Archive for 2011

Wall Street Banks: Too Big To Blame For Subprime?

Courtesy of www.econmatters.com.

By EconMatters

Goldman Sachs has historically been one of the more bullish investment houses on Wall Street, but the firm has recently taken a dark macro view.  The Wall Street Journal reported on Sept. 1 that Goldman issued a 54-page report sent to their institutional clients on August 16th arguing that as much as $1 trillion in capital may be needed to shore up European banks; that small businesses in the U.S., a past driver of job production, are still languishing; and that China’s growth may not be sustainable.

The trading ideas suggested by Goldman,

"….a fancy option play that offers a way to take a bearish position on the euro, and a bearish bet through an index of insurance contracts on the credit of European financial stocks."

But Goldman is also facilitating sales of Spanish sovereign bonds.  From WSJ:

"…..On Wednesday [Aug. 31], Goldman and two other major banks hosted a presentation in London in which the Spanish economics secretary, Jose Manuel Campa, planned to outline Spain’s fiscal austerity measures and pitch Spain’s case to investors, according to an invitation seen by The Wall Street Journal. Goldman has a leading position among banks in facilitating sales of Spanish sovereign debt."

Furthermore,

"Goldman’s own trading positions potentially could benefit if hedge funds and other clients make trades based on the report. Goldman says in bold letters at the top of the report that other Goldman traders, or "Goldman Sachs personnel," may already have acted on the material in the report."

So what that means is that Goldman is already in positions and is front-running their clients.  Now that’s really delivering the promise of putting the interests of clients first.  Moreover, there could be some potential conflict of interest.  

That is, on one hand, Goldman is getting compensated to market the sovereign bond of Spain, but on the other hand, Goldman has put in positions and advised its big clients to bet against the Euro and European banks, which is, in essence, betting against the Spanish bond the firm is supposed to facilitate sales, albeit indirectly.

So, it’d be very interesting (and entertaining), to say the least, to be a fly on the wall to listen to what Goldman’s response would be when challenged by the potential investors of the Spanish bond with…
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Wall Street Banks: Too Big To Blame For Subprime?

Courtesy of ZeroHedge. View original post here.

By EconMatters

Goldman Sachs has historically been one of the more bullish investment houses on Wall Street, but the firm has recently taken a dark macro view.  The Wall Street Journal reported on Sept. 1 that Goldman issued a 54-page report sent to their institutional clients on August 16th arguing that as much as $1 trillion in capital may be needed to shore up European banks; that small businesses in the U.S., a past driver of job production, are still languishing; and that China’s growth may not be sustainable.

The trading ideas suggested by Goldman,

 "….a fancy option play that offers a way to take a bearish position on the euro, and a bearish bet through an index of insurance contracts on the credit of European financial stocks."

But Goldman is also facilitating sales of Spanish sovereign bonds.  From WSJ:

"…..On Wednesday [Aug. 31], Goldman and two other major banks hosted a presentation in London in which the Spanish economics secretary, Jose Manuel Campa, planned to outline Spain’s fiscal austerity measures and pitch Spain’s case to investors, according to an invitation seen by The Wall Street Journal. Goldman has a leading position among banks in facilitating sales of Spanish sovereign debt."

Furthermore,

"Goldman’s own trading positions potentially could benefit if hedge funds and other clients make trades based on the report. Goldman says in bold letters at the top of the report that other Goldman traders, or "Goldman Sachs personnel," may already have acted on the material in the report."

So what that means is that Goldman is already in positions and is front-running their clients.  Now that’s really delivering the promise of putting the interests of clients first. Moreover, there could be some potential conflict of interest.  

That is, on one hand, Goldman is getting compensated to market the sovereign bond of Spain, but on the other hand, Goldman has put in positions and advised its big clients to bet against the Euro and European banks, which is, in essence, betting against the Spanish bond the firm is supposed to facilitate sales, albeit indirectly.

So, it’d be very interesting (and entertaining), to say the least, to be a fly on the wall to listen to what Goldman’s response would be…
continue reading





Guest Post: Why The Full Faith And Credit Of Governments Is Inferior To Real Assets And How We Can Fix It Once And For All

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Robert Paulson

Title: How the USA got to where it finds itself, why the full faith and credit of governments is inferior to real assets and how we can fix it once and for all

I used to think like a statist, and I used to agree with them. It’s appealing to redistribute wealth, especially when it’s not fairly achieved.

But what I’ve realized is that the solution to creating distortions in the market is not to create more distortions by attacking the symptoms. What ends up happening when you do that is that you create a hugely complex set of rules and regulations that hinder the market, make it inefficient and most importantly makes it ripe for abuse via regulation in favor of those who make the right campaign donations to the right politicians. This is the situation we find ourselves in now: A very broken market setup to benefit those who’ve made the right political moves.

On the other hand, you can simply end the sole cause of the problem to begin with. That sole problem is bad monetary policy. You might say that we should replace everyone in charge of the Federal Reserve with the “right” people. But even if you were able to do that, it’s really a temporary fix. The issue isn’t just having the wrong people in charge, but having so few people in charge of controlling the levers to begin with. Not only does it create a situation ripe for corruption and collusion, but it puts the value of money in the hands of people who are thereby expected to perform satisfactorily. They execute insane policies at the behest of a government and people who cry “DO SOMETHING!”

It is because of this monetary system that our government and the public at large have been able to amass such humongous debts. Because our system is based upon continual growth, its very lifeblood and continued existence hinges upon consistent expansion of GDP and inflationary monetary policy. The continually bad policy experienced off and on since the Nixon administration has a reason: It was masking declining economic factors.

The stagflation the US experienced in the 70s came about for two reasons: The final end to the gold standard and ensuing monetary policy attempting to stimulate the economy in…
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The Only Thing We Have To Fear Is Fear Itself… And Governments Telling Us What To Fear: Why The Beginning Of The End Started With FDR’s Confiscation Of Gold

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

As is well-known by now, following America’s collapse in the first Great Depression back in 1929, one of the first decisions undertaken by president FDR, not even a month following the first of four inaugural speeches (in which he notably said that “the only thing we have to fear is fear itself“) was to respond to the rolling bank runs and shutdowns, by doing something unprecedented: confiscating the gold of American citizens. And then he logically followed up by doing the only thing that insolvent governments know how to do: he debased the US Dollar overnight by 40% by changing the official exchange ratio of the USD to gold from $20.67 per ounce to $35.00 per troy ounce. Alas, since exchanging such gold would be impossible until 40 years later, nobody could take advantage of this generous offer. It is this point in history that to William Buckler of the famous Privateer newsletter marks the transition of American government from republican (on behalf of the people) to being authoritarian (in control of the people). It also begs the question: what did FDR offer in return for gold confiscation – after all if gold confiscation is not “something to be feared” then there is a quid pro quo. Why he gave us Social Security and the Welfare state. The same “welfare” state whose unfunded obligations amount to roughly $80 trillion, and whose increasingly tangible insolvency is precisely the reason why ever more capital is shifting right back to, you guessed it, gold. Perhaps FDR should have added that in addition to fear itself, the one other thing everyone should fear is governments believing they they know what they are doing when transitioning to central planning an an authoritarian regime based on nothing but faith.

From the latest Privateer newsletter:

The US banking collapse which occurred early in 1933 was the result of a huge withdrawal of Gold by both foreigners and Americans. There was real fear that the incoming government would repudiate the Gold standard – just as the UK government had done in late 1931. The worst nightmare of all central bankers was taking place. Just as Mr Bernanke does today, Fed Chairman Eugene Mayer had access to (primitive) helicopters and printing presses. What he did not


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S&P Futures Down 9, As Gold Kneejerks Over $1890

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Nothing surprising in the premarket action with ES open for trading despite Labor Day, down about 9 points at its worst, following weekend concerns of yet another European apocalypse. Elsewhere, gold is enjoying the fact that the only bearish downside is potentially a technically overbought formation and is surging right off the bat passing $1890 on the kneejerk then reconfirming slowly. As a reminder, a nervous Japan arrives on the scene in 2 hours, followed by an insolvent Europe, and no US-based HFT available to rescue the world tomorrow.

ES:

Gold:

Charts via Bloomberg





Latest Trading Jobs

Courtesy of Declan Fallon

This weeks trading jobs can now be found here.

Here are some of the trading jobs on offer

Associate Software Engineer (C++) Automated Trading
IRC746 – Senior Business Analyst (Energy/Commodities/Gas/Oil)
Trading Assistant – Commodities ($60-90K)
Senior Analyst – Middle Office (Hedge Fund; $95-115K + $65K)
Fixed Income Specialist – National Team
Investment Analyst
Investment Consultant – FW National Branch
Sr. Portfolio Margin Analyst
Mutual Fund Team Manager
Financial Advisor, Winchester
Amerivest Team Manager
Financial Advisor, Washington, DC
Credit Markets Analyst
Trading Desk Assistant
Associate Software Engineer (C#) Algo Products
Risk Control Analyst (Night Shift)
Quant Researcher Cross Asset – Investment Management – Boston ($80-120K)
Junior Quantitative Researcher – Investment Management – Boston ($80-130K)
Operations – Portfolio Accounting Analyst
Quantitative Research Analyst – Statistical Arbitrage – Boston ($80-150K)
C# Developer – Trading Systems ($110-160K)
Head of Market Risk Oversight ($150-200K)
Institutional Equity Trading Associate
Market Data Analyst ($80-100K)

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WHo Do You THiNK BuiLT AMeRiCa?

Courtesy of ZeroHedge. View original post here.

Submitted by williambanzai7.

Watch the news this Labor Day. You will have the unique opportunity to hear and see politicians, robbers, thieves and human strip miners tell you about how they have the best interests of "working" American men and women at heart.

There is an insidious disease eating America’s guts out. The infection took hold years ago and has spread slowly but surely as the light of day.

The patient is now critical.

Something has to be done my friends.

Something radical, because the patient is dying on the stretcher and the ambulance driver with hope and change tattooed on his forehead is a Wall Street drunkard.

There are few things I can ever say with 100% certainty, but this is one of them: All those speeches you will hear today and the leeches saying them, they are all liars, each and every one of them.

When you have the pleasure of joining your friends and family for a traditional Labor Day barbecue this weekend, you might consider raising your glass to toast the men and women who built this country with the following solemn words: Screw you Washington and Wall Street.

 

. LABOR DAY WITH THE BLANKFEIN'S

 

. WHO BUILT AMERICA

.

. FRIENDS OF LABOR (1980)

 

. STRIP MINING AMERICA

 

. LABOR DAY 2011

 

. IMMELT AWOL

Blaming those cheap Chinese laborers is nothing new. 

. COOLEY CHEAP LABOR

 

.THE CHINESE LABOR QUESTION

Cheap Chinese laborers are not the ones who decided that globalization and circulatory (as opposed to productive) capital are the panacea for…
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Where Is Our Oil Price Collapse?

Courtesy of ZeroHedge. View original post here.

Submitted by Jim Quinn of The Burning Platform

Where Is Our Oil Price Collapse?

Make no mistake about it, without plentiful, cheap, and easy to access oil, the United States of America would descend into chaos and collapse. The fantasies painted by “green” energy dreamers only serve to divert the attention of the non critical thinking masses from the fact our sprawling suburban hyper technological society would come to a grinding halt in a matter of days without the 18 to 19 million barrels per day needed to run this ridiculous reality show. Delusional Americans think the steaks, hot dogs and pomegranates in their grocery stores magically appear on the shelves, the thirty electronic gadgets that rule their lives are created out of thin air by elves and the gasoline they pump into their mammoth SUVs is their God given right. The situation was already critical in 2005 when the Hirsch Report concluded:

“The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking.”

In the six years since this report there has been unprecedented oil price volatility as the world has reached the undulating plateau of peak cheap oil. The viable mitigation options on the demand and supply side were not pursued. The head in the sand hope for the best option was chosen. The government mandated options, ethanol and solar, have been absolute and utter disasters as billions of taxpayer dollars have been squandered and company after company goes bankrupt. The added benefit has been sky high corn prices, dwindling supplies and revolutions around the world due to soaring food prices. The last time the country went into recession in 2008, the price of oil plunged from $140 a barrel to $30 a barrel in the space of six months. I’d classify that as volatility. We’ve clearly entered a second recession in the last six months. So we should be getting the benefit of collapsing oil prices.

But, a funny thing happened on the way to another oil price collapse. It didn’t happen. WTI…
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ABN Amro Complains About Interbank Liquidity Crunch, As CEO Says End Of Euro Would Make 1930s Seem Like “A Trifle”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

As we have been writing for a while now, it is not in the arcania of shadow banking that one needs to look to find increasing signs of the collapse in interbank lending. No: something as simple as Libor, especially its USD variant, which is so crucial to USD-crunched European banks, is more than sufficient to determine that not just Greece, or the PIIGS, but now the entire Eurozone is becoming completely dependent on the dollar generosity of the ECB, and the various other regional central banks. This by implication means that the Fed will once again be forced to step in, “in size” and bail out the world, only this time it is far more debatable if the world believes that even the Fed alone is sufficient to prevent a rising global insolvency tsunami. And confirming how bad it is, we now have none other than ABN AMRO’s CEO on the tape, complaining loudly about liquidity: this is and always has been a move of total desperation as the last thing a bank wants to do is give any indication of funding weakness. Furthermore, since ABN Amro is not a USD LIBOR reporting bank, we can safely say that the dollar liquidity crunch has spread far and wide from the 18 BBA member banks, where it is hardly any easier to procure the former reserve currency.

As a reminder this is what USD funding costs look like: as Dennis Gartman would say: it starts in the lower left and proceeds to the upper right.

From Bloomberg:

Banks are seeking to retain their liquidity, making interbank lending more difficult, as funding from money and capital markets becomes harder to obtain, ABN Amro Group NV Chief Executive Officer Gerrit Zalm said.

 

Interbank borrowing for more than six months is also becoming problematic because banks are reluctant to lend to competitors with “big positions in weaker countries’ debt, for instance,” he said today on Dutch television program “Buitenhof.” ABN Amro is “well-capitalized,” he said.

 

Zalm was Dutch finance minister from 1994 to 2002, during which time he helped oversee the implementation of the euro currency and the associated “stability pact” aimed at ensuring member states adhered to specific budgetary criteria. Germany and France both exceeded those criteria


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The First EURUSD Print Is In…

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

And it’s not pretty. Furthermore, without US vacuum tubes to step in tomorrow and fix what appears set to be a major overnight rout, the next 48 hours could be very interesting indeed.





 
 
 

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.

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