Archive for 2012

Euro Crisis and The Coming NWO

Courtesy of ZeroHedge. View original post here.

Submitted by EconMatters.

By EconMatters

Citing “Central banks are being cornered into prolonging monetary stimulus as governments drag their feet and adjustment is delayed”, the BIS (Bank for International Settlements) on Sunday, June 24 endorsed the proposals of forming a single banking union for the Euro Zone to “buy time” in the short term. 

 

After the election of a pro-bailout government in Greece, the markets now have shifted focus towards the two-day European Union (EU) summit later this week on June 28/29.  At a meeting in Rome, leaders from Germany, Spain, France and Italy agreed to press for a €130 billion ($163 billion) plan at the summit.

 

As we previously predicted, the $125-billion ‘Spailout’ did not give markets much comfort.  Despite the massive bank bailout, rating agencies are still busy downgrading major global banks.  Spain government 10-year bond yield shot up above 7.3%, and Euro-era high, before dropping to 6.4% last Friday on the hopes that European policymakers are moving towards a resolution for the euro sovereign debt crisis.    

Italy’s borrowing cost also officially crossed the 6% mark, before settling at around 5.8% on Friday.  Typically, economists see anything over 6% as unsustainable in the long term.  So now Italy has become a serious euro bailout contender.  Italy does not have as bad  the spending deficit problem as Greece, and its banks are in a better shape than Spain’s.  But the country could have problem serving its €2 trillion of debt (about 109% of GDP) as it has to borrow €35 billion a month.  The bottom line remains that there simply isn’t enough money under current bail-out arrangements to rescue Italy when the time comes. 


Graphic Source: BBC


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Regression to Trend: A Perspective on Long-Term Market Performance

Courtesy of Doug Short.

About the only certainty in the stock market is that, over the long haul, over performance turns into under performance and vice versa. Is there a pattern to this movement? Let’s apply some simple regression analysis (see footnote below) to the question.

Below is a chart of the S&P Composite stretching back to 1871 based on the real (inflation-adjusted) monthly average of daily closes. I’ve using a semi-log scale to equalize vertical distances for the same percentage change regardless of the index price range.

The regression trendline drawn through the data clarifies the secular pattern of variance from the trend — those multi-year periods when the market trades above and below trend. That regression slope, incidentally, represents an annualized growth rate of 1.72%.

 

 

The peak in 2000 marked an unprecedented 155% overshooting of the trend — nearly double the overshoot in 1929. The index had been above trend for two decades, with one exception: it dipped about 10% below trend briefly in March of 2009. But at the beginning of June 2012, it is 38% above trend, down from 40% at the end of the previous month. In sharp contrast, the major troughs of the past saw declines in excess of 50% below the trend. If the current S&P 500 were sitting squarely on the regression, it would be around the 954 level. If the index should decline over the next few years to a level comparable to previous major bottoms, it would fall to the mid-400s.


Footnote on Calculating Regression: The regressions on the Excel charts above are exponential regressions to match the logarithmic vertical axis. I used the Excel Growth function to draw the lines. The percentages above and below the regression are the calculated as the real average of daily closes for the month in question divided by the Growth function value for that month minus 1. For example, the monthly average of daily closes for June was 1323.48. The Growth function value for the month was 956.57. Thus, the former divided by the latter minus 1 equals 38.4%, which I rounded to 38%.

Footnote on the S&P Composite: For readers unfamiliar with this index, see this article for some background information.

 

 

 

 

 

 





Nightmare on Wall Street: This Secular Bear Has Only Just Begun

Courtesy of Doug Short.

Secular bull markets are great parties. Investors arrive from secular bears really wanting to take the edge off. As the bull proceeds, above-average returns become intoxicating. By the time it is over, the past decade or two has delivered bountiful returns.

In contrast, secular bears seem like hangovers. They are awakenings that strip away the intoxication, leaving a sobering need for an understanding of what has happened.

Conventional wisdom explains these periods as irrational or coincidental periods. In reality, secular bulls and bears are periods driven by longer-term trends in the inflation rate. A trend away from low inflation, whether to high inflation or deflation, drives the value of the market lower. That leaves investors with below-average returns. The return trip ? when the inflation rate trends toward low inflation ? drives the value of the market higher. That provides investors with above-average returns.

Then there was the “party” in the late 1990s! Intoxication!! Can you imagine a party so extreme that you end the next day feeling just as groggy as when you first woke up? A long, long day of frustration and misery? That day was the past decade. In stock market terms, it has been twelve years of pain that just now brings investors to the starting line.

Wake-up…this must be a nightmare.

Oh no, it’s not!!!

This is a moment of consternation ? an eerie tension between hope and fear. You find yourself saying, “It’s not fair… It doesn’t seem right… Secular bear markets average eleven years, don’t they? Isn’t this one supposed to be over by now? Some pundits are saying there might be just a few more years left in this nasty old bear… What do you mean this secular bear has only just begun?” We’ll get to that in a moment; but for now, please step back from the edge.

Even if a big bull is not around the corner, there’s plenty of opportunity. In fact, it’s conditions like these that provide the greatest potential for astute investors. First, they must understand the environment. Then, investors can use that knowledge to their advantage. This discussion is about the first part ? understanding. The upcoming charts will explain why we are actually early in the current secular bear and how we got here. There are many other resources for the second part ? what to do about…
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Weighing the Week Ahead: Time for Some Surprises?

Courtesy of Doug Short.

When nearly everything you see or read seems to carry the same message, it is time to take a deeper look. The mainstream thought now seems to include an obligatory nod to the “mess in Europe” featuring their clueless leaders, the fiscal cliff, the recessionary US economy, and the upcoming hard landing in China.

Wow! It does not take much to convince the punditry that investors should all step aside until after the election.

It is reminiscent of early 2009, when everyone searched to explain relentless selling in the absence of any fresh news. I started writing a four-part series and only finished three before things changed.

When it is least expected, something might go right.

I’ll offer some more thoughts on this in the conclusion, but first let’s do our regular review of the events and data from last week.

Background on “Weighing the Week Ahead”

There are many good sources for a list of upcoming events. With foreign markets setting the tone for US trading on many days, I especially like the comprehensive calendar from Forexpros. There is also helpful descriptive and historical information on each item.

In contrast, I highlight a smaller group of events. My theme is an expert guess about what we will be watching on TV and reading in the mainstream media. It is a focus on what I think is important for my trading and client portfolios.

This is unlike my other articles at “A Dash” where I develop a focused, logical argument with supporting data on a single theme. Here I am simply sharing my conclusions. Sometimes these are topics that I have already written about, and others are on my agenda. I am putting the news in context.

Readers often disagree with my conclusions. Do not be bashful. Join in and comment about what we should expect in the days ahead. This weekly piece emphasizes my opinions about what is really important and how to put the news in context. I have had great success with my approach, but feel free to disagree. That is what makes a market!

Last Week’s Data

Each week I break down events into good and bad. Often there is “ugly” and on rare occasion something really good. My working definition of “good” has two components:

  1. The news is market-friendly. Our personal policy preferences


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Mainstream Media Headline Silliness

Courtesy of Mish.

I am frequently amused by mainstream media news headlines that come across my screen.

For example, here are three consecutive headlines on Bloomberg in the span of 13 minutes that will show the silliness of it all.

  1. At 8:40 Bloomberg reported Japanese Stocks Advance on Optimism for Euro Growth.
  2. At 8:53 Bloomberg reported Japan Stocks Swing From Gains to Losses on Euro Growth Plan
  3. At 8:53 Bloomberg reported Asia Stocks Decline as Investors Await European Meeting

At a bare minimum someone is too glued to the screen.

Last Sunday, I admit I was glued to the screen following the Greek election (as was nearly every blogger). However, this moment-to-moment silliness is an every minute affair for Bloomberg.

Is it really necessary to update everyone the moment stocks in Japan, the US, Europe, and everywhere else switch from gains to losses?

Apparently they think it is, or they wouldn’t do it.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List



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Mainstream Media Headline Silliness

Courtesy of Mish.

I am frequently amused by mainstream media news headlines that come across my screen.

For example, here are three consecutive headlines on Bloomberg in the span of 13 minutes that will show the silliness of it all.

  1. At 8:40 Bloomberg reported Japanese Stocks Advance on Optimism for Euro Growth.
  2. At 8:53 Bloomberg reported Japan Stocks Swing From Gains to Losses on Euro Growth Plan
  3. At 8:53 Bloomberg reported Asia Stocks Decline as Investors Await European Meeting

At a bare minimum someone is too glued to the screen.

Last Sunday, I admit I was glued to the screen following the Greek election (as was nearly every blogger). However, this moment-to-moment silliness is an every minute affair for Bloomberg.

Is it really necessary to update everyone the moment stocks in Japan, the US, Europe, and everywhere else switch from gains to losses?

Apparently they think it is, or they wouldn’t do it.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List



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Daddy’s Home

Daddy’s Home 

Courtesy of John Mauldin at Thoughts from the Frontline

I have often said that when someone is appointed to be a member of the Federal Reserve, they are taken into a back room and given a complete DNA change. They simply are not like you and me once they step out of that room, with the exception of Fisher and Lacker and a few colleagues who seem to be able to resist the infection. This week we will look at the recent action of the Fed and use that as a springboard to think about how effective Fed policy can be in an age of deleveraging. And if there is time, we simply must look at Europe. I started this letter in Texas and will finish it this morning in Spain.

But first, and quickly, most of you are aware of my annual Strategic Investment Conference, co-sponsored with my partner, Altegris, which we held last month. This year's David Rosenberg (and many attendees!) said this was the best conference ever, featuring a lineup of world-class economic and financial leaders. Our very enthusiastic attendees created a room full of energy that the speakers seemed to feed off of, and everyone brought their "A" game. It really was quite special. And now we have the videos.

For those of you who are members of my special program for accredited investors, called the Mauldin Circle, you can access the conference videos by going to the "My Information" section at the bottom of your personal home page, when you log into www.altegris.com. I can't think of a better way to sharpen your investment outlook than to partake of some of the best minds in the world, including Dr. Lacy Hunt, Niall Ferguson, David Rosenberg, Jeffrey Gundlach, Mohamed El-Erian … and even your humble analyst.

In order to view the videos, you must be a member of the Mauldin Circle. This program has replaced our Accredited Investor Newsletter Program. My partner Altegris and I have worked hard to enhance the program, which now includes access to webinars, conferences, special events, videos, accredited newsletters, and presentations featuring alternative investment managers and other thought leaders and influencers.

The good news is that this program is completely free. The only restriction is that, because of securities regulations, you have to register and be vetted by one of my trusted partners, which in the United States is…
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Fishy Economic Data and the China Crash

Courtesy of ZeroHedge. View original post here.

Submitted by testosteronepit.

Wolf Richter   www.testosteronepit.com

An unrelenting, horrid wave of scandals about toxic ingredients in foods and medicines in China shows that regulators are unwilling and incapable of controlling it. It also shows a penchant—some evil tongues say it’s cultural—for pandemic cheating in order to get ahead in some way. And Chinese economic data falls into that category.

Every country has its own bureaucratic madness in pursuing obfuscation. In the US, one of the hardest things to get is a truthful, or at least a somewhat realistic, or at the very least a not totally fabricated unemployment and jobs number. But at least, the Bureau of Labor Statistics issues a slew of supplemental data. So, in addition to the nearly worthless headline numbers that media and politicians wave in proclaiming victory, we get numbers that point at deeper fissures [for a fun head-butting on this issue, read Yves Smith’s post].

But in China, the art of data manipulation is such that even the government might not know the true status of the economy. Officials even at the local level are rewarded, promoted, or demoted, based on achieving their economic quotas as measured by tax receipts, business revenues, real estate developments, and so on. Hence, the incentive to fudge the numbers on an individual basis is high. According to the New York Times, “The officials do so by urging businesses to keep separate sets of books, showing improving business results and tax payments that do not exist.”

As the fudged numbers flow upward and are consolidated, they aggregate into a fudged whole, inflating GDP by 1 to 2 percentage points. But it might be a lot worse, and sometimes it’s just the way it’s counted.

Auto sales, for example. A crucial economic data set. But the way they’re reported, even if they were accurate, make them useless for estimating the health of the auto industry or the consumer. In May, they jumped 23%, higher than analysts had expected. The media drooled. Toyota and Honda nearly doubled their sales. Ford pushed 23% more units out, GM 21%. BMW sales soared 32%. Everything was simply outstanding.

Alas, they’re wholesales to distributors, not to consumers. In the US, auto sales are based on sales by dealers to retail and commercial customers. In Europe, they’re based on new…
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Bill Buckler On Keynesian Religion As World War… And The One “Good” Thing About It

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Courtesy of Bill Buckler, author of The Privateer

If It Doesn’t Work – Keep Trying It Until It Does:

Those running the big investment banks and trading floors today bear an uncanny resemblance to the generals on both sides of the conflict in WWI. There is an old military saying about the folly of fighting the “next” war by the methods of the last war. In modern times, the best illustration of the truth of that adage is what happened on the Western Front between 1914 and 1918.

When 1914 dawned, Europe had not seen a continental war for a century. Most of the generals and the vast majority of their political masters on both sides had not noticed that the years since the Battle of Waterloo in 1815 had seen what was and remains the greatest technological revolution in the history of the world. Both sides had seen the US Civil War of 1861-65, a war which proved beyond all shadow of a doubt that a frontal assault on an established defensive position was almost guaranteed to fail. Both sides completely ignored the lesson. The literal “cannon fodder” on both sides paid a gruesome price.

The result of this stubborn ignorance, as the history books so voluminously recount, was the antithesis of “bliss”. It was mass carnage. When an attack by 50,000 men proved impotent to the task, the numbers were raised to 100,000 and then 250,000. When an hour of preliminary shelling of the target proved insufficient, it was raised to an entire morning and then to a day and then to the best part of a week. The “big” battalions got bigger and Bigger and BIGGER. The trenches proliferated. The barbed wire proliferated. The casualties proliferated. The destruction proliferated.

The men on the firing line on both sides quickly realised the futility of what those who commanded them were attempting to do. But there was no escape for them. They died in their millions while the generals and the politicians clung tenaciously to the goal of trying to make the unworkable “work”. Any suggestion of a deviation from the frontal assault was fiercely resisted. On the few occasions when it was actually tried, such as the Cambrai offensive with its use of tanks and no preliminary bombardment, it was done over…
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AOL to Announce Share Buyback This Week -AllThingsD

Courtesy of Benzinga.

AOL (NYSE: AOL) will announce a share buyback this week according to AllThingsD. Sources tell the tech blog that its billion-dollar windfall from its patent portfolio deal with Microsoft (NASDAQ: MSFT) will be used to finance the purchases.

For more Benzinga, visit Benzinga Professional Service, Value Investor, and Stocks Under $5.






 
 
 

ValueWalk

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

By Jacob Wolinsky. Originally published at ValueWalk.

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

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



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Zero Hedge

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

Courtesy of ZeroHedge. View original post here.

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

Several doctors from Hopkins an...



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Phil's Favorites

Divisive economics

 

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



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Kimble Charting Solutions

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

Courtesy of Chris Kimble.

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

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

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

If you find long-term perspectives helpf...



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Digital Currencies

Transparency and privacy: Empowering people through blockchain

 

Transparency and privacy: Empowering people through blockchain

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

Courtesy of Ajay Kumar Shrestha, University of Saskatchewan

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

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



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Insider Scoop

Cars.com Explores Strategic Alternatives, Analyst Sees Possible Sale Price Around $30 Per Share

Courtesy of Benzinga.

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

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Chart School

Weekly Market Recap Jan 13, 2019

Courtesy of Blain.

In last week’s recap we asked:  “Has the Fed solved all the market’s problems in 1 speech?”

Thus far the market says yes!  As Guns n Roses preached – all we need is a little “patience”.  Four up days followed by a nominal down day Friday had the market following it’s normal pattern the past nearly 30 years – jumping whenever the Federal Reserve hints (or essentially says outright) it is here for the markets.   And in case you missed it the prior Friday, Chairman Powell came back out Thursday to reiterate the news – so…so… so… patient!

Fed Chairman Jerome Powell reinforced that message Thursday during a discussion at the Economic Club of Washington where he said that the central bank will be “fle...



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Members' Corner

Why Trump Can't Learn

 

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

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...



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Biotech

Opening Pandora's Box: Gene editing and its consequences

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

 

Opening Pandora's Box: Gene editing and its consequences

Bacteriophage viruses infecting bacterial cells , Bacterial viruses. from www.shutterstock.com

Courtesy of John Bergeron, McGill University

Today, the scientific community is aghast at the prospect of gene editing to create “designer” humans. Gene editing may be of greater consequence than climate change, or even the consequences of unleashing the energy of the atom.

...

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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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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:

 

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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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