Archive for 2010

German Banks Hiding Stress Test Data Further Undemine Geithner's European Scammery Tour

Courtesy of Tyler Durden

Hot on the heels of our earlier disclosure that the Landesbank stress test passage is either a joke or a scam, comes the knowledge that 6 out of the 14 tested German banks, including Landesbanks, have decide against posting their stress test details, specifically withholding the breakdown of their sovereign debt holdings. “Every other European bank, bar Greece’s ATEbank, which failed the test, complied with the disclosure requirement. Analysts said the German banks’ non-compliance would fuel suspicion they had something to hide, and risked further undermining faith in the whole stress test exercise, already criticised for its benign scenarios.” Um “further undermine”? Has it not been made abundantly clear that the entire stress test soap opera was merely a pretext for Liberty 33 and Johnny 5 to ramp the market for the last hour of trading on Friday? Are people still confused that whenever Tim Geithner “plans” something, be it for the US, for his own tax estate, or for another continent, scammery, corruption and opacity are pretty much a necessary and sufficient condition for any “swiss watch” plan’s execution.

More from the FT:

Officials from the German regulatory authorities – Bafin and the Bundesbank – said local law meant they could not force banks to publish such details.

However, one banker told the FT: “There was a discussion in Germany about whether to publish the sovereign debt holdings, and at one point the banks were told that it was to be compulsory, but in the end Bafin did not require it.”

Mr Vossen would not comment directly on why Germany had backed out of the agreed publication but said he said he would be picking up the phone to the German authorities. “We agreed that these disclosures would be done,” he told the FT. “This is one of the topics we will follow through on. We need to have a chat.”

The European Commission echoed that sentiment on Sunday, saying it “encouraged the few banks who had not disclosed the information to do so”.

Yeah, whatever. Only when the EC and whoever the other brain dead zombies of endless corruption in the failed European experiment are, disclose the haircuts on the trillions in shadow debt, and what forms of government backstops are being taken to prevent another shadow banking system run, this time…
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German Banks Hiding Stress Test Data Further Undemine Geithner’s European Scammery Tour

Courtesy of Tyler Durden

Hot on the heels of our earlier disclosure that the Landesbank stress test passage is either a joke or a scam, comes the knowledge that 6 out of the 14 tested German banks, including Landesbanks, have decide against posting their stress test details, specifically withholding the breakdown of their sovereign debt holdings. “Every other European bank, bar Greece’s ATEbank, which failed the test, complied with the disclosure requirement. Analysts said the German banks’ non-compliance would fuel suspicion they had something to hide, and risked further undermining faith in the whole stress test exercise, already criticised for its benign scenarios.” Um “further undermine”? Has it not been made abundantly clear that the entire stress test soap opera was merely a pretext for Liberty 33 and Johnny 5 to ramp the market for the last hour of trading on Friday? Are people still confused that whenever Tim Geithner “plans” something, be it for the US, for his own tax estate, or for another continent, scammery, corruption and opacity are pretty much a necessary and sufficient condition for any “swiss watch” plan’s execution.

More from the FT:

Officials from the German regulatory authorities – Bafin and the Bundesbank – said local law meant they could not force banks to publish such details.

However, one banker told the FT: “There was a discussion in Germany about whether to publish the sovereign debt holdings, and at one point the banks were told that it was to be compulsory, but in the end Bafin did not require it.”

Mr Vossen would not comment directly on why Germany had backed out of the agreed publication but said he said he would be picking up the phone to the German authorities. “We agreed that these disclosures would be done,” he told the FT. “This is one of the topics we will follow through on. We need to have a chat.”

The European Commission echoed that sentiment on Sunday, saying it “encouraged the few banks who had not disclosed the information to do so”.

Yeah, whatever. Only when the EC and whoever the other brain dead zombies of endless corruption in the failed European experiment are, disclose the haircuts on the trillions in shadow debt, and what forms of government backstops are being taken to prevent another shadow banking system run, this time…
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Swing trading virtual portfolio – week of July 26th, 2010

This post is for live trades 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

 

Optrader 





At the Tipping Point (Again)

At the Tipping Point (Again) (SPY, DIA, IWM, QQQQ)

Weekly Stock Market and ETF, Exchange Traded Fund Commentary from Wall Street Sector Selector

Courtesy of John Nyaradi

Volatility was the name of the game last week as the bulls struggled back and nearly managed to push the S&P 500 above the all important 200 Day Moving Average.  As I mentioned during the mid-week updates this struggle will resolve itself one way or other in the coming days as the markets battle between negative macro indicators and positive earnings news. 

If the 200 Day Moving Average can be breached and held on the positive side, one could see another strong up leg ahead.  If this attempt fails, then lower prices or the current trading range will very likely continue. 

Today we switch to “Yellow Flag Flying,” expecting choppy prices ahead. 

Looking at My Screens

The indicators remain mixed with the Dow and Russell 2000 and NASDAQ 100 now above their respective 200 Day Moving Averages and the S&P 500, our major market barometer, below its 200 day average but having successfully breached the psychologically important 1100 level and a solid close above its 50 Day Moving Average. 

We remain overbought on a short and medium term basis which is bearish while sentiment remains relatively neutral with not much conviction on either side of the trade. 

The View from 35,000 Feet

Macro economic news was poor this week with new unemployment claims unexpectedly rising from 464,000 to 472,000 and the ECRI (Economic Cycle Research Institute) annualized indicator dropping to -10.5 from -9.8 and breaching the all important -10 level which has been an accurate forecaster of recession for more than 40 years.  This week’s reading was its lowest since last May as the current recovery was getting under way. 

The big news items were Dr. Bernanke’s testimony to Congress in which he said the recovery was ongoing but that we are in uncertain times and that the Fed stood ready to assist the recovery with more “quantitative easing” if conditions required.  Stocks plunged hard on his first day of testimony and rallied hard on the second, reflecting the confusing nature of today’s markets. 

Good earnings from Caterpillar and UPS helped the market higher and on Friday the results of the European banks “stress tests” were made public with just 7 out of 91 “failing” the tests. 

Over the weekend I’ve been reading almost…
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How Goldman's Counterparty Valuation Adjustment (CVA) Desk Saved The Firm From An AIG Blow Up (And Opens Up A Whole New Can Of Wormy Questions)

Courtesy of Tyler Durden

In today’s NYT, Gretchen Morgenson does a good summary of how Goldman was demonstratively net short AIG (or net long its CDS, depending how you look at it) via nearly 100 counterparties to the tune of just over $1.7 billion in net notional, after Chuck Grassley released several previously classified documents disclosing Goldman’s CDS position as of September 15, 2008, the day of Lehman’s bankruptcy. As Gretchen summarizes: “According to the document, Goldman held a total of $1.7 billion in insurance on A.I.G. from almost 90 institutions. Its exposure to A.I.G. at that time was $2.6 billion. Goldman bought most of the insurance from large foreign and domestic banks, including Credit Suisse ($310 million), Morgan Stanley ($243 million) and JPMorgan Chase ($216 million). Goldman also bought $223 million in insurance on A.I.G. from a variety of funds overseen by Pimco, the money management firm.” While the topic of how the world’s biggest asset management firm in the face of Pimco (and specifically its massive Total Return Fund) could have a net short CDS position (i.e., unlimited downside exposure), and how this is supposed to demonstrate prudent capital management, is ripe for evisceration, we will leave it for another day, as there is something more notable in the Grassley disclosure that has to be discussed. While Gretchen is correct that the external position of Goldman’s exposure vis-a-vis AIG is indeed a total of $1.7 billion in long CDS, if one were to actually present the gross number, the truth would be starker: as the Grassley document reveals, the firm’s gross exposure for its IG flow and structured finance desks goes from a positive $1.7 billion net exposure, to a ($2.9) billion net exposure, a massive $4.8 billion swing! What is it that in one fell swoop moved the firm from having a huge long bet on AIG, to a major short CDS position, one that nearly entirely covered the firm’s $2.6 billion in legacy risk exposure? Enter Goldman’s Counterparty Valuation Adjustment desk.

The Counterparty Valuation Adjustment desk at most “commercial banks” has operated in the shadows long enough. Perhaps this latest disclosure by Grassley will finally push it into the light. But just what is a CVA? Conveniently, the Bank of England just released its quarterly bulletin, in which it dedicates 9 pages to just this topic (granted…
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How Goldman’s Counterparty Valuation Adjustment (CVA) Desk Saved The Firm From An AIG Blow Up (And Opens Up A Whole New Can Of Wormy Questions)

Courtesy of Tyler Durden

In today’s NYT, Gretchen Morgenson does a good summary of how Goldman was demonstratively net short AIG (or net long its CDS, depending how you look at it) via nearly 100 counterparties to the tune of just over $1.7 billion in net notional, after Chuck Grassley released several previously classified documents disclosing Goldman’s CDS position as of September 15, 2008, the day of Lehman’s bankruptcy. As Gretchen summarizes: “According to the document, Goldman held a total of $1.7 billion in insurance on A.I.G. from almost 90 institutions. Its exposure to A.I.G. at that time was $2.6 billion. Goldman bought most of the insurance from large foreign and domestic banks, including Credit Suisse ($310 million), Morgan Stanley ($243 million) and JPMorgan Chase ($216 million). Goldman also bought $223 million in insurance on A.I.G. from a variety of funds overseen by Pimco, the money management firm.” While the topic of how the world’s biggest asset management firm in the face of Pimco (and specifically its massive Total Return Fund) could have a net short CDS position (i.e., unlimited downside exposure), and how this is supposed to demonstrate prudent capital management, is ripe for evisceration, we will leave it for another day, as there is something more notable in the Grassley disclosure that has to be discussed. While Gretchen is correct that the external position of Goldman’s exposure vis-a-vis AIG is indeed a total of $1.7 billion in long CDS, if one were to actually present the gross number, the truth would be starker: as the Grassley document reveals, the firm’s gross exposure for its IG flow and structured finance desks goes from a positive $1.7 billion net exposure, to a ($2.9) billion net exposure, a massive $4.8 billion swing! What is it that in one fell swoop moved the firm from having a huge long bet on AIG, to a major short CDS position, one that nearly entirely covered the firm’s $2.6 billion in legacy risk exposure? Enter Goldman’s Counterparty Valuation Adjustment desk.

The Counterparty Valuation Adjustment desk at most “commercial banks” has operated in the shadows long enough. Perhaps this latest disclosure by Grassley will finally push it into the light. But just what is a CVA? Conveniently, the Bank of England just released its quarterly bulletin, in which it dedicates 9 pages to just this topic (granted…
continue reading





Onshore Rush by Offshore Moratorium

Courtesy of asiablues

By Dian L. Chu, Economic Forecasts & Opinions

The de facto reinstated drilling ban in the U.S. Gulf of Mexico resulted from the BP oil spill is widely expected to last beyond the announced six months. Investors fled the energy sector, while producers are jumping onshore attempting to make up for the potential reserves and production shortfall due to the moratorium.

This presentation discussed this onshore boom, profiled the prolific Bakken formation, and some observations of the markets and the oil services sector.  

Onshore Rush by Offshore Moratorium

Dian L. Chu, July 25, 2010





Gotta Smoke ‘Em When You Got ‘Em

Gotta Smoke ‘Em When You Got ‘Em

Courtesy of David at All About Trends 

Amazon (AMZN) was featured in our newsletter as an ideal short-sell set-up.

All it did was rally on light volume back up to resistance at its downtrend channel line.

It’s at that point, we initiated a short-sell position in this issue.

Prior to its earnings release, we decided to stay with the issue and hold it through earnings because the issue had overhead supply at the moving averages was overbought and had just made a short-term run.

 
And kowabunga! After it reported earnings, AMZN imploded and dropped over 16 points in after hours. That’s where we locked in our gains.
 
Anytime the market gives you that type of gain fast you take the money and run! Never look a gift horse in the mouth as they say.  And good thing too as it is closed Friday pushing $119!

Why did AMZN turn into a home run? Plain and simple WE were willing to take the risk knowing full well it could have resulted in losses (That’s called being grounded in reality).

“IF YOU ARE NOT WILLING TO TAKE THE RISK DO NOT TAKE THE TRADE.”

And, we took the profits when we got ‘em.

 

To learn more, sign up for our free newsletter and receive our free report “How To Outperform 90% Of Wall Street With Just $500 A Week.”  We’re offering a $10/first two months special to PSW readers. 





My Life as a White-Collar Criminal

My Life as a White-Collar Criminal

Courtesy of Sam Antar at White Collar Fraud 

Last Friday evening, Marcia MacMillan from CTV News Channel (a 24-hour news network in Canada) interviewed me and asked me what it’s like to be a white-collar criminal and what role, if any, did morality play in my decisions to commit crime. 

 

You can watch the interview by clicking on this link.

Reflecting on my own white-collar criminal mind leaves no doubt that money is not the only motivating force compelling hardcore criminals to commit crimes.  There was also a passion for the act, a sense of accomplishment, that made me enjoy committing my crimes. It is perhaps the same positive feelings of success that law-abiding citizens experience for a legitimate job well-done.  

To better understand the behavior of white-collar criminals, take morality out of the equation. During my years at Crazy Eddie, we never had a single conversation about the morality of our actions. We did not give a damn about right and wrong.

Hardcore criminals don’t question their unethical and immoral conduct.  Laws, morality, and ethics are weaknesses of other people. They don’t factor in except by limiting society’s behavior. In our society, morality dictates that people are entitled to the benefit of the doubt. Ironically, the “benefit of a doubt” limits the behavior of law-abiding citizens while giving criminals greater opportunity to commit their crimes.  After all, no one likes to be called "a paranoid" or "impolite."  

Our late President Ronald Reagan used to say "trust, but verify." That initial trust gives criminals the freedom to take steps to evade detection.  For example, Joseph T. Wells, founder of the Association of Certified Fraud Examiners, described certain steps I took during Crazy Eddie’s audit to successfully execute my crimes: 

Crazy Eddie’s auditors were provided a company office during their examination. They had a key to lock the desk—which they kept in a box of paperclips on top of the desk in full view. After the auditors left for the day, Eddie’s cohorts would unlock the desk, increase the inventory counts on the work-papers and photocopy the altered records. Were the auditors stupid? No, just too trusting. After all, no one wants…
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China Calls Our Bluff: “The US is Insolvent and Faces Bankruptcy as a Pure Debtor Nation but [U.S.] Rating Agencies Still Give it High Rankings”

China Calls Our Bluff: "The US is Insolvent and Faces Bankruptcy as a Pure Debtor Nation but [U.S.] Rating Agencies Still Give it High Rankings"

creditor chinaCourtesy of Washington’s Blog 

America’s biggest creditor – China – has called our bluff.

As the Financial Times notes, the head of China’s biggest credit rating agency has said America is insolvent and that U.S. credit ratings are a joke:

The head of China’s largest credit rating agency has slammed his western counterparts for causing the global financial crisis and said that as the world’s largest creditor nation China should have a bigger say in how governments and their debt are rated.

“The western rating agencies are politicised and highly ideological and they do not adhere to objective standards,” Guan Jianzhong, chairman of Dagong Global Credit Rating, told the Financial Times in an interview.

***

He specifically criticised the practice of “rating shopping” by companies who offer their business to the agency that provides the most favourable rating.

In the aftermath of the financial crisis “rating shopping” has been one of the key complaints from western regulators , who have heavily criticised the big three agencies for handing top ratings to mortgage-linked securities that turned toxic when the US housing market collapsed in 2007.

“The financial crisis was caused because rating agencies didn’t properly disclose risk and this brought the entire US financial system to the verge of collapse, causing huge damage to the US and its strategic interests,” Mr Guan said.

Recently, the rating agencies have been criticised for being too slow to downgrade some of the heavily indebted peripheral eurozone economies, most notably Spain, which still holds triple A ratings from Moody’s.

There is also a view among many investors that the agencies would shy away from withdrawing triple A ratings to countries such as the US and UK because of the political pressure that would bear down on them in the event of such actions.

Last week, privately-owned Dagong published its own sovereign credit ranking in what it said was a first for a non-western credit rating agency.

The results were very different from those published by Moody’s, Standard & Poor’s and Fitch, with China ranking higher than the United States, Britain, Japan, France and most other major economies, reflecting Dagong’s belief that


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Zero Hedge

Trapped (When Will We Know 'They' Lost Control?)

Courtesy of ZeroHedge View original post here.

Authored by Sven Henrich via NorthmanTrader.com,

What? You thought a 850+ point drop in the $DJIA would result in a down week? No Sir. The unholy alliance has struck again. Massive jawboning by multiple administration officials about how well the China trade deal was going, a favorable jobs report and above all, the US Federal Reserve, all contributed to a furious rally to make markets green for the week on (whe...



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Phil's Favorites

The Portfolio Gap

 

The Portfolio Gap

Courtesy of 

Dalbar is known for publishing a study on returns from equity funds compared to the returns that investors capture in those same funds. Every year reveals the same message: The average investor, with remarkable consistency, underperforms their own investments, ostensibly by buying and selling at inopportune times.

The methodology behind the study has been under assault for at least the last 15 years. Here is ...



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Digital Currencies

Visualizing The New Cryptocurrency Economy

Courtesy of ZeroeHedge

Over a decade ago, the birth of Bitcoin sparked a revolution in the digital world - and just last year, the number of active cryptocurrencies jumped from roughly 1,600 to over 3,000 worldwide.

As Visual Capitalist's Ashley Viens details below, cryptocurrencies have now evolved past simple digital currencies, offering solutions to meet the complex needs of modern financial markets.

Today’s graphic from Abra visualizes the complex, ever-evolving cryptocurrency ecosys...



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Kimble Charting Solutions

Gold Miners Indicator Attempting Multi-Year Breakout, Says Joe Friday

Courtesy of Chris Kimble

Are Gold Mining stocks about to be sent a bullish signal they haven’t received in years? Possible says Joe Friday.

This chart looks at the Senior Miner/Junior miner (GDXJ/GDX) ratio over the past few years. Historically when the ratio is heading up, miners tend to do very well.

The ratio has created a series of lower highs just below the falling line (1), since the summer of 2016. The ratio is currently testing the strong falling resistance line and the June 2019 highs at (2).

Joe Friday Just The Facts Ma’am; If the ratio succeeds in a double breakout at (2), it sends miners a long-awaited bullish message.

...

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Insider Scoop

Scott Galloway Calls For Twitter's Board To Replace 'Part-Time CEO' Jack Dorsey Amid Africa Move Plans

Courtesy of Benzinga

A shareholder in Twitter Inc. (NASDAQ: TWTR) and New York University business professor wrote an open letter Friday to the company's board calling for the replacement of CEO Jack Dorsey.

What To Know

Scott Galloway, who owns more than 330,000 shares of Twitter stock a...



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Lee's Free Thinking

Chart Shows the Fed Ramping Up Not QE - Funding Almost All Treasury Issuance

 

Chart Shows the Fed Ramping Up Not QE – Funding Almost All Treasury Issuance

Courtesy of Lee Adler, Wall Street Examiner 

The Fed is ramping up “Not QE” .

The Fed bought $2.2 billion in notes today in its POMO, “not QE,” operations. Actually $2.15 billion because they sold back a whole $50 million. Must have been a little glitch in the force.

This brings the Fed’s total outright purchases of Treasuries to $170 billion since it started Not QE, on September 17.

It also did $107 billion in gross new repo loans to Primary Dealers to buy Tre...



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Chart School

Silver stock taking the sector higher

Courtesy of Read the Ticker

As the US economy begins to show late cycle characteristics like: GDP slowing, higher inflation, higher wage costs, CEO confidence slump. 

Previous Post: Gold Stocks Review

The big players in the market are looking for the next swing off good value lows. This means more money is finding it way into the gold and silver sector, and it is said gold and silver stocks actually lead the metal prices.

The cycle below shows prices are ready to move in the months ahead (older chart re posted).


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



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Members' Corner

Sacha Baron Cohen Uses ADL Speech to Tear Apart Mark Zuckerberg and Facebook

 

Sacha Baron Cohen Uses ADL Speech to Tear Apart Mark Zuckerberg and Facebook

By Matt Wilstein

Excerpt:

Sacha Baron Cohen accepted the International Leadership Award at the Anti-Defamation League’s Never is Now summit on anti-Semitism and hate Thursday. And the comedian and actor used his keynote speech to single out the one Jewish-American who he believes is doing the most to facilitate “hate and violence” in America: Facebook founder and CEO Mark Zuckerberg.

He began with a joke at the Trump administration’s expense. “Thank you, ADL, for this recognition and your work in fighting racism, hate and bigotry,” Baron Cohen said, according to his prepared...



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The Technical Traders

VIX Warns Of Imminent Market Correction

Courtesy of Technical Traders

The VIX is warning that a market peak may be setting up in the global markets and that investors should be cautious of the extremely low price in the VIX. These extremely low prices in the VIX are typically followed by some type of increased volatility in the markets.

The US Federal Reserve continues to push an easy money policy and has recently begun acquiring more dept allowing a deeper move towards a Quantitative Easing stance. This move, along with investor confidence in the US markets, has prompted early warning signs that the market has reached near extreme levels/peaks. 

Vix Value Drops Before Monthly Expiration

When the VIX falls to levels below 12~13, this typically v...



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Biotech

Why telling people with diabetes to use Walmart insulin can be dangerous advice

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

 

Why telling people with diabetes to use Walmart insulin can be dangerous advice

A vial of insulin. Prices for the drug, crucial for those with diabetes, have soared in recent years. Oleksandr Nagaiets/Shutterstock.com

Courtesy of Jeffrey Bennett, Vanderbilt University

About 7.4 million people ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

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

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

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

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

Some other great content in this free eBook includes:

 

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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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