Archive for 2012

Ouch! The Wine Bubble Blows Up

Courtesy of ZeroHedge. View original post here.

Submitted by testosteronepit.

Wolf Richter

Disclosure: I’m biased. I love wine—almost as much as I love craft brews—but I’m leaning towards Californian wines; they’re awesome and grow in my extended neighborhood. More precisely, I love drinking wine, not keeping it locked up in a refrigerated vault, and certainly not investing in it. Hence, I have little sympathy for those who got the timing wrong when they bought high-dollar French wines for the sole purpose of investing in them, instead of drinking them, and I certainly don’t feel sorry for them in their plight. But a plight it is.

It all has to do, like so many things, with the China bubble, and central banks.

Wine as an asset class, if you will, didn’t do much until the China bubble got going seriously and rich Chinese began piling into the market: from the summer of 2005 through the Beijing Olympics in 2008, the asset class skyrocketed 152%. But then the world experienced the Lehman Moment, and from September to December that year, the asset class plunged 22.3%.

The fact that wine could fall of a cliff like this scared central bankers around the world, and they dusted off their printers, plugged them into their 440-volt outlets—these are big industrial machines, not desktop devices (see video link at the bottom)—and they started printing money to buy up assets of whatever kind, possibly even wines, which would explain their drunken stupor at the time. As all this freshly printed money out there was searching for a place to go, it created numerous bubbles, and revived others that had been gasping for air. Including the wine bubble.

And so, from December 2008 through June 2011, the wines rallied another 76%. What a ride! That June, as we can see from the graph of the Liv-ex Fine Wine 100 index, was the peak of the wine bubble.



The Liv-ex Fine Wine 100, calculated monthly, is the “fine wine industry’s leading benchmark” and represents the price movement of 100 of the most sought-after wines, largely Bordeaux, “a reflection of the overall market,” but it also includes wines from Burgundy, the Rhone, Champagne, and Italy (but not from California). Now the index is back where it was just before the Lehman Moment, a 27.3% plunge. Thin mountain air appears…
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German President Demands Merkel Explain ‘Why Germany Needs To Save The Euro’

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

While we have been surprised by the lack of public consternation within Germany at the real levels of servitude that an ungrateful Europe is trying to shove down the German taxpayer’s throats; this week it appears the rubber is starting to meet the road. As Europe Online reports, German President Joachim Gauck called for Chancellor Angela Merkel to explain why Germany needs save the euro – at great expense to the country‘s taxpayers – and what will be necessary. In a TV interview, Gauck (having no doubt read our recent explanations of the TARGET2 ticking time-bomb and the real cost of GRExit) said that Merkel “has the duty to describe in great detail what it means [to stay in the Euro], including what it means for the budget”. In a somewhat shockingly honest (for a European leader) comment he said that the political establishment has struggled to explain why it is vital for Germany to do its part to save Europe’s currency union. Perhaps reflecting Juncker’s Modus operandi, Gauck added that “sometimes it‘s hard to explain what this is all about. And, sometimes, there‘s a lack of effort to openly tell the populace what is actually happening.”


The Telegraph adds, anti-euro protest within Germany is becoming louder as potential costs escalate (as we noted here) and a group of 170 economists from the ‘German-speaking’ zone published a warning -letter that a banking-union aggregating EUR23 trillion of bank debt would expose northern creditor states to ruinous liabilities (quite notable given the WSJ’s report tonight that the overarching banking supervisorory body is getting close – more rumors).

They said such a move would lead to bitter discord between countries and ultimately poison the European Project. The group called for the losses to be imposed on banks and creditors, claiming the EU’s current bail-out policies amount to a rescue for “Wall Street and the City of London”.

Pro bail-out economists in Germany said such arguments are reckless and echo the sort of “liquidationist” thinking that allowed the US and Central European banking systems to collapse in 1931, with dire consequences.

Guest Post: The Real Testosterone Junkies

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submittted by John Aziz of Azizonomics,

I especially enjoy reading things that I disagree with, and that challenge my own beliefs. Strong ideas are made stronger, and weak ideas dissolve in the spotlight of scrutiny. People who are unhappy to read criticisms of their own ideas are opening the floodgates to ignorance and dogmatism. Yet sometimes my own open-minded contrarianism leads me to something unbelievably shitty.

According to Noah Smith:

Zero Hedge is a financial news website. The writers all write under the pseudonym of “Tyler Durden”, Brad Pitt’s character from Fight Club. Each post comes with a little black and white icon of Brad Pitt’s head. On Zero Hedge you can read news, rumors, facts, figures, off-the-cuff analysis, and political screeds (usually anti-Obama, anti-government, and pro-hard money). On the sidebars, you can click on ads for online brokerages, gold collectibles, and The Economist.


The site is a big fat hoax. And if you read it for anything other than amusement, you’re almost certainly a big fat sucker.


That’s a bold claim! Why do I make this claim? Well, in one sense, all financial news is a hoax. Financial news, by definition, is public information — if you’ve read it, you can bet that thousands of other people have too. That means that if the market is anywhere close to being efficient, any information in any article you read will already have been incorporated into the price of financial assets. Reading or watching public information should not, in theory, give you any “alpha”.


If the writers of Zero Hedge really knew some information that could allow them to beat the market,why in God’s name would they tell it to you? If they had half a brain, they’d just keep the info to themselves, trade on it, and make a profit! Maybe then, after they had made their profit, they’d release the news to the public (and collect ad revenue), but by then the news would be worthless. Financial news sites, you should realize, are not in the business of giving you insider tips out of the goodness of their hearts.


As you might expect, it’s not hard to look back at Zero Hedge’s predictions and see that a large number of them are junk. For example, here’s a

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Trends in Duration of U.S. Unemployment

Courtesy of Doug Short.

Duration of Unemployment by Percentage:
5 Weeks and Under, 15 Weeks and Over, 27 Weeks and Over

Quick Figures

  • In June of 1983, the percentage of those unemployed 27 weeks or longer peaked at 26%. That is the only month prior to April of 2009 above the 25% mark.
  • Starting April of 2009, every month has been above the 25% mark.
  • Starting July of 2009, every month has been above the 30% mark.
  • Starting December of 2009, every month has been above the 40% mark.

Grim Picture

The trends paint a grim picture. With each recession the duration of unemployment has increased.

Note that prior to 1990, shortly after recessions ended, the percentage of people unemployed 15 weeks and over, and 27 weeks and over dropped quickly.

The last three recessions did not follow that pattern and the recession starting in 2007 is unprecedented in obvious ways.

I believe a major reason the 27 weeks and over percentage is dropping now is people have exhausted all their benefits and have claimed disability or gone on “forced retirement” to collect social security benefits.

Since the global economy has stalled (see Plunging New Orders Suggest Global Recession Has Arrived) and the US is headed for recession if not in recession (see 12 Reasons US Recession Has Arrived Or Will Shortly) there is not much realistic hope of these numbers showing drastic improvement except by more forced retirements or rising disability claims.

For more on disability claims, please see …

Originally posted at Mish’s Global Economic Trend Analysis

(c) Mike “Mish” Shedlock
Investment Advisor Representative





Protest Turns Deadly In Qatif As Saudis Use Live Ammo On Protesting Shi’ites

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Remember Qatif – the “weakest” Saudi authoritarian link, whose daily protests, many of them violent, threatened to topple the government last spring when soaring global food inflation set the MENA region on fire and led to the overthrow of numerous regimes in the Mediterranean rim? It’s back, only this time not based on food price concerns, but inflamed religious tensions, arising from the arrest, and shooting, of a senior religious opposition figure, Shia cleric Ayatollah Al-Neme. As of minutes ago, Redha Al-boori reports on Twitter, that there have been at least two casuualties as a result of confrontation between Saudi forces using live ammo and protesting Shiites.

The Shia Post reports

“Kingdom of Saudi Arabia has shot injured and arrested Shia cleric Ayatollah Al-Nemer on Saturday 08 July 2012, the Shia Post reported.

According to received picture, injuries from which it can be assumed that the arrest was violent. Two weeks ago in his Friday sermon Shaikh Al-Nemer criticised Arab dictators in Saudi, Bahrain.  He is well known for publicly criticising dictators. After the shot injures and arrest of Ayatullah Shaikh Al-Nemer, hundreds of  Saudis  Shiite Muslims took streets in Awamiah and Qatif for his release and protested against the KSA for the brutal attack on Shiite Cleric.” The result: protests that have covered the entire city, and reports via Twitter of Saudi forces using live ammo to disperse those protesting.

Videos from Qatif posted moments ago:

And for those who prefer more ‘credible’ sources of reporting, here is Reuters.

h/t Geoffrey Batt

Goin’ Down To The Crossroads (DIA, SPY, IWM, QQQ, EWG)

Courtesy of John Nyaradi.

Global Markets, ETFs at Crossroads (SPY, IWM, XLK, VGK, DIA)Goin’ down to the crossroads

“I went down to the crossroads, fell down on my knees

Down to the crossroads, fell down on my knees

Asked the Lord above for mercy,

‘Save me if you please’” Cream/Robert Johnson 1968/1936

Global markets are now “goin’ down to the crossroads” as described in the 1936 blues classic written by Robert Johnson and then made world famous by iconic rock band Cream in 1968.  According to legend, blues man Robert Johnson sold his soul to the devil at midnight at the intersection of U.S. Route 61 and U.S. Route 49, along the Blues Highway near Clarksdale, Mississippi, in a Faustian deal to become a blues legend.

Today, global financial markets look to central bankers to save them once more from gathering recession, high unemployment and the threat of a new bear market.

On My Wall Street Radar

chart courtesy of

In the chart above, we see how the S&P 500 (NYSEARCA:SPY) is “at the crossroads.”

In a trading range between 1315-1380, the index is moving sideways with declining momentum as RSI and MACD start to flatten and a declining 50 day moving average (blue) edges slowly closer to the 200 day average (red) rising from below.

If global central bankers answer the plea for “save me, if you please,” we could see a break to the upside and resumption of the upwards trend, while silence at midnight or insufficient intervention will likely lead to lower prices ahead.

The Economic View From 35,000 Feet

Last week’s big news was Friday’s Non Farm Payrolls Report which was ugly, ugly, ugly.  New jobs in June came in at 80,000, widely missing expectations and well below the 100,000 needed just to keep unemployment steady.  Overall unemployment was unchanged at 8.2% and U6, which includes part-timers who want full time work and those who have given up looking, ticked slightly higher to 14.9%, a gain of 0.1%.  Long term unemployment remains grim, with 5.4 million of our fellow Americans now unemployed longer than 27 weeks, a number that has has barely budged year to date.  12.7 million of our countrymen remain unemployed, and the three month average new jobs rate is now 78,000, just more than half of 2011′s average as employment gains markedly slow.

Economic data released last week was weak, as well, as ISM Manufacturing…
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The World’s Biggest Bank Just Got Thrown Into The Lieborgate Mess

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

When on Friday news broke that German regulator BAFIN (which is just like the SEC except that it also regulates, investigates and actually prosecutes, instead of just watching porn all day) was launching a probe of the biggest bank in Europe, and actually, make that the world, Germany’s Deutsche Bank, the shares took a quick, brisk hit, sliding 5% with everyone anxiously expecting to find out just which bank will follow Barclays into the scapegoat abattoir (because nobody had any clue Liebor manipulation was going on until a week ago). Yet while external inquiry into banks is to be expected (everywhere but in the US of course, because in the US no banks manipulated anything. Ever) as a proactive act on behalf of regulators to cover their back, things get a little more tricky when the bank itself admits there was an obvious supervision problem. From Reuters: “Two Deutsche Bank employees have been suspended after it used external auditors to examine whether staff were involved in manipulating interbank lending rates, German magazine Der Spiegel reported, citing no sources.” Now what can possibly go wrong if the biggest bank in the world, with just shy of $3 trillion in “assets”, which just happens to have a 1.68% Core Tier 1 ratio, is suddenly thrust smack in the middle of the scandal that the Economist just aptly named the finance industry’s “tobacco moment”?

From Reuters:

A spokesman for Deutsche Bank on Sunday declined to comment on the article, referring to its quarterly report, which said it has received subpoenas and requests for information from U.S. and European authorities in connection with setting interbank rates.


On Friday, people familiar with the matter told Reuters that Germany’s markets regulator has launched a special probe into Deutsche Bank over suspected manipulation of interbank lending rates.


Investigators in the United States, Europe and Japan are examining more than a dozen big banks over suspected rigging of the London Interbank Offered Rate (Libor).


Britain’s Barclays has been the only bank to admit wrongdoing, agreeing last week to pay a fine of more than $450 million.


The Libor rates, compiled from estimates by large banks of how much they believe they have to pay to borrow from

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A Journey Through Vogelsang: Once USSR’s Massive East German Nuclear Military Base, And Now A Ghost Town

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

And now for something completely different. Instead of scary tales of horrifying Math 101 (soon to be banned in one of the many upcoming Eurosummits), which confirms that no matter how it is spun, the global reality is ugly and getting worse (and ever more diluted in paper format), courtesy of Spiegel we present a photographic journey through Vogelsang: formerly one of the biggest Soviet military garrisons housing nuclear weapons and numerous nuclear launch pads, home of the 25th tank division protecting the USSR’s most prized external asset, located in the forest near Berlin and housing over 15,000 people. It is now a surreal ghost town, and as haunted as any of the “cities” one can find deep in China.

From Spiegel:

Vogelsang is not exactly a boomtown. Located just northwest of Berlin, it has a mere 100 residents and a tiny train station. It is extremely quiet.


But in the forest nearby, there is a different Vogelsang. It its day, it was completely autonomous from the nearby village, had its own residential buildings, cinemas, warehouses and even a school. Some 15,000 people once lived there, and it was seldom quiet. The second Vogelsang was the home of Soviet troops, the warehouses were crammed full of tanks, howitzers and all-terrain vehicles. The cinemas were for the soldiers’ families.


Vogelsang, one of the largest Soviet garrisons outside of the Soviet Union, was the base of the 25th tank division. For almost 40 year, soldiers belonging to the Group of Soviet Forces in Germany lived here — until they finally withdrew in 1994.


Sine then, Vogelsang has been left to the elements, a ghost town in the middle of the Brandenburg forest. And yet, two decades after the last light was switched off, there is still plenty of life at the site. Deer and raccoon roam among the trees as do feral sheep and goats.


The barracks too still hint at the life they once contained. While most look the same from the outside, plenty of differences can be seen on the inside. The type of heating within, for example, indicates whether they housed officers or mere foot soldiers. The former tended to have decorative, tiled wood stoves instead of simple potbelly stoves. Window grates in the form of a shining sun

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Mid-Day Update

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

Click here for the full report.

To learn more, sign up for David’s free newsletter and receive the free report from All About Trends – “How To Outperform 90% Of Wall Street With Just $500 A Week.” Tell David PSW sent you. – Ilene

The New American Normal: Box Wine

The New American Normal: Box Wine

Courtesy of Jr. Deputy Accountant

The economy has changed a lot of things. You see older cars on the road longer, families choosing to keep their humble digs over a McMansion, more coupons. Suddenly it's no longer cool to flaunt what you've got, lest someone out there get upset that you've somehow gotten a better hand throughout the recession.

So I really shouldn't have been all that surprised when I saw this ad for Black Box wine the other night. Box wine enjoys an even bigger stigma than Miller (whew, I'm going to pay for that comment with my fellow Wisconsinites but let's face it, the stuff is crap) and yet in the new normal, you've still got to get drunk. I've got to say I haven't indulged in box wine since before I was of legal drinking age so perhaps the stuff has actually managed to become drinkable in that time.


Black Box Wines Shattered Red TV Commercial from Black Box Wines onVimeo.

Advertising genius? Maybe.

Personally, I learned the big bottles of Smirnoff from Costco will get you through in a cash flow pinch and might never resort to box wine no matter how bad it gets but that's just me.  


Chart School

Large Caps Feel the Heat as Semiconductors Struggle

Courtesy of Declan.

Yesterday, Small Caps led the rally as Large Caps lost ground. Today, those same weak Large Caps took another hit and dragged Tech indices with them.  Small Caps also suffered but they have plenty of wiggle room before they hit trouble.

The Dow sell-off didn't stop at its 50-day MA and is now on course to test its 200-day MA. Technicals, aside from Stochastics, are bearish.

Of greater concern was the hit to the Semiconductor Index. The attempt to hold 1,393 support was swiftly ...

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Phil's Favorites

Opioids don't have to be addictive - the new versions will treat pain without triggering pleasure


Opioids don't have to be addictive – the new versions will treat pain without triggering pleasure


Courtesy of Tao Che, University of North Carolina – Chapel Hill

The problem with opioids is that they kill pain – and people. In the past three years, more than 125,000 persons died from an opioid overdose – an average of 115 people per day – exceeding the number killed in car accidents and from gunshots during the same period.

America desperately needs safer an...

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Zero Hedge

Dow Ties Worst Losing Streak In 40 Years

Courtesy of Zero Hedge

This is easy...

The brief respite for Chinese stocks disappeared overnight...

And it appears to be finally leaking into American stock markets too...

The Dow closed red... again... for the 8th day in a row...

There has not been a longer Dow losing streak since 1978!!

The Dow is down over 1% YTD while Nasdaq...

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Insider Scoop

Benzinga Pro's 5 Stocks To Watch Today

Courtesy of Benzinga.

Each day, the Benzinga Pro news team highlights several stocks with Trading Idea potential. Be the first to see them by becoming a Benzinga Pro user!

Casi Pharmaceuticals Inc (NASDAQ: CASI) stock was trading higher by more than 40 percent early Thursday morning. The biopharmaceutical said it secured a strategic and long-term manufacturing agreement with China's Yiling Wanzhou for manufacturing of entecavir and cilostazo, ... more from Insider

Digital Currencies

BIS Blasts Cryptos In Special Report: "Beyond The Hype"

Courtesy of Mike Shedlock, MishTalk

The BIS blasts cryptos over scaling issues, energy, and trust. The BIS is correct. Cryptos are fatally flawed as money.

A Bank of International Settlements (BIS) report examines cryptocurrencies in depth. The study, called "Looking Beyond the Hype" investigates whether cryptocurrencies could play any role as money.

Bloomberg, Reuters, and the Bitcoin Exchange guide all have articles on the report but not one of the bothered to link to it.

After a bit of digging, I found the crypto report is part of an upcoming BIS annual report. The BIS pre-released the crypto report today (as chapter 5).

Here's a l...

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Mind molding psychedelic drugs could treat depression, and other mental illnesses

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.


Mind molding psychedelic drugs could treat depression, and other mental illnesses

By agsandrew/

Courtesy of David E. Olson, University of California, Davis

It seems that psychedelics do more than simply alter perception. According to the latest research from my colleagues and me, they change the structures of neurons th...

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Buffett At His Best

By csinvesting. Originally published at ValueWalk.

Bear with me as I share a bit of my history that helped me create SkyVu and the Battle Bears games. The University of Nebraska gave me my first job after college. I mostly pushed TV carts around, edited videos for professors or the occasional speaker event. One day, Warren Buffet came to campus to speak to the College of Business. I didn’t think much of this speech at the time but I saved it for some reason. 15 years later, as a founder of my own company, I watch and listen to this particular speech every year to remind myself of the fundamentals and values Mr. Buffett looks for. He’s addressing business students at his alma mater, so I think his style here is a bit more ‘close to home’ than in his other speeches. Hopefully many of you find great value in this video like I have. Sorry for the VHS...

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Kimble Charting Solutions

The Stock Bull Market Stops Here!


The Stock Bull Market Stops Here!

Courtesy of Kimble Charting


The definition of a bull market or bull trends widely vary. One of the more common criteria for bull markets is determined by the asset being above or below its 200 day moving average.

In my humble opinion, each index above remains in a bull trend, as triple support (200-day moving averages, 2-year rising support lines, and February lows) are still in play ...

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Members' Corner

Cambridge Analytica and the 2016 Election: What you need to know (updated)


"If you want to fundamentally reshape society, you first have to break it." ~ Christopher Wylie

[Interview: Cambridge Analytica whistleblower: 'We spent $1m harvesting millions of Facebook profiles' – video]

"You’ve probably heard by now that Cambridge Analytica, which is backed by the borderline-psychotic Mercer family and was formerly chaired by Steve Bannon, had a decisive role in manipulating voters on a one-by-one basis – using their own personal data to push them toward voting ...

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Mapping The Market

The tricks propagandists use to beat science

Via Jean-Luc

How propagandist beat science – they did it for the tobacco industry and now it's in favor of the energy companies:

The tricks propagandists use to beat science

The original tobacco strategy involved several lines of attack. One of these was to fund research that supported the industry and then publish only the results that fit the required narrative. “For instance, in 1954 the TIRC distributed a pamphlet entitled ‘A Scientific Perspective on the Cigarette Controversy’ to nearly 200,000 doctors, journalists, and policy-makers, in which they emphasized favorable research and questioned results supporting the contrary view,” say Weatherall and co, who call this approach biased production.

A second approach promoted independent research that happened to support ...

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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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NewsWare: Watch Today's Webinar!


We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...

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All About Trends

Mid-Day Update

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

Click here for the full report.

To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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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...

Learn more About Phil >>

As Seen On:

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.

Market Shadows >>