Archive for 2013

US economy gets a Hollywood makeover

US economy gets a Hollywood makeover

By Robin Harding in Washington

The US economy will look different from July.

That is not because of a shift in its underlying prospects, but because of a comprehensive update to the national accounts by the Bureau of Economic Analysis, producing the most dramatic change to the way gross domestic product is measured in more than a decade, with preliminary estimates adding about 3 per cent to US GDP.

Keep reading: US economy gets a Hollywood makeover – FT.com.

See Zero Hedge's commentary:  US GDP Will Be Revised Higher By $500 Billion Following Addition Of "Intangibles" To Economy.





Swiss To Vote On Gold Repatriation – “Gold Is The Only Valuable Asset On The SNB’s Balance Sheet”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

A few weeks ago, we wrote of the Swiss People’s Party’s efforts to gain enough signatures to force the Swiss National Bank (SNB), who ‘supposedly’ guarantees the price stability in Switzerland, to stop selling its gold reserves. This last week, as the FT reports, they reached the required 100,000 signature mark and on Thursday the federal chancellery confirmed Switzerland is to hold a referendum that would ban the central bank from selling its gold reserves, force it to keep at least 20% of its assets in the metal, and  repatriate gold reserves held abroad and keep them at home. Following Cyprus’ forced sales and discussions of the net wealth in other European peripheral nations, proponents of the Swiss measure flatly reject the idea of sales, arguing that disposals of gold reserves at low prices between 2001 and 2006, as well as more recently, have cost Switzerland billions of Swiss francs. The “Save Our Swiss Franc” initiative proclaims, “today gold is almost the only really valuable asset left on the SNB’s balance sheet.” The SNB, however, is concerned at, “the monetary policy implications of the demands in the initiative.” A date for the referendum has not yet been set – but the FT notes that previous ‘referenda’ have taken up to several years from acceptance to actual vote.

Via The FT,

Switzerland is to hold a referendum on a popular measure that would ban the central bank from selling its gold reserves and force it to keep at least 20 per cent of its assets in the metal.

 

Under the terms of “Save our Swiss Gold”, which is led by members of the ultra-conservative Swiss People’s party, the Swiss National Bank would have to repatriate gold reserves held abroad and keep them at home.

 

 

Governments in the eurozone’s beleaguered southern periphery tend to hold a large part of their total foreign reserves in gold – the Italian central bank holds 2,451 tonnes, more than 70 per cent of its total reserves, while Portugal’s holding of 383 tonnes accounts for 90 per cent.

 

 

They insist that the SNB’s gold reserves, which stood at SFr49.5bn at the end of February, accounting for about 10 per cent of its balance sheet, are


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Treasury Yield Snapshot: 10-Year Yield Hovers Near 2013 Low

Courtesy of Doug Short.

What’s New: I’ve updated the charts below through Friday’s close. The S&P 500 is 2.39% off its all-time high set on April 11th. The yield on the 10-year note closed Friday at 1.73%, one basis point above the 2013 closing low on April 5th, 15th and 18th.

The latest Freddie Mac Weekly Primary Mortgage Market Survey puts the 30-year fixed at 3.41%, down from its interim high of 3.63% in mid-March and 10 basis points above its historic low of 3.31%, which dates from the third week in November of last year.



Here is a snapshot of selected yields and the 30-year fixed mortgage starting shortly before the Fed announced Operation Twist.

For a eye-opening context on the 30-year fixed, here is the complete Freddie Mac survey data from the Fed’s repository. Many first-wave boomers (my household included) were buying homes in the early 1980s. At its peak in October 1981, the 30-year fixed was at 18.63 percent.

The 30-year fixed mortgage at the current level is a confirmation of a key aspect of the Fed’s QE success, and the low yields have certainly reduced the pain of Uncle Sam’s interest payments on Treasuries (although the yields are up from recent historic lows of last summer). But, as for loans to small businesses, the Fed strategy is a solution to a non-problem. Here’s a snippet from the latest NFIB Small Business Economic Trends report:

Small business demand for credit remained weak in February, given the weak economy. Only 7% of owners surveyed reported that all their credit needs were not met, up 1 point but only 3 points above the record low. Twenty-nine percent reported all credit needs met, and 51% explicitly said they did not want a loan. Only 2% of owners reported that financing was their top business problem. Twenty-nine (29) percent of all owners reported borrowing on a regular basis, down 2 points and 1 point shy of the record low of 28 points set in November 2010.

A Perspective on Yields Since 2007

The first chart shows the daily performance of several Treasuries and the Fed Funds Rate (FFR) since 2007. The source for the yields is…
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Everyone’s Worried About The Economy Slowing Down Again — But This Time Will Be Different

SocGen: Everyone's Worried About The Economy Slowing Down Again — But This Time Will Be Different

Courtesy of Joe Weisenthal, Business Insider

The weekend is over, and so analysts are coming out with their notes on what people will be talking about for the week ahead.

In the US, the big question is whether the economy is flagging again (whether there's a 'spring swoon' to use the popular parlance).

If the economy were to fade again, it would mean that this was just the latest in a series of false-dawns since the crisis, where we thought that we'd finally broken out of the malaise, only to return to sub-trend growth.

SocGen's Michala Marcussen argues that this time, the recovery won't stall out.

She writes:

Recent softness in the data has sparked concerns that the US economy, in a replay of previous years, is about to stage a return to stall-speed growth. In our opinion, however, this time will be different as the foundations for a sustainable recovery are now in place, with much of the private sector deleveraging completed and credit channels largely repaired. The one remaining headwind is fiscal consolidation, but heading into H2, we should see the positives of (1) housing recovery, (2) fading policy uncertainty and (3) the positive supply side shock from shale gas drive a path to 3% growth.

Hopefully this is true.

The recent tumble in commodities has caused people to start seeing the world economy in a dim light once again.

And even to Marcussen's first point, the housing recovery, there's some evidence that things are flagging a bit.





US GDP Will be Revised Higher by $500 Billion Following Addition of “Intangibles” to Economy

US GDP Will Be Revised Higher By $500 Billion Following Addition Of "Intangibles" To Economy

Courtesy of ZeroHedge

Those who have been following the US debt to GDP ratio now that the US officially does not have a debt ceiling indefinitely, may have had the occasional panic attack seeing how this country's leverage ratio is rapidly approaching that of a Troika case study of a PIIG in complete failure. And at 107% debt/GDP no explanations are necessary. Luckily, the official gatekeepers of America's economic growth (with decimal point precision), the Bureau of Economic Analysis have a plan on how to make the US economy, which is now growing at an abysmal 1.5% annualized pace, or about 5 times slower than US debt growing at 7.5% annually, catch up: magically make up a number out of thin air, and add it to the total. And it literally is out of thin air: according to the FT, the addition will constitute of a one-time addition of intangibles, amounting to 3% of total US GDP, or more than the size of Belgium at $500 billion, to the US economy.

From FT:

The US economy will officially become 3 per cent bigger in July as part of a shake-up that will see government statistics take into account 21st century components such as film royalties and spending on research and development.

Billions of dollars of intangible assets will enter the gross domestic product of the world’s largest economy in a revision aimed at capturing the changing nature of US output.

Brent Moulton, who manages the national accounts at the Bureau of Economic Analysis, told the Financial Times that the update was the biggest since computer software was added to the accounts in 1999.

“We are carrying these major changes all the way back in time – which for us means to 1929 – so we are essentially rewriting economic history,” said Mr Moulton.

What exactly will constitute GDP growth going forward? In a word, intangibles: films, books, magazines and iTunes songs.

“We’re capitalising research and development and also this category referred to as entertainment, literary and artistic originals, which would be things like motion picture originals, long-lasting television programmes, books and sound recordings,” said Mr Moulton.

At present, R&D counts as a cost of doing business, so the final output of Apple iPads is included in GDP but


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Guest Post: How Hospitals Profit From Making Mistakes

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Michael Krieger of Liberty Blitzkrieg blog,

One of the many things holding the nation back at the moment is the complete lack of incentive to be a creative, productive and honest member of society versus the tremendous incentive to be a corrupt, thieving, lackey for the establishment.  In a free market system, with a strict set of rules governing the game that is applied to everyone equally, market signals and incentives exist for companies to create a great product and to meet customer needs with great service.  In contrast, within a crony capitalist system, the primary incentive is to get as close as possible to political and corporate power in order to financially benefit from their oligarchical ownership of the controlled economy.

It is only within a completely disconnected from reality, crony, fraudulent economy where you could have a situation in which hospitals actually earn much larger profit margins from making mistakes and harming their patients, than from providing excellent care.  We learn from the New York Times that:

Hospitals make money from their own mistakes because insurers pay them for the longer stays and extra care that patients need to treat surgical complications that could have been prevented, a new study finds.

 

Changing the payment system, to stop rewarding poor care, may help to bring down surgical complication rates, the researchers say. If the system does not change, hospitals have little incentive to improve: in fact, some will wind up losing money if they take better care of patients.

 

The study and an editorial were published Tuesday in The Journal of the American Medical Association. The study authors are from the Boston Consulting Group, Harvard’s schools of medicine and public health, and Texas Health Resources, a large nonprofit hospital system.

 

The study is based on a detailed analysis of the records of 34,256 people who had surgery in 2010 at one of 12 hospitals run by Texas Health Resources. Of those patients, 1,820 had one or more complications that could have been prevented, like blood clots, pneumonia or infected incisions.

 

The median length of stay for those patients quadrupled to 14 days, and hospital revenue averaged $30,500 more than for patients without complications ($49,400 versus $18,900). Private insurers paid far more for complications than


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Is the Market Correcting?

Is the Market Correcting? 

By David of All About Trends

spx42113_zps450d447a

comp42113_zps3df5e0f0

We are not out of the woods yet BUT what we see is encouraging. Expect some backing and filling in here. By the same token, there is an alternative count to a 5 waves down count (red) and that alternative count is shown in the blue numbers in the chart below. Thus, if the blue count is correct, we could easily come back down to retest recent lows for the 5th wave of the alternative count. 

spx15min42113_zpsa3889168

Going into next week, we are waiting to see if we retest the lows. AAPL reports on Tuesday AFTER the close. If we rollover Monday and Tuesday (following the alternative,  blue, count – don't fear it), we might retest the lows.  AAPL could be a catalyst for popping the market off of that retest.  

Our game plan for the week is:

Watch the 15-minute index charts for the potential of a retest of the recent lows per the Elliott Wave alternative count in blue.  The S&P stopped going up Friday at the pink POH (pullback off high) downtrend resistance line . 

Should we get a retest of the lows, we might start to see names stabilizing. We'd consider buying on the long-side watch list.

Take SODA for example:

Here we have a stock in a confirmed uptrend above the 50-day moving average that has pulled back off of its highs to hit support at the blue line and the 50-day mva.  A break above the pink line would trigger a long-side trade.   

What else is on our long side watch list? For a limited time, sign up for our FREE 15-day no obligation trial and receive for 15 days everything our paying subscribers receive including:

  • Newsletters about the top technical set-ups to look for
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  • Trade trigger alerts every time we buy and sell a stock/ETF or place an options trade 

To receive the free trial to David's All About Trends, you must use the promo code: PSW.

p.s. To learn more about Elliott Wave theory and how to count the waves, click on the ads below for free reports from Elliott Wave International:

 






So Who Sold All That Gold? – JPM’s Own Version

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Since prevailing fringe theory is that JPMorgan and the other bullion banks ‘control’ the price of gold, we thought it would be interesting to hear yet another explanation for last week’s monumental precious metal market events… from the horse’s mouth…

 

Via JPMorgan,

Who sold the gold?

 

Gold’s 1 day fall of 9% on Monday was one of the largest 1-day falls in the history of the gold market, but what do we know about who was selling?

 

We have three high frequency flow indicators for the gold market: CFTC futures positions, Gold ETFs and gold coin sales in the US. Of course, these only make up a portion of gold demand but the remaining physical demand is difficult to capture on a high frequency basis.

 

The peak in gold ETF holdings of physical gold was actually in December 2012 and there have been reasonably steady outflows since then. In contrast, the peak in the gold price was in October 2012 and it has been falling steadily since then.

 

Additionally, the outflows from gold ETFs have continued in the latter part of this week, even though the gold price has rebounded some 4%. Looking further back there has not been a strong correlation between ETF flows and gold prices on either a high or low frequency basis. ETFs do not seem likely to have been the culprit here, although Monday’s $1.8bn outflow undoubtedly didn’t help.

 

[ZH: It would seem the data in the chart above suggests that JPM is incorrect and ETFs were very responsible - as the momentum from the Q4 to Q1 divergence corrects]

 

Sales of American Eagle gold coins, perhaps an indicator of retail investment demand, have actually risen sharply over the past two weeks.

 

 

Total sales so far in April are 153,000 ounces, already the highest month since mid 2010, and we still have two weeks to go.

 

[ZH: It seems - unlike stocks - that a falling price does encourage more demand]

 

That leaves CFTC managed money futures positions. Unfortunately, we only have data up until last Tuesday, the 9th of April, so not including the sell-off period itself. However, there has historically been a strong correlation between changes in these


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Yet Another Market Top Indicator

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Forget the multitude of divergences from any and every sense of real fundamentals (or other market structures) that the US equity market is exhibiting; deny for just one moment the existential crisis that is inevitably drawing closer by the day as the world’s central bankers/planners truly believe they have the ‘final’ solution; there is only one fool-proof method of knowing what is coming next. As we noted in September 2012, just 13 days before QEternity was announced, Barron’s provided the ‘cover’ and it seems with this week’s ‘exuberance’ that they have once again provided confirmation. If nothing else, Barron’s is great at picking points where Bernanke (or Yellen) feels compelled to save the market from collapse.

 

 

(h/t @Not_Jim_Cramer)





“Econogate” and Japan

Courtesy of Bruce Krasting.

 

r&r

How about Reinhart-Rogoff? A couple of Bozos. These two Harvard economists have set back the debate on debt/deficits and the relationship to economic performance by years.

 

In 2009 there was “Climategate”, where scientists who wanted to see action on reducing greenhouse gases fudged data to “prove” their point. That blew up in a spectacular way, and gave those who appose efforts to curb CO2 the smoking gun they thought was needed to debunk all of the evidence on global warming. A few scientists derailed the debate on climate. We will have to wait 20 years to find out how much damage will result. The R&R horror story is no different.

 



Continue Here





 
 
 

Zero Hedge

World Trade War I: US Asks South Korea To Join Anti-Huawei Campaign

Courtesy of ZeroHedge. View original post here.

The bilateral trade war between the US and China is gradually becoming a global trade war of global geopolitical and commercial dominance between the US and Chinese spheres of influence.

Shortly after the two largest mobile phone companies in the UK decided against launching Huawei-built 5G phones this morning, and roughly around the time a bevy of Japanese tech and telecom companies including ARM Holdings, Panasonic and SoftBank all imposed a boycott on supplying Huawei with mission critical components joining Australia, and New Zealand as major US allies to end commercial relat...



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Phil's Favorites

Overpriced tech IPOs sell grand visions but aren't worth their valuations

 

Overpriced tech IPOs sell grand visions but aren't worth their valuations

rblfmr / Shutterstock.com

Courtesy of John Colley, Warwick Business School, University of Warwick

The year of the tech IPO is 2019. Uber went public on May 10 with a US$82.4 billion valuation. Fellow ride-sharing app Lyft floated in March with a U$24 billion valuation and Pinterest had a US$10 billion IPO in April...



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Kimble Charting Solutions

Emerging Markets About To Submerge If 3-Year Support Breaks?

Courtesy of Chris Kimble.

Are Emerging Markets about to “Submerge” and head a good deal lower? What they do at (3) will go a long way in answering this question!

Emerging Markets ETF (EEM) has been lagging the broad market for the past 15-months. They hit their 50% retracement level of the last year’s highs and lows and falling resistance at (2) recently. The weakness of last has EEM trading below its 200-MA line.

EEM has spent the majority of the past 3-years inside of rising channel (1), which reflects that this trend remains up. The weakness of late has it testing the bo...



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Insider Scoop

Amgen To Buy Danish Collaborator Nuevolution For $167M

Courtesy of Benzinga.

Amgen, Inc. (NASDAQ: AMGN) took a logical step forward in buying a preclinical biotech it has been collaborating with since 2016. 

What Happened

Amgen announced Wednesday an agreement to buy Copenhagen-based Nuevolution for $167 million.

Th...



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Chart School

Weekly Market Recap May 18, 2019

Courtesy of Blain.

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

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

Then on Wednesday:

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

...

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Digital Currencies

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

 

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

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

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



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Biotech

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

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

 

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

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

Courtesy of David M. Gilbert, Florida State University

...



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ValueWalk

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

By Jacob Wolinsky. Originally published at ValueWalk.

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

rawpixel / Pixabay

Friends and Fellow Investors:

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



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

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

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



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OpTrader

Swing trading portfolio - week of September 11th, 2017

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

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

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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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