Archive for 2014

Fed Officials Trying to Warn Bond Markets

Fed Officials Trying to Warn Bond Markets

Courtesy of EconMatters

The Purpose of Complacency Talk
 
The Fed officials have been coming out in speeches the last couple of weeks with rhetoric about ‘complacency’ and other such code words for chasing risk ahead of what the Federal Reserve knows is going to be an abrupt change in monetary policy over the next six months.  
 

The Fed is concerned because they know they want an orderly transition in markets and not causing major dislocations in markets by massive selloffs. However, the getting is so good with interest free money that participants are going to push this edge they have in markets right up until the last possible exit minute.

 
So despite the fact that QE ends in October with no more bond buying by the Fed, the 10-Year is still sitting at 2.50% with participants making money hand over fist with the borrow at 15-25 basis points and investing in yield instruments with massive leverage trades that has been so popular and irresistible by investors looking for ‘free money arbitrage’ opportunities.
 
An Orderly Unwind
 
The problem that the Fed has rightly identified is that they are not going to get an orderly exit at this pace, the unwind is going to be massive, jarring, and definitely not ‘orderly’! The Bond markets, take the 10-year yield could literally have a 25 or 35 basis point move over a 24 hour period that would wreak a lot of havoc on fund flows, asset classes and financial markets. 
 
This turmoil in the bond market could really be disastrous because the Fed participants realize the bond market isn`t being priced currently where the Fed is moving to in terms of monetary policy. The Fed should be alarmed because the unwind is setting up for a possible 100 basis point move in two months’ time frame type of fund dislocation and reallocation of capital, and that is going to be problematic for markets! 
 
But the Fed only has themselves to blame for this predicament as in this case you cannot have your cake and eat it too! Janet


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Meanwhile, In Argentina: Riot Police Unleash Tear Gas & Water Cannons In Buenos Aires – Live Feed

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

With the nation teetering on the brink of default amid major inflation pressures at home and growing poverty (and Kirchner facing pressure into next year's election), today's loss in the FIFA World Cup final appears to have lit the blue touch paper. As RT reports, police used tear gas and water cannons to disperse angry fans in Buenos Aires. Following the mass gathering around the Obelisk during the game, fans clashed with riot police as the loss sunk in. There are no reports of civilian injuries but 8 police were hurt. Rio has also seen violence between Argentina fans and others (and Brazil's Rousseff has issued a calming statement).

As AP reports,

Riot police are firing tear gas and using water cannons to restrain a group of youth who are hurling rocks and vandalizing stores at a rally in Buenos Aires to celebrate Argentina's gutsy performance in a 1-0 loss to Germany in the World Cup finals.

 

Parents with young children could be seen running down streets after police, who at first remained on the sidelines, tried to take back the area near the city's iconic Obelisk after 9 p.m. local time.

 

Local media reported 8 police officers were injured in violence late Sunday.

 

The disturbances came after thousands of Argentines gathered peacefully at the Obelisk with families and neighbors to applaud Argentina's best World Cup performance in 24 years.

The Obelisk where fans watched the game…

Has become a riot zone…

 

Live Feed

 

And even in Rio there were problems after the match…

Perhaps fearing the same in Brazil, President Rousseff issued a 'calming' statement:

A letter written by Brazil's President Dilma Roussef was released on Sunday, suggesting the national soccer team to "take advantage


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China – It’s Politics, Not Just Finance

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Sean Corrigan of Diapason Commodities,

Scanning the Chinese press, the sense is primarily that problems related to their dysfunctional financial system and the gross lack of personal accountability in its exploitation are being detailed everywhere. Troubles involving mutual guarantee companies in Whenzhou, commodity shippers in Qingdao and elsewhere, Ping An insurance execs, BOC/CITI ‘money launderers’ in Guangzhou, steel execs, trust fund sellers, stockbrokers front running orders via their personal accounts, real estate developers colluding with their local government buddies – you name it; and the whole superstructure is, of course, intricately interlocking and hence becoming systemically fragile.

Every day that goes by, China’s “little Dutch boy” needs another finger to plug the new leak he caused by trying to stem the previous one. The risk is, he may soon run out of digits…

Against this backdrop, the regime is trying to launch reforms while not allowing the so-called ‘bicycle’ economy to slow down so much it falls over.

One key point here is that Xi’s increasingly rigorous ‘corruption’ purge has totally paralysed decision makers so that, in fact, it is hard to resist the conclusion that all effort at reform has been completely grounded. This has gone so far beyond the bounds of what s routine that there was even some speculation I read that next move will come uncomfortably close to Li himself (via Xi’s factional struggle rather than through the former’s personal culpability).

No wonder Li is said to be screaming at officials to get of their backsides and DO something in his meetings with them

One element of Xi’s extraordinary concentration of power in his own hands is that he may be putting the nation on a (precautionary) war footing, but the greater point is that the problems he has inherited are so entrenched that every attempted solution becomes a new problem in its turn, hence all the chopping and changing and all the conflicting signals being generated as to the true thrust of policy.

As for his crackdown, if the idea was to scare the previously unresponsive local cadres into compliance with Beijing’s directives, he has WAY overshot that mark. No heads above the parapet now and hence precious little appetite to take bold action, further down the food chain.

Xi seems to have created his…
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Want To Buy A Tank? Here’s How

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Dreamed of driving a “Deathstalker”? Always wanted to drive an M3 Light Tank over your neighbor’s car parked in your driveway? Well, now’s your chance… As Bloomberg reports, on July 11, a portion of the world’s largest private collection of tanks and historic military vehicles will be up for auction. Former Silicon Valley engineer, Jacques Littlefield, bought his first tanks in the 1980’s and by the time of his death in 2009, he had acquired more than 200 vehicles.

 

 





Making Sense Out of “Contradictions That Make No Sense”

Courtesy of Mish.

A New York Times headline by Floyd Norris reads In U.S. Data, a Baffling Contradiction.

The same article, by the same author, appears on Yahoo!Finance as In U.S. Data, a Contradiction That Makes No Sense.

The first quarter of this year was the worst for the United States economy since the depths of the Great Recession in early 2009.

During the same period, employers hired more people than in any quarter over the last six years, signaling gathering strength in the economy.

It is hard to imagine how both of those statements could be true, but they are what government statistics indicate.

While the employment numbers have been strong, the government sharply cut its estimate of first-quarter gross domestic product late last month. It had previously said the economy declined at an annual rate of 1 percent during the quarter — a small dip that could be explained by severe weather in much of the country. The new figures showed a 2.9 percent rate of decline, the worst since a 5.4 percent drop in the first three months of 2009.

What happened? Put simply, a single government survey produced highly dubious numbers. Those who conduct the survey say it was done normally and that nothing suspicious surfaced in the responses. But — particularly in the case of one vital part of the economy — that survey contradicted other available information. The result was suspiciously low revenue estimates for companies in both health services and food retailing.

The big decline in estimates of the size of the United States economy was caused primarily by a sharp reversal in the government’s estimate of spending on health care services.

In May, the Bureau of Economic Analysis of the Commerce Department, which produces the G.D.P. figures, estimated that in the first quarter such spending rose at an annual rate of 9.7 percent before adjusting for inflation. That would have been the largest quarterly increase in 13 years.

There was a significant increase in Medicaid spending in the first quarter, said Benjamin R. Mandel, an economist who is chief of the federal branch of the bureau’s government division. He said that increase was one reason the early estimate was so positive. He also said that increase had been expected because,


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Making Sense Out of “Contradictrions That Make No Sense”

Courtesy of Mish.

A New York Times headline by Floyd Norris reads In U.S. Data, a Baffling Contradiction.

The same article, by the same author, appears on Yahoo!Finance as In U.S. Data, a Contradiction That Makes No Sense.

The first quarter of this year was the worst for the United States economy since the depths of the Great Recession in early 2009.

During the same period, employers hired more people than in any quarter over the last six years, signaling gathering strength in the economy.

It is hard to imagine how both of those statements could be true, but they are what government statistics indicate.

While the employment numbers have been strong, the government sharply cut its estimate of first-quarter gross domestic product late last month. It had previously said the economy declined at an annual rate of 1 percent during the quarter — a small dip that could be explained by severe weather in much of the country. The new figures showed a 2.9 percent rate of decline, the worst since a 5.4 percent drop in the first three months of 2009.

What happened? Put simply, a single government survey produced highly dubious numbers. Those who conduct the survey say it was done normally and that nothing suspicious surfaced in the responses. But — particularly in the case of one vital part of the economy — that survey contradicted other available information. The result was suspiciously low revenue estimates for companies in both health services and food retailing.

The big decline in estimates of the size of the United States economy was caused primarily by a sharp reversal in the government’s estimate of spending on health care services.
 

[Keep reading]

Questions on Obamacare

In regards to the peculiarities of Obamacare I have a couple of questions:…

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Picturing The March Of Tyranny

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Well-known libertarian cartoonist Ben Garrison has previously summarized the state of the States perfectly in this image. As he describes it – the cartoon “shows how the banking and corporate masters (crony capitalist fascists) control both major parties behind the scenes. They keep us distracted with left vs. right while giving us the illusion that voting for one of the other parties will solve things. It won’t.It appears his ‘prophecy’ has grown more and more the reality in the past years…

 

 

Source: Ben Garrison





Colorado Man Infected With Deadliest, Rarest Form Of Plague

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Don’t Panic. But…”The message we’re trying to get out is that the plague bacteria is present here in Colorado, and to take necessary precautions to avoid getting infected,” is the warning from health officials as a Colorado man is infected with the rarest and most fatal form of the pneumomic plague, an airborne version that can be spread through coughing and sneezing. As Bloomberg reports, it is the first case of pneumonic plague seen in the state since 2004, and rather stunningly, he appears to have contracted the illness from his dog. “We don’t think it’s out in our air,” House said. “We think it’s in our dead animal populations.”

As Bloomberg reports, a Colorado man is infected with the rarest and most fatal form of plague, an airborne version that can be spread through coughing and sneezing.

The state is working “to investigate the source of exposure and to identify those who may have been exposed through close contact with the individual,” the Colorado Department of Public Health and Environment said in its statement. “Any individuals exposed will be recommended for antibiotic treatment.”

 

 

“We don’t think it’s out in our air,” House said. “We think it’s in our dead animal populations and dead rodent populations.”

 

“The reaction is leaning toward people who are tired of the protection of prairie dogs on some level,” said Jim Siedlecki, director of public information of Adams County. “Most people look at them as cute little dogs on the side of the road, but in rural Adams County they are looked at as a rodent who damages crops and is potentially plague-ridden.”

 

 

Untreated plague is fatal, and antibiotics have to be given within 24 hours of the first symptoms to reduce the chance of death. Symptoms of the disease include fever, headache and chest pain, along with a pneumonia that develops rapidly causing shortness of breath, chest pain and bloody mucus, according to the CDC.

There is no vaccine available for plague in the U.S.

Colorado officials recommend that residents keep pets away from wildlife, especially dead rodents. The plague can spread from animals after a large die-off of prairie dogs, when fleas with the


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US Offers Immunity To Junior FX Manipulators In Exchange For Ratting Out Their Seniors

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

In another indication that the ongoing FX probe is picking up steam, or at least preparing for primetime public PR consumption, the FT reports that US prosecutors are offering immunity deals to junior traders in London. The quo for this particular quid: rat our the senior staff involved in what has previously been reported to be years of currency manipulation (recall “How Wall Street Manipulates Everything: The Infographics“). And continuing the tradition of the DOJ only focusing on European banks, because apparently nobody in the US ever engaged in manipulation of anything, ever, the “US Department of Justice staff have flown to the UK in recent weeks to interview foreign exchange traders, who have been offered partial immunity in exchange for volunteering information about superiors, people familiar with the situation said.”

Previously such a blanket immunity agreement was used by UBS to rat out its peers in the Libor manipulation probe to avoid prosecution. And so piggybacking on bankers’ eagerness to expose their former best friends, regulators are going bank to bank and focusing on those most with the most to lose, and most liable to spill the goods: the junior-most traders.

From the FT:

Such “proffer agreements” allow individuals to give authorities information about crimes with some assurances they will be protected against prosecution, as long as they do not lie.

 

The move marks another step in the global investigation into collusion and market-rigging in the $5.3tn a day currency market by at least 15 regulators and prosecutors. They are investigating allegations that bank traders and sales staff used chat rooms and other means of communication to share client information and manipulate daily currency benchmarks.

 

Most authorities initially gave banks free rein to conduct their own probes, prompting the suspension, placing on leave or firing of so far almost three dozen staff at 10 banks and the Bank of England, where one official has been suspended.

 

One senior lawyer said the DoJ probe was well-advanced. The DoJ declined to comment. Referring to general criminal activity, Leslie Caldwell, its criminal division chief since May, told the FT last week that the authority would be “appropriately aggressive” and seek to bring “timely” cases against financial institutions.

On the other hand, showing…
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Daughter Of Mortgage Bankers Association CEO Has Lost Faith In American Homeownership Dream

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

"The world has changed," explains the 27-year old daughter of David Stevens – CEO of the Mortgage Bankers Association. Despite her father's constant 30-year pitch of the merits of homeownership – and knowing full well that rates are low, rents are high, and owning a home 'builds wealth' – Sara Stevens is not buying. After watching "cousins and other family members go through pretty tough situations in 2008 and 2009," her skepticism is broad-based as Bloomberg reports, t’s more than the weight of student loans, an iffy job market and tight credit — even those who can buy are hesitant. As Bloomberg so eloquently concludes, when even the cheerleader-in-chief for housing can’t get a rah-rah out of his daughter, you know this time is different.

As Bloomberg reports,

Six years since the collapse of Lehman Brothers triggered a financial meltdown, some young adults are more risk averse and view the potential upsides of status and wealth more skeptically than before the crisis, altering the homeownership calculation. It’s more than the weight of student loans, an iffy job market and tight credit — even those who can buy are hesitant.

 

The doubt is so pervasive that it’s eroded entry-level sales and hampered the recovery. In May, the share of first-time buyers fell for the third month, to 27 percent, according to the National Association of Realtors. Historically, it’s been closer to 40 percent of all buyers.

 

“We have a younger generation that has sat on the front lines of this housing recession,” said Stevens, 57. “They’re clearly being more thoughtful about it and they’re clearly deferring that decision.”

 

 

 

As the charts above show, Sara Stevens and other millennials — the generation born beginning in the early 1980s — started coming of age just as housing collapsed.

Sara was just out of college in 2009 when President Barack Obama put her dad in charge of the Federal Housing Administration. Part of his job was to lobby Congress not to dismantle the financial architecture that had made it possible for generations of Americans — including himself — to buy homes. He also was juggling pleas from family and friends who couldn’t pay their adjustable-rate mortgages


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Phil's Favorites

Congress is considering privacy legislation - be afraid

 

Congress is considering privacy legislation – be afraid

Courtesy of Jeff Sovern, St. John's University

Supreme Court Justice Louis Brandeis called privacy the “right to be let alone.” Perhaps Congress should give states trying to protect consumer data the same right.

For years, a gridlocked Congress ignored privacy, apart from occasionally scolding companies such as Equifax and Marriott after their major data breaches. In its absence, ...



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Zero Hedge

Key Events This Week: Trade War, EU Elections, Durables, PMIs And Fed Minutes

Courtesy of ZeroHedge

Looking at this week's key events, Deutsche Bank's Craig Nicol writes that while the unpredictable nature of US-China trade developments will likely continue to be the main focus for markets again next week, we also have the European Parliament elections circus to look forward to as well as various survey reports including the flash May PMIs which may offer some insight into the impact of trade escalation on economic data. The FOMC and ECB meeting minutes are also due, along with a heavy calendar of Fed officials speaking.

The European Parliament elections will kick off next Thursday with voting continuing into the weekend across the continent, with results expected on Sunday. With the elections surrounded by internal and external challenges for the EU, members di...



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Kimble Charting Solutions

Will S&P 500 Double Top Derail The Rally?

Courtesy of Chris Kimble.

The rally off the December stock market lows has been strong, to say the least. The S&P 500 rallied 25 percent before hitting and testing the 2018 high.

The old highs proved to be formidable resistance and ushered in some volatility in May… and a 5 percent pullback.

In today’s 2-pack, we look at that resistance level – could that be a double top? We can see similar patterns develop on the S&P 500 Index and its Equal Weight counterpart.

Both indexes are testing short-term Fibonacci retracement levels of the recent decline at point (2).

What takes place here after potential double top highs will be important. Stay tuned...



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Insider Scoop

60 Biggest Movers From Friday

Courtesy of Benzinga.

Gainers
  • Fastly, Inc. (NYSE: FSLY) shares jumped 50 percent to close at $23.99 on Friday. Fastly priced its 11.25 million share IPO at $16 per share.
  • Outlook Therapeutics, Inc. (NASDAQ: OTLK) shares climbed 37.3 percent to close at $2.10 on Friday after the stock rose over 68 percent Thursday following an Oppenheimer initiation at Outperform with a price target of $12.
  • Cray Inc. (NASDAQ: CRAY) shares rose 22.5 percent to close at $36.52 after Hewlett Packard Enterpri...


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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:

 

·       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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