Archive for May, 2010

Will Canada Lead G7 Rate Hikes?

Courtesy of Leo Kolivakis

Via Pension Pulse.

Reuters reports, World trade growth slows in 1st qtr:

Global trade volumes in the first three months of this year were 5.3 percent higher than in the previous quarter, representing slightly slower growth than in recent months but still a healthy rebound from the crisis, data from the Dutch CPB institute showed on Monday.

 

The CPB, whose data are used by the European Commission and World Bank, said world trade in the three months ended February had grown by 5.8 percent over the previous three months and grown 6.0 percent in the last quarter of 2009.

 

Trade growth remained strongest in Asia and Latin America, but was relatively low in the euro area, it said in its latest monthly world trade monitor.

 

On the more volatile monthly figures, world trade volumes were 3.5 percent higher in March than in February, when they grew 1.7 percent.

 

Trade volumes grew worldwide except for Japanese imports, and both imports and exports in the euro area were strong.

 

World trade in March was 4 percent below the peak reached in April 2008 and 21 percent above the trough seen in May 2009.

The CPB report also showed a pickup in world industrial production:

On the basis of preliminary data, world industrial production grew by 0.2% in March 2010, following an unrevised 1.0% increase in February. Production continues to grow in all regions, emerging Asia excepted. In March, industrial production was 1.9% below the peak level reached in March 2008. It has risen by an accumulated 12% from the March 2009 trough. In the first quarter of 2010 production was up by 10.9% on year ago, the highest such value in our series (which start in 1991).

Robust global trade helped Canada register a record 6.1% gain in Canadian GDP during Q1. Phred Dvorak of the WSJ reports, Canada’s Growth Sets Stage for Rate Increase:

Canada’s economy grew at the fastest pace in more than a decade during the first quarter of this year, a stronger-than-expected performance that cemented expectations of an interest-rate increase on Tuesday.

 

Gross domestic product rose an annualized 6.1% during the three months ended March 31, fueled by continued


continue reading





European Cross Country Bond Spreads

Courtesy of Tyler Durden

As we embark on what will likely be another painful week for European markets, here is where all the cross country spreads are as of this moment.

As compared to the stable German 10 year benchmark, the worst 5 continue to be the PIIGS, in the following order – Greece, Ireland, Portugal, Spain and Italy. The tightest spreads are for Finland, Holland, France, Austria, and Belgium. We anticipate some further divergence between the PIIGS and the rest of Europe by the end of the week.





Bank Of International Settlements Warns To Ignore Banker “Doomsday Scenario” Fearmongering And Racketeering

Courtesy of Tyler Durden

Over the past two years, the one strategy that has elicited the greatest amount of anger in the general population has been the traditional resolution to the “lowest common denominator” strategy of fearmongering or racketeering by the financial elite, any time it was faced with a status quo extinction event. The primary example is the Fed and Clearinghouse Association’s threat that should the Fed be forced to disclose the details of its bailout of various banks (as two courts have already ordered it to do), the result would be the greatest run on US banks in history: “If the names of our member banks who borrow emergency funds are publicly disclosed, the likelihood that a borrowing bank’s customers, counterparties and other market participants will draw a negative inference is great.” This is nothing but the patronizing of the broader population by those who seek to preserve their millions in bonuses, while disguising their hypocrisy in bluster, and hoping that the topic will be promptly forgotten. Curiously one entity that has decided to take on this “fire and brimstone” head on and to warn the general population to ignore the bankers “doomsday scenarios” is the bankers’ bank, the BIS. As the FT reports, according to a soon to be released report by the bank’s Chief Economic Advisors Stephen Cecchetti, “Banks are exaggerating the economic effects of the regulations they are likely to face in the coming years.” While his focus is on the implications of the passage of the Basel III treaty, and to preempt counter lobbying by the bank themselves, his argument can be extended to ever instance in which banks present scenarios of collapse should they not get their way: as Cecchetti points out: “the banks’ “doomsday scenarios” were based on their assuming “the maximum impact of the maximum change with the minimum behavioural change.” This is a huge point, as it means that even the failure of the TBTF banks could have been mitigated in the context of a controlled (and even uncontrolled) bankruptcy, and the only reason they were bailed out was to preserve the equity interests and the existing management team, period. This also means that the Fed and Treasury are nothing but vehicles for perpetuating Wall Street’s status quo, as we have claimed from the very beginning.

More from the FT:


continue reading





Swing trading virtual portfolio-results as of May 31st, 2010

 The last month has been very good for our virtual portfolio! We were up 42.58% for a 3% risk per trade, and 28.39% for a 2% risk.

Year-to-date, the virtual portfolio is now up 70% for 3% risk, and 46% for 2% risk! Last month we had 17 profitable trades, and 15 losers. The big difference was that we had some big winners, and we controlled our losses very well.

We only had one trade at more than 2R loss, and it was the MON trade, where really we could not have done much better.

On the other side, we had 7 winners at more than 2R, with some even bigger winners (4R+) on the puts that we let run like AMZN.

If you were trading options, your results might have been even better on some of those puts, as delta increased significantly with IV. That was a very important month, as it shows us that we can make a lot of money, even when being wrong almost 1/2 of the time about direction. This is probably the most important lesson to be learned here: cut your losses short, and let your winners run, and you will make money consistenly!

 





Presenting A Dutch Proposal To Stop GoM Oil Spill “Within Days”

Courtesy of Tyler Durden

The Netherlands has experience with controlling water: 2,000 miles of dykes preventing the sea from flooding the country’s nether regions have taught the Dutch a thing or two about hydroisolation and spillover control. Unfortunately, as the last 40 days or so demonstrate so amply, neither the US nor the UK have the faintest clue how to stop the GoM oil spill which is now entering into the realm of the surreal. Which is why it may be time to learn from those who do know something about the matter. Zero Hedge has received the following proposal from Van Den Noort Innovations BV, which asserts it can get the GoM oil spill under control within days, and it doesn’t even involve nuking the continental shelf.

From Johann H.R. van den Noort:

Please, be informed that we from our Dutch background water related inventions have found a most effective solution to stop the oil spill in the Mexican Gulf within a few days!

Just yesterday we have publicized this news on the front page of our website, see www.noort-innovations.nl

For the sake of all people concerned, we would appreciate that you could bring out this news on your website at your earliest convenience as so much time has already been lost. We have tried to reach president Obama but did not succeed on Memorial Day.

We are the first to admit we know nothing about the feasibility or practicality of the attached proposal, which is why we post it here and hopefully those who are experts on the topic can voice in. As the situation is indeed hopeless and getting worse, it may be time to consider every proposal, no matter how far-fetched it sounds.

Stop the BP Oil Spill in the Gulf of Mexico:

 

Attachment Size
Stop the BP Oil Spill in the Gulf of Mexico.pdf 112.5 KB




Jeff Gundlach Warns Massive Asset Managers Like PIMCO And BlackRock Are Greater TBTF Risk Than Citi

Courtesy of Tyler Durden

In this brief interview with Morningstar, Doubleline’s star MBS analyst, and the bane of TCW’s existence, Jeff Gundlach, points out the glaringly obvious: i.e., that “if Citigroup was too big to fail, then so much greater is the risk for asset managers at a multiple of that market cap.” Obviously the mortgage expert here is contemplating asset manager behemoths such as PIMCO and BlackRock, which have quietly become even more institutionalized within the fabric of the financial markets, than some of the TBTF banks. And without access to the Fed’s discount window, liquidity threats to firms like PIMCO are exponentially greater than even for a bankrupt POS like Citigroup. No wonder Gross was offloading European sovereign debt with gusto as of last check. With total assets of over $1 trillion, saying that a failure by PIMCO, and by extension its Fed-unmoderatable counterparty risk, would have huge implications on the US financial system, is so obvious, that it is completely understandable that there is not one single provision in the Senator from Countrywide and the Congressman from Fannie’s FinReg proposals on how to tackle this most recent threat to capital markets.

From the Gundlach interview:

Jason Stipp: You had mentioned in a recent interview about the government and the whole notion of the “too big to fail” and you said that that should really be extended to asset managers. I am wondering if you could elaborate a little bit on what you see as a risk of asset managers that may be too big to fail and can you confirm if you were talking about PIMCO with that comment?

Jeffrey Gundlach: Well, I’m not talking about any one firm in particular, I am just saying that any investment management firm that is controlling many hundreds of billions or even trillions of dollars and is using a lot of counter party risk for synthetic transactions is introducing a lot of systemic risk into the system. Remember when we had all those problems in September ’08 and the government had to come to the rescue of Citibank, Citibank has a market cap of something like $300 billion, and that was enough capital at risk to be deemed too big to fail.

If there is an asset manager with $600 billion or $1.2 trillion or $3 trillion of investors’ money


continue reading





France Worries About AAA Rating; UK Economists Urge Greece to Abandon Euro; Spanish Prime Minister Losing Support; Japan’s Industrial Output Weakens

France Worries About AAA Rating; UK Economists Urge Greece to Abandon Euro; Spanish Prime Minister Losing Support; Japan’s Industrial Output Weakens

Courtesy of Mish 

Inquiring minds might be interested in an international roundup for Memorial Day. Let’s take a look at top stories about France, Germany, Greece, the EU, Spain, and Japan.

French Finance Minister Says "Keeping AAA Rating a Stretch" 

As Eurozone trade unions prepare to battle over various austerity programs, the French budget minister warns on credit rating.

France admitted on Sunday that keeping its top-notch credit rating would be "a stretch" without some tough budget decisions, following German hints that Berlin may resort to raising taxes to help bring down its deficit.

Euro zone trade unions are preparing for possible confrontations in the coming week if governments impose austerity measures or labor reforms unilaterally. But ministers made clear they were ready to take unpopular steps to prevent the Greek debt crisis spreading to their economies, although doubts are growing about whether the Spanish government in particular has enough support to get its way.

Budget Minister Francois Baroin indicated on Sunday that France should not take for granted its AAA rating, which allows Paris to borrow relatively cheaply on international markets and finance its big budget deficit.

"The objective of keeping the AAA rating is an objective that is a stretch, and it is an objective that, in fact, partly informs the economic policies we want to have," Baroin said. "We must maintain our AAA rating, reduce our debt to avoid being too dependent on the markets, and we must do this for the long term," he told Canal+ TV in an interview.

France has forecast its deficit will hit 8 percent of gross domestic product this year, but aims to bring it down to within the European Union’s 3 percent limit by 2013.

UK Economists Advise Greece to Abandon the Euro

The Times Online reports Greece urged to give up euro

THE Greek government has been advised by British economists to leave the euro and default on its €300 billion (£255 billion) debt to save its economy.

The Centre for Economics and Business Research (CEBR), a London-based consultancy, has warned Greek ministers they will be unable to escape their debt trap without devaluing their own currency to boost exports. The only way this can happen is if Greece returns to its own currency.


continue reading


Tags: , , , , , , ,




Weekly Market Report

(May 30th, 2010 – June 5th, 2010)

Courtesy of InTheMoneyStocks

This past week the S&P 500 INDEX,RTH (INDEXSP: .INX) gained 1 point when all was said and done into Friday’s close. The broad based market cap weighted index did happen to close above the weekly 50 moving average after testing and briefly piercing the February 5th pivot low. The pattern on the weekly chart is a bottoming tail at a support level which could lead to further upside. However, every rally has been sold recently and that type of continued action cannot be ruled out. Next week is a holiday shortened week in the U.S. as the market is closed on May 31, 2010 for the Memorial Day holiday. Therefore, the holiday will give the European Union an extra day to come up with some calming news before the U.S. markets resume trading on Tuesday June 1st, 2010. As of this time it is prudent to expect more volatility as the markets remain uncertain.

The SPDR Gold Trust (ETF) (NYSE:GLD) gained $3.66 this past week to close at $118.88 for the week. The pattern on the gold chart is an inside week. Often this pattern can go either way and will usually require more time to define a move. The one positive for the GLD is the overall trend remains intact and healthy on the weekly chart. As of this time the GLD looks to be consolidating the recent double top high made on May 12th, 2010. Most traders and investors continue to hold gold because of the massive money creation by the central banks around the world. As we all know by now gold has been considered a global currency since the beginning of time and will likely remain that way until the end of time. If the stock markets did go into a deflationary spiral gold could get dragged down with everything else similar to what took place in 2008. If that does not occur gold can be bought after every pullback or correction.

The United States Oil Fund LP (ETF) (NYSE:USO) finished the week higher by $1.76 to $34.04. The USO bounced off the $31.60 support level last week and continues to remain in the long sideways base since June 2009. Should the $31.60 level fail to hold…
continue reading





Here’s What You Need To Know About The Israeli Flotilla Crisis

Here’s What You Need To Know About The Israeli Flotilla Crisis

israeli flotilla crisisCourtesy of Gregory White at Clusterstock/Business Insider

This morning, Israel intercepted a flotilla bound for Gaza from Turkey that was, according to the Israeli military, carrying a cache of weapons. Those on the flotilla, who included members of parliaments from the region, claimed they were carrying only aid items for the Palestinians.

  • At least 10 people were killed in Israel’s assault on the flotilla. Israel claims 10 of its soldiers were also injured in the attack.
  • The flotilla was meant to break the blockade on Gaza, a portion of Palestine ruled by Hamas, a political party but also a terrorist organization.
  • The flotilla was attacked in international waters.
  • Those on the boat, and those who support their cause, claim that all they were carrying was personnel, many of whom were teachers and doctors, and items to support their aid mission. Supporting video, from Al-Jazeera:
  • Israel claims the boat was housing a weapons cache and that individuals on the boat attacked their troops with weapons when they stormed it. Supporting video, from the Israeli Defense Force (IDF): 
  • Protests against the actions of the Israeli government have broken out in LondonCairo, and Istanbul.
  • Governments in Europe have spoken out against the attacks, with President Sarkozy of France and Foreign Minister Hague of the UK calling Israel’s actions "out of line."
  • Israeli PM Benjamin Netanyahu has canceled his trip to the U.S. as a result of the attack, choosing to remain in Israel to deal with the problem.
  • This is likely a massive political misstep for Israel, as tensions with the U.S. government were just beginning to dissolve, and now are likely to remain high.

Tags: , ,




Free 2010 Options Expiration Calendar

Options Traders — check out this easy-to-read Options Expiration Calendar for a helpful reminder of the monthly expiration dates for various option types.  (Note: mine landed initially in my spam file.) - Ilene 

Free 2010 Options Expiration Calendar

The Options Industry Council, the primary, unbiased resource for Options education, now offers a free 2010 Expiration Calendar. Get yours today!

 


Tags:




 
 
 

Phil's Favorites

DARK TOWERS by David Enrich

 

In his best-selling book Dark Towers, David Enrich, finance editor at The New York Times, chronicles the complicated history of Deutsche Bank and its entanglement with Donald Trump. Reviewing Dark Towers, Roger Lowenstein writes, 

"Enrich’s most tantalizing nugget is that in the summer of 2016, Jared Kushner’s real estate company (which received lavish financing from Deutsche) was moving money to various Russians. A bank compliance officer filed a “suspicious activity report,” but the report was quashed and she was fired. The suggestion that maybe the money was payback for Russian campaign meddling isn’t one that Enrich can prove. Similarly, we will have to wait to see if Deutsch...



more from Ilene

Zero Hedge

NYSE Announces Disaster-Recovery Test Due To Virus Fears

Courtesy of ZeroHedge View original post here.

In a somewhat shocking sounding move, given administration officials' ongoing effort to calm the public fears over the spread of Covid-19, The New York Stock Exchange has announced it will commence disaster-recovery testing in its Cermak Data Center on March 7 amid coronavirus concern, Fox Business reports in a tweet, citing the exchange.

During this test, NYSE will facilitate electronic Core Open and Closing Auctions as if the 11 Wall Stree...



more from Tyler

Chart School

Dow, Three strikes and your out!

Courtesy of Read the Ticker

The Dow has topped out with major events, the current virus could be the third strike!

2001 - 9/11 Twin Towers
2007 - Bear Sterns
2020 (?) - C19 Virus


Chart explains all. Dow Jones Industrial's comparing market tops 2000, 2007 and 2020.


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












Changes in the world is the source of all market moves, to catch and ride the change we believe a combination of ...

more from Chart School

ValueWalk

Cities With The Most 'New' And Tenured Homeowners

By Jacob Wolinsky. Originally published at ValueWalk.

Homeownership is a major investment. Not just financially, but when a person or family purchases a home, they’re investing years – if not decades – in that particular community. 55places wanted to find out which real estate markets are luring in new homebuyers, and which ones are dominated by owners that haven’t moved in decades. The study analyzed residency data in more than 300 US cities and revealed the top 10 cities with the most tenured homeowners – residents who’ve lived in and owned their home for more than 30 years – are sprinkled across ...



more from ValueWalk

Kimble Charting Solutions

Financial Crisis Deja Vu: Home Construction Index Double Top?

Courtesy of Chris Kimble

Most of us remember the 2007-2009 financial crisis because of the collapse in home prices and its effect on the economy.

One key sector that tipped off that crisis was the home builders.

The home builders are an integral piece to our economy and often signal “all clears” or “short-term warnings” to investors based on their economic health and how the index trades.

In today’s chart, we highlight the Dow Jones Home Construction Index. It has climbed all the way back to its pre-crisis highs… BUT it immediately reversed lower from there.

This raises concerns about a double top.

This pr...



more from Kimble C.S.

Insider Scoop

A Peek Into The Markets: US Stock Futures Plunge Amid Coronavirus Fears

Courtesy of Benzinga

Pre-open movers

U.S. stock futures traded lower in early pre-market trade. South Korea confirmed 256 new coronavirus cases on Thursday, while China reported an additional 327 new cases. Data on U.S. international trade in goods for January, wholesale inventories for January and consumer spending for January will be released at 8:30 a.m. ET. The Chicago PMI for February is scheduled for release at 9:45 a.m. ET, while the University of Michigan's consumer sentime...



http://www.insidercow.com/ more from Insider

Biotech & Health

Could coronavirus really trigger a recession?

 

Could coronavirus really trigger a recession?

Coronavirus seems to be on a collision course with the US economy and its 12-year bull market. AP Photo/Ng Han Guan

Courtesy of Michael Walden, North Carolina State University

Fears are growing that the new coronavirus will infect the U.S. economy.

A major U.S. stock market index posted its biggest two-day drop on record, erasing all the gains from the previous two months; ...



more from Biotech

The Technical Traders

SPY Breaks Below Fibonacci Bearish Trigger Level

Courtesy of Technical Traders

Our research team wanted to share this chart with our friends and followers.  This dramatic breakdown in price over the past 4+ days has resulted in a very clear bearish trigger which was confirmed by our Adaptive Fibonacci Price Modeling system.  We believe this downside move will target the $251 level on the SPY over the next few weeks and months.

Some recent headline articles worth reading:

On January 23, 2020, we ...



more from Tech. Traders

Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

...

more from Promotions

Members' Corner

Threats to democracy: oligarchy, feudalism, dictatorship

 

Threats to democracy: oligarchy, feudalism, dictatorship

Courtesy of David Brin, Contrary Brin Blog 

Fascinating and important to consider, since it is probably one of the reasons why the world aristocracy is pulling its all-out putsch right now… “Trillions will be inherited over the coming decades, further widening the wealth gap,” reports the Los Angeles Times. The beneficiaries aren’t all that young themselves. From 1989 to 2016, U.S. households inherited more than $8.5 trillion. Over that time, the average age of recipients rose by a decade to 51. More ...



more from Our Members

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...



more from Bitcoin

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 ...



more from Lee

Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

more from M.T.M.





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...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.