Archive for 2011

Congressional Insider Trading Gone Wild

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Back in May we penned, “Why A Hedge Fund Comprised Of Junior Congressional Democrats Should Outperform The Market By 9%” in which the simple conclusion was that insider trading is not only rampant in Congress, but completely unregulated, as it is perfectly legal for Congressional staffers to trade at their leisure on inside information: an exemption which the beta chasing 2 and 20 crowd on Wall Street would sell their first through fifth born to be granted, now that their glaring inability to generate alpha is laid out for all to see. Tonight we were happy to see that 60 Minutes has finally brought this gross and criminal injustice to the general public, and we expect that Congress will promptly legislate itself into actually complying with laws meant for the mere mortals out there. That said, we fully commiserate with the pathological excrement that makes up House of Representative these days: it is indeed a sad day when a Congressional member has to rely on honest work to make their millions as opposed to perfectly legal trading on inside information predicated upon laws that these very congress men and women legislate. Something tells us all the world’s banana republics are just staring at the US with sheer and utter amazement as layer after layer of the unprecedented depravity of American society is exposed for all to see.

From 60 Minutes – the part where Nancy Pelosi’s face melts is 9:20 in. And speaking of Nancy Pelosi it may be time to revisit: “ Moody’s Leaked Again: Told Nancy Pelosi Will “Probably Not” Downgrade US Weeks Ago; Did Her Multi-Millionaire Investor Husband Know Too?” andSEC To Investigate Trades Based On S&P Downgrade Inside Information… We wonder just how deep the SEC investigation has penetrated for it to have generated not even a peep 3 months later.

And transcript:


Greece’s ‘Worst-Worst-Case-Scenario’

Courtesy of ZeroHedge. View original post here.

Submitted by testosteronepit.

By Wolf Richter

Judging from the stream of rumors and energetic denials, German bureaucrats, experts, and politicians are furiously working on dozens of projects that all deal with the debt crisis, and they go off in as many directions.

Reports surfaced today that Chancellor Angela Merkel wants to accelerate amending the Lisbon Treaty so that debt-sinner countries that can’t get their budgets in order would be dealt with more harshly—through imposition of additional sanctions (just how they’d pay for these sanctions when they’re already having trouble funding their deficits hasn’t been addressed, apparently).

The Lisbon Treaty is a chef d’œuvre of the 27 members of the European Union. Negotiations started in 2001 to establish the European Constitution, which flopped in 2005 when French and Dutch voters said non and neen. A watered-down compromise treaty was worked out that everyone could agree on. But in 2008, Irish voters didn’t agree on it. Then the financial crisis hit. The Irish got scared, and when the referendum was re-run, voters changed their mind. The treaty became effective December 1, 2009, after eight years of struggle. And now, according to Reuters, Merkel wants to rush very unpopular sanctions through the system: amendments on the table by next spring and ratification by all 27 members at the end of 2012. A pipe dream.

Another report surfaced in the Spiegel. Experts at the Ministry of Finance are working on scenarios that incorporate Greece’s exit from the Eurozone. The idea that not long ago was part of the official Denkverbot (prohibition to think) became official language at the G-20 after Giorgios Papandreou, prime minister of Greece, had fired his referendum bazooka into the air. And now it has transmogrified into actual scenarios.

The underlying assumption is that Greece will not implement the agreed-upon budgetary measures and economic restructuring. Such a failure would entail Greece’s exit from the Eurozone. And when that happens, the experts envision a range of scenarios, according to the Spiegel, from rather benign to, well, rough.

It starts with the basis scenario. Greece reinstitutes the drachma. After some initial chaos, the removal of the weakest country of the Eurozone might strengthen the Eurozone over time. While other countries, like Italy and Spain, would still have difficulties, they would be better able to manage their problems
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Deja Vu All Over Again: An Unsolicited Whitney Tilson Explains Why He Is Short Green Mountain, Long Netflix

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

The last time Whitney Tilson presented his “investing thesis” case in public, he got promptly anihilated as was to be expected – there is a reason why real hedge funds keep their positions secret. This time, “it will be different.” Incidentally, it is not a hedge fund manager’s job, no matter how tiny said hedge fund is, to plea to the broad investing public: it makes one appear like a petulant child. Their job is to outperform the S&P since inception: a task T2 still seems to find daunting…

T2 Partners performance since inception vs the S&P:

An artist’s rendering of how this latest episode of unsolicited transparency will end:

Full “explanation” for those very few who care:


Decision Time For Europe: The Definitive Presentation On The Future (Or Lack Thereof) Of The Eurozone

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

When dealing with the daily barrage of headlines from Europe, it is easy to get lost in the trees and forget what the forest looks like. That’s perfectly understandable – after all, it is precisely the intention of the Eurocrats to confound everyone with noise, so any track of the fact that the big picture is unfixable is if not lost then promptly forgotten, with reactionary newsflow dominating the flawed decision-making process. Luckily, the fact remains that no matter what, no matter the scale of lies out of Europe, the problem still remains: the math just does not make any sense. Conveniently reminding us precisely of this, we present to our readers the must read presentation by Swiss private bank Pictet titled “Decision time for monetary union” which puts the forest right back into focus, and explains why all attempts to kick the can down the street will be met with a prompt and furious response by the bond vigilante crowd, which has now officially been thawed out of cryogenic stasis. Because, all noise aside, the Eurozone has two options – continue the current course which is catastrophic: “Current response to the crisis has created conditions leading the euro area towards depression” or accept the reality and do something about it, yet “things are going to get worse before European authorities decide to wheel out their heavy artillery.” Said otherwise: lose-lose. So without further ado, let’s dig in…

1.Italy has put its head above the emergency parapet

2. The good news: Italian public accounts well on track

  • Italy and Germany are the rare countries likely to record primary surpluses in 2011

3. The bad news: Italian public debt: a weighty millstone


4. All benefits from the creation of the euro have been erased: Spreads above levels prevailing before the euro’s birth

5. The light at the end of the tunnel is a trillion and a half euro oncoming train: €1,500bn to be financed in peripheral euro area states between now and 2014

6. From Arab Srping to European Winter: Winter and springtime will be busy seasons for refinancing

7. Surveys now clearly in recession territory

  • Only the post-Lehman deterioration was as rapid as the current downswing

8. Orders/inventory ratio has continued…
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Oil And Gold Excited As USD Leaks Lower

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

As EURUSD toys with 1.38 and AUD outperforms, the USD is leaking lower (-0.2%) from Friday (after closing the week almost perfectly unchanged Friday-to-Friday). Gold and Oil appear to be basking in the glow of increased macro and geopolitical tensions as $1795 and $99.50 (respectively) have already been broken this evening. It appears Silver and Gold are tracking each other as Oil follows the USD and Copper is the major outperformer so far (in early trading).


Commodity (and USD) performance from Friday’s close – Gold/Silver (+0.35%) outperforming Oil (+0.14%) as it tracks the USD and Copper outperforms (+1.39%).


UPDATE: TSYs just opened (after being closed Friday) with a 4-7bps bear steepener and 2s10s30s rising 8bps. ES is pretty much in line with CONTEXT at 1269 now all the risk drivers are open.

Chart: Bloomberg

China Misses 3 Trillion Yuan But You Should Trust Inflation and GDP Data

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

In yet another accounting error (or not), a sovereign nation accidentally missed a large amount of debt that it owes. Bloomberg (via The Economic Observer) is citing data from Beijing Fost Economic Consulting that ~3tn yuan ($473bn) of debt in township governments was not included in China’s National Audit Office reports. This is not a drop in the ocean as it raises the local government debt load by around 30% and represents debt in vehicle financings and bank loans. Of course, we should remain calm and walk (not run) to the exits as GDP, inflation, and whichever macro data point you choose that has subliminally met expectations recently is completely accurate – have no fear.


From Bloomberg:

China’s National Audit Office didn’t include ~3t yuan ($473b) of debt in township governments in report, Economic Observer says, citing data from Beijing Fost Economic Consulting Co.


China’s local govts. of 4 levels may have 13.5t yuan in debt vs 10.7t yuan reported by audit office: Observer


Debt in local govt. financing vehicles, bank loans underestimated in audit report: Observer


Duyang town in Guangdong province has >200m yuan of debt vs annual fiscal income of 500,000 yuan: Observer



That Hyddeous Strength

Courtesy of ZeroHedge. View original post here.

Submitted by ilene.

Here’s the newest Stock World Weekly: “That Hyddeous Strength.”  


Excerpt from Stock World Weekly’s That Hyddeous Strength

“The shadow of that hyddeous strength, sax myle and more it is of length…” [From the “Dialog” by David Lyndsay (1490 - 1555?), referencing the Tower of Babel.]

Image: Pieter Bruegel the Elder (1526/1530–1569)

Daniel Hannan, journalist with the UK Telegraph, has been reporting on the “hideous strength” of the European Union (EU) for many years. He contends that the “European Union is making its constituent nations poorer, less democratic and less free.” According to Hannan, every time a nation in the eurozone becomes a problem for Brussels (capital of the EU), the EU’s strength becomes manifest. Both heads of state and political parties end up succumbing to its power. Perhaps, as a well-known euro-skeptic who campaigned against the Lisbon Treaty, Hannan’s comments should be taken with the proverbial grain of salt. However, with last week’s ouster of Greek Prime Minister Papandreou and this week’s resignation of Italian Prime Minister (PM) Berlusconi, Hannan’s views are finding vindication. 

Discussing Silvio Berlusconi’s resignation, Hannan wrote, “Silvio Berlusconi had seemed irremovable. ‘Il Cavaliere’ had survived a series of blows that would have felled anyone else. He had weathered accusations of bribery, soliciting underage sex, tax fraud and mafia links. He had shrugged off the attentions of – by his own count – 789 prosecutors and magistrates. He had recovered from being whacked in the face with a statue by an angry Milanese. He had laughed off gaffes on electric-rail topics from Muslims to Nazis.

“No wonder he thought himself invulnerable. He had become the longest-serving Italian leader since – well, since Mussolini. Yet he underestimated the EU’s hideous strength. Observing the crisis in Greece, and the EU’s reaction to it, he had concluded that Brussels would do anything to keep the euro together. If his austerity measures were insufficient, the EU would come up with the extra cash. It was the same calculation that George Papandreou had made, and his fate was the same; the same, indeed, as that of every leader since Margaret Thatcher to have found himself on the wrong side of the Brussels combine harvester.” (Now Silvio Berlusconi is crushed by the
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Totally Corrupt America


Originally published at CounterPunch

Last March I reviewed Matt Taibbi’s important book Griftopia, an entertaining account of the through-going financial fraud that gave us the financial crisis.  Taibbi shows that the US “superpower” can match any third world backwater in the magnitude of greed and fraud that is endemic in business and government. Taibbi’s Griftopia was published last year. This year Henry Holt publishers have provided us with Gretchen Morgenson and Joshua Rosner’s Reckless Endangerment.

Morgenson and Rosner tell the story again, but with less drama and provocation. Possibly, it might be more acceptable to those gullible Americans who wrap themselves in the flag and refuse to believe that their country could ever knowingly do anything that is wrong.

I am not suggesting that Morgenson and Rosner pull their punches.  To the contrary, the authors deliver enough knockouts to be contenders with Taibbi as world champions in exposing the reckless  fraud that the US financial sector and its regulators now epitomize.

The financial crisis, which is very much still with us, did not result from accident or miscalculation; neither did it result because of a flaw in Alan Greenspan’s theory, as he told Congress when a feeble effort was made to hold him accountable.   It was the intentional result of people motivated by short-term profits who wanted to get theirs and get out.

As Reckless Endangerment shows, fraud characterized every stage of the process from the fraudulent borrower incomes and credit scores that mortgage issuers gave to unqualified buyers, through the securitization of the mortgages and their triple-A investment grade ratings by the rating agencies (Standard & Poor’s especially, but also Moody’s and Fitch) to the investment banks that sold what the banks knew was junk to investors around the world as investment grade securities.  Indeed, Goldman Sachs was simultaneously betting against the mortgage derivatives that it was selling to clients.

Investment banks, such as Goldman Sachs, which once considered it a matter of honor to represent the interests of customers, took advantage of the trust that had been built up in the past to commit fraud against customers in order to advance the banks’ short-term profits and the out-sized multi-million dollar managerial bonuses that these fraudulent profits produced.

Morgenson and Rosner provide a number of unique accounts of how those benefitting from fraud were able to defeat laws that were passed that would have

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Advance Look At This Week’s Key Event: Is Europe’s Latest Velvet Revolution Credible?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

From Goldman Sachs

Last week was another milestone in terms of escalating sovereign tensions in the Eurozone. For several days it was not clear who would lead the next Greek government. Similar uncertainty regarding the future of the Italian government triggered a severe BTP sell-off, which then led to a clearinghouse margin call for Italian debt.

But as so often in Europe, looking down the abyss led to a last-minute policy response. Greek and Italy will now both be led by national unity governments under Lucas Papademos and Mario Monti, respectively. Both governments also seem to enjoy broad support to push through urgent reforms – at least for now.

There are still many questions, including the increasing debate about the constitutional set-up of the Eurozone and a possible Treaty change in the future. Moreover, it is possible that even these new governments in Greece and Italy will struggle to push their reform agendas through. But it will take some time before we know. And until then, it is quite likely that sovereign risk premia decline – at least temporarily. Following this logic, we initiated a long EUR/$ recommendation on Friday at a level of 1.3710 for a quick bounce to our initial target of 1.40.

We also added a long RUB/HUF recommendation last week. This was partly driven by the continued upward drift in oil prices, which should boost the Ruble. At the same time, balance sheet pressures for many Eurozone banks potentially creates external funding challenges for countries in the European periphery, like Hungary, with substantial external debt roll-over needs.

Looking ahead in the upcoming week, markets will likely scrutinise the first steps of the new Greek and Italian governments. The appointment of key cabinet positions will be of relevance to establish credibility. However, it may be a bit too early for the first concrete policy steps.

Beyond politics, three themes dominate the data schedule. First, there is a raft of Q3 GDP releases in Europe (Germany, France, Eurozone, Hungary, Poland, Czech Republic). The numbers will likely still be mixed with more uniform weakness expected in the Q4 numbers. Second, we will see the beginning of the monthly survey season with the US Empire and Philly Fed releases. Finally, there is a raft of Fed speakers scheduled to talk…
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Europe’s Crash Landing

Courtesy of MIKE WHITNEY

Originally published at CounterPunch

“Italy is now mathematically beyond the point of no return.”

–Barclays Capital 

The situation in Europe gets more depressing by the day. Policymakers have waited too long and now events are beyond their control. The only way to avert a disorderly breakup and another Great Depression is by deploying the European Central Bank (ECB) to backstop the debt of the individual countries, and even that might not work. New ECB chief Mario Draghi must announce his intention to keep interest rates down regardless of the cost. Blanket guarantees are the only way to stop the bleeding. But acting as lender of last resort will not stop the contagion; it will merely minimize the damage. The dissolution of the eurozone is a foregone conclusion. It’s only a matter of time. Here’s an excerpt from an article by Edward Harrison over at Credit Writedowns:

“… it’s game over for the euro zone. The extend and pretend stuff ain’t gonna work…. if you are an investor, this is the moment of truth. Everything – every asset class – depends on how the euro zone performs in the Italian Job. There are only two outcomes, here. If Italy blows up, a Depression is upon us; banks would be insolvent, CDS triggers would implode the system, bank runs would begin, stock markets would crash, and you will would see sovereign debt yields go to unbelievable lows for nations with a lender of last resort.” (“Italy, Italy, Italy”, Edward Harrison, Credit Writedowns)

Yields on Italian debt are soaring while overall economic conditions continue to deteriorate. The eurozone is sliding fast into recession if it isn’t in one already. The EU’s ill-considered austerity measures have increased deflationary pressures and slowed growth. Credit is shrinking while bank balance sheets dip deeper into the red. This is why the ECB intervened in Thursday’s auction of Italian and Spanish debt and loaded up on both hoping to calm the markets and stop the panic. This is from Reuters:

“Traders said the European Central Bank increased its bond buying, but the ECB’s hard-line chief economist told regional governments not to expect the bank to rescue them with unlimited funds.

A sale on Italian debt went smoothly, but worries persisted that Italy’s borrowing costs were unsustainable. The pullback in yields helped support market sentiment.”

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#1 Performing Global Macro Hedge Fund Sees More Shorts Opportunities Ahead As China Bursts

By Jacob Wolinsky. Originally published at ValueWalk.

Crescat Global Macro Fund update to investors on 1/19/2019

Crescat Global Macro Fund and Crescat Long/Short fund delivered strong returns for both December and full year 2018 in a difficult market. Based on ...

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Zero Hedge

Johns Hopkins, Bristol-Myers Face $1 Billion Suit For Infecting Guatemalan Hookers With Syphilis 

Courtesy of ZeroHedge. View original post here.

A federal judge in Maryland said Johns Hopkins University, pharmaceutical company Bristol-Myers Squibb and the Rockefeller Foundation must face a $1 billion lawsuit over their roles in a top-secret program in the 1940s ran by the US government that injected hundreds of Guatemalans with syphilis, reported Reuters.

Several doctors from Hopkins an...

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Phil's Favorites

Divisive economics


Guest author David Brin — scientist, technology consultant, best-selling author and futurist — explores the records of Democrats and Republicans on the US economy in the following post. For David's latest posts, visit the CONTRARY BRIN blog. For his books and short stories, visit his web...

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Kimble Charting Solutions

Stock declines did not break 9-year support, says Joe Friday

Courtesy of Chris Kimble.

We often hear “Stocks take an escalator up and an elevator down!” No doubt stocks did experience a swift decline from the September highs to the Christmas eve lows. Looks like the “elevator” part of the phrase came true as 2018 was coming to an end.

The first part of the “stocks take an escalator up” seems to still be in play as well despite the swift decline of late.

Joe Friday Just The Facts Ma’am- All of these indices hit long-term rising support on Christmas Eve at each (1), where support held and rallies have followed.

If you find long-term perspectives helpf...

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Digital Currencies

Transparency and privacy: Empowering people through blockchain


Transparency and privacy: Empowering people through blockchain

Blockchain technologies can empower people by allowing them more control over their user data. Shutterstock

Courtesy of Ajay Kumar Shrestha, University of Saskatchewan

Blockchain has already proven its huge influence on the financial world with its first application in the form of cryptocurrencies such as Bitcoin. It might not be long before its impact is felt everywhere.

Blockchain is a secure chain of digital records that exist on multiple computers simultaneously so no record can be erased or falsified. The...

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Insider Scoop Explores Strategic Alternatives, Analyst Sees Possible Sale Price Around $30 Per Share

Courtesy of Benzinga.

Related 44 Biggest Movers From Yesterday 38 Stocks Moving In Wednesday's Mid-Day Session ... more from Insider

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 chaotic presidency based on his high-conflict personality, which was evident years ago. This post, written in 2017, references a prescient article Bill wrote before Trump even became president, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...

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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

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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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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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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