Archive for January, 2009

Is It Time to Bail Out of America?

Astonishing Incongruities – instead of bailing out America, should we be bailing out of America?

Is It Time to Bail Out of America?

Courtesy of PAUL CRAIG ROBERTS writing at CounterPunch

California State Controller John Chiang announced on January 26 that California’s bills exceed its tax revenues and credit line and that the state is going to print its own money known as IOUs.  The template is already designed.  

Instead of receiving their state tax refunds in dollars, California residents will receive IOUs.  Student aid and payments to disabled and needy will also come in the form of  IOUs.  California is negotiating with banks to get them to accept the IOUs as deposits.

California is often identified as the world’s eighth largest economy, and it is broke.  

A person might think that California’s plight would introduce some realism into Washington, DC, but it has not.  President Obama is taking steps to intensify the war in Afghanistan and, perhaps, to expand it to Pakistan.  

Obama has retained the Republican warmongers in the Pentagon, and the US continues to illegally bomb Pakistan and to murder its civilians.  At the World Economic Forum at Davos this week, Pakistan’s prime minister, Y. R. Gilani, said that the American attacks on Pakistan are counterproductive and done without Pakistan’s permission.  In an interview with CNN, Gilani said: “I want to put on record that we do not have any agreement between the government of the United States and the government of Pakistan.”  

How long before Washington will be printing money?

On January 28 Obama announced his $825 billion bailout plan.  This comes on top of President Bush’s $700 billion bailout of just a few months ago.  

Obama says his plan will be more transparent than Bush’s and will do more good for the economy.  

As large as the bailouts are--a total of $1.5 trillion in four months--the amount is small in relation to the reported size of troubled assets that are in the tens of trillions of dollars.  How do we know that by June there won’t be another bailout, say $950 billion?

Where will the money come from?

Obama’s bailout plan, added to the FY 2009 budget deficit he has inherited from Bush, opens a gaping expenditure hole of about $3 trillion. 

Who is going to purchase $3 trillion of US Treasury…
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When Giants Fall Has Arrived!

That’s the message from author Michael Panzner, who has contributed many excellent articles to Phil’s Favorites and now has a new book out on the shelves of your local book store, or Amazon. – Ilene

When Giants Fall Has Arrived!

Courtesy of Michael Panzner at Financial Armageddon and When Giants Fall

My latest book, When Giants Fall: An Economic Roadmap for the End of the American Era, has just been published by John Wiley & Sons. It is already on the shelves at Barnes & Noble, and will soon be in stock at Amazon.com, Borders, and many other booksellers around the country.

For a taste of what it’s all about, here is the Introduction:

In late 2007, a Chinese submarine suddenly “popped up” in the middle of U.S. military exercises taking place in the Pacific Ocean. According to Matthew Hickley of the United Kingdom’s Daily Mail, the 160-foot Song class diesel-electric attack submarine “sailed within viable range for launching torpedoes or missiles ” at the USS Kitty Hawk, a 1,000-foot aircraft carrier with 4,500 personnel on board that was being guarded by a dozen warships and at least two submarines. The newspaper added—in a report that received scant U.S. media attention—that American military chiefs “were left dumbstruck.” One North Atlantic Treaty Organization (NATO) official said that “the effect was ‘as big a shock as the Russians launching Sputnik ’—a reference to the Soviet Union’s first orbiting satellite in 1957 which marked the start of the space age.”

But it isn’t only in the military arena where there are signs that the United States is not quite in a league of its own. An August 2007 New York Times editorial, “World’s Best Medical Care?” highlighted two studies that revealed the U.S. health care system, contrary to popular belief, had fallen significantly behind those of other nations. The first, published by the World Health Organization seven years earlier, ranked the United States 37th out of 191 countries worldwide. The second, detailed in May by the well-regarded Commonwealth Fund, rated the United States “last or next-to-last compared with five other nations—Australia, Canada, Germany, New Zealand, and the United Kingdom—on most measures of performance, including quality of


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THE WEEK THAT WAS 1/26-30/2009

How did Robin do this week with the market call?  Comments from the weekly blog posted 1/24/2009:
“The INDU is trying to break resistance at 8348.  The index has shown me that it wants to go higher as evidenced by a “Tweezer like” candlestick formation on Thursday and Friday.  The DOW will have significant difficulty breaking below 7900 [...]





CHARTS WEEK ENDING 1/30/2009

-7900-8000 has exhibited remarkable support.  Once again, there does not appear to be strong conviction to drive the INDU below support as evidenced by decreasing volume.  We are in a trading range between 7900-8405.  We may linger briefly at this level and confirm support before once again making another attempt to breach immediate resistance at 8340-8405.  [...]





RISK GRAPH: THE BEAR PUT

TOOLS OF THE TRADE
THE BEAR PUT

The Bear put is the mirror image of the Bull Call.  It is a debit spread which means that the trader must pay to initiate the trade.  The strategy optimizes a bearish trend and is comprised of two trading instruments. 1) the long put and 2) the short put.  Each [...]





THE WEEK THAT IS TO BE 2/2-6/2009

ECONOMIC REPORTS
MONDAY 2/2
Personal Income, Personal Spending, Construction spending, ISM Index
TUESDAY 2/3
Pending Home Sales, Auto Sales, Truck Sales,
WEDNESDAY 2/4
ADP Employment Change, ISM Services, Crude Inventories
THURSDAY 2/5
Initial Claims, Productivity-Prel, Unit Labor Costs, Factory Orders
FRIDAY 2/6
Average Workweek, Hourly Earnings, Nonfarm Payrolls, Unemployment Rate, Consumer Credit
 
 
EARNINGS OF NOTE
MONDAY 2/2
AFL, APC, HUM, PJC, ROK, SNDK, GRA
TUESDAY 2/3
ADM, AVP, [...]





WSJ Weighs In On Peter Schiff

In (partial) defense of Peter Schiff, he made some correct calls, but unfortunately did not turn these calls into profits for his clients. True, it was a particularly vicious year for being only part right! Peter Schiff

The Wall Street Journal Weighs In On Peter Schiff

Courtesy of Greg Feirman, at Top Gun Financial Planning

Geez…. Mish’s post from Sunday night, “Peter Schiff Was Wrong”, has sure generated a lot of interest and controversy. That’s because Peter Schiff is a polarizing figure. People tend to either love him or hate him and have a hard time coming to a balanced, realistic assesment of him.

Today, The Wall Street Journal weighed in with a piece on the front of their Money & Investing section: “Right Forecast By Schiff, Wrong Plan?” (subscription required – [but see excerpt below]). In it, they mainly rehash criticisms from Mish’s piece. Schiff was wrong about decoupling, wrong about commodities, wrong about the dollar in 2008.

They provide a couple of specific examples of how this played out for specific Euro Pacific clients. Richard De Gennaro, an 83-year-old retired Harvard University librarian, put $100,000 into a Euro Pacific account early in 2008. The account is now worth $37,000 – a 63% plunge.

Similarly, Brian Kullberg, a design engineer in Portland, Ore, put $70,000 into a Euro Pacific account early last year. That account is now worth about $25,000 – a similar 64% drop.

Schiff has put up a piece defending himself: “Peter Schiff Answers His Critics”. The main defense is that short term market fluctuations don’t disprove his longer term investment theses: “[Mish] is confusing short term market fluctuations with long term economic trends……I never held myself out to be a market timer. My advice was always geared to long term investors.”

That’s primarily how I defended Schiff as well in my “In Defense Of Peter Schiff – A Response To Mish”.

*****

The truth, as usual, lies somewhere in the middle. Peter Schiff deserves a lot of credit for the correct calls he made about the housing bubble, the financial system and the US economy – not only for the calls but the intransigent way in which…
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Weekly Wrap-Up

Worst January EVER!

What a way to start the year!  I've decided to delve into the bear case this weekend to see if I can talk myself out of thinking we've suffered enough at the 8,000 line.  I'll be posting as I read in a Weekend Reading section but I thought it would be a good idea to first review what worked and what did not work in a choppy week

After a solid and active week of picks last week,  we went into this week with a much more cautious attitude.  Monday morning I warned that the VIX would fall and it was time to start grabbing those March premiums.  The VIX did drop 20% (and spiked all the way to 34 on Wednesday) but recovered nicely into Friday, which is why I was up all night Thursday working on our Buy List, as it was once again a good time to enter some hedged plays.  But on Monday Morning, I was in no mood to buy anything and my comment that morning was: "XOM and CVX together on Friday (15% of the Dow weighting) have me really, really, REALLY worried that we’ll get a -5% GDP along with poor earnings from them and people are going to act like the world is ending so it’s going to be a tricky play this week but lots of fun playing the ultras."

In the end, XOM and CVX did not kill us but the 33% decline in XOM profits didn't inspire a lot of confidence in the XLE, which fell 6% from Wednesday's silly high and finished at the low for the week.  The bottom-line takeaway from XOM's report is that revenues are way off and even the best companies are getting hit very hard – what chance do the little guys have?  I pointed out on Monday that January is supposed to be THE BEST month of the year for the markets – let's hope not!  Of course I mentioned gold again, stating: "investors look for REAL safety as opposed to the very imaginary safety of fiat currency, no matter what country is issuing the paper" and the January chart really emphasises why I do, indeed, like gold.

Rolling CAT puts we sold to the March $30 puts at $2…
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Autism, Vaccines and the CDC

No need to debate whether science has been held hostage for eight years, but we can ask what areas of science suffered the most and what can we do about it now? This article discusses one of the greatest harms flowing from a combination of failed policies in medical science tainted by greed, willful blindness (or worse), and political collusion, to the detriment of a generation of our children.  – Ilene

Autism, Vaccines and the CDC: The Wrong Side of History

Courtesy of Robert F. Kennedy Jr. and David Kirby, in the Huffington Post

Even as the evidence connecting America’s autism epidemic to vaccines mounts, dead-enders at the Centers for Disease Control (CDC) — many of whom promoted the current vaccine schedule and others with strong ties to the vaccine industry — are trying to delay the day of reckoning by creating questionable studies designed to discredit any potential vaccine-autism link and by derailing authentic studies.

On January 12, a cadre of mid-level health bureaucrats left over from the Bush administration ignored Federal requirements for advance notice in order to vote to quietly strip vaccine research studies from funding allocated by Congress in the Combating Autism Act (CAA) of 2006. Members of Congress had said that this money should be used to study the vaccine-autism connection.

These rogue bureaucrats — members of the Interagency Autism Coordinating Committee — held an unannounced vote to remove previously approved vaccine studies from funding under the CAA. Nearly all of the "Federal" members of the panel voted to remove the two studies, whose estimated cost was $16 million – or 1.6% of the billion dollars authorized by Congress for autism. The panel’s civilian members, in contrast, voted nearly unanimously to retain the funding.

IACC’s action to halt vaccine-autism research flies in the face of congressional intent. The bill’s authors clearly stated that vaccine research should be funded. Even the esteemed Institute of Medicine has condemned CDC’s methods. In 2005, an IOM panel condemned CDC for its "lack of transparency" in vaccine-autism research.

The bureaucrats responsible for this scandal are on the wrong side of history and it’s hard to not attribute an obstructionist motive to their act since vaccine-autism research has already entered the realm of mainstream science. Serious scientists (except those tied to the vaccine industry)…
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January ends with grim news

Is a dicey January setting up for a perilous rest of the year?

January ends with grim news on stocks, jobs, shipping

Courtesy of Mish

The stock market decline that started over a year ago picked up some steam in the Worst January ever for Dow, S&P 500

It was the worst January ever for the Dow industrials and S&P 500, according to Stock Trader’s Almanac data.

The Dow lost 8.8% and the S&P 500 lost 8.6% in the month.

The Nasdaq’s loss of 6.4% was eclipsed by last January’s loss of 9.9%. That 2008 loss was the worst in the tech average’s history, going back to its inception in 1971.

As goes January so goes the year. Or so they say.

Cargo Plummets 22.6% in December

The International Air Transport Association is reporting Cargo Plummets 22.6% in December

The International Air Transport Association (IATA) released international scheduled traffic results for both December 2008 and the full-year.

In the month of December global international cargo traffic plummeted by 22.6% compared to December 2007. The same comparison for international passenger traffic showed a 4.6% drop. The international load factor stood at 73.8%.

For the full-year 2008, international cargo traffic was down 4.0%, passenger traffic showed a modest increase of 1.6%, and the international load factor stood at 75.9%.

“The 22.6% free fall in global cargo is unprecedented and shocking. There is no clearer description of the slowdown in world trade. Even in September 2001, when much of the global fleet was grounded, the decline was only 13.9%,” said Giovanni Bisignani, IATA’s Director General and CEO.” Air cargo carries 35% of the value of goods traded internationally.

Nearly 6% of world’s boxships laid up

The picture is grim for container ships as well as Nearly 6% of world’s boxships laid up

The number of containerships laid up is growing very fast. According to French maritime consultant AXS-Alphaliner, 255 ships, equivalent to 675,000 teu in capacity (5.5% of the global containership fleet), were laid up as of January 19 this year. It projects that the volume of containerships on standby will jump to the equivalent of 750,000 teu in early February this year, accounting for 6% of the entire global boxship fleet.

Since the week before Christmas – just one month ago – the number of ships idling has grown


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Zero Hedge

Why Is Maduro Still Pushing The Petro?

Courtesy of ZeroHedge View original post here.

Authored by William Luther via The American Institute for Economic Research,

In a recent Wall Street Journal article, Mary Anastasia O’Grady writes that Venezuela’s “National Superintendency for the Defense of Socio-Economic Rights is reportedly pressuring stores to accept the government’s new digital fiat currency, the petro.” The Venezuelan government claims its digital...



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The Technical Traders

Is The Technology Sector Setting Up For A Crash? Part IV

Courtesy of Technical Traders

As we continue to get more and more information related to the Coronavirus spreading across Asia and Europe, the one thing we really must consider is the longer-term possibility that major global economies may contract in some manner as the Chinese economy is currently doing.  The news suggests over 700+ million people in China are quarantined.  This is a staggering number of people – nearly double the total population of the entire United States.

If the numbers presented by the Chinese are accurate, the Coronavirus has a very high infection rate, yet a moderately small mortality rate (2~3%).  Still, if this virus continues to spread throughout the world and infects m...



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Phil's Favorites

Why Trump's post-impeachment actions are about vengeance, not retribution

 

Why Trump's post-impeachment actions are about vengeance, not retribution

President Trump fired Army Lt. Col. Alexander Vindman for testifying in his impeachment trial. AP Photo/Susan Walsh, File

Courtesy of Austin Sarat, Amherst College

Since the end of his Senate impeachment trial, President Donald Trump has carried out a concerted campaign against ...



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Biotech & Health

Deep learning AI discovers surprising new antibiotics

 

Deep learning AI discovers surprising new antibiotics

A colored electron microscope image of MRSA. NIH - NIAID/flickr, CC BY

Courtesy of Sriram Chandrasekaran, University of Michigan

Imagine you’re a fossil hunter. You spend months in the heat of Arizona digging up bones only to find that what you’ve uncovered is from a previously discovered dinosaur.

That’s how the search for antibiotics has panned out recently. The relatively few antibiotic hunters out there ...



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Kimble Charting Solutions

King Dollar Going To Lose Strength Here? Gold & Silver Hope So!!!

Courtesy of Chris Kimble

Is King$ and the Euro facing important breakout/breakdown tests at the same time? It looks like it in this chart!

The US$ trend remains up, as it has created a series of higher lows since the start of 2018. The opposite can be said for the Euro, as it has created a series of lower highs since early 2018.

The US$ is currently testing the top of its 18-month rising channel, as the Euro is testing the bottom of its falling channel.

What King$ and...



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Insider Scoop

The Daily Biotech Pulse: Heron Pain Drug Review Extended, Disappointment For Teva In Tourette Syndrome Study

Courtesy of Benzinga

Here's a roundup of top developments in the biotech space over the last 24 hours.

Scaling The Peaks

(Biotech Stocks Hitting 52-week highs on Feb. 19)

  • Adverum Biotechnologies Inc (NASDAQ: ADVM)
  • Akebia Therapeutics Inc (NASDAQ: AKBA)
  • Ana...


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Digital Currencies

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

 

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

‘We have you surrounded!’ Wit Olszewski

Courtesy of Gavin Brown, Manchester Metropolitan University and Richard Whittle, Manchester Metropolitan University

When bitcoin was trading at the dizzying heights of almost US$2...



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ValueWalk

What US companies are saying about coronavirus impact

By Aman Jain. Originally published at ValueWalk.

With the coronavirus outbreak coinciding with the U.S. earnings seasons, it is only normal to expect companies to talk about this deadly virus in their earnings conference calls. In fact, many major U.S. companies not only talked about coronavirus, but also warned about its potential impact on their financial numbers.

Q4 2019 hedge fund letters, conferences and more

Coronavirus impact: many US companies unclear

According to ...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Tuesday, 01 October 2019, 02:18:22 AM

Click for popup. Clear your browser cache if image is not showing.


Comment: Wall of worry, or cliff of despair!



Date Found: Tuesday, 01 October 2019, 06:54:30 AM

Click for popup. Clear your browser cache if image is not showing.


Comment: Interesting.. Hitler good for the German DAX when he was winning! They believed .. until th...



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Members' Corner

How to Stop Bill Barr

 

How to Stop Bill Barr

We must remove this cancer on our democracy.

Courtesy of Greg Olear, at PREVAIL, author of Dirty Rubles: An Introduction to Trump/Russia

...



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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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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. Contact Ilene to learn about our affiliate and content sharing programs.