Archive for 2013

Comment by David Ristau

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  1. David Ristau

    Jere,

    I was saying that if you wanted to get into a position with DIG you could long term. I like oil’s prospects for increasing over the next couple weeks, so it may not be a long term play. That was my response to whether you should buy it or not.







Comment by David Ristau

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  1. David Ristau

    I am available all day for comments. Let me know if you have any questions.







Inflation is Raging – If You Know Where to Look

Courtesy of John Rubino.

Most people – certainly most governments and economists – define inflation as a general rise in prices. But this is wrong. Inflation is an increase in the money supply, of which a rising general price level is just one possible result – and not the most common one.

More often, excessive money creation shows up as asset bubbles, where the new money, instead of flowing equally to all the products that are for sale at a given time, flow disproportionately into the ‘hottest’ asset classes. Readers who were paying attention in the 1990s might recall that the consumer price index was well-behaved while huge amounts of money flowed into financial assets, producing the dot-com bubble.

The same thing happened in the 2000s, when excess currency flowed into housing and equities. In each case, mainstream economists and government officials pointed to modest consumer price inflation as a sign that things were fine. And in each case they were simply looking in the wrong place and completely missing the destabilizing effects of an inflating money supply.

Now we’re at it again, with economists, legislators and central bankers using low consumer price inflation as a rationale for even easier money, while ignoring epic bubbles in sovereign bonds, equities, high-end real estate and collectibles around the world. These bubbles are the true evidence of inflation, and since they’re growing progressively larger, it’s accurate to say that inflation is high and accelerating. Let’s take some exotic examples, first from the art world:

Art prices painting a disturbing picture of inflation

The Francis Bacon painting “Three Studies of Lucian Freud” was sold for a whopping $142.4 million as part of a $691.6 million Christie’s sale on Tuesday night, making it the most expensive work of art ever sold at auction.

Some argue that the sale is giving us a message about inflation that investors aren’t getting from the action in gold, the Dollar Index, or the government’s official consumer price index data.

“Asset inflation took another leg higher last night,” wrote Peter Boockvar in a Wednesday morning note. “Thank you Federal Reserve, and thank you Bureau of Labor Statistics for not including art in the consumer price index.”

And this from…would you call it the jewelry world?:…
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Comment by advill

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  1. advill

    C´mon, Tyler, this is not serious, if you can´t write a day….take a leave!, relax!, you can not compare an idiot that never finished high school (Venezuelan level) with a Harvard Graduate…..even if you are against something you can not lose your quality as a person.

    C´mon rectify and recognize that today it was a bad day, happen to all of us!.







Why The Fed Can’t See A Bubble In Equity Valuations

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

In 'An Open Letter To The FOMC' John Hussman lays out in detail the true state of the world that asset-gatherers and Fed members alike seem blinded to. The intent of his letter is not to criticize, but hopefully to increase the mindfulness of the FOMC as to historical evidence, the strength of various financial and economic relationships, and the potentially grave consequences of further extreme and experimental monetary policy. Crucially, as we have heard numerous times in the last few weeks, the Fed sees no bubble, and so, a courtesy to both the investing public and the gamblers at the Fed, Hussman explains the reason that the Fed does not see an “obvious” stock market bubble (to use a word regularly used by Governor Bullard, as if to imply that misvaluations cannot exist unless they smack their observers with a two-by-four).

 

Excerpted from John Hussman's "Open Letter To The FOMC",

 

The reason that the Fed does not see an “obvious” stock market bubble (to use a word regularly used by Governor Bullard, as if to imply that misvaluations cannot exist unless they smack their observers with a two-by-four) is because while price/earnings multiples appear only moderately elevated, those multiples themselves reflect earnings that embed record profit margins that stand about 70% above their historical norms.

We can demonstrate in a century of evidence that a) profit margins are mean-reverting and inversely related to subsequent earnings growth, b) margin fluctuations are largely driven by cyclical variations in the combined savings of households and government, and importantly, c) valuation measures that normalize or otherwise dampen cyclical variation in profit margins are dramatically better correlated with actual subsequent outcomes in the equity markets.

 

[ZH: READ THAT AGAIN!!]

 

A few additional charts will drive this point home. The chart below shows the S&P 500 price/revenue ratio (left scale) versus the actual subsequent 10-year nominal total return of the S&P 500 over the following decade (right scale, inverted). Market valuations on this measure are well above any point prior to the late-1990’s market bubble. Indeed, if one examines the stocks in the S&P 500 individually, the median price/revenue multiple is actually higher today than it was


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The 10 Corporations That Control Almost Everything You Buy

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

We know the ten “people” that run the world, that 25 cities represent over half the world’s GDP, and that the world’s billionaires control a stunning $33 trillion in net worth… but who controls what the average joe-sixpack on Main Street buys? As PolicyMic notes, these ten mega corporations control the output of almost everything we buy – from household products to pet food and from jeans to jello. The so-called “Illusion of Choice,” that these corporations (and their nepotistic inter-relationships) create is remarkable…

(click image for gigantic legible version)

(Note: The chart shows a mix of networks. Parent companies may own, own shares of, or may simply partner with their branch networks. For example, Coca-Cola does not own Monster, but distributes the energy drink. Another note: We are not sure how up-to-date the chart is. For example, it has not been updated to reflect P&G’s sale of Pringles to Kellogg’s in February.)

 

Via PolicyMic,

Here are just a few examples: Yum Brands owns KFC and Taco Bell. The company was a spin-off of Pepsi. All Yum Brands restaurants sell only Pepsi products because of a special partnership with the soda-maker.

 

$84 billion-company Proctor & Gamble — the largest advertiser in the U.S. — is paired with a number of diverse brands that produce everything from medicine to toothpaste to high-end fashion. All tallied, P&G reportedly serves a whopping 4.8 billion people around the world through this network.

 

$200 billion-corporation Nestle — famous for chocolate, but which is the biggest food company in the world — owns nearly 8,000 different brands worldwide, and takes stake in or is partnered with a swath of others. Included in this network is shampoo company L’Oreal, baby food giant Gerber, clothing brand Diesel, and pet food makers Purina and Friskies.

 

Unilever, of soap fame, reportedly serves 2 billion people around the world, controlling a network that produces everything from Q-tips to Skippy peanut butter.





A Look Inside The “New Normal” McMansion

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

And they’re back:

  • 2,277 sq.ft. - Median new-home size in 2007
  • 2,306 sq. ft. - Median new-home size in 2012

Just as that crowning achievement of the last housing bubble, the McMansions, have once again returned with the second and final return of the Fed-blown housing bubble, the Bluths picked a perfect time to also come bac on the scene.

But back to the triumphal return of McMansions.

Readers will recall that one of the prevailing themes in the early post-depression years, was a return to thrift – in spending and in housing size – and after the median home size hit a record high of 2,277 square feet in 2007, it declined progressively in the following two years according to Census Bureau figures (we can only assume these were not manipulated unlike the jobs numbers). As David Rosenberg at the time, and as the NYT pointed out a day ago, “It seemed that after more than a decade of swelling domiciles, the McMansion era was over. But that conclusion may have been premature.”

Because as data from 2010 and onward shows, now only is American fascination with size, in this case of one’s home, back but it has never been more acute:

In 2010, homes starting growing again. By last year, the size of the median new single-family home hit a record high of 2,306 square feet, surpassing the peak of 2007. And new homes have been getting more expensive, too. The median price reached $279,300 in April this year, or about 6 percent higher than the pre-recession peak of $262,600, set in March 2007. The numbers are not adjusted for inflation.

However, since we have already covered the return of the housing (and all other) bubbles previously, we will not comment on how the Fed is once again doing everything in its power to bring about the biggest credit and housing bubble crash in history. The NYT has done a rather good and concise job of that:

 Yet the economy remains weak. How can Americans keep buying bigger and more expensive homes? It turns out, of course, that not everyone can.

 

“It’s all about access to credit,” said Rose Quint,


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The Cost Of An Ultrawealthy Uberclass: $1500 Per Worker

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by mickeyman via The World Complex blog,

Interpretation of scaling laws for US income

It has been remarked that if one tells an economist that inequality has increased, the doctrinaire response is "So what?"

                                          – Oxford Handbook of Inequality

h/t Bruce Krasting

Social Security online has published a full report on income distribution in America.

Two years ago we looked at the distribution of wealth in America. Today we are looking at income.

There were a total of about 153 million wage earners in the US in 2012, which is why the graph suddenly terminates there.

As we have discussed before, in self-organizing systems, we expect the observations, when plotted on logarithmic axes, to lie on a straight line. Casual observation of the above graph shows a slight curve, which gives us some room for interpretation.

I have drawn two possible "ideal states"--the yellow line and the green line.

Those who feel the yellow line best represents the "correct" wealth distribution in the US would argue that the discrepancy at the lower income (below about $100k per year) represents government redistribution of wealth from the pockets of the ultra-rich to those less deserving.

 

Followers of the green line would argue the opposite--that the ultra-wealthy are earning roughly double what they should be based on the earnings at the lower end.

Which is it? Looking at the graph you can't tell. But suppose we look at the numbers. Adherents of the yellow line would say that roughly 130 million people are getting more than they should. The largest amount is about 40%, so if we assume that on average these 130 million folks are drawing 20% more than they should (thanks to enslavement of  the ultra-wealthy), we find that these excess drawings total in excess of $1 trillion. Thanks Pluto!

The trouble with this analysis is that the combined earnings of the ultra-wealthy--the top 100,000--earned a total of about $400 billion. They simply aren't rich enough to have provided the middle class with all that money.


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Comment by jmm1951

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  1. jmm1951

    In the post above the word "psychopaths" as I have used it should always be in quotes or have the words "so-called" placed in front.







Comment by goober

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  1. goober

    Excellent commentary. It’s about time some of the democrats started speaking out and exposing so many bad decisions/acts. The republicans started this malaise of malfeasance and the democrats seem to be more than accomodating to continue the criminal acts of deficit spending and calling it "savings". They are all criminals in my view and many should be prosecuted.   







 
 
 

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

This Is The One Chart Every Trader Should Have "Taped To Their Screen"

Courtesy of Zero Hedge

After a year of tapering, the Fed’s balance sheet finally captured the market’s attention during the last three months of 2018.

By the start of the fourth quarter, the Fed had finished raising the caps on monthly roll-off of its balance sheet to the full $50bn per month (peaking at $30bn USTs, $20bn MBS, although on many months the (balance sheet) B/S does not actually shrink by this full amount which depends on the redemption schedule) and by end-Q4 markets also experienced some of the largest volatility and drawdowns in nearly a decade.

As Nomura&...



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ValueWalk

The Competition For Capital Has Made Stocks Cheap

By Michelle Jones. Originally published at ValueWalk.

The new year is upon us, and now is the time many investors look at what 2018 was and prepare for what 2019 might be. Recession jitters are starting to pick back up again, especially now that the full picture of 2018 is in the books. But what if you could pick only one theme for 2018? Jefferies strategist Sean Darby and team have a suggestion which is especially timely given that it appears to mark the end of an era.

StockSnap / PixabayVolatility carries into the new year

This past year was one of extremes, and the markets ended i...



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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 ...

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

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:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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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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