Archive for 2010

The Imperialist Oscar Feed Must Be Down: North Korea Orders Army, People To Be Prepared For Warfare

Courtesy of Tyler Durden

Yawn, more “imminent warfare” out of North Korea. As the Kospi is up over 1%, South Korea is either engrossed by Ben Stiller’s make up or giving this news the proper attention it deserves.

From Dow Jones:

The army of the Democratic People’s Republic of Korea issued an order, saying the army and people in North Korea should get ready for warfare in response to the U.S.-South Korean joint military exercise, Xinhua News Agency reported Monday, citing North Korea’s official KCNA news agency.





Swing trading virtual portfolio – Week of March 8th, 2010

This post is for live trades and daily comments. 

To learn more about the swing trading virtual portfolio (strategy, membership etc.), please click here

- Optrader





Bill Lockyer Goes Direct To Retail Investors With The "Terrific" Opportunity To Front Run Institutional Investors In Cali Bonds

Courtesy of Tyler Durden

After recently pulling a $2 billion bond issue due to an internal Snafu (and, as the rumor goes, due to a material lack of institutional demand), California has been advertising (and, ironically, using Google contextual ads on Zero Hedge for just that purpose, possibly running on this very page) the very same bond issue, direct to retail investors, and making it seems like retail is getting a great deal by getting on the same (deserted) floor as institutions, and even frontrunning the major institutional investors (which incidentally would not touch these bonds with a 12 foot pole). While we sympathize  with Bill Lockyer’s problem of being the Treasurer of a default state, we are not very sure that going direct to retail is the best option (or, all that legal either). If anything, it underscores just how horrendous the fiscal situation in California is, and how anyone buying into this bond issue should be prepared that the next round just may not find enough greater fools to extend the perpetual refi Ponzi (forget about repayment at maturity).

From the buycaliforniabonds.com website:

Welcome. Thank you for visiting Buy California Bonds.

California bonds finance investments in our schools, roads, housing, parks, levees, public facilities and other crucial infrastructure projects. They also finance the research and development of stem cell therapies to treat and cure diseases which ravage lives and families.

As Treasurer, I am responsible for managing all of the State’s bond sales. I want to make it easy for individuals to make these investments – and pay the same price as large institutional investors. This website will show you how to buy infrastructure bonds, lease-revenue bonds to build State-government buildings, bonds to fund stem cell research, as well as shorter-term notes that help the State manage its cash flow.

The bulk of these bonds will help finance infrastructure projects. California voters have approved the issuance of more than $65 billion of bonds to improve and build new schools, roads, housing, parks and levees. Over the next few years, the State will be selling these bonds to raise the money to build these projects. By investing in these bonds, you will help turn the projects you approved at the polls into reality – adding to our quality of life and the vibrancy of our


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Bill Lockyer Goes Direct To Retail Investors With The “Terrific” Opportunity To Front Run Institutional Investors In Cali Bonds

Courtesy of Tyler Durden

After recently pulling a $2 billion bond issue due to an internal Snafu (and, as the rumor goes, due to a material lack of institutional demand), California has been advertising (and, ironically, using Google contextual ads on Zero Hedge for just that purpose, possibly running on this very page) the very same bond issue, direct to retail investors, and making it seems like retail is getting a great deal by getting on the same (deserted) floor as institutions, and even frontrunning the major institutional investors (which incidentally would not touch these bonds with a 12 foot pole). While we sympathize  with Bill Lockyer’s problem of being the Treasurer of a default state, we are not very sure that going direct to retail is the best option (or, all that legal either). If anything, it underscores just how horrendous the fiscal situation in California is, and how anyone buying into this bond issue should be prepared that the next round just may not find enough greater fools to extend the perpetual refi Ponzi (forget about repayment at maturity).

From the buycaliforniabonds.com website:

Welcome. Thank you for visiting Buy California Bonds.

California bonds finance investments in our schools, roads, housing, parks, levees, public facilities and other crucial infrastructure projects. They also finance the research and development of stem cell therapies to treat and cure diseases which ravage lives and families.

As Treasurer, I am responsible for managing all of the State’s bond sales. I want to make it easy for individuals to make these investments – and pay the same price as large institutional investors. This website will show you how to buy infrastructure bonds, lease-revenue bonds to build State-government buildings, bonds to fund stem cell research, as well as shorter-term notes that help the State manage its cash flow.

The bulk of these bonds will help finance infrastructure projects. California voters have approved the issuance of more than $65 billion of bonds to improve and build new schools, roads, housing, parks and levees. Over the next few years, the State will be selling these bonds to raise the money to build these projects. By investing in these bonds, you will help turn the projects you approved at the polls into reality – adding to our quality of life and the vibrancy of our


continue reading





China Dissected: CLSA's Andy Rothman Speaks

Courtesy of Tyler Durden

Now that China is once again back in the center of attention, we present the latest from one of the undisputed leaders in Chinese analysis (albeit extremely bullish): CLSA, and specifically Andy Rothman’s latest edition of Sinology, “A Wild Ride.” In a nutshell, CLSA sees virtually no signs of overheating in China, and all is good, with lines of people in front of Hermes boutiques all over the place (with some caveats). This is ironic because lately even the Chinese press has quoted Chinese real estate investors and management teams as saying that the entire Chinese market is one unprecedented turbo-bubble. More on this soon.

 

Some notable observations: consumer sentiment in China is now at an all time optimistic high: alas, there is onlly one way it can go from here.

Comparison of China and US consumption. Guess who is leading world purchasing. Too bad, Chinese GDP is less than a third of that of the US (and even that number is highly circumspect).

For those who think that Zara just monopolizes every block in Barcelona, take a look at this (map of middle-class distribution).

And just in case you think that Hermes dresses are limited to philanthropic wives of hedge fund managers that made a billion (for themselves), then lost ten billion (for their LPs), you have not been to China.

A look at where CLSA sees actual tightening within Chinese markets.

Here is a chronological look at China’s required reserve ratio and 1 year benchmark interest rate.

Full CLSA report for all you Sinofiles attached.

 

Attachment Size
CLSA China Feb.pdf 1.53 MB




China Dissected: CLSA’s Andy Rothman Speaks

Courtesy of Tyler Durden

Now that China is once again back in the center of attention, we present the latest from one of the undisputed leaders in Chinese analysis (albeit extremely bullish): CLSA, and specifically Andy Rothman’s latest edition of Sinology, “A Wild Ride.” In a nutshell, CLSA sees virtually no signs of overheating in China, and all is good, with lines of people in front of Hermes boutiques all over the place (with some caveats). This is ironic because lately even the Chinese press has quoted Chinese real estate investors and management teams as saying that the entire Chinese market is one unprecedented turbo-bubble. More on this soon.

 

Some notable observations: consumer sentiment in China is now at an all time optimistic high: alas, there is onlly one way it can go from here.

Comparison of China and US consumption. Guess who is leading world purchasing. Too bad, Chinese GDP is less than a third of that of the US (and even that number is highly circumspect).

For those who think that Zara just monopolizes every block in Barcelona, take a look at this (map of middle-class distribution).

And just in case you think that Hermes dresses are limited to philanthropic wives of hedge fund managers that made a billion (for themselves), then lost ten billion (for their LPs), you have not been to China.

A look at where CLSA sees actual tightening within Chinese markets.

Here is a chronological look at China’s required reserve ratio and 1 year benchmark interest rate.

Full CLSA report for all you Sinofiles attached.

 

Attachment Size
CLSA China Feb.pdf 1.53 MB




Bear Stearns Boogie Man Yet Again

Bear Stearns Boogie Man Yet Again

Courtesy of Mish

Once again a series of videos is making the rounds touting how evil short sellers destroyed Bear Stearns. I was asked to comment on this.

The video makes a bunch of assumptions

1. That whoever bought way out of the money Bear Stearns PUTs "knew" something and illegally acted on it.
2. The same institution that bought the PUTs was illegally shorting shares.
3. There is a conspiracy to protect those evil doers.

How The System Really Works

Fact #1: When someone buys PUTs the market maker or counterparty who sold them is short those PUTs. This is a mathematical statement of fact.
Fact #2: The market maker who sold the PUTs, shorts stocks as a hedge against those short PUTs.
Fact #3: The lower the share price, the more shares the market maker has to short to stay delta neutral.
Fact #4: Market Makers are not governed by naked shorting rules

The video alleges that it was the person buying way out of the money PUTs that was doing the shorting. The reality is the market makers who sold PUTs were most likely those doing the allegedly "illegal" naked shorting.

To stay delta neutral, the market makers were forced to short more shares the lower the price dropped. Also remember this happened with every PUT at every strike all the way down, not just on that batch of way out of the money PUTs.

It should not take a genius to figure out how easily this could spiral out of control.

Who Was Shorting?

It was probably Goldman Sachs, Citigroup, Morgan Stanley, Merrill Lynch or whoever sold the PUTs. Moreover, those market makers probably lost money shorting because of how quickly the stock plunged.

The irony is everyone blames the naked sellers for making a fortune by short selling when the PUT sellers lost more on the PUTs they were short than they gained shorting the shares.

Did Someone Know Something?

The video alleges that someone "knew something". Well someone did know something, and that something is what we all knew: Bear Stearns was not only the most leveraged of the large institutions, but also held the highest concentration of subprime mortgage garbage.

Also other institutions could see or at least feared a run on the bank at Bear…
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Crude Oil Breaks The Dollar Rule For The Summer High Noon

Courtesy of asiablues

By Economic Forecasts & Opinions

Crude oil surged to its highest level in almost eight weeks and gasoline also rose to a 17-month high after the U.S. employment declined less than forecast in February. Encouraged by the upbeat news, investors moved into oil on the expectation that fuel demand will climb as economic growth picks up pace.

Extending the impressive gains of 9.3% in February, crude oil for April delivery settled at $81.50 a barrel on the New York Mercantile Exchange (NYMEX), the highest closing price since Jan. 11. The contract jumped 2.3% in last week alone.

Positive statements from China that it would maintain its economic stimulus, rekindling hopes for accelerating growth to drain excess oil supplies also helped support the oil market.

Moving On Up Via Currency?

New York crude has been trading in the $69-$83 range since late September as uncertainty over the global economy has contributed to several failed rallies. The close above $81, capping a 14.5% increase from a year-to-date low last month, sparked speculation that oil could be targeting $85 in the near term.

Now, some traders and analysts say currency movements may play an important role in pushing prices beyond those limits…. or will they?

Breaking The Dollar Rule

Much of the movement in oil over the past year was driven by overall fund flows out of the U.S. dollar as opposed to supply and demand fundamentals of the commodity. Dollar weakness tends to boost dollar-denominated commodities, which has characterized the relationship between crude and the dollar for most of last year. (Fig. 1)

However, just as the Greece debt crisis negatively impacted the euro pushing gold and the US dollar to trade in tandem (see analysis), the dollar’s no longer in the driver’s seat dictating the direction of crude prices, as crude and the dollar have both advanced since last December. (Fig. 1)

This break in the pattern suggests this year could be a transition where broader market fundamentals begin to take hold, with weekly inventory levels and demand trends becoming a larger factor for the energy market.

Down The Contango Spread

Meanwhile, the forward curve has flattened out considerably. The spread between the near-month oil in relation to the 12-month forward contract has dropped from $8.32 per barrel three months ago…
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Rooseveltian reflections

Excellent read by Steve Randy Waldman at Interfluidity. 

Rooseveltian reflections

Franklin Delano

Wednesday morning, I attended a Roosevelt Institute conference, on the theme “Make Markets Be Markets“. It was an enjoyable affair, with a bunch of smart, well-known speakers saying things I broadly agree with, mostly on financial reform. A wrinkle I had not really expected was how frequently, and rather charmingly, the name of the gentleman after whom the Institute is named would be invoked. FDR, and the 1930s generally, were very much with us that morning.

I have much to spout on the subject of financial reform; I am several posts in arrears on that. But by the end of the conference, I was fascinating myself with a little thought experiment.

Suppose the good guys win. Better yet, suppose they had never lost. Suppose banks had never ventured beyond conservatively prudent lending; that there had been no housing, internet, or credit bubble. Forlorn cul-de-sacs surrounded by mouldering homes were never cut from the Arizona desert. Webvan and pets.com were rejected straight off by investors rather than soaring against all reason then dying in an unreasonably sudden collapse.

In a world without bubbles and, let’s not mince words, in a world without fraud in substance if not in law, would we, or how could we, have enjoyed two decades of near “full employment” and apparent growth? Without all the internet companies that were forseeably destined to fail, without all the housing construction, without all the spending by employees whom we know now and should have known then were not actually participating in economic production, without all the spending by people feeling rich on stock or housing gains that would eventually collapse in their or someone else’s arms, what kind of economy would we have built?

These are not questions that answer themselves. They are unknowable counterfactuals.

But we do know something about the 1930s. In 1930, Keynes famously proclaimed “we have magneto trouble”, with the implication that the then incipient depression was due to a kind of remediable, technical failure. Less famously, Keynes was wrong. The post-war economy that finally put paid to the Great Depression was an economy different in kind from that of the go-go 1920s. One piece of that was financial sector reform: there were the securities acts and the FDIC and an astonishing forty years without major banking crises. But there was…
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Stiglitz: Federal Reserve system is corrupt

Stiglitz: Federal Reserve system is corrupt

Courtesy of Tim Iacono at The Mess That Greenspan Made  

You have to give Nobel Prize winning economist Joseph Stiglitz credit for his candor in some remarks he made yesterday at a conference where financial market reform was discussed.

As recounted in this story over at the Huffington Post, he said a few things that should be patently obvious to anyone with a working knowledge of how the Federal Reserve system really works, yet, even to me they somehow seemed shocking.

"If we had seen a governance structure that corresponds to our Federal Reserve system,we would have been yelling and screaming and saying that country does not deserve any assistance, this is a corrupt governing structure," Stiglitz said during a conference on financial reform in New York. "It’s time for us to reflect on our own structure today, and to say there are parts that can be improved."



To Stiglitz, the core issue is that regional Fed banks, such as the New York Fed, have clear conflicts of interest -- a result of the banks being partly governed by a board of directors that includes officers of the very banks they’re supposed to be overseeing.

What’s even more egregious is to think that, not only does the Federal Reserve supervise the very banks whose CEOs sit on its board, but that, even after their disastrous track record as a consumer watchdog over the last decade or so, that power appears likely to stay with the central bank despite loud protestations from those with no lobbying clout.

Clearly, the system can not be reformed from within – that much should be clear by now.


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Zero Hedge

Bloomberg System Goes Down Ahead Of US Open

Courtesy of ZeroHedge. View original post here.

For the second time in a few months, the Bloomberg Terminal system appears to be down and is causing panic across Wall Street ahead of the US market open...

Traders are not happy...

When Bloomberg panels go down 8 minutes before the open...... pic.twitter.com/pqoQoyoBHj

— NOD (@NOD008) January 17, 2019 ...

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Kimble Charting Solutions

Triple Breakout Test In Play For S&P 500!

Courtesy of Chris Kimble.

Is the rally of late about to run out of steam or is a major breakout about to take place in the S&P 500? What happens at current prices should go a long way in determining this question.

This chart looks at the equal weight S&P 500 ETF (RSP) on a daily basis over the past 15-months.

The rally from the lows on Christmas Eve has RSP testing the top of a newly formed falling channel while testing the underneath side of the 2018 trading range and its falling 50-day moving average at (1).

At this time RPS is facing a triple resistance test. Wil...



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Phil's Favorites

Brexit deal flops, Theresa May survives -- so what happens now?

 

Brexit deal flops, Theresa May survives -- so what happens now?

Courtesy of Victoria Honeyman, University of Leeds

As the clock ticks down to March 29 2019, all of the political manoeuvring, negotiating, arguing and fighting is coming to a peak. In the two and a half years since the 2016 EU referendum, views on both sides have hardened and agreement still seems as far away as it was the day after the referendum.

With Theresa May’s withdrawal agreement disliked by all sides, and voted down by an unprecedented majority in the House of Commons, everyone is wondering what can and should be done next?

...



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Digital Currencies

Crypto-Bubble: Will Bitcoin Bottom In February Or Has It Already?

Courtesy of Michelle Jones via ValueWalk.com

The new year has been relatively good for the price of bitcoin after a spectacular collapse of the cryptocurrency bubble in 2018. It’s up notably since the middle of December and traded around the psychological level of $4,000... so is this a sign that the crypto market is about to recover?

Of course, it depends on who you ask, but one analyst discovered a pattern which might point to a bottom next month.

A year after the cryptocurrency bubble popped

CCN...



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ValueWalk

D.E. Shaw Investment Calls For Leadership Change At EQT

By ActivistInsight. Originally published at ValueWalk.

Elliott Management has offered to acquire QEP Resources for approximately $2.1 billion, contending the oil and gas explorer’s turnaround efforts have done little to lift the company’s share price. The company responded and said that a thorough review of the proposition is imperative in order to properly act in the best interests of shareholders, “taking into account the company’s other alternatives and current market conditions.” The news came only a month after Travelport Worldwide agreed to sell itself to Siris Capital Group and Elliott’s private equity arm Evergreen Coast Capital for $4.4 billion in cash and two months after Athenahealth was bought by Veritas and Evergreen for $5.7 bi...



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Insider Scoop

UBS Says Disney's Streaming Ambition Gives It A 'New Hope'

Courtesy of Benzinga.

Related DIS Despite Some Risks, Analysts Still Expecting Double Digit Growth From Communications Services In Q4 ...

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

Chart School

Weekly Market Recap Jan 13, 2019

Courtesy of Blain.

In last week’s recap we asked:  “Has the Fed solved all the market’s problems in 1 speech?”

Thus far the market says yes!  As Guns n Roses preached – all we need is a little “patience”.  Four up days followed by a nominal down day Friday had the market following it’s normal pattern the past nearly 30 years – jumping whenever the Federal Reserve hints (or essentially says outright) it is here for the markets.   And in case you missed it the prior Friday, Chairman Powell came back out Thursday to reiterate the news – so…so… so… patient!

Fed Chairman Jerome Powell reinforced that message Thursday during a discussion at the Economic Club of Washington where he said that the central bank will be “fle...



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Members' Corner

Why Trump Can't Learn

 

Bill Eddy (lawyer, therapist, author) predicted Trump's chaotic presidency based on his high-conflict personality, which was evident years ago. This post, written in 2017, references a prescient article Bill wrote before Trump even became president, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...



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Biotech

Opening Pandora's Box: Gene editing and its consequences

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

 

Opening Pandora's Box: Gene editing and its consequences

Bacteriophage viruses infecting bacterial cells , Bacterial viruses. from www.shutterstock.com

Courtesy of John Bergeron, McGill University

Today, the scientific community is aghast at the prospect of gene editing to create “designer” humans. Gene editing may be of greater consequence than climate change, or even the consequences of unleashing the energy of the atom.

...

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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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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.

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