Archive for September, 2012

It’s No Fun In Iran

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Since Mahmoud Ahmadinejad first became President of Iran, in August 2005, the country’s economy has gone from bad to worse. As Steve ‘hyperinflation’ Hanke noted recently, the Iranian economy has, for decades, been cobbled together by religious-bureaucratic regimes that have employed mandates, regulations, price controls, subsidies, a great deal of red tape, and a wide variety of other interventionist devices, in an attempt to achieve their goals. It’s all been kept afloat – barely afloat – by oil revenues. Shortly after Ahmadinejad took power, Iran began to draw the ire of the United States and its allies over a number of issues related to its nuclear ambitions and this ‘loose’ coalition of allies has ratcheted up economic sanctions. These sanctions are starting to have very significant impacts. From the Rial’s greater-than-50% plunge to estimated inflation rates over 70%, the country’s ‘Misery Index’, as noted in Bloomberg’s Chart-of-the-day, has surged massively in recent months. For context, Iran’s Misery score of 106 currently compares to Egypt’s pre-Arab Spring Misery score of around 40! Whether the sanctions’ “bite” will cause the regime to dig their heels in more and/or force the people to openly revolt (or turn ther anger on the sanction-enforcing aggressor?), it truly is no fun in Iran.

 


Hanke – “Even if sanctions have a massive impact on the economy, they tend to paradoxically do what they are intended not to do, the highest probability scenario in terms of interpreting the misery index in a case where you have sanctions is that as the misery index goes up the regime gets stronger and digs in.”

 

The Chronology of Sanction against Iran:

 

Via Cato:

 

There is no question that the sanctions the “allies” are imposing on Iran are starting to bite, and bite pretty hard. But, will this coercion win the “war?” Probably not. Prof. John Mearsheimer, in his masterpiece, The Tragedy of Great Power Politics, provides more than ample evidence to show that naval blockades and strategic bombing (and I would add financial sanctions) rarely produce their desired results. As Prof. Mearsheimer concludes:

 

“…the populations of modern states can absorb great amounts of pain without


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Courtesy of Declan Fallon

A few extra jobs for this week and the carryover from the previous weeks

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China Bails Out World’s Largest Maker Of Solar Panels

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Chinese local governments are facing the prospect of major unemployment problems should the swathe of solar panel makers, that have been subsidized from birth to now-near-death, continue to suffer from US and European tariffs (as well as simple gross mis-allocation of capital amid massive over-capacity). However, as is the way of the mal-investing world today, no barrier to rational economic theory is too low for government status-quo maintenance as it would appear that local banks have been strong-armed into extending loans to keep them alive. As Reuters reports, debt-laden (NYSE-traded) SunTech Power Holdings  – which is close to removal from the exchange due to its dismal equity price – has just received new ‘bailout’ loans. First, it was a race to debase. Now, we have the race to bailout the world’s most worthless companies (especially in channel-stuffed industries) as the New Normal trade wars continue.

 

Via Reuters:

Banks in Wuxi, Jiangsu province, have extended new loans totalling 200 million yuan ($31.73 million) to locally headquartered solar power giant Suntech Power Holdings Co Ltd, the Shanghai government-owned China Business News reported on Friday, citing anonymous sources.

 

Suntech, the world’s largest maker of solar panels, whose shares hit a high of $90 in early 2008, runs the risk of being removed from the New York Stock Exchange for failing to keep the average closing price of its shares higher than $1 over the last 30 trading days as of Sept. 10, Suntech said in a statement on Sept. 21.

 

Shares in Suntech, like rivals JA Solar Holdings Co , Trina Solar Ltd and Yingli Green Energy Holding Co, have fallen sharply in the past three years as sales prices have tumbled, squeezed by declining demand in export markets and overcapacity at home.

 

Debt-laden Suntech’s shares have also been hit after it said in July that its partner in a solar development fund might have defrauded it with a bogus collateral pledge of hundreds of millions of euros of German bonds.

 

Local governments that invested heavily in supporting the development of solar power companies in their regions now face the likelihood of big local unemployment problems if those firms collapse. Last week Suntech announced it would lay off around 1,500 people from one of


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On the Cliff

Courtesy of ZeroHedge. View original post here.

Submitted by Bruce Krasting.

 

Absent some earth shaking event between now and November, Obama is going to win, the House will remain in the hands of the Republicans and the Senate will continue to be equally divided. The war between Reds and Blues will be just as bad as it was a year ago. The day after the election, the fight over the fiscal cliff will commence. I expect it will be ugly.

 

-I think there is zero probability that all of the issues now on the cliff will be pushed off to some future period. (Ultimate-can-kicking) Some of the cutbacks/tax increases that are now scheduled, will happen.

 

-I put the odds on falling off the cliff without any compromises at 40%. This scenario comes about if the Reps and Dems can’t agree on anything. If that is the case, we fall very hard on January 2. (No-can-kicking)

 

-Therefore, I see a 60% chance of a compromise that softens the consequences of the fiscal cliff, but does not eliminate it entirely. (Semi-can-kicking, but still kicking ourselves in the face)

 

If there is to be a compromise, it will be interesting to see who gets what, and who gives up what. It might play out with the following results:

 

I) The 2% reduction in FICA taxes is history. As of 1/1/13 every worker is getting hit with a 2% tax increase. This is a very regressive tax increase.

 

 

II) The Bush tax cuts for those making more than $250k are gone. This is a very Progressive tax increase.

 

III) The Bush tax cuts for those making less than $250k will be retained. This “centrist” compromises is the result of the "give" on #s I and II. Both sides will be able to claim that they did their best for “Middle Class Workers”.

 

IV) The Alternative Minimum Tax will be adjusted for inflation and will be fully phased in over a period of three years. This tax will hit 40m taxpayers (up from only 4m today). This is most definitely a middle class tax increase.

 

V) The capital gains tax rate is going to go up to at least 25%.

 

 

The result of I – V is that everyone who works, or has…
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Importance of Patience and Persistence in Trading

Importance of Patience and Persistence in Trading 

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Britain’s Labour leader vows to break up banks

Britain's Labour leader vows to break up banks (via AFP)

Britain's opposition Labour leader Ed Miliband vowed on Sunday to break up the country's biggest banks if his party comes to power at the next general election. Miliband, whose party enjoys a 10-point lead in the latest polls, told the Observer newspaper that Labour would force banks to split their…





Massive Microbial Population Colonized Land 2.75 Billion Years Ago

Massive Microbial Population Colonized Land 2.75 Billion Years Ago (via Planetsave)

New research from the University of Washington is suggesting that the earliest land microbes were probably much more widespread than previously thought, creating oxygen and weathering pyrite, which is an iron sulfide mineral that releases sulfur and molybdenum into the oceans when ‘weathered.’…





Rent or own? The new sharing economy values access over ownership

Rent or own? The new sharing economy values access over ownership (via The Christian Science Monitor)

Lisa Gansky likes to share, and usually with strangers. A typical day for her looks something like this: •She leaves her house in Napa, Calif., at 7:30 a.m. and drives to the ferry, parks her Mini Cooper, and takes the 60-minute ride across the bay to San Francisco. •If it's raining, she'll pull…





Thousands on Paris streets to denounce EU ‘austerity’ pact

Thousands on Paris streets to denounce EU 'austerity' pact (via AFP)

Thousands of left-wing protesters took to the streets of Paris on Sunday to denounce the European Union fiscal pact forcing governments to stick to tough deficit limits. Chanting "Resistance!", protesters marched through central Paris in a rally organisers said was aimed at fighting EU-imposed austerity…





Presenting The World’s Biggest Hedge Fund You Have Never Heard Of

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

The world’s largest hedge fund is not located in the top floor of some shiny, floor-to-ceiling glass clad skyscraper in New York, London, Hong Kong or Shanghai. It isn’t in some sprawling mansion in Greenwich or Stamford which houses a state of the art trading desk behind a crocodile-filled moat. Instead it can be found in tiny, nondescript office in Suite 225 located on 730 Sandhill Road in Reno, Nevada.

That’s not possible” one may say – the world’s largest hedge fund is Ray Dalio’s Bridgewater, which at last check had about $100 billion in AUM (and which has so far had a less than stellar performance in 2012, underperforming the S&P by a substantial margin). Turns out it is: the fund which was at $117.2 billion as of June 30, and which has lately been growing at a pace of about $15 billion per quarter (which would put it at about $130 billion currently), is none other than Braeburn Capital, a Nevada-based asset management corporation.

Who is Braeburn?

Braeburn is a subsidiary of another far more famous company, which since 2006 has had one simple task: manage the cash of the parent company.

At Braeburn’s inception, the cash pile was modest, yet absolutely massive in unlevered terms, at just over $10 billion. Fast forward 6 years, and the massive cash pile has now grown to be epically gargantuan. Of course, the parent company in question is none other than Apple, whose publicly reported cash horde at June 30, 2012 was a whopping $117,221,000,000. This is the AUM of Braeburn.

Any substantial follow up diligence on Braeburn will not reveal much if anything.

CapitalIQ has the following description of the firm: “Braeburn Capital Inc. is the asset management arm of Apple Inc. The firm invests in the public equity markets. Braeburn Capital Inc. was founded in 2006 and is based in Reno, Nevada.” And that’s it – there is no breakdown of which “public equity market” investments Braeburn is invested in, as is to be expected.

Bloomberg provides the following minimalist information:

Some more useful information cn be found in the Nevada Annual Report of tax-filing entities:

  • Entity Name: BRAEBURN CAPITAL, INC.
  • Filing Status: Active    
  • Date Filed: 10/03/2005


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Phil's Favorites

Rogue science strikes again: The case of the first gene-edited babies

 

Rogue science strikes again: The case of the first gene-edited babies

Chinese scientists led by He Jiankui claimed they used CRISPR to modify human embryos that eventually were born as twin girls. AP Photo/Mark Schiefelbein

Courtesy of G. Owen Schaefer, National University of Singapore

The idea of scientists tinkering with the genes of babies was once the provenance of science fiction, but now it’s apparently entered the realm of reality: On Nov. 26, Chinese scientist He Jiankui reported the historic live births of ...



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Zero Hedge

Trump Administration Considering Issuance Of 50, 100-Year Treasuries

Courtesy of ZeroHedge View original post here.

The last time the US was seriously considering issuing ultra-long dated bonds - those with a maturity of 50 and 100 years - was back in late 2016 and early 2017, when yields were near the record lows hit in recent days. As we reported back in November 2016, shortly after Steven Mnuchin was confirmed as US Treasury Secretary, the former Goldman banker proceeded to roil the bond market when he told CNBC he would look at extending the maturity of future Tr...



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Insider Scoop

Heavy Volume Drives Low-Float Stock Plus Therapeutics Up 200%

Courtesy of Benzinga

Plus Therapeutics Inc (NASDAQ: PSTV) is the latest and one of the most extreme recent examples of the powerful combination of low float and heavy trading volume.

Plus shares traded higher by more than 215% on Friday. The biotech stock more than tripled after the company reported ...



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Lee's Free Thinking

Long Term Stock Market Chart Perspective

Courtesy of Lee Adler

After a big day like yesterday, I like to get a little long term stock market chart perspective. (Yes, this stilted verbiage is for search engine optimization ).

We do that with a monthly bar chart, which I update when relevant in Lee Adler’s Technical Trader. That’s in addition to the regular daily bar/cycle charts covering the past year, and a weekly cycle chart covering the past 4 years.

I wrote on July 14, in reference to the price and indicator patterns on the weekly chart:

The market has overshot a 3-4 year cycle projection in terms of both price and time. There are no long term projections. A 4 year cycle high is ideally due now. A 4 ye...



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Kimble Charting Solutions

S&P About To Decline 14%, Catching Up With The Crude Oil Declines?

Courtesy of Chris Kimble

This chart looks at the performance of the S&P 500, Crude Oil and the Yield on the 10-Year note over the past 4-months.

Crude Oil has declined around 14% more than the S&P during this time frame. Yields have declined, even more, around 36%. The is a huge spread between these assets over this short of a time period.

A few importa...



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Chart School

Bitcoin 2019 fractal with Gold 2013

Courtesy of Read the Ticker

Funny how price action patterns repeat, double tops, head and shoulders. These are simply market fractals of supply and demand.

More from RTT Tv

Ref: US Crypto Holders Only Have a Few Days to Reply to the IRS 6173 Letter

Today's news from the US IRS has been blamed for the recent price slump, yet the bitcoin fractal like the gold fractal suggest the market players have set bitcoin up for a slump to $9000 USD long before the IRS news hit the wire.

Get the impression some market players missed out on the b...

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The Technical Traders

Global Central Banks Move To Keep The Party Rolling - Part III

Courtesy of Technical Traders

This section of our multi-part article regarding current and past central bank actions, we are going to attempt to look at key elements of the past and present to highlight what we believe may turn out to be an incredible “setup” in the global markets. 

This setup is almost like a complex chess game where two skilled players battle for control and near the end of the game, one player is left with the King, a Rook, and a Pawn while the other player has a dramatic advantage with stronger chess pieces.  Yet, as the game continues, the weaker player is able to remove one or two of the stronger players key pieces and move his pawn to his opponent’s side to r...



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Digital Currencies

New Zealand Becomes 1st Country To Legalize Payment Of Salaries In Crypto

Courtesy of ZeroHedge View original post here.

Bitcoin and other cryptocurrencies have been on a persistent upswing this year, but they're still pretty volatile. But during a time when even some of the most developed economies in the word are watching their currencies bounce around like the Argentine peso (just take a look at a six-month chart for GBPUSD), New Zealand has decided to take the plunge and become the first country to legalize payment in bitcoin, the FT reports.

The ruling by New Zealand’s tax authority allows salaries and wages to b...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Biotech

DNA testing companies offer telomere testing - but what does it tell you about aging and disease risk?

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

 

DNA testing companies offer telomere testing – but what does it tell you about aging and disease risk?

A telomere age test kit from Telomere Diagnostics Inc. and saliva. collection kit from 23andMe. Anna Hoychuk/Shutterstock.com

Courtesy of Patricia Opresko, University of Pittsburgh and Elise Fouquerel, ...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Promotions

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In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

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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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