Archive for September, 2011

Margin Stanley, China, And High Yield: Mix It All In, And Let Simmer (With An Aussie Accent?)

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

This week’s trifecta of key financial developments, that go far deeper than superficial headlines, namely China, Morgan Stanley (and European bank exposure in general) and the equity-credit disconnect, just got another major push. CNBC just interviewed Tim Backshall (of Capital Context) to discuss the dramatic moves in MS credit risk (which we mentioned earlier) and in an undeniably convincing accent (British, Aussie, South African?), he managed to bring many of our broader concerns into focus including global financial contagion, bank funding, Chinese growth, and high yield credit. We also learned that ZeroHedge is a blog.





Mid-Day Update

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

 

On one hand one can clearly see we are locked in an overall downtrend when viewing the indexes.
 
 
 
 
 
 
 
 
 
On the other hand take a look at what the stocks below are starting to build out. 
 
 
LEADING STOCKS OF INTEREST
 
 
 
 
AMZN
 
 
 
 
 
 
 
 
AAPL
 
 
 
 
 
 
ULTA
 
 
AVGO 
 
 
 
PANL
 
 
ATHN
 
 
 
 
NUS
 
  
When I operate from a mechanical trade what I see perspective with no clue as to what is going on in the world I see some Pullback Off Highs (POH) structure I can start to get interested in. in simplest terms all I’m really saying is that the names above are starting to sport some positive longside patterns setting up.
 
We aren’t out of the woods just yet all things macro and still could easily get slammed but I’m starting to think any slam may very well be short lived so should that occur then we’ll want to use that to our advantage and clean up our short sells and look to get long, that’s the mind set with any slam by the way. The big question is?  WHEN.
 
On a side note there are a lot of rumblings out there about the IMF doing a huge bailout across the Atlantic. Yes I know there is nothing good about that BUT it could in a weird sort of way be the equivalent of a QE move.  Sure over time it probably (in the event there is any truth to it) will come back to bite but right now the market is looking for some sort of resolution , anything it can hang its hat on.   So if we see it and the market sells off on fear or shall I say a REACTION? its what we want to see to lock our gains on short side and again who are we going to buy on the


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Agenus Announces 1-for-6 Reverse Stock Split

Courtesy of Benzinga.

Agenus Inc. (Nasdaq: AGEN) today announced that its board of directors has approved a 1-for-6 share consolidation, or reverse stock split, that will become effective on October 3, 2011.

The primary objectives for implementing the reverse stock split are to enable the company to comply with NASDAQ’s minimum bid price requirement of $1.00 per share, to reduce the number of shares outstanding to be more commensurate with the company’s size and market capitalization and to reduce transaction costs for investors.

The company’s common shares will begin trading on a split-adjusted basis on The NASDAQ Capital Market at the opening of trading on Monday, October 3, 2011.





Radiohead To Play At #OccupyWallStreet Event At 4 pm

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

The scrappy #OccupyWallStreet movement, which is now into its second week, will get some high caliber reinforcements today at 4 pm, when as the official web site indicates, will see Radiohead play a surprise (or not so surprise anymore) for the event. Assuming this actually does transpire, will Radiohead become a harbinger of the interest that other musical bands (and other media organization) will express in the activist venue as a promotion for their own interests, and thus bring much more popular focus to the events in lower Manhattan?





Navistar Announces Redemption Notice of Senior Notes

Courtesy of Benzinga.

On September 28, 2011, Navistar International Corporation (NYSE: NAV) issued a redemption notice to holders of its 8.25% Senior Notes due November 1, 2021.

Navistar intends to redeem $50 million of its Senior Notes on November 1, 2011 at a price of 103 and to redeem an additional $50 million of the same Senior Notes at a price of 103 on November 2, 2011. The company intends to borrow under its Asset Based Revolving Line of Credit to finance the redemption of the Senior Notes.





Morgan Stanley CDS – Is China Part Of The Problem?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Via Peter Tchir of TF Market Advisors

The move in Morgan Stanley CDS has been grabbing some attention.  It has moved wider than any of the other banks.  Its exposure to French banks in particular has been part of the reason.  Potential hedging of counterparty exposure has also been listed as a reason. (Once again I can’t help but wonder why derivatives in general, and CDS in particular, didn’t get forced into clearing or exchanges after Lehman).

Those are both valid reasons, but I wonder if there is concern about its exposure to Asia and Asian property markets are playing a role as well.  Here is a graph showing the CDS spreads of MS, GS, BAC and Citi.  BAC underperforms whenever mortgage lawsuits are in the headlines.  All the banks have moved wider as the problems in Europe have continued to escalate, but the underperformance of Morgan Stanley is fairly recent.  It is only in the past 2 weeks that it has blown through BAC.

Since the European problems have been around for awhile, I’m not sure it makes complete sense to blame the underperformance on their exposure to French banks.  Just below the radar screen of what is trading out there, are problems with Emerging Market corporate bonds in general, but specifically for Asian Property bonds.  These bonds have been dropping in price over the past two weeks and have been part of why China CDS is blowing out.   The price drop for assets tied to Asian properties is big enough to have an impact.

This graph has MS CDS along with SocGen, France, and China CDS.  SocGen CDS has actually improved a lot in the past 2 weeks.  If MS was just going wider on the back of French banks, it should have seen more relief.  Even French CDS has been relatively stable, so it doesn’t explain the move particularly well either.  On the other hand China started widening right around the same time as Morgan Stanley started underperforming.  MS CDS is currently at 470 at China is above 200.

I tried looking through the annual report.  I could see exposure there for French banks  but I remain confused about how much net exposure there really is as the reported numbers are based on Federal Financial Institutions Examination Council’s rules –…
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Margan Stanley CDS – Is China Part Of The Problem?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Via Peter Tchir of TF Market Advisors

The move in Morgan Stanley CDS has been grabbing some attention.  It has moved wider than any of the other banks.  Its exposure to French banks in particular has been part of the reason.  Potential hedging of counterparty exposure has also been listed as a reason. (Once again I can’t help but wonder why derivatives in general, and CDS in particular, didn’t get forced into clearing or exchanges after Lehman).

Those are both valid reasons, but I wonder if there is concern about its exposure to Asia and Asian property markets are playing a role as well.  Here is a graph showing the CDS spreads of MS, GS, BAC and Citi.  BAC underperforms whenever mortgage lawsuits are in the headlines.  All the banks have moved wider as the problems in Europe have continued to escalate, but the underperformance of Morgan Stanley is fairly recent.  It is only in the past 2 weeks that it has blown through BAC.

Since the European problems have been around for awhile, I’m not sure it makes complete sense to blame the underperformance on their exposure to French banks.  Just below the radar screen of what is trading out there, are problems with Emerging Market corporate bonds in general, but specifically for Asian Property bonds.  These bonds have been dropping in price over the past two weeks and have been part of why China CDS is blowing out.   The price drop for assets tied to Asian properties is big enough to have an impact.

This graph has MS CDS along with SocGen, France, and China CDS.  SocGen CDS has actually improved a lot in the past 2 weeks.  If MS was just going wider on the back of French banks, it should have seen more relief.  Even French CDS has been relatively stable, so it doesn’t explain the move particularly well either.  On the other hand China started widening right around the same time as Morgan Stanley started underperforming.  MS CDS is currently at 470 at China is above 200.

I tried looking through the annual report.  I could see exposure there for French banks  but I remain confused about how much net exposure there really is as the reported numbers are based on Federal Financial Institutions Examination Council’s rules –…
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A Free Lunch for America

Courtesy of Brad Delong, Grasping Reality with Both Hands 

We are live at Project Syndicate:

BERKELEY – Former US Treasury Secretary Lawrence Summers had a good line at the International Monetary Fund meetings this year: governments, he said, are trying to treat a broken ankle when the patient is facing organ failure. Summers was criticizing Europe’s focus on the second-order issue of Greece while far graver imbalances – between the EU’s north and south, and between reckless banks’ creditors and governments that failed to regulate properly – worsen with each passing day.

But, on the other side of the Atlantic, Americans have no reason to feel smug. Summers could have used the same metaphor to criticize the United States, where the continued focus on the long-run funding dilemmas of social insurance is sucking all of the oxygen out of efforts to deal with America’s macroeconomic and unemployment crisis.

The US government can currently borrow for 30 years at a real (inflation-adjusted) interest rate of 1% per year. Suppose that the US government were to borrow an extra $500 billion over the next two years and spend it on infrastructure – even unproductively, on projects for which the social rate of return is a measly 25% per year. Suppose that – as seems to be the case – the simple Keynesian government-expenditure multiplier on this spending is only two.

In that case, the $500 billion of extra federal infrastructure spending over the next two years would produce $1 trillion of extra output of goods and services, generate approximately seven million person-years of extra employment, and push down the unemployment rate by two percentage points in each of those years. And, with tighter labor-force attachment on the part of those who have jobs, the unemployment rate thereafter would likely be about 0.1 percentage points lower in the indefinite future.

The impressive gains don’t stop there. Better infrastructure would mean an extra $20 billion a year of income and social welfare. A lower unemployment rate into the future would mean another $20 billion a year in higher production. And half of the extra $1 trillion of goods and services would show up as consumption goods and services for American households.

In sum, on the benefits side of the equation: more jobs now, $500 billion of additional consumption of goods and services over the next two years, and then a $40 billion a…
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David Stockman: Blame The Fed!

Courtesy of ZeroHedge. View original post here.

Submitted Chris Martenson

David Stockman, former US Representative and Director of the Office of Management and Budget under Reagan, does not mince words. He sees the monetary systems of the world coming apart.

How did we get here? He identifies the root cause as the intentional over-leveraging of world economies by central planners in a misguided effort to enjoy growth without consequence.

I blame it on the Fed. I blame it on the 1971 decision by Nixon to close the gold window and let the dollar float. Because out of that has evolved — or morphed — a central banking policy in the world that absorbs unlimited amounts of government debt. And so we went on what I call the "T-bill standard" or the "federal debt standard." And the other central banks of the emerging mercantilist Asian economies — Japan, Korea, and now, especially, the People’s Printing Press of China — have absorbed this massive emission of debt that otherwise would’ve created powerful negative consequences that would’ve forced politicians to act long ago. In other words, higher interest rates, pressure for inflationary monetary policy, and the actual appearance of price inflation. But because all the bonds on the margin were being absorbed by the central banks, we got away for twenty or twenty five years with “deficits without tears.”

And he’s just getting started. The only thing more impressive than Stockman’s CV of insider roles in public economics and private finance is his talent for colorful metaphor. 

On The Fed

As far as I’m concerned, Bernanke is the monetary Darth Vader. He has destroyed the bond market. Because fundamentally, in a healthy capitalist system, the interest rate in the money market and in the longer-term capital market is the price of money and the price of capital. And if the pricing system isn’t working, if it’s been totally crushed, disabled, manipulated, rigged, medicated, everything that the Fed has done with QE1, QE2, zero interest rates, Operation Twist – all the rest of this insanity – then we’ve destroyed the ability of the capital market to function and we’re giving false signals in every direction.    

On The Economy

We effectively had, over the last thirty years, a national LBO – a leveraged buyout of the whole economy. And this is important because if you look


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Banks Raise Fees on Same People Who Bailed Out Their Asses

Introduce New ‘Thank You’ Fee on Debit Cards 

NEW YORK (The Borowitz Report) – The largest banks in the US made history today by hiking fees on the same people who bailed out their asses three years ago.

“We would not exist today without the generosity of the American taxpayers,” said CEO Brian Moynihan of Bank of America, which received billions of dollars of Federal bailout money.  “And we want to thank them by assessing a special monthly ‘thank you’ fee on all of our debit cards.”

Becoming emotional, Mr. Moynihan added, “We think of the taxpayers every time we vacation on our yachts or visit our third homes, and we want them to think of us every time they try to spend $20 on groceries.”

Keep reading: Banks Raise Fees on Same People Who Bailed Out Their Asses « Borowitz Report.

 





 
 
 

Phil's Favorites

South Africa is caught in the global hype of the fourth industrial revolution

 

South Africa is caught in the global hype of the fourth industrial revolution

There’s nothing inherent in Fourth Industrial Revolution technologies that will result in economic growth. Shutterstock

Courtesy of Alison Gillwald, University of Cape Town

South Africa is caught up in the global hype of the Fourth Industrial Revolution (4IR). This is distracting it from the unfinished business of redressing inequality and creating the preconditions for an inclusive digital economy and society.

Reinvented by Klaus Schwab of the World Econo...



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Zero Hedge

Yield Curve Tumbles Back Into Inversion As Fed Sparks Mid-Cycle Maelstrom

Courtesy of ZeroHedge View original post here.

Today's chaos was brought to you by the the words "mid-cycle" (market threw a tantrum that The Fed Minutes were not more dovish) and "inverted" (the much-watched 2s10s curve tumbled back into inversion)  and the number '16' (line in the sand for VIX and gamma)

Chinese stocks trod water overnight...

Source: Bloomberg

Source: Bloomberg

European stocks surged on the day, led by Italy...

...



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Kimble Charting Solutions

Gold Is Knocking On Key Breakout Level

Courtesy of Chris Kimble

In 2013, Gold broke below its 23 percent Fibonacci retracement level and a bearish trend change took place at (1).

This was the beginning of a bigger decline that saw gold fall another 450 dollars.

Nearly six years later, Gold returns to this “breakdown” level in hopes of making it a new “breakout” level at (2).

If Gold can breakout at (2) it will send a very bullish message to the market.

Stay tuned – gold bulls are knocking on heaven’s door!

If pattern opportunities in Gold, Silver, Copper and Miners is imp...



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Insider Scoop

Earnings Scheduled For August 21, 2019

Courtesy of Benzinga

Companies Reporting Before The Bell
  • Analog Devices, Inc. (NASDAQ: ADI) is estimated to report quarterly earnings at $1.22 per share on revenue of $1.45 billion.
  • Lowe's Companies, Inc. (NYSE: LOW) is expected to report quarterly earnings at $2 per share on revenue of $20.94 billion.
  • Target Corporation (NYS...


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Lee's Free Thinking

Watch Out Bears! Fed POMO Is Back!

Courtesy of Lee Adler

That’s right. The Fed is doing POMO again.  POMO means Permanent Open Market Operations. It’s a fancy way of saying that the Fed is buying Treasuries, pumping money into the financial markets.

Over the past 6 days, the Fed has bought $8.6 billion in T-bills and coupons. These are the first regular Fed POMO Treasury operations since the Fed ended outright QE in 2014.

Who is the Fed buying those Treasuries from?

The Primary Dealers. Who are the Primary Dealers?  I’ll let the New York Fed tell you:

Primary dealers are trading counterparties of the New York Fed in its implementation of monetary policy. They are also expected to make markets for the New York Fed on behalf of its official accountholders as needed, and to bid on a ...



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The Technical Traders

Fed Too Late To Prevent A Housing Market Crash?

Courtesy of Technical Traders

Real Estate is one of the biggest purchases anyone will make in their lifetime.  It can account for 30x to 300x one’s annual income and take over 30 years to pay off.  After you’re done paying for your property, now you have to keep paying to maintain it and to support the property taxes to keep it.  What has happened to the US Real Estate market since the 2008-09 global credit market collapse and is the US Fed behind the curve?

Case-Shiller Home Price Index

One of the most common indicators used to measure national housing affordability and price trend is the Case-Shiller Home Price Index.  In this chart, we are displaying the Case-Shiller National Home ...



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Chart School

Bitcoin 2019 fractal with Gold 2013

Courtesy of Read the Ticker

Funny how price action patterns repeat, double tops, head and shoulders. These are simply market fractals of supply and demand.

More from RTT Tv

Ref: US Crypto Holders Only Have a Few Days to Reply to the IRS 6173 Letter

Today's news from the US IRS has been blamed for the recent price slump, yet the bitcoin fractal like the gold fractal suggest the market players have set bitcoin up for a slump to $9000 USD long before the IRS news hit the wire.

Get the impression some market players missed out on the b...

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Digital Currencies

New Zealand Becomes 1st Country To Legalize Payment Of Salaries In Crypto

Courtesy of ZeroHedge View original post here.

Bitcoin and other cryptocurrencies have been on a persistent upswing this year, but they're still pretty volatile. But during a time when even some of the most developed economies in the word are watching their currencies bounce around like the Argentine peso (just take a look at a six-month chart for GBPUSD), New Zealand has decided to take the plunge and become the first country to legalize payment in bitcoin, the FT reports.

The ruling by New Zealand’s tax authority allows salaries and wages to b...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Biotech

DNA testing companies offer telomere testing - but what does it tell you about aging and disease risk?

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

 

DNA testing companies offer telomere testing – but what does it tell you about aging and disease risk?

A telomere age test kit from Telomere Diagnostics Inc. and saliva. collection kit from 23andMe. Anna Hoychuk/Shutterstock.com

Courtesy of Patricia Opresko, University of Pittsburgh and Elise Fouquerel, ...



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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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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.

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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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