Archive for 2012

3 Months After The MF Global Bankruptcy, We Find That $1.2 Billion (Or More) In Client Money Has “Vaporized”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

On the three month bankruptcy anniversary of the company whose rehypothecation gimmicks will one day be seen as a harbinger of everything that is  broken with the multi-trillion ponzi system, but not just yet despite loud warnings otherwise, we are getting close to a final verdict of where the $1.2 billion (and possibly more as originally predicted by Zero Hedge – see below) in commingled client money may have gone. Note the use of the passive voice because using the active, as in money that MF Global executives stole from clients, is prohibited in a legal system in which nobody goes to jail for something as modest as $1.2 billion in theft. That verdict? “Vaporized.” No really (and yes, in the passive voice of course). From the WSJ: “As the sprawling probe that includes regulators, criminal and congressional investigators, and court-appointed trustees grinds on, the findings so far suggest that a “significant amount” of the money could have “vaporized” as a result of chaotic trading at MF Global during the week before the company’s Oct. 31 bankruptcy filing, said a person close to the investigation.” Uh huh… Because money simply vaporizes. Which means one of two things: i) the “vaporization” is merely the phrase that so called investigators use to avoid the far more troubling sounding “stolen” as it would imply guilt, something which the former NJ governor and Goldman CEO (and not to mention JP Morgan which most likely was on the receiving end of the $1.2 billion + transaction) will, under guidance from counsel, sternly disagree with, or ii) the capital markets are such an unprecedented and manipulated fraud, that nobody has any clue at any moment, where any client money is, and that any residual capital still “invested” in mythical representations of “assets”, which are likely rehypothecated so many times, that not even Bank of America’s robosigning division would have a clue where to start unraveling, will promptly be converted into tangible manifestations of capital. So when someone asks what happened to stock market volume, and to investor confidence in the “stock market” feel free to use just that phrase: “it vaporized.”

WSJ “explains” how $1.2 billion “vaporized”

Many officials now believe certain employees at MF Global dipped into the “customer segregated account”


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ACTA: “Would Usurp Congressional Authority”, “Threatens Numerous Public Interests”, a “Backroom Special Interest Deal”

Courtesy of ZeroHedge. View original post here.

Submitted by George Washington.

By Washington’s Blog

SOPA, PIPA, ACTA … WHAT’S NEXT?

We just beat back SOPA and PIPA with the web blackout.

Now everyone is talking about ACTA. But – because ACTA is complicated, and is just starting to receive coverage – most are not sure exactly what ACTA really is, or why we should be concerned about it.

We’ll give you an executive summary of what you need to know.

Instead of giving you the specifics about what’s actually in the bill (we provide links at the end for those who want to know), we’ll explain why the procedure used is a recipe for disaster.

Why are we stressing procedure over substance?

Because, as awful as ACTA is, there are other horrible bills such as the Trans Pacific Partnership Agreement waiting in the wings … which may be even worse than ACTA.

Unless we understand the rotten, anti-democratic process which is causing these bad bills to be introduced, we will be caught off-guard by the introduction of one draconian bill after another … and we will lose the fight for Internet freedom.

(The problem is that powerful men are making laws in secret to protect their interests.)

HOLLYWOOD TRIES TO RAM U.S. IP POLICIES DOWN THE THROAT OF EUROPE

On the most superficial level, ACTA is an attempt to ram American intellectual property policies down Europe’s throat.

As the Electronic Frontier Foundation’s Eva Galperin told me:

The United States will continue to use multi-national treaties negotiated in secret without the consultation of civil society or other key stakeholders as a way of ramming US IP policy down the throats of other countries.

But this is a superficial analysis. Specifically, it is also an attempt to ram Hollywood’s interests down the throats of the American people … and Congress.

A HANDFUL OF POWERFUL MEN ARE TRYING TO RAILROAD DEMOCRACY AND THE CONSTITUTION TO PROTECT THEIR INTERESTS

The fastest way to understand ACTA is to look at the way in which its backers have tried to trample the normal democratic processes in the U.S., Europe and elsewhere in order to railroad it through.

As an international treaty, ACTA is supposed to…
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Guest Post: The Banker Tax

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Tim McCormick. Tim trades bonds in Texas

The Banker Tax

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

Henry Ford

Is it ok with you if we starve poor people to bail out Citibank again? Will you stand by and do nothing while seniors struggle to afford heating oil just to keep Bank of America solvent? The fundamental structure of our monetary system creates a multifaceted regressive tax. Only when we come to view this complex confiscation of wealth as a tax, will we be able to summon the political force to defeat it.

Nobody likes to pay taxes, but some taxes are more treacherous than others. An open and simple tax can be opposed because it is vulnerable to “sound-bite politics”. The worst taxes are hidden by the complexity of their indirectness. Hidden regressive taxes imposed without the representation of the payer are most unjust. We are now paying a banker tax or subsidy. It is hidden, it is regressive and we have little political control over it.

This banker tax is the hidden consequence of the many policies we employ to support an uneconomic level of credit. First, central banks try to manage our economies by fixing the price of credit and by printing money through quantitative easing. Second, this banker tax is made larger by the misguided policy of our governments subsidizing credit by bailing out private banks. Third is all of our tax policies creating an above market level of leverage. And fourth is all the various government agencies created to promote an extra-normal amount of credit.

Credit is just another resource for the production of goods or services. There is nothing magic about it. It is most efficiently allocated by the supply and demand pricing mechanism of a free market. We don’t fix the price of equity capital, labor or raw materials because we know price fixing allocates resources inefficiently. Fixing a price to low creates shortages, and fixing a price to high creates a glut. Having a central bank impose an artificial price and quantity of credit is not in the public interest. It is only in the…
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SocGen Answers: “Is Greece Unique?”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Greece is now yesterday’s news. The only question is if, and when, Portugal will follow in the Greek footsteps. SocGen explains, answering key “client questions.”

From Michala Marcussen:

Will Portugal follow Greece? Portuguese bond yields have increased on the back of downgrades and fears that Portugal will follow in the footsteps of Greece. Under the current EU/IMF program, Portugal is due to return to market funding in 2013. For this to become realistic, 10-year bond yields would have to decline substantially from the current level of 15.1%. In our opinion, the Portuguese government will bite the bullet and deliver deep reaching structural reform and austerity in 2012. The risk, however, is that even a successful program may not be enough to secure a sufficient decline in bond yields. That would leave only two options (1) a second official package or (2) PSI. A firm  commitment from euro area policymakers that Portugal will not see PSI and, if necessary, funds would be made available would clearly be helpful and push bond yields lower (and thus reduce the risk that an official second package would be needed!). MARKET ISSUES: The ECB warned on the dangers of Greek PSI and have been proven correct. Until clear commitment is given by euro area policymakers on Portugal, market nerves are likely to remain on edge.

As a reminder, as both Zero Hedge, and subsequently Mistubishi UFJ warned, Portuguese bonds issued under UK law represent a far greater amount of the total notional outstanding than in the case of Greece, making a simple CAC stripping virtually impossible. And since the “UK bonds” have a negative pledge, option (1) the “official package” become next to impossible, as numerous bonds have a “negative pledge” covenant making priming loans (aka a Troika DIP) next to impossible. Good luck providing Portugal with incremental capital, if the collateral has to be allocated pro rata to the entire existing balance sheet. Alas, this most critical question was not answered by SocGen, which simply means that its “clients” have no idea what the right questions even are…

They’ll find out soon enough.





Key Events In The Coming Week

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

In addition to telling everyone to short the euro and go long the dollar (wink) Goldman Sachs is kind enough to summarize what the recurring Eurocentric rumor-based headlines of the coming week will be.

From Goldman Sachs

This past week brought a powerful reminder to the markets of just how dovish key players at the Fed remain, with the FOMC statement essentially doubling the conditional commitment period for the Fed Funds target range and Chairman Bernanke sounding quite open to further unconventional policies if the recovery remains weak. The advanced Q4 GDP print on Friday played into a weak recovery, with a strong contribution to growth from inventories casting doubt over the strength of growth in Q1.

With the Fed once again signaling its dovish stance, and with overall FX positioning remaining very close to max long USD on our metrics, the dominant theme for the week continued to be a recovery in high-beta currencies against USD, a theme that has prevailed since the start of the year (Figure 1). Even with the recent rebound in high-beta FX, many of these currencies remain significantly weaker than their mid-2011 levels (Figure 2), so that there is certainly plenty of room for the recent rally to continue. In the wake of the FOMC, and with relatively positive developments in Europe ahead of this Monday’s EU Heads of State summit, we are very much in this camp, and recommended three tactical USD shorts this week against EUR, CAD, and MXN.

The week ahead starts with the EU Heads of State Summit, where discussions will be focused on finalizing negotiations around the fiscal compact, where we think important progress has been made, not least by allowing individual countries to police each other’s budget policies. Attention will also be squarely focused on Greece, where negotiations over PSI continue, in addition to negotiations between the Troika and the government. The IMF mission is scheduled to remain in Athens at least through Friday. The week also brings important bond auctions, starting with Italy on Monday (at 5- and 10-year tenors), followed by France and Spain on Thursday. Outside of Europe, key data include the slew of global PMI’s on Wednesday. Consensus sees China’s PMI slipping below the 50 threshold in January. We are slightly more cautious than consensus on the ISM,…
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Germany Frets As Bailouts And Risks Balloon

Courtesy of ZeroHedge. View original post here.

Submitted by testosteronepit.

Wolf Richter   www.testosteronepit.com

In her speech at the Davos World Economic Forum, Chancellor Angela Merkel warned that Germany might be overwhelmed by its efforts to bail out the Eurozone. Germany must not make promises that in the end can’t be kept, she said. It doesn't make sense to demand a doubling or tripling of Germany's contribution. "How long will that remain credible?" she asked.

The government’s reluctance has made Germany the favorite punching bag of the economic world, and most certainly of George Soros, who mused in Davos: "It's Germany that dictates European policy … the trouble is that the austerity that Germany wants to impose will push Europe into a deflationary debt spiral."

But every few months, the amounts to bail out Greece are rising. And it’s not just Greece. Other countries are on life support as well. So the bailout mechanisms have become a bewildering and expanding array of direct and indirect contributions, commitments, and guarantees that, theoretically, all 17 member states of the Eurozone would share proportionately. But five of them—Portugal, Ireland, Italy, Greece, and Spain—are in trouble. So the remaining 12 have to shoulder their burden, and some of them are already teetering as well.

Now all eyes are on Germany. CESIfo, the Munich-based economic research group that publishes the closely-followed Ifo Business Climate index, has put a pencil to Germany’s maximum exposure over time. The report takes into account Germany 27.1% share of the ECB and 6% voting rights of the IMF. Total exposure: 635 billion ($831 billion), a whopping 27% of Germany’s GDP. And it doesn’t even include any bailouts within Germany. The details:

- €22 billion for the first bailout package for Greece, agreed upon in May 2010. The Eurozone would contribute €80 billion, the IMF €30 billion—to be paid out in tranches. Germany's share is based on its share of the ECB (27.1%).

- €1.8 billion for Germany's share (6%) of the IMF’s €30 billion contribution to the package.

- €12 billion for the European Financial Stability Mechanism (EFSM) of €60 billion, established in May 2010—based on Germany's 20% share of the EU budget.

- €253 billion for the European Financial Stability Facility (EFSF), established in June 2010 and enlarged in October 2011 to €780 billion. Germany’s share is 27.1%, or €211 billion. Also…
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Weekly Market Commentary: Breadth Breakout

Courtesy of Declan Fallon

The past week saw some significant moves despite the weaker Friday close.

For the indices there was a breakout in the Russell 2000. This cleared the former neckline and brought the index into the congestion zone of the early part of 2011.

The Nasdaq also edged a breakout on higher volume accumulation, although the real challenge is the 2011 high.

Supporting the break in the Nasdaq was the break in declining resistance of the Percentage of Nasdaq Stocks above the 50-day MA:

The Nasdaq Bullish Percents also cleared declining resistance at 58%, leaving room to maneuver to the next (minor) level at 65%.

Along with declining resistance in the Summation Index.

The S&P built on its breakout from last week with another gain on higher volume accumulation

This followed similar breaks in S&P market breadth.

The weekly picture continues to look good for bulls. Last week’s breakouts in the S&P were followed by breaks for the Nasdaq and Russell 2000, on higher volume accumulation. There should be sufficient momentum to see 2011 highs challenged, but it will likely require another volume injection to see them broken.

—--

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Is a 50% decline in the Baltic Index a good or bad sign for stocks?

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

No doubt the Baltic Dry index has had a rough start to 2012, losing over half its value in just the first month of this year.  Is the Baltic Dry index a leading or lagging indicator for the future direction of the S&P 500?

The Baltic decline has caught the attention of many investors of late, judging by the number of posts on the internet recently.  The Baltic doesn’t have the best predictive track record for 500 rallies or declines, as can be seen in the 15 year chart above. 

Of interest or oddly enough… when the Baltic reached the gray price zone above, the 500 index more often than not was closer to a short-term low than high. 

Do you think/feel the Baltic Index is sending a message of confusion or direction?





Chinese Zodiac New Year Market Predictions: Year Of the Dragon (XLF, GLD, SLV)

Courtesy of John Nyaradi.

Chinese Zodiac New Year Market Predictions: Year Of the Dragon (XLF, GLD, SLV)Chinese New Year is upon us, and this New Year is the year of the Dragon!  The Dragon sits in the 5th position in the Chinese Zodiac and is one of the most revered signs in China.  The Dragon represents lively, intellectual problem solvers who are dignified and persistent.  In fact, ancient Chinese Emperors called themselves “the Dragon,” and used the dragon’s power to reign over their empires and personify their divine power.  Dragons are also well known for their arrogance and impatience, and so when you put it all together, we must wonder what the Year of the Dragon holds for financial markets?

According to CLSA, Asia-Pacific Markets, the word for “Dragon,” in Chinese is spelled “Lóng.” Automatically that is a good sign for markets, as we are always hopeful for long markets and lots of profit.  The Chinese Zodiac takes into consideration all five elements of metal, fire, water, earth, and wood, and in the Year of the Dragon, the zodiac predicts that markets will steadily drop until about mid-August when a huge surge will take place and a “Lóng” market takes us well into the next Chinese New Year.  Predominant elements this year are water, which could douse any fire in the markets, and is expected to be a powerful force in February and March, and so the Dragon says to liquidate (yes, liquidate) any funds you have during that period (CSLA).

How about specific Sector performance?  Dragon Years say that metal will perform well this year-good news for the gold (NYSEARCA:GLD) and silver (NYSEARCA:SLV) bugs.  Since water is prevalent this year (despite the Dragon’s fire?), be careful with the Financials Market (NYSEARCA:XLF), as any paper of any kind does not stand a chance.  If it was the year 2000, or the year of the Metal Dragon, then Financials would likely be a good choice since metal symbolizes wealth and is the foundational material of most currencies.  I understand that metal sometimes bodes well for gold investors, but a metal Dragon is like two for one. However, we are in 2012, and I failed to mention earlier that this is not only the year of the Dragon, but it is also the year of the Black Water Dragon, so beware of any paper related currencies (all of them) (CSLA).

All in…
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Zero Hedge

Enemy Of The People?

Courtesy of ZeroHedge. View original post here.

Via The Zman blog,

There has never been a time when normal people did not know the media was biased and biased in a predictable direction. For every non-liberal in the media, there were at least ten liberals. The ratio was probably higher, but then, as now, some lefties liked to pretend they were independents or some third option.

The media used to invest a lot of time denying they had a bias and an agenda, but the only people who believed them were on the Left, which had the odd effect of confirming they had a bias and an agenda.

...



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Phil's Favorites

A 2019 Earnings Recession?

 

A 2019 Earnings Recession?

Courtesy of 

Shout to Leigh!

On the new Talk Your Book – Josh Brown is joined by Leigh Drogen of Estimize, one of the leading providers of crowdsourced financial and economic data to talk about the trend in corporate profits that could potentially lead to an earnings recession later this year.

What is the thing that Leigh is seeing in the data that Wall Street isn’t yet picking up on? What segment of the stock market is most at risk? Why is the crowd smarter than the narrow consensus of Wall Street analysts?

Check out Estimize ...



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ValueWalk

D.E. Shaw Investment Calls For Leadership Change At EQT

By ActivistInsight. Originally published at ValueWalk.

Elliott Management has offered to acquire QEP Resources for approximately $2.1 billion, contending the oil and gas explorer’s turnaround efforts have done little to lift the company’s share price. The company responded and said that a thorough review of the proposition is imperative in order to properly act in the best interests of shareholders, “taking into account the company’s other alternatives and current market conditions.” The news came only a month after Travelport Worldwide agreed to sell itself to Siris Capital Group and Elliott’s private equity arm Evergreen Coast Capital for $4.4 billion in cash and two months after Athenahealth was bought by Veritas and Evergreen for $5.7 bi...



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Kimble Charting Solutions

Gold & Silver Testing Important Breakout Levels!

Courtesy of Chris Kimble.

Gold and Silver from a long-term perspective have created a series of lower highs over the past 8-years. Will 2019 bring a change to this trend? A big test is in play!

Gold since the lows in 2016 has created a series of higher lows, while Silver may have created a double bottom.

Gold & Silver are currently facing break attempts a (1) and (2). These falling resistance lines have disappointed metals bulls for the past few years.

The direction of Gold and Silver weeks and months from now should be highly influenced by what each does as they are attempting to break above important resistance levels.

To become a member of Kimbl...



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Insider Scoop

UBS Says Disney's Streaming Ambition Gives It A 'New Hope'

Courtesy of Benzinga.

Related DIS Despite Some Risks, Analysts Still Expecting Double Digit Growth From Communications Services In Q4 ...

http://www.insidercow.com/ more from Insider

Digital Currencies

Russia Prepares To Buy Up To $10 Billion In Bitcoin To Evade US Sanctions

Courtesy of Zero Hedge

While the market has been increasingly focused on the rising headwinds in the global economy in general, and China's economic slowdown in particular, while the media is obsessing over daily revelations that Trump may or may not have colluded with Russia to get elected, a far more critical, if underreported, shift has been taking place over the past year.

As we reported in June, whether due to concerns over draconian western sanctions and asset confiscations following the poisoning of former Russian military officer Sergei Skripal, or simply because it wanted to diversify away from the dollar, Russia liquidated virtually all of its Treasury holdings in the late spri...



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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 failure based on his personality, which was evident years ago. This article, written in 2017, references a prescient article Bill wrote before Trump became president, in July, 2016, 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

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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.

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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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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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