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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Phil's Favorites

Negative Interest Rates Spread To Mortgage Bonds

Courtesy of John Rubino, DollarCollapse.com

There are trillions of dollars of bonds in the world with negative yields – a fact with which future historians will find baffling.

Until now those negative yields have been limited to the safest types of bonds issued by governments and major corporations. But this week a new category of negative-yielding paper joined the party: mortgage-backed bonds.

Bankers Stunned as Negative Rates Sweep Across Danish Mortgages

(Investing.com) – At the biggest mortgage bank in the world’s largest covered-bond market, ...



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Zero Hedge

Negative Interest Rates Spread To Mortgage Bonds

Courtesy of John Rubino, DollarCollapse.com

There are trillions of dollars of bonds in the world with negative yields – a fact with which future historians will find baffling.

Until now those negative yields have been limited to the safest types of bonds issued by governments and major corporations. But this week a new category of negative-yielding paper joined the party: mortgage-backed bonds.

Bankers Stunned as Negative Rates Sweep Across Danish Mortgages

(Investing.com) – At the biggest mortgage bank in the world’s largest covered-bond market, ...



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Insider Scoop

Jefferies Sees 60-Percent Upside In Aphria Shares, Says Buy The Dip

Courtesy of Benzinga.

After a red-hot start to 2019, Canadian cannabis producer Aphria Inc (NYSE: APHA) has run out of steam, tumbling more than 31 percent in the past three months.

Despite the recent weakness, one Wall Street analyst said Friday that the stock has 30-percent upside potential. 

The Analyst

Jefferies analyst ...



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Kimble Charting Solutions

DAX (Germany) About To Send A Bearish Message To The S&P 500?

Courtesy of Chris Kimble.

Is the DAX index from Germany about to send a bearish message to stocks in Europe and the States? Sure could!

This chart looks at the DAX over the past 9-years. It’s spent the majority of the past 8-years inside of rising channel (1), creating a series of higher lows and higher highs.

It looks to have created a “Double Top” as it was kissing the underside of the rising channel last year at (2).

After creating the potential double top, the DAX index has continued to create a series of lower highs, while experiencing a bearish divergence with the S...



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Chart School

Brexit Joke - Cant be serious all the time

Courtesy of Read the Ticker.

Alistair Williams comedian nails it, thank god for good humour! Prime Minister May the negotiator. Not!


Alistair Williams Comedian youtube

This is a classic! ha!







Fundamentals are important, and so is market timing, here at readtheticker.com we believe a combination of Gann Angles, ...

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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control

 

Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...



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Biotech

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

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

 

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

A map of DNA with the double helix colored blue, the landmarks in green, and the start points for copying the molecule in red. David Gilbert/Kyle Klein, CC BY-ND

Courtesy of David M. Gilbert, Florida State University

...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

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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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. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>