Archive for October, 2011

MF Global Holdings Bankruptcy: Energy And Oil ETFs Suffer (USO, IYE, XLE, MF)

Courtesy of John Nyaradi.

Energy ETFs such as the United States Oil Fund LP (AMEX:USO), iShares Dow Jones Energy Sector ETF (AMEX:IYE), and Energy Select Sector SPDR (AMEX:XLE), all slumped today on news that MF Global Holdings (NYSE:MF), a large holder of futures positions, filed for bankruptcy earlier today.

(AMEX:USO) lost nearly 1% today as oil closed at $93.19 per barrel.  The loss can largely be attributed to news that MF Global Holdings (NYSE:MF), a large holder of commodities positions, filed for Chapter 11 bankruptcy today, and is no longer able to trade its holdings except for sell off purposes.  The bankruptcy could trigger a massive sell-off of commodities positions, including oil holdings, which would likely put supply in control and drive down prices.  The oil market reacted accordingly today, and (AMEX:USO) followed directly behind with its 1% drop.

Other energy ETFs reacted negatively today, largely due to the oil slip and MF Global Holdings (NYSE:MF) news.  The iShares Dow Jones Energy Sector ETF (AMEX:IYE) dropped 4.43% today while the Energy Select Sector SPDR ETF (AMEX:XLE) plummeted 4.71%.  The drops in both (AMEX:IYE) and (AMEX:XLE) are likely a reaction to lower prices because oil is such a large staple of the US and Global economies.  Any drop in oil is likely to trigger a similar drop in (AMEX:IYE) and (AMEX:XLE), and the MF Global Holdings (NYSE:MF) did not help.

The slump in Energy ETFs today is also largely attributed to the rising US dollar in response to the Japanese Government’s yen intervention to hold back the Yen’s strength.  Commodities, and oil in particular, generally go down as dollars go up, and so a combination of the MF Global Holdings (NYSE:MF) failure plus a dollar increase are the likely culprits for oil and energy ETFs decline.

Bottom Line:  MF Global Holdings (NYSE:MF) filing for Chapter 11 Bankruptcy is a huge deal for the commodities market.  One can expect Oil and Energy ETFs like (AMEX:USO), (AMEX:IYE), and (AMEX:XLE) to respond accordingly until this market irons itself out.

ETF Summary:

United States Oil Fund LP (AMEX:USO): -0.20, -0.80%

iShares Dow Jones Energy Sector ETF (AMEX:IYE): -1.84, -4.43%

Energy Select Sector SPDR (AMEX:XLE): -3.44, -4.71%

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Panic Behind The MF Scenes As Company Refuses To Disclose Information To Regulators Even In Death

Courtesy of ZeroHedge. View original post here.

As in life, so in death. Reuters reports that "U.S. regulators are unhappy with the failure of MF Global Holdings Ltd to provide them with the required data and records, a source close to one regulator told Reuters on Monday. "So far they’ve been very disappointed with the cooperation in the fulsomeness of records and data from MF," the source said, noting regulators have been working with the firm since late last week. "They were supposed to be able to show us their books and they’re supposed to be able to tell us what’s what and where their customer funds are and how they’ve been segregated and protected and to date we don’t have the information that we should have," the individual told Reuters." Seriously, as Erin Burnett would say, you are already bankrupt. Just how much worse is it if you even in death you still are hiding secrets? And at this point it should be obvious to everyone: whatever MF is hiding is not something that will hurt it or much less its stakeholders for which the management team obviously never cared one iota. After all the company is already dead. Whatever is on its books has huge impacts to those either behind the corporate veil, read Mr. Corzine, who may or may not have regulatory issues arising from 10(b)-5 "concerns", or more probably, to other banks and Primary Dealers. And with even one simple affidavit still to be filed in Bankruptcy Court, the panic behind the scene is palpable.

From Reuters:

MF Global, which filed for bankruptcy protection on Monday, is the biggest U.S. casualty of Europe’s debt crisis, and the seventh-largest bankruptcy by assets in U.S. history.

Regulators had expressed "grave concerns" about the viability of MF Global, which filed for bankruptcy only after "no viable alternative was available in the limited time leading up to the regulators’ deadline," the company’s chief operating officer, Bradley Abelow, said in a court filing. 

U.S. regulators held a series of calls on Monday related to MF Global.

The Financial Stability Oversight Council, which is headed by the Treasury Department, received "a series of oral reports" from the Securities and Exchange Commission, the Commodity Futures Trading Commission and the Federal Reserve, according to one Treasury Department official. 

No other details of the calls were


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Open Europe On The Greek Referendum: Is Democracy Finally Coming Home?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Euroskeptic think thank Open Europe once again appears on the scene with one of the first more extended reactions to what the possibility of a Greek referendum, which according to the Guardian will take place in January, means for Greece, the Eurozone, and the latest bailout (which according to Williem Buiter, who reiterates to the FT something we said 2 months ago, needs to be €3 trillion). One thing we would like to point out is that if indeed the popular vote on the future of Europe will take place in January, then kiss the year end rally goodbye as the uncertainty around the market will be insurmountable by anything the bureaucrats can throw at the concern that Europe is on fast-track to political suicide.

From Open Europe

Democracy Is Coming Home…

Interesting developments coming out of Greece this evening, as Greek Prime Minister George Papandreou has called a referendum on the latest Greek bailout and austerity package. Speaking to the Greek parliament he said:

“The command of the Greek people will bind us. Do they want to adopt the new deal, or reject it? If the Greek people do not want it, it will not be adopted…We trust citizens, we believe in their judgment, we believe in their decision.”

It’s not yet clear exactly what will be voted on, but we imagine it will have to include the entire second bailout package, including the 50% write down for Greek bondholders, as well as the austerity and fiscal conditions attached to the latest package. So a lot of important factors for the future of Greece in there. As if that wasn’t enough, it will be tied to a vote of confidence on the current Greek government.

So which way will it go?

Well, it’s tough to say off the bat. A recent poll showed that 59% of Greeks think the new package is “negative” or “probably negative” for Greece, and there’s been no hiding their displeasure with the austerity measure and economic collapse. As such, there wouldn’t be too many Greeks who would be sad to see the back of Papandreou.

On the other hand, they may be keen to see Greek bondholders take some losses finally and endure some pain (although given…
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Newest Grant Brings Ambrotose Technology Patents to a Total of 52

Courtesy of Benzinga.

Mannatech, Incorporated (NASDAQ: MTEX) announced a new patent grant today. A Notice of Grant of the patent entitled “Compositions of Plant Carbohydrates as Dietary Supplements” was published in the Brazilian Industrial Property Journal on October 18, 2011. This brings the total number of patents related to our Ambrotose technology to 52.





Urstadt Biddle Acquires Shopping Center for $17M

Courtesy of Benzinga.



Urstadt Biddle Properties Inc. (NYSE: UBA)(NYSE: UBP) announced today that it had completed the purchase of the Fairfield Centre shopping center in the Town of Fairfield, Fairfield County, Connecticut for a purchase price of $17 million, excluding closing costs.





Gold And Silver Slump On News Of MF Global Holdings Bankruptcy (GLD, SLV, MF)

Courtesy of John Nyaradi.

Gold and Silver ETFs (AMEX: GLD), (AMEX: SLV), slumped today on news  of MF Global Holdings Bankruptcy (NYSE: MF) and Stock Market Sell-Off.

Gold dropped a total of $22 today to land at $1725.20 per ounce and the SPDR Gold Trust ETF (AMEX: GLD) followed suite by shaving off 1.34% off its record setting October highs.

The sell-of for (AMEX:GLD) can largely be attributed to MF Global Holding’s filing for Bankruptcy earlier today.  MF Global Holdings (NYSE:MF) has large stakes in the futures markets, and as of right now any trades made by the bank are for “liquidation” purposes, thus prompting fear that supply will rule over demand for many commodities, indicating lower prices for metals, including (AMEX:GLD).

The US dollar surge sparked by a Japanese yen-intervention today, in addition to renewed hopes that Europe finally has its fiscal house in order, also likely contributed to the drop in (AMEX:GLD) today.  Gold and gold ETFs typically track inversely to currencies, and the meteoric rise in (AMEX:GLD) for  October can largely be attributed to Euro fears and possible affects of any European outcome on US banks and the US dollar.  Since the currencies of the world (US Dollars and Euros) seem to be stable for now, it is not surprising that (AMEX: GLD) took a dive.

Silver also slumped today, with the iShares Silver Trust (AMEX:SLV) dropping nearly 2.3% on news of the MF Global Holdings Bankruptcy and because of the dollar surge via Japanese yen intervention.  Although Silver is not as much of a “reserve” currency as Gold, silver typically tracks opposite to currency movement, and thus we saw (AMEX:SLV) drop today.

Bottom Line: the MF Global Holdings (NYSE:MF) Bankruptcy likely fueled the (AMEX:GLD) and (AMEX:SLV) sell-off today because the bank has a very large presence in the commodities markets, and a sell off of these assets would likely drop prices.  A US dollar rally caused by a Japanese yen intervention also likely sparked the metals sell-off.

At the end of the day, however, the drop in (AMEX:GLD) and (AMEX:SLV) put just a small dent in the metal’s overall growth for October.

ETF Wrap-Up:

SPDR Gold Trust (AMEX:GLD): -2.28, -1.34%

iShares Silver Trust…
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Ugly Close As 30Y TSY Yield Drops Most Since March 2009

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

While much was made of the MF Global news today, we suspect that the tipping point for risk assets was more likely driven by the plethora of reality-based analysis of the situation in Europe combined with the afternoon news that Greece is facing a referendum and a lack of demand for the EFSF issue today. Heavy volume arrived into the close to the downside, suggesting asset allocation rotation from equities to bonds, which helped propel TSYs even further down in yield. The entire complex flattened notably with 30Y outperforming -24.5bps, the largest single-day yield move since March 2009, as the much-watched 2s10s30s butterfly has retraced all of last week’s increase. ES closed at its lows (down over 2.5%) only to extend those losses in the evening session as we post.

At over 4 standard deviations, today’s drop in 30Y yields was the highest for a single-day since 3/18/09.The roundtrip in the entire TSY complex from last Wednesday is quite impressive and remains surprising as to how a broad market can interpret what was so clearly no-real-news in such a schizophrenic way without some ‘help’.

35bps sell-off in 30Y at its best early Friday – only to give it all back and some by the close of today – perhaps there is something to our perspective on MF Global and its TSY inventory last week. The drop in TSY yields was initially shrugged off by ES but very quickly it became clear that fears were gathering and ES accelerated to the downside – with IG and HY credit tracking wider also. VWAP acted as natural resistance at every small rally suggesting there was more of an institutional bias to selling today – which again fits with the rotation we would expect after such an aggressive month’s performance in stocks.

As the day wore on, all risk-drivers were reverting back to what is more realistic (as opposed to the intervention-dislocation from the overnight session). EURJPY has retraced almost the entire move and as we closed CONTEXT and ES were back in line – rather surprisingly given the amount of movement (and lack of recalibration) in asset classes today – though we did note earlier that risk-off in broad markets was dominating any correlation-drivers.

Under the surface, HY and HYG underperformed stocks
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FNB United Corp. Announces One-for-One Hundred Reverse Stock Split

Courtesy of Benzinga.



FNB United Corp. (Nasdaq: FNBN) today announced that it has completed the effectiveness of a one-for-one hundred reverse stock split of its common stock. The reverse stock split was adopted by the Company’s board of directors and approved by the Company’s shareholders at the 2011 Annual Meeting of Shareholders held on October 19, 2011.

A purpose of reverse stock split is to increase the per share trading price of the Company’s common stock to satisfy the $1.00 minimum bid price requirement for continued listing on The Nasdaq Capital Market. As a result of the reverse stock split, every one hundred (100) shares of the Company’s common stock issued and outstanding prior to the opening of trading on November 1, 2011 will be consolidated into one (1) issued and outstanding share. No fractional shares will be issued as a result of the reverse stock split. Instead, any fractional share resulting from the reverse stock split will be rounded up to the next largest whole share.





Europe’s Economy is Falling Apart

Courtesy of Yves Smith of Naked Capitalism

Yves here. Note the comment at the end, that Sarkozy’s sales pitch to China on the levered up EFSF did not go so well. If the Chinese don’t relent, this greatly reduces of this scheme working, even in the short term. And further note that the flagging European growth is the result of the austerity hairshirt being imposed on highly indebted economies. Ambrose Evans-Pritchard has a pointed article on the consequences of the beggar-thy-neighbor German stance.

By Delusional Economics, who is horrified at the state of economic commentary in Australia and is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness

Angela Merkel has been warning for quite some time that Europe’s economic woes will take up to a decade to fix and that it is time for Europe to rethink its economic strategy after years of living “beyond its means”. It seems fairly obvious from those statements that the rest of the world is going to have to get use to Europe moving into a slow growth phase while it attempts to adjust away from what it considers to be unsustainable debt.

In an attempt support the transition while keeping Europe together the European leaders have put together 3 part package to save Greece, re-capitalise the banks and provide a stability mechanism for countries that run into trouble. The problem is that once you understand the technicalitiesbehind what they have come up with you come to realise that real economic growth is the only thing that actually matters. The latest news out of Europe for many of the 17 member nations is not good at all in that regard.

It became obvious that Belgium was in trouble when it was forced to nationalise Dexia, and over the weekend the Belgium central bank reported that economy is now stalling:

Belgium’s economy stalled in the third quarter as European leaders struggled to contain a worsening debt crisis and signs increased that the euro region is heading toward a recession.

Gross domestic product in Belgium, the sixth-largest economy in the euro area, was unchanged from the second quarter, when it grew a revised 0.4 percent, the National Bank of Belgium said today in a statement. That’s the worst performance since the country emerged from a recession in 2009.

Cyprus is looking far worse and…
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Justice Bransten Issued Ruling on MBIA vs Countrywide Litigation

Courtesy of Benzinga.



Justice Bransten issued a ruling on the MBIA vs. Countrywide litigation, allowing MBIA (NYSE: MBI) to pursue discovery against Bank of America (NYSE: BAC) regarding its potential successor liability vis-à-vis the MBIA-insured Countrywide securitization.

View ruling here.





 
 
 

Zero Hedge

For The First Time Since The Crisis, Companies Spent More On Buybacks And Dividends Than They Earned...

Courtesy of ZeroHedge View original post here.

It will hardly come as a surprise to many, but according to the latest cash flow analysis from Goldman Sachs, 2018 was a record year for S&P 500 cash spending: not only did aggregate spending on capex, R&D, cash acquisitions, dividends, and share repurchases rose by 25% to $2.8 trillion, "the fastest year/year growth in 30 years"...

...



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Phil's Favorites

Fed's Balance Sheet Spikes by $253 Billion, Now Topping $4 Trillion

Courtesy of Pam Martens

By Pam Martens and Russ Martens: October 18, 2019 ~

Shhh! Don’t tell Congress that the Federal Reserve is back to electronically creating money out of thin air to throw at a liquidity problem (of an, as yet, undetermined origin) on Wall Street. And be sure not to mention that the Fed’s balance sheet has shot up in a period of just 42 days by $253 billion. And, of course, don’t remind Congress that before the last Wall Street crisis was over the Fed had secretly, with no oversight from Congress, piled up ...



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Insider Scoop

48 Biggest Movers From Yesterday

Courtesy of Benzinga

Gainers
  • Hepion Pharmaceuticals, Inc. (NASDAQ: HEPA) shares climbed 43.2% to close at $3.58 on Thursday after the company announced the publication of a research article, "A Pan-Cyclophilin Inhibitor, CRV431, Decreases Fibrosis and Tumor Development in Chronic Liver Disease Models," in the peer-reviewed Journal of Pharmacology and Experimental Therapeutics.
  • Synthesis Energy Systems, Inc. (NASDAQ: SES) rose 26.9% to close at $9.20 after surging 12.24% on Wednesday.
  • Assembly Biosciences, Inc...


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Kimble Charting Solutions

Bank Index Breakout? Stock Market Bulls Sure Hope So

Courtesy of Chris Kimble

One of the most important sectors of the stock market is the banking industry and bank stocks.

When the banks are healthy, the economy is likely doing well. And when bank stocks are participating in a market rally, then it bodes well for the broader stock market.

In today’s chart, we look at the Bank Index (BKX).

As you can see, the banks have been in a falling channel for the past 20 months. As well, the banks have been lagging the broader market during this time as well – see the Ratio in the bottom half of the chart above.

That said, th...



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The Technical Traders

Currencies Show A Shift to Safety And Maturity - What Does It Mean?

Courtesy of Technical Traders

Recent rotation in multiple foreign currencies hints at the fact that a new stage of the “Capital Shift” process is taking place and that skilled technical investors need to pay very close attention to how these currencies continue to react over the next 3 to 6+ months.  In the recent past, most of the world’s foreign currencies were declining in value while the US Dollar continued to strengthen.  In fact, we authored many research articles about these trends and how weakness in foreign currencies will drive new foreign investment into the US stock markets for two simple reasons; strength and security. 

Now that a few of the world’s most ...



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Chart School

Review of Andrew CardWell RSI with Wyckoff price waves

Courtesy of Read the Ticker

RSI measures relative strength of price action of a set period versus prior set periods. It helps review the price swings or waves, the power of each price thrust into new ground, or lack of it. Price thrust like many things relies on energy, and energy is not a constant, it has a birth, a life and a death and relative strength helps us see that cycle. 

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Digital Currencies

Zuck Delays Libra Launch Date Due To Issues "Sensitive To Society"

Courtesy of ZeroHedge View original post here.

Authored by William Suberg via CoinTelegraph.com,

Facebook is taking a much more careful approach to Libra than its previous projects, CEO Mark Zuckerberg has confirmed. 

“Obviously we want to move forward at some point soon [and] not have this take many years to roll out,” he said. “But ...



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Lee's Free Thinking

Look Out Bears! Fed New QE Now Up to $165 Billion

Courtesy of Lee Adler

I have been warning for months that the Fed would need new QE to counter the impact of massive waves of Treasury supply. I thought that that would come later, rather than sooner. Sorry folks, wrong about that. The NY Fed announced another round of new TOMO (Temporary Open Market Operations) today.

In addition to the $75 billion in overnight repos that the Fed issued and has been rolling over since Tuesday, next week the Fed will issue another $90 billion. They’ll come in the form of three $30 billion, 14 day repos to be offered next week.

That brings the new Fed QE to a total of $165 billion. Even in the worst days of the financial crisis, I can’t remember the Fed ballooning its balance sheet by $165 bi...



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Biotech

The Big Pharma Takeover of Medical Cannabis

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

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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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

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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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