Archive for July, 2012

JPM To Be Subpoenaed Over Defunct PFG’s Missing Segregated Money

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

The blunt trauma that JPMorgan was implicated in the missing millions from segregated accounts in Jon Corzine’s bankrupt MF Global may have passed but the memory lingers, especially for all those whose cash is still locked up somewhere in vapor space. Yet one event that may tear the scab that patiently was healing, courtesy of a Copperfield market full of distractions such as JPM’s CIO fiasco, Lieborgate, oh and, Europe, right off is the recent bankruptcy of Peregrine Financial, aka PFG, whose story we first broke, and which just as we suspected, has promptly become the second coming of MF Global, as at least $200 million has “evaporated.” It is thus with little surprise that we find that the first party of interest is none other than JPMorgan, which together with various other banks, will be the target of a subpoena by the PFG trustee. How shocking will it be to find that Dimon’s company is once again implicated in this particular episode of monetary vaporization.

From Bloomberg:

The trustee liquidating Peregrine Financial Group Inc. asked a judge for authority to subpoena the defunct futures brokerage’s banks including JPMorgan Chase & Co. (JPM) and Citigroup Inc. (C) for information about transfers from segregated accounts and proprietary accounts.

 

Citing a lawsuit by the U.S. Commodity Futures Trading Commission against the company and founder Russell Wasendorf Sr. over misappropriation of customer funds, the trustee said he needs records from “various financial institutions” to identify “abnormalities” in the company’s records.

 

The trustee liquidating Peregrine Financial Group Inc. asked a judge for authority to subpoena the defunct futures brokerage’s banks including JPMorgan Chase & Co. (JPM) and Citigroup Inc. (C) for information about transfers from segregated accounts and proprietary accounts.

 

Citing a lawsuit by the U.S. Commodity Futures Trading Commission against the company and founder Russell Wasendorf Sr. over misappropriation of customer funds, the trustee said he needs records from “various financial institutions” to identify “abnormalities” in the company’s records.

And while Jamie Dimon may have to spend another 2-3 hours before his muppets explaining how a few hundred million in PFG cash just may have ended up on his balance sheet, with nobody gaining anything, except for C-Span once again beating all other…
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Why Another Major China Stimulus Package Is Not Coming

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

When might the government roll out another stimulus? Have local governments already announced major stimulus? Will the economy grow at a much slower pace than targeted by the government if no new stimulus is adopted soon? Could the country/industries/companies survive without another stimulus? These are some of the recent more frequently asked questions.

UBS: Don’t Hold Your Breath for another Stimulus in China

Indeed some market participants seem to be eagerly anticipating or hoping for another stimulus in China, and each day that has passed without a big policy announcement seems to have depressed the market further. While the Chinese government has been very concerned about the economic slowdown and has taken policies to support growth, we would not be holding our breath for another big stimulus. The previous stimulus in 2008-09 did lift growth much higher than otherwise would have been, but the excessive credit expansion also worsened the imbalance in the economy and left serious negative consequences which are still been dealt with today. Chinese government has clearly recognized this and is keen to avoid making a similar mistake this time. Of course, the slowdown in export and in the overall economy is also much milder compared with 2008-09. Importantly, the lack of labour market distress so far has made it less urgent to come up with any big stimulus.

This is not to say that the government has done little or will do little to support growth. Indeed macro policies have changed to supportive of growth since early this year and this has intensified since mid-May. The policies taken so far include fiscal (tax cuts for small businesses, subsidies for some appliances, pension increase, and more spending on social housing), monetary (increase of base money supply through RRR cuts and reverse repos, increase of banks’ lending quota, and 2 interest rate cuts), and credit and quasi-fiscal (easing of lending to the property sector, local government platforms and some sectors, approval and launch of more government investment projects). Among all these, we continue to believe that the measures to increase public investment, to be financed largely by bank credit, will be the most important ones in the near term.

The government has also been trying to encourage private investment in energy, utility, transport and service sectors including by promising easier entry and access
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Max Keiser: Bankers and Central Bankers are Responsible for Eurozone Debt Crisis, Barack Obama’s Devastating Missed Opportunity

Courtesy of Jaime Falcon.

Max Keiser discusses the mess created by bankers and central bankers, and the abysmal performance of Barack Obama:

Europe is a distraction: Concern about Europe and the Euro are misplaced. The real trouble spots in the world are the UK and Japan. That’s what we will be talking about in 6 months.

What is happening in Europe: Policy makers are extorting us into accepting things like transforming the European Stability Mechanism – the new financing fund – into a bank, allowing them 10 to 100 times leverage, enabling them to recapitalize and refinance 5 to 10 trillion Euros in debt. That will make many bankers fabulously wealthy. There will be no change in terms of political power. But the Europe will probably not break up. There is a lot of leveraging potential left in Europe.

What has become of Greece: The Troika, including the IMF, the EU, and the ECB, got Greece to sign off on the memorandum which passed sovereignty from Greece to the IMF. George Papandreou, the leader of Greece at the time, was going to have a referendum on that until the Troika told him he was not going to have a referendum.

Iceland did much better: The president of Iceland did put the question to referendum. The people of Iceland voted it down. That country is now thriving because they got rid of their banker infestation problem.

The result of the Greek capitulation: Greece gave away their sovereignty to the Troika. Greece is not a sovereign state. Leaving the Eurozone is no longer up to them. The IMF is in Greece with hundreds of agents. The goal of the Troika is to acquire Greece’s income-producing assets for next to nothing – their ports, the lottery, the airports, the toll roads – for the benefit of the patrons of the IMF.

European Central Bank policy is producing a post-capitalism 2-tier economy that benefits central bankers and their friends: The European Central Bank is swapping toxic assets from banks all over Europe for fresh short-term treasury paper. They are expanding their balance sheet to accommodate toxic debts and they are suppressing interest rates. This is to keep the debt service manageable on the junk that they have acquired. It is causing a 2-tier global economy where the


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Guest Post: The Most Often Forgotten Survival Preparations

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Brandon Smith from Alt-Market

The Most Often Forgotten Survival Preparations

I think it’s safe to say with some conviction that in the year of 2012 the concept of survival prepping is NOT an alien one to most Americans.  When National Geographic decides there is a viable market for a prepper TV show (no matter how misrepresentative of true preppers it may be), when Walmart starts stocking shelves with long term emergency food storage kits, when survivalism in general becomes one of the few growing business markets in the midst of an otherwise disintegrating economy; you know that the methodology has gone “mainstream”.  There is a noticeable and expanding concern amongst Americans that we are, indeed, on the verge of something new and unfortunate. 

Is it the big bad hoodoo of the soon to expire Mayan Calendar?  For a few, maybe, but for the majority of us, no.  That jazz is a carnival sideshow designed to make the prepping culture appear ridiculous.  We don’t need to believe in magical prophecies to know that there is a catastrophic road ahead; all we have to do is look at the stark realities of our current circumstances.  It does not take much awareness anymore to notice looming fiscal volatility, social unrest, the potential for unrestrained war, and the totalitarian boldness of our government.  I’ll take the wrath of Quetzalcoatl any day over the manure storm that is approaching us currently. 

With some estimating a count of 3 million prepper families and growing in the U.S., the motto of “beans, bullets, and band-aids” is finding a home amongst legions.  However, being closely involved in the survivalist movement during the past six years and speaking with literally thousands of preppers, it has become clear to me that we still have a long journey ahead of us before we can claim true efficiency and mastery.

Sadly, having a stockpile of food, weapons, and some slick tactical gear is not enough to ensure a high likelihood of survival, at least not in any of the social collapses that have occurred in the past century around the world.  It’s a start, but only just…

There are a number of detrimental weakness to the survivalist movement and considerable holes in prepper knowledge that must be addressed now while we…
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China PMI Misses And Prints Lowest In 8 Months With 10 Of 11 Sub-Indices Contracting

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

The seemingly exuberant levels of the China Manufacturing PMI data when compared to HSBC’s Manufacturing PMI have largely disappeared now as the two are the closest together in 9 months. As China’s PMI drops to its lowest print in 8 months at 50.1 (less than the expected 50.5), we note that 10 of the 11 sub-indices (including employment and new orders) are all lower and now in contraction mode. Only the Output sub-index remains above 50 (in the if-we-build-it-they-will-come period). New Export Orders also fell notably. Of course having learned their lesson with the unintended consequences of their last major stimulus effort, we suspect the PBoC will be a little more careful with the method to resuscitate this time.

 

 

We will update later with the final HSBC print (as opposed to the Flash print below)…





What Would Jesus Do with Bankers?

Courtesy of ZeroHedge. View original post here.

Submitted by George Washington.

 

Clipboard02 What Would Jesus Do with Bankers? Anthony Freda/Daniel Zollinger

Preface: If you are a Christian or Jew, the importance of the Bible is obvious.  If you are an atheist and believe that religion is crazy, please remember that some 85% of the American population identifies itself as Christian and millions more identify themselves as Jewish.

The head of Goldman Sachs said he’s doing “God’s work” with his banking activities.

The head of Barclays also told his congregation that banking as practiced by his company was not antithetical to Christian principles.

Are they right? Is big banking as practiced by the giant banks in harmony with Christian principles?

Do Justice

Initially, the Bible does not counsel us to ignore the breaking of laws by the the powerful.

In fact, the Bible mentions justice over 200 times — more than just about any other topic. The Bible asks us to do justice and to stand up to ANYONE — including the rich or powerful — who do injustice or oppress the people.

Indeed, one of the first things God asks of us is to do justice:

He has told you, O man, what is good; and what does the Lord require of you but to do justice, and to love kindness, and to walk humbly with your God? (Micah 6:8)

While many churches and synagogues have become obsessed with other issues, many have arguably ignored this most important of God’s demands of us. As pointed out by a leading Christian ministry, which rescues underage girls trapped as sex slaves in third world countries:

In Scripture there is a constant call to seek justice. Jesus got upset at the Pharisees because they neglected the weightier matters of the law, which He defined as justice and the love of God . . . Isaiah 58 complains about the fact that while the people of God are praying and praying and praying, they are not doing anything about the injustice.

Should Christians just pray for justice and leave the rest to God?

That’s not what the Bible asks us to do. Instead, Hebrews 11:33 tells…
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Heat Wave Can’t Get You $8 Natural Gas in 2012

Courtesy of ZeroHedge. View original post here.

Submitted by EconMatters.

 

By EconMatters

 

The Energy Department reported that natural gas in storage grew by 26 billion cubic feet to 3.189 trillion cubic feet for the week ended July 20. The inventory level was 15.8% above the five-year average of 2.754 trillion cubic feet, and 18% above last year’s level.

 

Low natural gas prices in the U.S. this year has not only tanked the stocks of many gas-weighted producers, but also dragged down profits of U.S-based oilfield services companies as a result of reduced gas drilling activity (See Chart Below).  However, since hitting a 10-year low of below $2/mmbtu in April, Henry Hub benchmark prices has surged 69% hitting $3.214/mmbtu on Monday, July 30, the high of the year.

 

 

Source: EIA, July 18, 2012

 

 

The latest bullish sentiment is fueled mostly by forecasts for more unusual heat this summer to increase air conditioning use.  In addition, there’s also an increase in usage/demand as lower natural gas prices have also attracted many utilities to switch from coal to natural gas for power generation.  According to the EIA, electricity generated using natural gas was roughly even with coal for the first time ever in April.  Historically, natural gas typically supplied just over 20% of the domestic electricity needs. 


These positive indicators have prompted at least one article at Forbes to predict $8.00/mcf natural gas by “the approaching winter”--that means another 160% rise in about four months.  
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Jeremy Grantham: “I, For One, Wish That The World Would Get On With Whatever Is Coming Next”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

We will share much more of Jeremy Grantham's latest just released must read letter shortly, but for now the following section will suffice because, in short, we agree with every single word said in it.

“Groundhog Day”

The economic environment seems to be stuck in a rather unpleasant perpetual loop. Greece is always about to default; the latest bailout is always about to save the day and yet never seems to; China is always about to collapse but instead teases us by inching down; and I swear the Financial Times is beginning to recycle its reports! In the U.S., the fiscal cliff looms along with debt limits and the usual election uncertainties. The dysfunctional U.S. Congress continues for the time being in its intractable ways. The stock market rises and falls and rises and falls again. It is getting difficult to find anything new to say at client meetings. I, for one, wish that the world would get on with whatever is coming next.

One slight change, though, is that fantastic (almost unbelievable) profit margin and earnings gains have finally weakened a little. They, together with Bernanke’s super low rates, have been the twin pillars of the market and not bad ones at all: here we are up 8% for the year in a thoroughly unsettling financial and economic world. With margins weakening, one of the twin pillars is looking shaky and price declines look more likely than before.





The Big Four Economic Indicators: New Update

Courtesy of Doug Short.

Note from dshort: This commentary has been updated to include today’s release of Personal Income data, which includes revisions back to January 2009.


Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. This committee statement is about as close as they get to identifying their method.

There is, however, a general understanding that there are four big indicators that the committee weighs heavily in their cycle identification process. They are:

  • Industrial Production
  • Real Income
  • Employment
  • Real Retail Sales

The weight of these four in the decision process is sufficient rationale for the St. Louis FRED repository to feature a chart four-pack of these indicators along with the statement that “the charts plot four main economic indicators tracked by the NBER dating committee.” In his July 10th Bloomberg TV interview, ECRI’s Lakshman Achuthan cites these four at about the 2:05 minute point in his remarks. He says, and I quote “When you look at those four measures, they are rolling over.”

Are they really rolling over? First, here are the four as identified in the Federal Reserve Economic Data repository. See the data specifics in the linked PDF file with details on the calculation of two of the indicators.

 

 

The FRED charts are excellent. They show us the behavior of the big four indicators currently (the green line) as compared to their best, worst and average behavior across all the recessions in history for the four indicators (which have start dates). Their snapshots extend from 12 months before the June 2009 recession trough to the present.

The latest update to the Big Four was today’s release of the June Personal Income data, which included the annual revisions to past data back to January 2009. The chart below shows the new June data and the substantial revisions.

The revisions added a rather dramatic lift to the series and improved the upward trend in…
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Guest Post: The European Tinder Box

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Moraymint of The Needle blog,

I wonder if harsh economic realities could transcend generally accepted logic.  The common perception of unravelling events relies, by and large, on politicians remaining in close control of events and in particular in tight control of their societies.

 

But when institutions start running out of cash and people don’t get paid on a grand scale (which must now be well and truly on the cards in saying the coming 1 – 3 years, if not within the coming months), then politicians’ grand economic and political plans can rapidly turn in to the proverbial ‘ball of chalk’.

Like many people I struggle to discern the details of unfolding events over the coming months.  However, my age and instinct tell me that Europe’s political elites are losing control of their own societies even now.  There are more than 18 million people unemployed in Europe today and, for as long Europe’s political class stays on its current course, that unemployed rate will climb and climb.  That’s a really bad state of affairs; indeed, it’s life-threatening.

Eventually, I judge that the smouldering European tinder box will burst forth in to flame and thence on to conflagration.  At which point all bets are off.  No amount of logical and neat arguments about how politicians will engineer a European superstate without an explicit democratic mandate so to do will counteract the incandescent rage that could grip a critical mass of European citizens going without work, going without shelter, going hungry and living without hope.

It’s this ‘direct action’ by angry citizens that would scupper the controlled, totalitarian formation of a European superstate, I believe.  But I accept that I may be quite wrong in this and that the Europeans could well end up stumbling like lambs to the slaughter when it comes to their political masters implementing acoup de continent’ and forcing the formation of the United States of Europe on 495 million people.  God help them if it happens that way.

And if it does, there would need to be revolution in the UK to prevent our own political class from stitching us in to that self same socialist-fascist nightmare that would be the nascent USE.

Frankly, with each passing day now I can barely believe what the European…
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Zero Hedge

Schiff: Negative Interest Rates Are "Boneheaded"

Courtesy of ZeroHedge View original post here.

Via SchiffGold.com,

Donald Trump has been badgering Federal Reserve Chairman Jerome Powell for months, begging for lower interest rates. This week, he took things to another level, saying that the “boneheads” at the Fed need to push rates into negative territory.

In his podcast, Peter Schiff said negative interest rates are boneheaded. ...



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The Technical Traders

Metals are following downside sell off prediction before the next rally

Courtesy of Technical Traders

It is absolutely amazing how the precious metals markets have followed our October 2018 predictions almost like clockwork.  Our call for an April 21~24 momentum base below $1300 followed by an extensive rally to levels above $1550 has been playing out almost like we scripted these future price moves.

Now that the $1550 level has been reached, we are expecting a rotation to levels that may reach just below the $1490~1500 level before attempting to set up another momentum base/bottom formation.  And just like clockwork, Gold has followed our predictions and price is falling as we expected. Just look at our October 2018 chart where we forecasted the price of gold...



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Chart School

Crude Oil Cycle Bottom aligns with Saudi Oil Attack

Courtesy of Read the Ticker

Do the cycles know? Funny how cycle lows attract the need for higher prices, no matter what the news is!

These are the questions before markets on on Monday 16th Aug 2019:

1) A much higher oil price in quick time can not be tolerated by the consumer, as it gives birth to much higher inflation and a tax on the average Joe disposable income. This is recessionary pressure.

2) With (1) above the real issue will be the higher interest rate and US dollar effect on the SP500 near all time highs.

3) A moderately higher oil price is likely to be absorbed and be bullish as it creates income for struggling energy companies and the inflation shock may be muted. 

We shall see. 

...

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Phil's Favorites

Black Hole Investing

 

Black Hole Investing

Courtesy of John Mauldin, Thoughts from the Frontline 

Scientists say the rules change in a cosmic “black hole” at what astrophysicists call the event horizon. How do they know that? Not by observation, since what happens in there is, by definition, un-seeable. They infer it from the surroundings, which say that the mathematics of the universe as we understand them change at the event horizon.

Or maybe not. One theory says we are all inside a black hole right now. That could possibly explain a few things about central bank policy. ...



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Insider Scoop

The Street Reacts To Kroger's Q2 With Mixed Takeaways

Courtesy of Benzinga

Kroger Co (NYSE: KR) reported second-quarter results that came in better than expected. The earnings beat may have been overshadowed by management's decision to remove its prior guidance of $400 million in incremental EBIT by fiscal 2021.

Q2 A Mix Of Positives And Negativ...

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Kimble Charting Solutions

Bond Yields Due For Rally After Declining More Than 1987 Stock Crash

Courtesy of Chris Kimble

U.S. Treasury Bond Yields – 2, 5, 10, 30 Year Durations

The past year has seen treasury bond yields decline sharply, yet in an orderly fashion.

This has spurred recession concerns for much of 2019. Needless to say, it’s a confusing time for investors.

In today’s chart of the day, we look at a longer-term view of the 2, 5, 10, and 30-year treasury bond yields.

Short to long term bond yields are all testing 7 to 10-year support levels as momentum is at the lowest levels in a decade.

A yield rally is likely due across the board after a recent decline that was bigger than the stock crash in 1987!

If yields fail to ral...



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Lee's Free Thinking

Nonfarm Payrolls Not Seasonally Adjusted Tell the Real Story - Unspinning Wall Street™

Courtesy of Lee Adler

Not seasonally adjusted nonfarm payrolls, that is, the actual numbers, give us a truer picture of the jobs market than the seasonally adjusted garbage that Wall Street spews.

Friday’s seasonally adjusted nonfarm payrolls jobs headline numbers disappointed investors with slower than expected growth. But was it really that bad?

Here’s How The Street Spun It – Wall Street Journal Modest August Job Growth Shows Economy Expanding, but Slowly

Employers added 130,000 nonfarm jobs, jobless rate held steady at 3.7%

U.S. employment grew only modestly in August, suggesting that a global economic slowdown isn’t driving the U.S. into recession but has dente...



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Digital Currencies

China Crypto Miners Wiped Out By Flood; Bitcoin Hash Rate Hits ATHs

Courtesy of ZeroHedge View original post here.

Last week, a devastating rainstorm in China's Sichuan province triggered mudslides, forcing local hydropower plants and cryptocurrency miners to halt operations, reported CoinDesk.

Torrential rains flooded some parts of Sichuan's mountainous Aba prefecture last Monday, with mudslides seen across 17 counties in the area, according to local government posts on Weibo. 

One of the worst-hit areas was Wenchuan county, ...



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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

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:

 

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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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