Archive for 2012

Bond Market – Phone Home

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

If the U.S. Federal Reserve were a hedge fund, its phones would be ringing off the hook with prospective investors wanting fresh allocations and Ben Bernanke would be zipping around the French Riviera in a gold-plated helicopter.  The Fed’s multibillion-dollar position in Treasuries is nicely in the money with the recent moves to record lows risk-free yields, after all.  But it’s policy outcomes, not returns, that the Fed is after.  By that measure, the current record low payouts in “Safe Haven” bonds (U.S., Germany, U.K, for example) are troublesome.  There is, of course, the worry that they portend a global recession.  This concern cannot be waved away with the notion that a worldwide flight to quality totally upends the bond market’s historical function as a weather-vane of economic expansion and contraction.  Beyond this concern, however, Nic Colas of ConvergEx sees two further worries.  The first is that the Fed has needlessly compromised its independence by pursuing bond purchases that, in hindsight, were unnecessary in the face of the current economic outlook and investment environment.  The second is that interest rates have been demoted to a supporting role in kick starting any global economic recovery.


Movies about aliens usually come during the summer blockbuster season of lightweight entertainment, but the history of this science fiction genre is solidly grounded in the world of social commentary.  That’s the upshot of an article by Laura Miller in a recent edition of the The New Yorker, and it got me thinking about everything from Darwinism to the state of the global capital markets.  She traces the history of fictitious accounts of alien invasions all the way back to 18th French literature; Voltaire wrote of a 6,000 foot alien who comes to Earth simply to examine life here.  After Darwin’s publication of On the Origin of Species in 1859, the story lines change to invasions of deadly creatures from outer space, hungry for either natural resources or human blood.


The landmark book of this version of evil aliens, of course, H.G. Wells War of the Worlds, published in 1898. Made even more famous by Orson Welles’ compelling radio adaptation in 1938, it told of an invasion of Earth that was only defeated when the aliens succumbed to bacterial infections to which they had no defense.  At the…
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Today’s Dow Has Slipped to Fifth Place

Courtesy of Doug Short.

Here is the latest look at the “Sweet Sixteen” Dow recoveries adjusted for inflation/deflation I’ve been illustrating from time to time over the past three years. The charts below compare the current Dow recovery since the March 2009 low with fifteen other major recoveries dating from the origin of this legendary index in 1896. (See the footnote for my selection criteria.)

At this point the Dow is 816 market days beyond the 2009 low. The index has slipped to fifth place in our Sweet Sixteen competition with a real gain of 70.6% off the low. On our last check, on April 23rd, the real Dow was up 83.2% and was in fourth place. The latest close is a nominal gain of 85.1% since the 2009 trough (the interim high being 102.6% on April 2nd). However, since we’re comparing such a diverse set of market eras with such a wide patterns of inflation/deflation, the real numbers provide greater comparative insights.



I find it curiously interesting that the four rallies with higher real gains at the equivalent post-trough point all date from the early history of the Dow, namely, the troughs in 1896, 1903, 1921 and 1932 (see the table below).

Why is inflation adjustment useful for this overlay? Throughout history the cost of living has undergone some dramatic changes, as this chart illustrates. High inflation, such as during the 1974 recovery, gives an exaggerated sense of price growth. Deflation, which accompanied several of the earlier market cycles, makes recoveries appear weaker. By adjusting for the inflationary/deflationary cycles, we get a clearer sense of the real value of the index price across time.

Now let’s extend the time frame. Here is a set of charts with increasing numbers of market days: 500, 1000, 2000, 3000, 4000, and 5000. Depending on the historical period, the number of market days in a year varies slightly. But it rounds out to about 250 market days per year. So the time frames in this series are approximately 2, 4, 8, 12, 16, and 20 years. The series features the 500-day chart with and without…
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Tour De Farce of The Real Employment Charts

Courtesy of Lee Adler of the Wall Street Examiner

Total and Full Time Employment

Updated June 3, 2012

The number of persons employed full time in May rose by 635,000, not seasonally manipulated (from the household survey). That compares with a gain of 774,000 in April 2011.  The average gain in May for the previous 10 years was 797,000. This May’s increase came on the heels of a very poor April which appeared to be a giveback of some of the record gains in March. The March gain of 1.33 million was a record since 2002, and it was multiples of the typical March gain of 289,000. Taking the 3 months from March through May to filter out the weather related gyrations, this year’s gain of 2.05 million was significantly stronger than 2011′s gain of 1.9 million and was well above the prior 10 year average of 1.76 million.

In other words, these numbers were much better than the “sky is falling” headline seasonally adjusted numbers that everyone was moaning and groaning about on Friday. Any time you see that much hysteria over a single data point, it’s usually a good idea to be highly skeptical. Not that any of this has anything to do with stock prices. They may continue lower, but the employment data is not the reason. Fear of the unknown is.

My focus is on full time rather than total employment. Part time jobs are nice, and for many that hold them, they are a lifeline, but the important metric here is full time jobs. Without those, we’re dead. Total employment grew far more than full time jobs, as has been the case throughout this “recovery.”

Full Time and Total Employed Long Term View - Click to enlarge

Full Time and Total Employed Long Term View – Click to enlarge

The chart above  gives some perspective on how far total employment and full time employment fell in the first stage of this depression, and how much they have yet to recover. It’s clear that full time employment is lagging badly.

The seasonally adjusted (SA) fiction is really screwing the pooch this month. Seasonally adjusted numbers frequently veer away from reality by the very nature of the arbitrary seasonal adjustment process. Conomists and the media focus almost entirely on this nonsense, which attempts to compare one fictitious number with another fictitious number to derive a fictitious month to month change. Meanwhile…
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Selling about to pick up speed due to the S&P 500 crossing below its 200 day moving average and key rising support?

Courtesy of Chris Kimble.


Many investors use the 200 SMA as a key line in the sand, per when to enter or exit the market.  The 500 index is now crossing the 200SMA and crossing a rising support line, drawn off the 2009 lows.

A break of both the 200SMA and lsupport at (1) increases the odds that more investors will be willing to sell the S&P 500 in the near future.

Are Low Interest Rates Good?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

In a perfectly succinct follow-up to Last Friday’s Santelli-Kaminsky CNBC-aberration discussion of the now status quo financial repression (low interest rate / QE environment), this two-and-a-half minute clip asks and answers the seemingly simple question of whether low interest rates are good. Borrowing and saving are really about whether to consume more now or later (or more later and less now) and we agree with Professor Antony Davies that these decisions are best left to individuals – and not the nanny-state/Fed. Each person’s judgment of what is best for them is replaced by the Federal reserve’s judgment and the free market interest has become a thing of the past (for now). Lower rates don’t mean more spending; they mean more spending now and less in the future.

Larry Summers Does It Again

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Back in October 2011, our inaugural “Quote of the Week” went to that destroyer of pretty much everything, deep fried twinkies and value most certainly included, Larry Summers:

The central irony of financial crisis is that while it is caused by too much confidence, too much borrowing and lending and too much spending, it can only be resolved with more confidence, more borrowing and lending, and more spending.” Larry Summers, source

It is only fitting that the sequel to what to a large majority of people is the dumbest quote in history, will once again come from Larry Summers:

Rather than focusing on lowering already epically low rates, governments that enjoy such low borrowing costs can improve their creditworthiness by borrowing more not less.“  Larry Summers, source.

3….. 2….. 1….. and #Ref!

Greek Polling Ban In Effect Until Election; Latest Results Show SYRIZA Support at 31.5 percent, Well in the Lead Over New Democracy; Why I expect Syriza to Win

Courtesy of Mish.

The preponderance of recent Greek polls show a tight election. However, the latest Public Issue Survey stands out, and I happen to think that is the most accurate one.

Please consider Going into final stretch, SYRIZA builds poll lead

In the last opinion poll to be published by Kathimerini before the June 17 elections, leftist SYRIZA maintains a clear lead over New Democracy, although short of enough support for a clear parliamentary majority.

According to the Public Issue survey, SYRIZA garners 31.5 percent of the vote, 1.5 more than just a week ago. Support for New Democracy is largely unchanged at 25.5. PASOK has lost 2 percent and falls to 13.5. It is followed by Democratic Left (DIMAR) on 7.5 percent and the weakening Independent Greeks on 5.5. The Communist Party (KKE) also has 5.5 percent, while the neo-Nazi Chrysi Avgi (Golden Dawn) has fallen to 4.5 percent. The liberal alliance of Dimiourgia Xana (Recreate Greece) and Drasi attracts 2.5 percent.

In terms of parliamentary seats, this translates into 134 for SYRIZA, 68 for New Democracy, 36 for PASOK, 20 for DIMAR, 15 for KKE, 15 for Independent Greeks and 12 for Chrysi Avgi. Most would fall slightly if the liberals reach the 3 percent parliamentary threshold.

Most Greeks, however, are not convinced that SYRIZA will win. The poll indicates that 58 percent believes ND will come first and only 34 percent see the leftists triumphing.

Speaking to reporters on Thursday, IMF spokesman Gerry Rice said that the Washington-based fund is willing to listen to “any new ideas” that the next Greek government has with respect to how the fiscal targets agreed as part of the bailout can be achieved more effectively.

Rice also said IMF managing director, Christine Lagarde, regretted recent remarks concerning tax evasion by Greeks and comparing their suffering to children in Niger. “She regrets her remarks were misunderstood and caused offense, that was not her intention.”

What’s Lagarde’s Game?

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Everything is Getting Gummed up in Greece

Courtesy of ZeroHedge. View original post here.

Submitted by testosteronepit.

Wolf Richter

Tourism, Greece’s second largest industry after the shipping industry, and already in a downdraft, is taking another hit as tour-bus drivers will go on strike next week; wage negotiations have deadlocked. Owners demand that drivers take an additional 50% cut in pay and benefits on top of the 20% cut they’ve already suffered.

The National Organization for Healthcare Provision (EOPYY), Greece’s state-owned health insurer, hasn’t paid pharmacists for months and owes them €540 million. In turn, pharmacists are refusing to sell medications to insured patients, including cancer patients, unless they’re paid in cash—and even hospitals are reporting shortages.

Greece’s ship repair and shipbuilding industry, a highly competitive activity in a global market, has collapsed. Over 90% of its union workers are jobless—though Greek shipping companies own 16% of the global merchant fleet, more than any other nation. They’re just not having their ships built and repaired in Greece anymore—whatever the reason, high cost of labor, lack of investment, changing shipping routes, strikes. A sign that there are fundamental problems related to competitiveness that a bailout, no matter how generous, won’t be able to solve.

And yet, President Barak Obama—whose reelection hinges on the US economy, which is wobbling, and on the jobs picture, which remains dismal—blamed European leaders, specifically German leaders, for refusing to bail out Greece and the rest of the tottering Eurozone at taxpayers’ expense, just so he could sail to four more years. Everything in the book, from the loss in US manufacturing jobs to cancelled IPOs, was “attributable to Europe and the cloud that’s coming over from the Atlantic,” he said at a fundraiser in Chicago.

German Chancellor Angela Merkel shrugged off the bullying and just said no to Eurobonds, again. Despised in Germany, they’re seen as an insidious transfer from bleeding German taxpayers to other countries. Instead, her government wants struggling Eurozone countries to overhaul their economies with utmost speed—and Germans are willing to dole out hundreds of billions of euros to make that possible—but it’s proving to be impossible, at least in Greece, and very painful everywhere, to unwind years of an economic gravy train fueled by cheap euro debt. Read…. Germany Walks Away From Greece.

And unpaid bills are now threatening Greece’s electricity supply. State-owned Electricity Market Operator (LAGIE),…
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“We Are Off The 2012 Lows” By About 10 Points

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

While the Dow Jones Industrial Average crossed into negative territory for the year on Friday, E-Mini and the S&P are still “off the lows” of the year (low print was 1259.75 on January 5th). However, if the rapid sell off in the premarket session accelerates, it is possible that we will wipe out all of the 2012 gains in hours if not minutes: December 30, 2011 close was 1252.50. We are now 10 just points higher and closing fast.


Zero Hedge

Auto Shares Surge As Fiat, Renault Confirm Merger Talks

Courtesy of ZeroHedge. View original post here.

With President Trump in Japan for a state visit and most of Europe headed to the polls to vote in the quinquennial EU Parliamentary elections, there was enough news to keep market watchers occupied during what was supposed to be a quiet holiday weekend in the US. 

But on top of these political headlines, on Saturday afternoon, the news broke that Italian-American carmaker Fiat Chrysler had approached France's Renault with a merger proposal that would leave the shareholders of each carmaker with half of the combined company, in a tie-up that would create the world's third-largest au...

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Phil's Favorites

Trump and the problem with pardons


Trump and the problem with pardons

Courtesy of Andrew Bell, Indiana University

As a veteran, I was astonished by the recent news that President Trump may be considering pardons for U.S. military members accused or convicted of war crimes. But as a scholar who studies the U.S. military and combat ethics, I understand even more clearly the harmful long-term impact such pardons can have on the military.

My researc...

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Insider Scoop

Jefferies Sees 60-Percent Upside In Aphria Shares, Says Buy The Dip

Courtesy of Benzinga.

After a red-hot start to 2019, Canadian cannabis producer Aphria Inc (NYSE: APHA) has run out of steam, tumbling more than 31 percent in the past three months.

Despite the recent weakness, one Wall Street analyst said Friday that the stock has 30-percent upside potential. 

The Analyst

Jefferies analyst ... more from Insider

Kimble Charting Solutions

DAX (Germany) About To Send A Bearish Message To The S&P 500?

Courtesy of Chris Kimble.

Is the DAX index from Germany about to send a bearish message to stocks in Europe and the States? Sure could!

This chart looks at the DAX over the past 9-years. It’s spent the majority of the past 8-years inside of rising channel (1), creating a series of higher lows and higher highs.

It looks to have created a “Double Top” as it was kissing the underside of the rising channel last year at (2).

After creating the potential double top, the DAX index has continued to create a series of lower highs, while experiencing a bearish divergence with the S...

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Chart School

Brexit Joke - Cant be serious all the time

Courtesy of Read the Ticker.

Alistair Williams comedian nails it, thank god for good humour! Prime Minister May the negotiator. Not!

Alistair Williams Comedian youtube

This is a classic! ha!

Fundamentals are important, and so is market timing, here at we believe a combination of Gann Angles, ...

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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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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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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


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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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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