Archive for 2010

A Different Direction for the Foreclosure Mess?

Courtesy of Bruce Krasting

I keep thinking of the mortgage foreclosure story and wondering, “Where will this go?” The problem is that this question is very hard to answer. One possible direction.

According to Realtytrac the number of actual repossessed properties in August was 95,000. They also have reported that in the second quarter the number of repos was 248,000. Call it a million over the last 12 months. “How many of these are now tainted” is a central question. But for me the more significant issue is, “Why were they were tainted”.

From what I have read it would appear that this has been administratively blown up due to the volume of foreclosures. No one in the housing/mortgage story really wants to do a foreclosure. It is the most costly outcome. Not only does the lender lose principal and interest there is a big cost to close on a homeowner. So the lenders, lawyers, servicers and document houses all tried to push the process through a hole that is too small. Along the way they hired bozos to do the work and the cut every corner they could to close a file.

That sounds bad, but it does not worry me too much. A probable outcome would be that most of the closed deals are either properly documented or they deal with an original borrower who was so far underwater that the last thing he/she would want to do is restart the process with the old IOU’s. To be sure there is going to be a percent of deals that will result in some form of restitution to the original obligor. That will be a loss to all of the players. But it is not going to bring down the house.

There is a great deal of difference between a lender who is facing a loss and cuts corners to minimize the loss and fraud that occurs when the same tactics are used to make money. And that is what I fear has happened. Should that be the case we are looking at a very big hole developing in the mortgage space.

Assume there is a home that has a $250,000 mortgage and the loan is in default. Now assume that the owner of that mortgage wants to sell it. Assume further that the mortgage is bundled up with a…
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Here Is Why The Fed’s Strategy Of Getting Retail Investors Into Stocks Via QE2 Will Fail

Courtesy of Tyler Durden

One of the more obvious side-effects of Ben Bernanke’s simplistic QE 2 plan is to force retail investors out of their existing trajectory directed at fixed income products, and back into stocks, so that retail can once again occupy it long-coveted (by the bankers) position of buying Apple and Amazon at triple digit forward multiples. Unfortunately, as JPM’s Nikolaos Panigirtzoglou explains, all that QE’s lowering of bond yields will do (in addition to sending soybeans limit up every day for the balance of 2010, despite what others claim is merely a hallucination) is “reinforcing retail investors’ flows into bonds.” The biggest problem with the secular shift away from equities, and into bonds, is that the very mindset that the banking cartel loved for so long: retail buying stocks high, buying even more higher, has now translated completely into bonds. As JPM says: “The more bonds rally, the stronger the buying of bond funds by retail investors.” In addition to the daily flash crashes in now countless names, surely this phenomenon explains why retail investors have taken money out of stocks for 23 weeks now (leaving many mutual funds running on fumes and a prayer) and put it into the best performing asset category (after precious metals of course). And QE2 will cement not only retail, but institutional demand for bonds as well: “lower bond yields are widening the deficits of pension funds in both the US and Europe inducing them to move further into fixed income to reduce the mismatch between assets and liabilities… This raises the risk that these institutional investors will move more towards corporate bonds in search for yield. So a potential aggressive move away form government into corporate bonds could exert strong downward pressure on credit spreads.” Suddenly the world will realize that the average duration on rate-based exposure is 10+ (especially if Mexico issues a few more 100 Year bonds). And when rates creep up even a tiny little bit, it is game over as the next negative convexity event will be the (credit) market itself. Which is why we have long said that the black swan is not a failed auction, but the merest hint that rates are finally starting to creep up.

More from JPM on this psychological quandary, so very troubling for the Federal Reserve, as well as on other “unexpected” consequences of QE2. Pay…
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DARK HORSE HEDGE – What I Like About You, VECO

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

DARK HORSE HEDGE – What I Like About You, VECO

By Scott Brown at Sabrient, and Ilene, at Phil’s Stock World

 

What I like about you, you really know how to dance
When you go up, down, jump around,
think about true romance, yeah

 

That's what I like about you

What I like about you, you keep me warm at night
Never wanna' let you go, know you make me feel alright, yeah

Veeco Instruments Inc. (Veeco) (VECO) designs, manufactures, markets and services enabling solutions for customers in the high brightness light emitting diode (HB LED), solar, data storage, scientific research, semiconductor and industrial markets. In its LED and Solar segment, Veeco designs and manufactures metal organic chemical vapor deposition systems that are used to make HB LEDs or solar cells made of III-V compound semiconductors. In its Data Storage segment, Veeco designs and manufactures equipment used in the production of thin film magnetic heads that read and write data on hard disk drives. In its Metrology segment, the Company designs and manufactures atomic force microscopes, scanning probe microscopes, stylus profilers and fast three-dimensional (3D) optical microscopes… (Sabrient's Ratings Report)

Sabrient rates VECO a Strong Buy for its superior value and growth profiles, which indicates a stock that should outperform the market.  

Read Sabrient's full report here.

We liked a lot about VECO when we added it to the Dark Horse Hedge virtual portfolio at $31.93 on August 25, 2010. Using Phil Davis's Buy/Write strategy, we bought half a position in the stock and sold October $32 calls and puts against it (1 put and 1 call per 100 shares of stock).  

With option expirations on Friday, October 15, it's time to decide if we "never wanna let you go,"…
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DARK HORSE HEDGE – What I Like About You, VECO

DARK HORSE HEDGE – What I Like About You, VECO

By Scott Brown at Sabrient, and Ilene, at Phil’s Stock World

Dancing Scotsmen waving money

What I like about you, you really know how to dance
When you go up, down, jump around,
think about true romance, yeah

That’s what I like about you

What I like about you, you keep me warm at night
Never wanna’ let you go, know you make me feel alright, yeah
 

Veeco Instruments Inc. (Veeco) (VECO) designs, manufactures, markets and services enabling solutions for customers in the high brightness light emitting diode (HB LED), solar, data storage, scientific research, semiconductor and industrial markets. In its LED and Solar segment, Veeco designs and manufactures metal organic chemical vapor deposition systems that are used to make HB LEDs or solar cells made of III-V compound semiconductors. In its Data Storage segment, Veeco designs and manufactures equipment used in the production of thin film magnetic heads that read and write data on hard disk drives. In its Metrology segment, the Company designs and manufactures atomic force microscopes, scanning probe microscopes, stylus profilers and fast three-dimensional (3D) optical microscopes… (Sabrient’s Ratings Report)

Sabrient rates VECO a Strong Buy for its superior value and growth profiles, which indicates a stock that should outperform the market.  

Read Sabrient’s full report here.

We liked a lot about VECO when we added it to the Dark Horse Hedge virtual portfolio at $31.93 on August 25, 2010. Using Phil Davis’s Buy/Write strategy, we bought half a position in the stock and sold October $32 calls and puts against it (1 put and 1 call per 100 shares of stock).  

With option expirations on Friday, October 15, it’s time to decide if we "never wanna let you go," for now, or if we want to close the trade and take profits.  

VECO closed at $36.51 yesteday. We could keep the $6.20 option premium and let VECO get called away for $32. But why do that when there is so much to like about…
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Guest Post: A Modest Proposal

Courtesy of Tyler Durden

Submitted by Jim Quinn of The Burning Platform

A Modest Proposal

As we have debated various issues on this site for the last couple years my understanding of our economic system has changed. I’ve come to the conclusion that the middle class of this country has been caught in a pincer movement by two armies. My definition of the Middle Class is households making between $50,000 and $150,000 per year. The Free Shit Army is attacking us on the left. The middle class has been the backbone of the country, doing the heavy lifting in this country. They get up every morning and trudge off to work to support their families. The Free Shit Army sleeps in. They have chosen to not educate themselves in order to advance in our society. Politicians have enabled them to stay in poverty by providing welfare, disability, food stamps, and tax incentives that make their lives just comfortable enough to not work. If you provide money to people who are classified as disabled, you get more disabled. The Free Shit Army has 50% more disabled than the general population. If you pay people for not working, why should they work? The middle class works and pays their taxes. These taxes are then redistributed to the Free Shit Army.

The second pincer movement on the middle class has been conducted by a stealthier army. This army has experts in propaganda, misinformation, and obfuscation. I call them the Ruling Elite Army. The generals are the ultra-wealthy CEOs of Wall Street banks and mega-corporations. Their armor divisions are manned by the corporate mainstream media. They are excellent at laying down a great smoke screen before blasting away. The infantry is manned by 535 Congressional officers with thousands of corporate lobbyist foot soldiers. This army has been given the mission to capture the supplies of the middle class.

The middle class were not prepared for the assaults they have been fending off. They became soft and satisfied. They stopped training. They became distracted by their gadgets, delusions of home wealth, and fear of phantom terrorist enemies behind every bush. The propaganda machine of their true enemies has convinced the middle class that foreign enemies are massing. The enemy is within. The middle class will need to sacrifice and go to war against two enemies. Are they up to the task? I’m not sure.

In my opinion the…
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How The ECB Directly And Indirectly Monetized All Irish September Treasury Auctions

Courtesy of Tyler Durden

One of the most bullish stories coming out of Europe last month was that Ireland, despite a drunk and disorderly finmin, and banks either increasingly more nationalized or on the verge of full scale restructuring, managed to fund its €25 billion in sovereign debt maturities. Of course, the European media took that as a sign of strength and from that point on it was off to the races for the EUR. Yet it appears the celebration was just a little premature. We learn today that virtually all of the maturities were funded indirectly by the ECB: in other words the monetization shell game so well mastered by the Fed is now being conducted by European banks everywhere. In September Irish bank borrowings surged from €95 billion to €119 billion, a €24 billion increase, and virtually a euro-for-euro match for all the new Treasury issuance. And since no demented monetization ploy goes unpunished, the action raised Irish ECB borrowings to 9% of liabilities, the same as Portuguese banks. As for the balance, as readers will recall we highlighted that last week the ECB purchased €1.4 billion of government bonds directly, therefore confirming that every single Irish bond auction would have been a 100% failure had it not been for Jean Claude Trichet’s direct and indirect monetization scheme. But yes, somehow the euro is considered more viable than the dollar.

One day Germany will say “monetize away, Weimar be damned.” That day will be very memorable for the dollar which has now become the funding currency of choice. That is the day when Europe will officially retaliate against endless US FX aggression, and the currency war will be really on.





Weekly Review And Upcoming Weekly Events Calendar

Courtesy of Tyler Durden

Goldman’s weekly review and outlook for the upcoming week.

Week in Review

Payrolls and QE2 US payrolls on Friday came in rather mixed with softer guts as seen in the rise in the U-6 rate and hours worked stagnating. The November FOMC meeting remains very much the likely expected commencement date of Fed QE2. Stocks received a slight boost from this and the Dollar was slightly weaker, with $/JPY notably dipping below the 82 level.
 
IMF/G7 meetings and ‘currency wars’ The meetings in Washington this weekend garnered agreement for greater IMF surveillance on exchange rates but did not yield any ‘grand statement’ on broad Dollar weakness and global FX coordination. One of the reasons why significant action here on these issues was unlikely (as we flagged in last Friday’s FX Views) is because the G7 has all but ceased to become the main channel for official statements on currencies, with the focus shifting mainly to the G20 (the next finance minister’s meeting is scheduled for Oct 22 before the November G20 leader’s summit in Seoul).
 
New forecasts Last week, we changed our Dollar forecasts across the board. One thing we highlighted in particular is that there will be limited trade weighted impact on most currencies if all share at least part of the USD weakness.

Week Ahead

Key US data--FOMC minutes, retail sales, CPI, trade balance. The minutes of the Sep 21 FOMC meeting out on Tuesday will be worth watching closely for anything special about the rationale for highlighting the low level of inflation and also to gauge how strong the support was for the decision to signal readiness to make further asset purchases. Speeches by Fed officials Dudley and Bernanke on Monday and Friday respectively will also be watched.
 
Other key releases are retail sales and inflation. Following reports of increases in auto sales and chain store results, our US economists expect retail sales to show solid gains (we are above consensus at +0.6%mom for headline and ex-autos). On CPI and PPI, we expect the disinflation trends to remain intact with benign core prints (+0.1% in line with consensus). Other noteworthy items for the week are the usual Claims on Thursday and Empire and the preliminary Michigan sentiment reading on Friday.
 
Central bank meetings—Singapore, Korea, Turkey, Mexico and Chile We have a few key central bank meetings in NJA. First, the biannual…
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Don’t Panic.

Courtesy of Sacrilege

At 7 EST we’re going to strip all incoming cookies effectively locking the ability to comment/etc so we can update the back end. It will look like you have logged out, but you haven’t. Don’t freak out. No matter how many times you click “log in” this will not change. Also, “search” and “donate” will not work for a while. When we stop stripping cookies, everything should return to normal.





Inside the Global Banking Intelligence Complex, BCCI Operations

Inside the Global Banking Intelligence Complex, BCCI Operations

Courtesy of David DeGraw of Amped Status 

Editor’s Note: The following is Part II of David DeGraw’s new book, “The Road Through 2012: Revolution or World War III.” This is the third installment to a new seven-part series that we will be posting throughout the next few weeks. You can read the introduction here and Part I here. To be notified via email of new postings from this series, subscribe here.

Part Two: Inside the Global Banking Intelligence Complex, BCCI Operations

I: All Roads Go Through BCCI

II: BCCI & US Intelligence

III: Af-Pak Covert Operations

IV: The Iran-Contra Affair

V: Kissinger Associates & Iraqgate-BNL

VI: The Ultimate Conspiracy: The BCCI 


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Futures Market Is Open – October 10

Courtesy of RobotTrader

Other foreign market action can be seen overnight here:

http://clearstation.etrade.com/cgi-bin/bbs?post_id=9507251

 

Indexes

 

Energy

 

 

Metals

 

 

Agricultural commodities

 

 

Bonds

 

 

Currencies

 

 

 

New Zealand

 

 

Australia

 

 

Japan

 

 

Korea

 

 

Hong Kong

 

 

Dubai

 

 

Shenzen Stock Exchange

 

 

Shanghai

 

 

India

 

 

Might as well enjoy the good weather on Monday here in Los Angeles.





 
 
 

Zero Hedge

World Trade War I: US Asks South Korea To Join Anti-Huawei Campaign

Courtesy of ZeroHedge. View original post here.

The bilateral trade war between the US and China is gradually becoming a global trade war of global geopolitical and commercial dominance between the US and Chinese spheres of influence.

Shortly after the two largest mobile phone companies in the UK decided against launching Huawei-built 5G phones this morning, and roughly around the time a bevy of Japanese tech and telecom companies including ARM Holdings, Panasonic and SoftBank all imposed a boycott on supplying Huawei with mission critical components joining Australia, and New Zealand as major US allies to end commercial relat...



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Phil's Favorites

Overpriced tech IPOs sell grand visions but aren't worth their valuations

 

Overpriced tech IPOs sell grand visions but aren't worth their valuations

rblfmr / Shutterstock.com

Courtesy of John Colley, Warwick Business School, University of Warwick

The year of the tech IPO is 2019. Uber went public on May 10 with a US$82.4 billion valuation. Fellow ride-sharing app Lyft floated in March with a U$24 billion valuation and Pinterest had a US$10 billion IPO in April...



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Kimble Charting Solutions

Emerging Markets About To Submerge If 3-Year Support Breaks?

Courtesy of Chris Kimble.

Are Emerging Markets about to “Submerge” and head a good deal lower? What they do at (3) will go a long way in answering this question!

Emerging Markets ETF (EEM) has been lagging the broad market for the past 15-months. They hit their 50% retracement level of the last year’s highs and lows and falling resistance at (2) recently. The weakness of last has EEM trading below its 200-MA line.

EEM has spent the majority of the past 3-years inside of rising channel (1), which reflects that this trend remains up. The weakness of late has it testing the bo...



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Insider Scoop

Amgen To Buy Danish Collaborator Nuevolution For $167M

Courtesy of Benzinga.

Amgen, Inc. (NASDAQ: AMGN) took a logical step forward in buying a preclinical biotech it has been collaborating with since 2016. 

What Happened

Amgen announced Wednesday an agreement to buy Copenhagen-based Nuevolution for $167 million.

Th...



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Chart School

Weekly Market Recap May 18, 2019

Courtesy of Blain.

China – U.S. trade talk continued to dominate the week.   A heavy selloff Monday was followed by 3 up days, with Friday moderately down.

On Monday, Chinese officials announced retaliatory tariffs against the U.S., hitting $60 billion in annual exports to China with new or expanded duties that could reach 25%.

Then on Wednesday:

The Trump administration plans to delay a decision on instituting new tariffs on car and auto part imports for up to six months, according to media reports.

...

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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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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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