants.  This was in the heyday of research, where multiple companies had drugs for the same target (Mevocor, Zocor, Crestor, Lipitor), and could reap the rewards on multiple scales.  However, in the c...



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Sabrient

Sector Detector: Bullish technical picture appears to trump cautious fundamentals

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

Courtesy of Sabrient Systems and Gradient Analytics

By Scott Martindale

Stocks closed last week on a strong note, with the S&P 500 notching a new high, despite lackluster economic data and growth. I have been suggesting in previous articles that stocks appeared to be coiling for a significant move but that the ingredients were not yet in place for either a major breakout or a corrective selloff. However, bulls appear to be losing patience awaiting their next definitive catalyst, and the higher-likelihood upside move may now be underway. Yet despite the bullish technical picture, this week’s fundamentals-based Outlook rankings look even more defensive.

In this weekly update, I give ...



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OpTrader

Swing trading portfolio - week of May 18th, 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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Digital Currencies

Nasdaq's bitcoin plan will provide a real test of bitcoin hype

 

Nasdaq's bitcoin plan will provide a real test of bitcoin hype

By 

Excerpt:

Bitcoin, the virtual digital currency, has been called the future of banking, a dangerous fad, and almost everything in between, but we're finally about to get some solid data to help settle the debate.

On Monday, the Nasdaq (NDAQ) stock exchange said it would ...



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Market Shadows

Kimble Charts: US Dollar

Which way from here?

Chris Kimble likes the idea of shorting the US dollar if it bounces higher. Phil's likes the dollar better long here. These views are not inconsistent, actually, the dollar could bounce and drop again. We'll be watching. 

 

Phil writes:  If the Fed begins to tighten OR if Greece defaults OR if China begins to fall apart OR if Japan begins to unwind, then the Dollar could move 10% higher.  Without any of those things happening – you still have the Fed pursuing a relatively stronger currency policy than the rest of the G8.  So, if anything, I think the pressure should be up, not down.  

 

UNLESS that 95 line does ultimately fail (as opposed to this being bullish consolidation at the prior breakout point), then I'd prefer to sell the UUP Jan $25 puts for $0.85 and buy the Sept $24 call...



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Mapping The Market

An update on oil proxies

Courtesy of Jean-Luc Saillard

Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself. 

Since...



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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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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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About Phil:

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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About Ilene:

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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