Archive for 2011

ECB Rate Hikes could Kill Greece, Ireland, Portugal, and even Spain!

Courtesy of Smart Money Europe

On Sunday, new analysis of the recent actions by the ECB was published in the Observer (Guardian). The British media outlet hired consultancy firm Fathom to evaluate the bailouts of different European member states and the possible outcome.

The study concluded that the bailouts are not the biggest threat for Europe. The renewed hawkish stance by the ECB, which led to the recent interest rate hike, is far more dangerous!

Via the Observer:

Analysis by City consultancy Fathom, obtained exclusively by the Observer, shows that because the interest rates on the bailouts provided to Greece and Ireland track the European Central Bank’s lending rate, a series of increases could push these countries – and Portugal – into default.

 

“If the ECB continues to tighten policy, the impact is clear: default is more or less inevitable,” says Fathom director Danny Gabay. “Greece is clearly on an unsustainable path.”

 

Fathom also warns that Spain remains vulnerable, despite Madrid insisting last week that its economy is much healthier than Portugal’s and its debts are much more manageable. Spanish banks must roll over debts worth more than 5% of GDP this year, and more than 9% in 2012, in addition to the government’s financing needs. A two-point increase in the interest Madrid pays in the bond markets – much of which could come from the ECB, even without a further loss of confidence from bond investors – would, on Fathom’s calculations, force Spain into a fiscal crisis.

 

A string of defaults could shatter the markets’ confidence, Gabay argues, resulting in a devaluation of up to 30%, with significant knock-on effects: “What could make the markets lose confidence is watching these countries implode.”

While the experts are discussing the future of the EU, the euro is on a tear versus the dollar, choking European exporters. This could lead to even more damage to tax income, i.e. state budgets.

There’s no question about it: the tensions are building rapidly in Europe. At the current pace, Code Red could be installed fairly quickly for the European financial system.

>>> www.smartmoney.eu

Follow us on Twitter: @SmartMoneyEU





Oxen Group Webinar – How To Identify Winning Earnings Trades





Premarket Summary: Inflationary Hysteria

Courtesy of Tyler Durden

One word (well technically two) can describe what is going on in the electronic pre-market arena right now: inflationary hysteria. Gold is at a new record, wheat is surging, corn is at highest since 2008, crude at a new 30 month high, silver is at $41.10 – a new fresh post Hunt high, beans surging, etc, etc, etc. Essentially everything is bid, following news first reported on Zero Hedge that PIMCO is betting the farm that either inflation is about to go parabolic and force bondholders to dump everything, or that the Fed will have no choice but to pursue another round of QE, sending gold to $2,000 and unleashing the Weimar endgame.

Gold:

Silver:

WTI:

Corn:

etc.

 





An Inconvenient Truth – The Truth Shall Not Set Us Free

Courtesy of Cognitive Dissonance

An Inconvenient Truth – The Truth Shall Not Set Us Free

By

Cognitive Dissonance

 

There is a widely held belief among those who wish for ‘the truth’ to be exposed that once this is accomplished the insanity will begin to unravel and a new day will dawn. Unfortunately this belief is erroneous, delusional even, and by itself also a part of the insanity. The uncomfortable and extremely inconvenient truth is that ‘truth’, regardless of where it originates or whether it’s really truth or not, will never set us free because the official lies are not the ultimate source of our bondage. Instead the lies are just a small part of the overall control system, a system that relies upon our willing (some would say informed) consent not only to exist but to endure. 

Hidden somewhere deep down inside any discussion of true and false statements by politicians, the Bureau of Lies and Statistics (BLS), psyops and disinformation programs, WikiLeaks or any other governmental, corporate or individual propaganda is a simple and fundamental truth that’s widely known but carefully ignored. We are being lied to by hundreds of entities about dozens of different subjects, all for the purpose of maintaining or increasing control and power over the masses. The truth of these fundamental lies is all around us and yet we are still not free.

The only way a relatively small nucleus of people can control a much larger population is through psychological manipulation regardless of whether it’s by way of brutality or baubles. Spending our days minimizing, dismissing or bargaining with these controlling lies is simply the process we use to avoid dealing with our own internal self deception. This is also a well understood and universal truth that is self evident, obvious even, to those who wish to honestly look. Yet it is denied as well.

We hide this fact from ourselves by differentiating between big and small lies, from their evil propaganda and our harmless little tales. And we always tell ourselves
continue reading





Balancing Act – Stock World Weekly

Courtesy of ilene

This week’s Stock World Weekly is called “Balancing Act.”  

Click here for the full pfd file, Balancing Act.

Cost of Living Stampede

Excerpt:

Inflation and stagflation have been important topics of debate, particularly since the Fed announced the QE2 program last fall, and even more so as prices of commodities have been rising unabated. While Fed apologists make academic arguments that QE shouldn’t cause inflation, many financial commentators disagree. Jason Kaspar, of GoldShark.com, discussed the subject with SWW editor Ilene in email correspondence. Jason wrote, “The real definition of inflation is an increase in the money supply, and according to me, that includes credit as well. The real definition of deflation, conversely, is a decrease in the money supply.

“Logic presupposes that when the money supply increases, the prices of goods will increase. This is generally true. However, the reverse is not always true. An increase in the price of goods does not necessarily mean there has been an increase in the money supply.

“For example, during the collapse of 2008, a tremendous amount of money was vaporized through de-leveraging (among other things). We saw much of this occur in the mortgage market with innumerable foreclosures. When the Treasury instituted its stimulus spending and the Fed helped facilitate this spending through quantitative easing in 2009, the stimulus served only to replace the money that was lost. The Fed bought mortgage backed securities (in QE1) and treasuries from the banks, but instead of lending that money out to individuals, the banks allowed it to build in reserves at the Fed (which renders it useless) or have been investing that money in assets, like food, equities, gold, etc.

“Therefore, even though there is no overall increase in the money supply (M3 has started contracting again recently), some of the QE money has been shifted into specific assets, which are enjoying nominally large price increases. This is the difference between money supply inflation, and price inflation.”

Russ Winter, at Wall Street Examiner, and author of Winter Watch writes, “The following chart says it all (below). The Fed’s aggressive Treasury monetization has been the causa proxima (90-percent correlation) to the pedal-to- the-metal Minsky Meltup in commodities. I suspected this would be the effect but confess I did not believe the Fed and government could be so irrational and stupid as to attempt it, especially with the blowback evident by year end. Though I
continue reading





Gaddafi To “Give Ceasefire A Chance” – Accepts Undetermined “Roadmap To Peace”; Oil Dips To Be Savagely Bought

Courtesy of Tyler Durden

It almost seems like it was yesterday that Hugo Chavez was threatening to steal Obama’s peace prize from under the president nose, when one dictator seemed on the verge of ending another dictator’s multi-decade rule. But not really. And since nobody remembers that fable any more, it is time to come up with a new rehash on a common theme. Per Reuters, “Muammar Gaddafi has accepted a roadmap for ending the conflict in Libya, South African President Jacob Zuma said on Sunday after leading a delegation of African leaders at talks in Tripoli.” Good thing Zuma has so much more credibility in the international community than Chavez. Or else people may see through yet another attempt at push oil prices lower for a day or two while the big boys load up, only for the rumor to dissipate in a day or so. “Zuma, who with four other African heads of state met Gaddafi for several hours at the Libyan leader’s Bab al-Aziziyah compound, also called on NATO to stop air strikes on Libyan government targets to “give a ceasefire a chance.”” We are not positive, but something tells us the Beatles are about to get a asston of royalties on that particular phrase. And just in case there is no confusion about just what this “roadmap” entails, there damn well should be. “No one at the talks gave details of what was contained in the roadmap. Anti-Gaddafi rebels have said they will accept nothing less than an end to Gaddafi’s four decades in power, but Libyan officials say he will not step down.” So no actual details, but please sell Brent or else Goldman won’t be able to load up. Is that about the gist of it?

More from Reuters:

 “I have some commitment which is compelling me to leave now but we have completed our mission with the brother leader (Gaddafi),” Zuma said after the talks.

Apparently Zuma, after extensive deliberations with the guy with the headdress, has realized how important it is to move his gold stash from point A to point B post haste.

“The brother leader delegation has accepted the roadmap as presented by us. We have to give ceasefire a chance,” he said.

“The delegation … will be proceeding tomorrow to


continue reading





ZH Exclusive: Bill Gross Is Now Short US Debt, Hikes Cash To $73 Billion, An All Time Record

Courtesy of Tyler Durden

A month ago, Zero Hedge first reported that Bill Gross had taken the stunning decision to bring his Treasury exposure from 12% to 0%: a move which many interpreted as just business, and not personal: after all Pimco had previously telegraphed its disgust with US paper, and was merely mitigating its exposure. This time, in another Zero Hedge first, we discover that it is no longer business for Bill – it has now become personal (and with an attendant cost of carry). In March, Pimco’s flagship Total Return Fund (TRF) has now taken an active short position in US government debt: -3% on a Market Value basis (or $7.1 billion), and a whopping -18% on a Duration Weighted Exposure basis. And confirming just what PIMCO thinks of US-related paper is the fact that the world’s largest "bond" fund now has cash, at a stunning $73 billion, or 31% of all assets, as its largest asset class on both a relative and absolute basis. We repeat: cash is more than PIMCO’s holdings of Treasurys and Mortgage securities ($66 billion) combined. To paraphrase: in March PIMCO was dumping everything related to US rates (see chart below). This is the first net short position that PIMCO has had in Government-related debt since the Great Financial Crisis of 2008, and going positive in February of 2009 only after it became clear that the Fed would commence monetizing US debt one month later. This is the closest that Gross has come to making a political statement and is now without doubt putting his money where his mouth is. The only event that could possibly derail Gross’ thinking is a huge market crash forcing a rush to Treasury safety. Alas, as has been made all too clear recently, US debt is no longer the safe haven it once was. Which begs the question: when will the TRF break out a "gold" asset holdings line item.

And another side effect of the firm’s scramble away from debt and into cash is that the effective duration of TRF is now down to 3.6: only the second lowest since the 3.38 posted in December of 2008… when the world was on the verge of ending.

That Bill Gross is willing to risk a surge in redemptions (after all who would be willing to pay PIMCO to manage a third of…
continue reading





Day Laborers Brave Risks at Japan’s Nuclear Plants – NYTimes.com

Xcerpt (read the whole thing). This article alone makes a strong case for not supporting efforts to strip labor unions of power, of collective bargaining rights:

Of roughly 83,000 workers at Japan’s 18 commercial nuclear power plants, 88 percent were contract workers in the year that ended in March 2010, the nuclear agency said. At the Fukushima Daiichi plant, 89 percent of the 10,303 workers during that period were contractors. In Japan’s nuclear industry, the elite are operators like Tokyo Electric and the manufacturers that build and help maintain the plants like Toshiba and Hitachi. But under those companies are contractors, subcontractors and sub-subcontractors — with wages, benefits and protection against radiation dwindling with each step down the ladder.

[...]

In the most dangerous places, current and former workers said, radiation levels would be so high that workers would take turns approaching a valve just to open it, turning it for a few seconds before a supervisor with a stopwatch ordered the job to be handed off to the next person. Similar work would be required at the Fukushima Daiichi plant now, where the three reactors in operation at the time of the earthquake shut down automatically, workers say.

“Your first priority is to avoid pan-ku,” said one current worker at the Fukushima Daini plant, using a Japanese expression based on the English word puncture. Workers use the term to describe their dosimeter, which measures radiation exposure, from reaching the daily cumulative limit of 50 millisieverts. “Once you reach the limit, there is no more work,” said the worker, who did not want to give his name for fear of being fired by his employer.

[...]

 

Tetsuen Nakajima, chief priest of the 1,200-year-old Myotsuji Temple in the city of Obama near the Sea of Japan, has campaigned for workers’ rights since the 1970s, when the local utility started building reactors along the coast; today there are 15 of them. In the early 1980s, he helped found the country’s first union for day workers at nuclear plants.

The union, he said, made 19 demands of plant operators, including urging operators not to forge radiation exposure records and not to force workers to lie to government inspectors about safety procedures. Although more than 180 workers belonged to the union at its peak, its leaders were soon visited by thugs who kicked down their doors and threatened to harm


continue reading





ETF News Update: Theatre of the Absurd

Courtesy of John Nyaradi at Wall Street Sector Selector

This week’s soap opera in Washington, D.C. was truly the “theatre of the absurd” as Congress and the President wrangled over an “historic” $39 Billion budget cut that pales sadly in comparison to the $189 Billion deficit that the Federal Government ran up in March alone. 

We’ll discuss this in greater detail in a moment, but for today, Wall Street Sector Selector is content with its positions in gold, oil and inverse exchange traded funds and we remain in the defensive mode, anticipating stronger headwinds ahead. 

On My Radar

In the chart below we can see that the S&P500 remains in a bearish signal mode with a price objective of 1160.  Strong overhead resistance is at 1330 which held this week and support lies at the 1250 level. 

 Chart courtesy of StockCharts.com 

We have been in this range for the last 25 trading days but, as always, this sideways action will be broken one way or the other.  

Based on current fundamental and technical elements, we expect this break to be on the downwards side of the range. 

The View From 35,000 Feet 

The big news this week was the 11th hour “resolution” of the bill to keep the government open which resulted in an “historic” cut of $39 Billion.  As mentioned at the outset, this is truly the theatre of the absurd because the deficit in March alone was $189 Billion, and…
continue reading





Exclusive: Bill Gross Is Now Short US Debt, Hikes Cash To $73 Billion, An All Time Record

Courtesy of Tyler Durden

A month ago, Zero Hedge first reported that Bill Gross had taken the stunning decision to bring his Treasury exposure from 12% to 0%: a move which many interpreted as just business, and not personal: after all Pimco had previously telegraphed its disgust with US paper, and was merely mitigating its exposure. This time, in another Zero Hedge first, we discover that it is no longer business for Bill – it has now become personal (and with an attendant cost of carry). In March, Pimco’s flagship Total Return Fund (TRF) has now taken an active short position in US government debt: -3% on a Market Value basis (or $7.1 billion), and a whopping -18% on a Duration Weighted Exposure basis. And confirming just what PIMCO thinks of US-related paper is the fact that the world’s largest “bond” fund now has cash, at a stunning $73 billion, or 31% of all assets, as its largest asset class on both a relative and absolute basis. We repeat: cash is more than PIMCO’s holdings of Treasurys and Mortgage securities ($66 billion) combined. To paraphrase: in March PIMCO was dumping everything related to US rates (see chart below). This is the first net short position that PIMCO has had in Government-related debt since the Great Financial Crisis of 2008, and going positive in February of 2009 only after it became clear that the Fed would commence monetizing US debt one month later. This is the closest that Gross has come to making a political statement and is now without doubt putting his money where his mouth is. The only event that could possibly derail Gross’ thinking is a huge market crash forcing a rush to Treasury safety. Alas, as has been made all too clear recently, US debt is no longer the safe haven it once was. Which begs the question: when will the TRF break out a “gold” asset holdings line item.

And another side effect of the firm’s scramble away from debt and into cash is that the effective duration of TRF is now down to 3.6: only the second lowest since the 3.38 posted in December of 2008… when the world was on the verge of ending.

That Bill Gross is willing to risk a surge in redemptions (after all who would be wiling to pay PIMCO to manage a…
continue reading





 
 
 

Zero Hedge

Enemy Of The People?

Courtesy of ZeroHedge. View original post here.

Via The Zman blog,

There has never been a time when normal people did not know the media was biased and biased in a predictable direction. For every non-liberal in the media, there were at least ten liberals. The ratio was probably higher, but then, as now, some lefties liked to pretend they were independents or some third option.

The media used to invest a lot of time denying they had a bias and an agenda, but the only people who believed them were on the Left, which had the odd effect of confirming they had a bias and an agenda.

...



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Phil's Favorites

A 2019 Earnings Recession?

 

A 2019 Earnings Recession?

Courtesy of 

Shout to Leigh!

On the new Talk Your Book – Josh Brown is joined by Leigh Drogen of Estimize, one of the leading providers of crowdsourced financial and economic data to talk about the trend in corporate profits that could potentially lead to an earnings recession later this year.

What is the thing that Leigh is seeing in the data that Wall Street isn’t yet picking up on? What segment of the stock market is most at risk? Why is the crowd smarter than the narrow consensus of Wall Street analysts?

Check out Estimize ...



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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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Kimble Charting Solutions

Gold & Silver Testing Important Breakout Levels!

Courtesy of Chris Kimble.

Gold and Silver from a long-term perspective have created a series of lower highs over the past 8-years. Will 2019 bring a change to this trend? A big test is in play!

Gold since the lows in 2016 has created a series of higher lows, while Silver may have created a double bottom.

Gold & Silver are currently facing break attempts a (1) and (2). These falling resistance lines have disappointed metals bulls for the past few years.

The direction of Gold and Silver weeks and months from now should be highly influenced by what each does as they are attempting to break above important resistance levels.

To become a member of Kimbl...



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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

Digital Currencies

Russia Prepares To Buy Up To $10 Billion In Bitcoin To Evade US Sanctions

Courtesy of Zero Hedge

While the market has been increasingly focused on the rising headwinds in the global economy in general, and China's economic slowdown in particular, while the media is obsessing over daily revelations that Trump may or may not have colluded with Russia to get elected, a far more critical, if underreported, shift has been taking place over the past year.

As we reported in June, whether due to concerns over draconian western sanctions and asset confiscations following the poisoning of former Russian military officer Sergei Skripal, or simply because it wanted to diversify away from the dollar, Russia liquidated virtually all of its Treasury holdings in the late spri...



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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 failure based on his personality, which was evident years ago. This article, written in 2017, references a prescient article Bill wrote before Trump became president, in July, 2016, 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.

Market Shadows >>