Archive for 2012

Guest Post: On Gold, A Cracked Dam, And The Fed’s Small Thumb

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Brian Rogers,

We get some rules to follow
That and this
These and those
No one knows

We get these pills to swallow
How they stick
In your throat
Tastes like gold
-Queens of the Stone Age

Real growth vs. the illusion of growth
Understand the short video below and you will understand what I mean when I say that the United States of America (and the rest of the world for that matter) has not fundamentally grown much at all over the last 40 years. 

We have instead replaced fundamental growth with the illusion of growth brought on by constantly increasing the monetary supply, aka, inflation.

Usually, when a good or service is dramatically increased, it’s price will fall.  Too many cars manufactured?  Prices will fall.  Too many new houses?  Prices will fall.  You get the idea.  Good ol’ laws of supply and demand. 

But laws, especially economic ones, can be broken or at least bent for extended periods of time.  Too many dollars produced?  Rates should rise.  But that didn’t happen.  Quite the opposite.

Despite the dramatic increase in the amount of dollars circulating since 1971, interest rates in the US have fallen.  Exactly the opposite of what the laws of supply and demand tell us should have happened.  How was this possible?

It’s good to be king
The dollar is the world’s reserve currency.  This means that the rest of the world buys and pays for things in dollars rather than their own local currencies.  This situation, brought to us by the winning of World War II and dominating the Bretton Woods Conference, created a convenient and almost constant demand for dollars. 

This constant demand for dollars has somewhat offset the constant creation of new ones.  Not entirely, of course, we have experienced periods of great inflation like 1973-1980, for example.  But the point is, our inflation has generally been much lower than anyone would have expected because the rest of the world has continually lined up to buy more dollars.

This has led to one of the greatest periods of sustained asset price appreciation in human history.  The period of time from 1980 to today is often-times referred to as the 30-year bull market for bonds which is another way of saying that rates have been falling for about 30 years now.

With rates…
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This Is Your Country On Fat: Presenting 14 Years Of Exponential American Obesity

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

A week ago we had the displeasure of reminding America that in 8 years three quarters of the population will be obese. We said that “many forget that a much more serious long term issue for the US (assuming anyone cares what happens in the long run) is a far more ominous secular shift in US population – namely the fact that everyone is getting fatter fast, aka America’s “obesity epidemic.” And according to a just released analysis by BNY ConvergEx’ Nicholas Colas, things are about to get much worse, because as the OECD predicts, by 2020 75% of US the population will be obese. What this implies for the tens of trillions in underfunded healthcare “benefits” in the future is all too clear.” Subsequently, The Atlantic decided to do a follow up on what it titled “The True Cost Of Unwalkable Streets” in which author Kain Benfield says: “Perhaps the single most alarming public health trend in the United States today is the dramatic rise in the number of people who are overweight and obese, bringing serious risks of heart disease, diabetes and other consequences leading to life impairment and premature death. This is bad enough as it is, but I contend that it is particularly unfortunate that we do not sufficiently recognize the extent to which these trends are caused by environmental factors, particularly the shape of our built environment.”

Alas, resorting to the traditional American pastime of assigning meaningless blame when faced with a probem of epic proportions, instead of attempting to proactively resolve it, is about as expected as that of the four people around you, three will be, quite soon, morbidly fat. Because no matter who, why, when or where the obesity epidemic started, it won’t end until the US welfare state is, pardon the pun, sucked dry (see “Welfare – the Great Delusion“). And if ordinary American citizens are shocked by how little Wall Streeters and politicians have changed their behvaiour, they would be speechless if only they looked in the mirror.

So while we don’t have quite the suitable reflective device, here is a chart that should do the trick, coming from the same Atlantic piece. If this doesn’t get one to rush out and scarf down the local (within 10 kcal…
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Guest Post: A Postmortem Of Niall Ferguson’s Otherwise Epic Lecture: Empires On The Edge Of Chaos

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Low Profile

A Postmortem Of Niall Ferguson’s Otherwise Epic Lecture:  Empires On The Edge Of Chaos

 

Niall Ferguson: Empires on the Edge of Chaos from Australian Broadcasting Corporation on FORA.tv

A few words on this IMO must watch lecture – Niall Ferguson: Empires on the Edge of Chaos 

While Fergie is brilliant in his historical analysis, he gets a few niggling points wrong – Which I suspect is in part from having an Anglocentric viewpoint, which leads one to ignore some fairly hushed up (by the MSM) points of the good ‘ol US of A, and in part from his rather British nature of believing in above all else, order, honoring of contracts, rule of law, and other quaint genteel notions of civil society.

 

Point One:  Interest payments as a share of US revenue

Fergie assumes that since China is getting out of US debt and into commodities, the US will have some problem making interest payments.  Given the current state of America exceptionalism lawlessness (MBS, Robosigning, MF Global, etc., etc., ab surdium, ad nauseam)… It should be apparent to anyone paying close attention that in order to solve these problems, the Fed will simply…  Print. 

After all, it’s not like “preserving the value of the currency those treasury bonds you bought” is included anywhere in the fine print or anything.  Given that (as Zerohedge has well documented) contract law in the US is now interpreted to the advantage of the highest political bidder, at this point defaulting on an “unspoken agreement” with a bunch of foreigners is a very low threshold to cross indeed.

Point Two:  Gold investing

Fergie states that 10% of one’s well-heeled portfolio should be held in gold, but no more:  Deflation will keep the price in check.  This ignores the fact that gold does well in deflation as well as inflation, which is because of doubts about the soundness of the currency (debt deflation requires future printing to “make good” on the debt to save the system).  Also, see Point One.

Point Three:  Fear of hyperinflation

Fergie again states that the problem facing the US is not inflation, but deflation.  Again, please kindly refer to Point One.

I fail to see how this ends any…
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A Postmortem Of Niall Ferguson’s Otherwise Epic Lecture: Empires On The Edge Of Chaos

Courtesy of ZeroHedge. View original post here.

Submitted by Low Profile

A Postmortem Of Niall Ferguson's Otherwise Epic Lecture:  Empires On The Edge Of Chaos

Niall Ferguson: Empires on the Edge of Chaos from Australian Broadcasting Corporation on FORA.tv

A few words on this IMO must watch lecture – Niall Ferguson: Empires on the Edge of Chaos

While Fergie is brilliant in his historical analysis, he gets a few niggling points wrong – Which I suspect is in part from having an Anglocentric viewpoint, which leads one to ignore some fairly hushed up (by the MSM) points of the good 'ol US of A, and in part from his rather British nature of believing in above all else, order, honoring of contracts, rule of law, and other quaint genteel notions of civil society. 

Point One:  Interest payments as a share of US revenue

Fergie assumes that since China is getting out of US debt and into commodities, the US will have some problem making interest payments.  Given the current state of America exceptionalism lawlessness (MBS, Robosigning, MF Global, etc., etc., ab surdium, ad nauseam)… It should be apparent to anyone paying close attention that in order to solve these problems, the Fed will simply…  Print. 

After all, it's not like "preserving the value of the currency those treasury bonds you bought" is included anywhere in the fine print or anything.  Given that (as Zerohedge has well documented) contract law in the US is now interpreted to the advantage of the highest political bidder, at this point defaulting on an "unspoken agreement" with a bunch of foreigners is a very low threshold to cross indeed.

Point Two:  Gold investing

Fergie states that 10% of one's well-heeled portfolio should be held in gold, but no more:  Deflation will keep the price in check.  This ignores the fact that gold does well in deflation as well as inflation, which is because of doubts about the soundness of the currency (debt deflation requires future printing to "make good" on the debt to save the system).  Also, see Point One.

Point Three:  Fear of hyperinflation

Fergie again states that the problem facing the US is not inflation, but deflation.  Again, please kindly refer to Point One.

I fail to see how this ends any other way than with a crisis of…
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Fast Forward Through Fiat’s Fantastic Fabrications

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Still confused about the fiat system praised last week so highly by the Chairman, to students from a university named for a person who would do away with the Fed in a heartbeat? The following 3:30 mintue video will explain everything.





Times Three: That’s How Much The BLS Upwardly Fudges Data During An Election Year

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

That the BLS perpetually distorts and manipulates data is no secret and has been reported previously both here and elsewhere numerous times. That the BLS also has a habit of leaking critical market moving data to various entities is also well known. However, we had yet to see just what the BLS is capable of when it comes to fudging and outright slaughtering economic data in a presidential election year. The result is nothing short of a 3 sigma stunner.

John Lohman explains:

It has been well over a year and a half since Zero Hedge first exposed the Department of Labor’s incessant upward revisions to Initial Jobless Claims (here).  As this ridiculous bias continued, it was eventually called out by such  “non-fringe” media sources as CNBC (here).

One might think that, after 18 months of exposure, the almost-as-fast-as-a-blind-and-retarded-turtle statisticians at the BLS would “find” and correct the bias.  Alas, one would be wrong.  Not only does the bias continue, it’s getting worse.  Much worse.  As illustrated in the chart below, 2012 year-to-date revisions are running 3x the long-term average.

Indeed, the most recent revision was the fourth largest on record.  If one only read the headlines this year (at such blogs that specialize in architectural billings, deliveries by canoe, and what not), one would have the impression that Initial Claims have fallen nearly 25,000 this year.  The revised reality? Barely over 10,000.  And that’s a 10,000 improvement against a number that has been revised upward by 50,000.  So, yeah.






World Markets Weekend Review: A Snapshot of the First Quarter

Courtesy of Doug Short.

The 2012 worldwide rally went on hold last week. Five of the eight indexes in our basket finishing with a weekly loss, with the average of the eight at -0.77%. At least this is a less negative average than the previous week’s -1.88%. For the second week in a row, the S&P 500 finished in the top spot, but this week with gain of 0.81%, an improvement over the 0.50% loss the previous week. The Nikkei finished second with a 0.72% gain and the SENSEX was the other index with a positive weekly gain, a fractional 0.24%. The Shanghai Composite was the week’s biggest loser, with a loss of 3.69%. And the bloom remains off the rose in Europe with the DAXK, FTSE, and CAC 40 all finishing in the red.

Despite the selloff over the past two weeks, the adjacent table of the 2012 first quarter shows some remarkable performance. The Nikkei’s quarterly gain of 19.27% is tops the list and is the best quarter since its 22.80% gain in Q2 of 2009. The S&P 500′s 12.00% gain, touted by the financial press as its best quarter since 1998, is in the middle of the pack, snuggled between the SENSEX and Hang Seng. The Shanghai comes in last, but even its 2.88% quarterly advance would produce a healthy 11.52% annualized gain.

A Closer Look at the Last Four Weeks

The tables below provide a concise overview of performance comparisons over the past four weeks for these eight major indexes. I’ve also included the average for each week so that we can evaluate the performance of a specific index relative to the overall mean and better understand weekly volatility. The colors for each index name help us visualize the comparative performance over time.

The chart below illustrates the comparative performance of World Markets since March 9, 2009. The start date is arbitrary: The S&P 500, CAC 40 and BSE SENSEX hit their lows on March 9th, the Nikkei 225 on March 10th, the DAX on March 6th, the FTSE on March 3rd, the Shanghai Composite on November 4, 2008, and the Hang Seng even earlier on October 27, 2008. However, by aligning on the same day and measuring the percent change, we get a better sense of the…
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Weekly Market Commentary: Mixed Bag

Courtesy of Declan Fallon

It was a bit of a confusing week for indices.  In general, there were gains across the indices which honored prior bullish channels, but market breadth was more mixed.

The Nasdaq continued to be contained by channel resistance, although it finished off the week’s high and back where it started on Monday.  Volume climbed to register as accumulation and technicals remain in good shape. The index looks destined to pull back at some point in the very near future, perhaps coming back as far as 2,900, but it hasn’t indicated this yet.

The conflict is in Nasdaq Market Breadth. The Nasdaq Bullish Percents look to be rolling out from a swing high, which is bullish.

But the Percentage of Nasdaq Stocks above the 50-day MA has suggested a swing low may not be complete and further weakness is likely (for the Nasdaq).

The Nasdaq Summation Index is caught in the middle, weakening on the week, but not enough to kill the developing swing low which will help bulls.

The S&P inched higher on lower volume, but has room to resistance (unlike the Nasdaq)

Small Caps finished modestly higher but has yet to cleanly clear 830 resistance

Bulls hold the edge but should Nasdaq Market Breadth takes a larger swing lower it will bring an end to the rally – at least until Market Breadth reaches an oversold condition.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed


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Is it Really as Simple as Don’t Fight the Fed?

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

This chart from Yardeni Research is a few weeks old but the market has mostly gone sideways to slighty up since up since; I’ve seen some updated charts since which essentially are identical.  It raises the question of do we simply not fight the Fed during their unconvential actions.  Below we see the stock market action in blue shade during QE1, QE2 (please note the vertical line that designates when Bernanke gave the “all clear for QE2″ signal at Jackson Hole, WY in August 2010), and Operation Twist.  When those operations were not in full swing the market fell from 9-11%.  That contrasts with double digit gains of anywhere from ~15 to 35% when the Fed is easing.  Is it really that simple?

If the answer is yes – that leads us to the next comment. In 2011 the market begin weakening around this time as the door on QE2 was closing with no new program in sight. Contrast this to 2012 where talk of ‘sterlized bond buying’ and a Fed who refuses to refute these ideas even in light of “improving economic data”. So as Operation Twist ends in June, and talk of sterlized bond buying to replace it happens, will back half of 2012 just be “that easy”? And does April-May… the only period the market may doubt a new easing program is coming down the pike, represent the only time this year the market “would be allowed” to correct?  Or does the handoff of Operation Twist to an new easing program immediately meaning all we get is “blue shade” in 2012?  Food for thought.

Disclosure Notice

Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog





 
 
 

Phil's Favorites

Congress is considering privacy legislation - be afraid

 

Congress is considering privacy legislation – be afraid

Courtesy of Jeff Sovern, St. John's University

Supreme Court Justice Louis Brandeis called privacy the “right to be let alone.” Perhaps Congress should give states trying to protect consumer data the same right.

For years, a gridlocked Congress ignored privacy, apart from occasionally scolding companies such as Equifax and Marriott after their major data breaches. In its absence, ...



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Zero Hedge

Key Events This Week: Trade War, EU Elections, Durables, PMIs And Fed Minutes

Courtesy of ZeroHedge

Looking at this week's key events, Deutsche Bank's Craig Nicol writes that while the unpredictable nature of US-China trade developments will likely continue to be the main focus for markets again next week, we also have the European Parliament elections circus to look forward to as well as various survey reports including the flash May PMIs which may offer some insight into the impact of trade escalation on economic data. The FOMC and ECB meeting minutes are also due, along with a heavy calendar of Fed officials speaking.

The European Parliament elections will kick off next Thursday with voting continuing into the weekend across the continent, with results expected on Sunday. With the elections surrounded by internal and external challenges for the EU, members di...



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Kimble Charting Solutions

Will S&P 500 Double Top Derail The Rally?

Courtesy of Chris Kimble.

The rally off the December stock market lows has been strong, to say the least. The S&P 500 rallied 25 percent before hitting and testing the 2018 high.

The old highs proved to be formidable resistance and ushered in some volatility in May… and a 5 percent pullback.

In today’s 2-pack, we look at that resistance level – could that be a double top? We can see similar patterns develop on the S&P 500 Index and its Equal Weight counterpart.

Both indexes are testing short-term Fibonacci retracement levels of the recent decline at point (2).

What takes place here after potential double top highs will be important. Stay tuned...



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Insider Scoop

60 Biggest Movers From Friday

Courtesy of Benzinga.

Gainers
  • Fastly, Inc. (NYSE: FSLY) shares jumped 50 percent to close at $23.99 on Friday. Fastly priced its 11.25 million share IPO at $16 per share.
  • Outlook Therapeutics, Inc. (NASDAQ: OTLK) shares climbed 37.3 percent to close at $2.10 on Friday after the stock rose over 68 percent Thursday following an Oppenheimer initiation at Outperform with a price target of $12.
  • Cray Inc. (NASDAQ: CRAY) shares rose 22.5 percent to close at $36.52 after Hewlett Packard Enterpri...


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Chart School

Weekly Market Recap May 18, 2019

Courtesy of Blain.

China – U.S. trade talk continued to dominate the week.   A heavy selloff Monday was followed by 3 up days, with Friday moderately down.

On Monday, Chinese officials announced retaliatory tariffs against the U.S., hitting $60 billion in annual exports to China with new or expanded duties that could reach 25%.

Then on Wednesday:

The Trump administration plans to delay a decision on instituting new tariffs on car and auto part imports for up to six months, according to media reports.

...

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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control

 

Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...



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Biotech

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

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

 

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

A map of DNA with the double helix colored blue, the landmarks in green, and the start points for copying the molecule in red. David Gilbert/Kyle Klein, CC BY-ND

Courtesy of David M. Gilbert, Florida State University

...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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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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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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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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