Archive for 2015

Time For Some Mattress Padding

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Bryce McBride via Mises Canada blog,

Can you imagine borrowing $1000 from the bank and receiving $10 per year interest from the bank? I didn’t think so. However, this is the happy situation facing some European countries and even a few Swiss companies. The Swiss, Swedish, and Danish governments and the food multinational Nestle are now borrowing money from lenders who are happy to pay them for the privilege. In what may signal the beginning of the end of the current financial system, we have moved beyond zero percent interest rates to negative interest rates.
Why are negative interest rates now making an appearance? They are a natural consequence of the rampant money creation undertaken by central banks in response to the global financial crisis. To look at Switzerland, as European savers lost confidence in the euro in 2010 and 2011 and started converting their euro into Swiss francs, the value of the franc against the euro began to rise rapidly. This increase in the value of the franc made Swiss-made products expensive compared to French- or German-made products. In order to keep Swiss companies in business (and Swiss workers in jobs) the Swiss National Bank committed to keeping the value of the franc at or below 83 euro cents.
In order to do this, it was necessary for the Swiss National Bank to do two things. First, it created billions of additional francs and exchanged them for euro on the foreign currency markets. Second, it set Swiss interest rates lower than European interest rates in order to make Swiss bank deposits unattractive to European savers and Swiss loans attractive to European borrowers. European companies and thousands of people in countries like Austria and Hungary, attracted by lower Swiss interest rates, took out loans and mortgages denominated in Swiss francs. These francs were then sold on the foreign exchange market in order to buy the euro needed to fund investment or buy property. The increased supply of francs courtesy of the SNB and European borrowers and the reduced demand for francs from European saver kept the value of the franc suppressed against the euro.
However, as the European Central Bank has responded to each new crisis with promises of additional money printing, last month the Swiss National Bank, no doubt alarmed at the…
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Courtesy of ZeroHedge. View original post here.

Submitted by williambanzai7.



Hitler’s plans to re-arm Germany were also popular. By recruiting a large army and building a whole new navy and air force, he would be able to reduce unemployment. With so many people out of work, this was an appealing prospect.--The Holocaust Expained


People think history is not repeating itself because a loaf of bread does not cost 10 million Deutsche Marks…


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A Black Swan Lands In Southern Austria: The Ripple Effects Of “Mini-Greece Going Off In The Heartland Of Europe”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

By far the most notable news of the past week, which has still gone largely unnoticed by the greater investing community whose focus instead was on whether algos would ramp the Nasdaq to 5000, and keep the S&P above 2100, even before Mario Draghi finally began buying bonds that nobody wants to sell, was the “Spectacular Development” In Austria, whereby the “bad bank” of failed Hypo Alpe Adria – the Heta Asset Resolution AG – itself went from good to bad, with its creditors forced into an involuntary “bail-in” following the “discovery” of a $8.5 billion capital hole in its balance sheet primarily related to ongoing deterioration in central and eastern European economies.

This shocking announcement promptly sent the price of Heta bonds crashing as creditors, no longer enjoying the explicit guarantee of the state, scrambled to get out of “northern Europe’s” first Lehman moment.

But while the acute pain came and went for Heta bondholders who have seen a nearly 50% loss in just a few short months, the bigger and far more diffuse pain is only just starting, or as Bloomberg put it, “Austria’s decision to wind down Heta Asset Resolution AG sent ripples through the financial system, causing credit rating downgrades in Austria and bank losses in Germany.”

The first casualty: the beautifully picturesque southern Austrian province of Carinthia.

Why and how was one of the 9 Austrian provinces just sacrificed? Telegraph explains:

[The Heta] bonds are notionally guaranteed by the Austrian state of Carinthia, which now theoretically becomes liable for the bail-in. It’s an echo of the mess Ireland got itself into at the height of the banking crisis, when it foolishly attempted to stem the panic by underwriting all Irish banking liabilities; the move very nearly ended up bankrupting the entire country. Hypo will bankrupt Carinthia.

Essentially, what the Austrian government is doing is cutting loose an entire region, rather in the way the federal authorities in the US allowed Detroit to go bust a number of years ago.

It’s a mini-Greece going off in the heartlands of Europe.

Specifically, to quantify the Carinthian exposure vis-a-vis its guarantee which will now be put in play: Carinthia provides deficiency guarantee on Heta’s senior debt: the total is equivalent
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Bart Chilton: Since 2007′s Rise Of The Machines, “Markets Have Not Been The Same”

Courtesy of Adam Taggart via Peak Prosperity,

The commodity markets impact almost everybody on the planet, every single day, because some derivative or variant of about everything that they consume is impacted by those prices. Whether it’s a home loan, or a piece of jewelry, or a fill up at the gas station, or a gallon of milk, or a loaf of bread — commodity pricing is vastly more important than most people actually realize. ~ Former CFTC Commissioner Bart Chilton 

In theory, regulation is supposed to set and enforce the rules of the game that market participants play by, in order to ensure that price discovery remains efficient, effective — and most important — fair.

In practice, there's plenty of debate to be had on how successful our regulators are in effecting their mission. And one investment class in particular, commodities, frequently comes under criticism for questionable price action.

So, this week we talk with Bart Chilton, former Commissioner of the Commodity Futures Trading Commission (CFTC), about price discovery within the commodity markets, and whether investors can have confidence in the "fairness" of the current system.

Perhaps it will come as little surprise that Commissioner Chilton, a longtime inside player, does not see the current environment as 'broken' or 'unfair', as some critics claim. And as a former regulator, there are certain topics he is not allowed to comment on. But that said, he's a vocal advocate for several reforms that he believes will reduce the chances for manipulation within the market — particularly position size limits and better rules for high-frequency trading (HFT) algorithms:

[Position] size is an important thing to look at. That’s why in my career as a financial regulator I sought to have limits placed on speculative positions. And unfortunately, there haven’t been. Even though it’s law now, my former agency has not sought to finalize those rules.

Size does impact markets and it can push prices around. In electronic trading, even a small size can move prices just because they’re so quick. You don’t need just to have size. If you control 20% of the crude oil market, and I’ve seen that in the past, you make a big trade you can move a market. Well, today with electronic markets and high frequency traders you

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President Obama’s New Book Revealed?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Another best seller?

Source: Townhall

Greenspan’s Insulting Admission Of Fed Culpability

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Seth Mason via Solidus Center blog,

As if to thumb his nose at the millions of Americans who have undergone long-term financial distress since the late 1990s due to the interventionist monetary policies he implemented, former Federal Reserve Chairman Alan Greenspan, the original engineer of the Fed’s bubble/burst economic paradigm, indirectly admitted to CNBC’s Kelly Evans that the Fed has created unsustainable asset bubbles that could burst when it allows interest rates to rise.

“Mr. Bubble” defended the Fed’s promotion of these bubbles, though, stating though a smile, “It’s good, not bad”:

Greenspan noted that the Fed has been juicing the markets primarily because business investment has been weaker than it has been for any extended period of time since the Great Depression:

And, when asked if this period of asset bubbles will end as badly as the tech and housing bubbles did, Greenspan concluded:

We’re not yet there in a position where it’s crisis. However, the real issue here is going to be when interest rates start to move up.

That’s quite an (unintended) indictment of interventionist Fed policy. On one hand, Greenspan stated that the Fed has inflated asset bubbles, and, on the other hand, stated that the bubbles could burst when it allows interest rates to rise.

But, remember, Greenspan asserted that the bubbles are “good, not bad” because business investment has been so weak. The Fed, according to the former chairman, has therefore been inflating bubbles to promote the expansion of the sluggish Main Street economy. The data, however, say otherwise. There’s a preponderance of evidence that suggests that the Greenspan-Bernanke-Yellen Fed has been pumping torrents of liquidity over the last decade-and-a-half to stimulate Wall Street at the detriment of Main Street, as evidenced by the following charts. (Tap to enlarge explanations in the captions.)

Screen Shot 2015-03-05 at 9.22.41 PM

Screen Shot 2015-03-05 at 9.30.22 PM

Screen Shot 2015-03-05 at 9.47.44 PM

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The evidence is pretty compelling. The Greenspan-Bernanke-Yellen Fed has almost certainly been pumping torrents of liquidity since the latter part of the last millennium to promote the expansion of business on Wall Street, not Main Street. But, even if Fed has had the interests of Main Street in mind when inflating bubbles (I don’t know how they possibly could given…
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Warmongers United: Juncker Requests Creation of EU Army; Peace by War

Courtesy of Mish.

Warmongers United

European discussion of Russia has gone from dumb to dumber.

Of course, the highly regarded “Warmongers United Think Tank” (WUTT) would dispute that. “Warmongers United” believes more armies, more missiles and more fighting are precisely the right thing to do.

What? Haven’t heard of WUTT?

The think tank consists of a various collection of folks itching for a war with Russia, Iran, and Syria, preferably all at once. True believers want to include China in that group.

In general, WUTT wants to set the world right (just as they insisted a war with Iraq, Vietnam and other places would set the world right).

John McCain is the official spokesman for Warmongers United in the US. Jean-Claude Juncker assumed that role today for Europe. Hillary Clinton and Jeb Bush both hope to assume global leadership in 2016.

Juncker Requests Creation of EU Army

Please consider Jean-Claude Juncker Calls for Creation of EU Army.

The president of the European Commission has called for the creation of an EU army in order to show Russia “that we are serious about defending European values”.

In an interview with German newspaper Die Welt, Jean-Claude Juncker, who leads the EU’s executive arm, said an EU army would let the continent “react credibly to threats to peace in a member state or a neighbour of the EU”.

In an interview with German radio on Sunday, Ursula von der Leyen, Germany’s defence minister, also spoke in favour of a European army, pointing out that a brigade of Dutch soldiers was already under German command….

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Welcome To The Dark Side: GDP & The Non-Observed Economy

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Silvia Merler and Pia Huttl via,

Back in 2009, the United Nations Statistical Commission endorsed a revision to the System of National Accounts (SNA), which sets the international standards for the compilation of national accounts. As a consequence, Eurostat has amended the European equivalent of the SNA, the European System of Accounts (ESA) leading to a revision of GDP figures.

The changes come from the accounting treatment of some items. Research & Development (R&D) purchases and military weapon systems have been reclassified from intermediate consumption to investments, which increases value added (the difference between output and intermediate consumption), and thus GDP. Additional changes have been introduced in the accounting of pension entitlements, directly affecting the computation of compensation of employees and households’ savings rate. Other measures, such as changes in measurement of financial services, and the classification of head offices, holding companies and Special Purpose Entities, have little or no impact on the GDP numbers.

Figure 1 shows the average difference between GDP computed with the new and the old standard, retrospectively over the period 2000-2013. The reclassification has had a positive effect on GDP, increasing it on average by 3.5 percentage points for the EU and the Euro area as whole. Country variation is however significant; the impact of the reclassification ranges from 0.3 percentage points in Luxembourg to 9.3 percentage points in Cyprus. Although the revision may have had a visible impact on GDP levels, growth rates are generally less affected.

Unfortunately, Eurostat does not provide a breakdown of how the different accounting changes contribute to the final number. However, the OECD published this month a report disentangling the effect of the different factors for all OECD countries in year 2010 (Figure 2).

Having a breakdown is important because most countries have used the opportunity of the changeover in standards to also introduce a new statistical benchmark estimate, introducing new sources and methods. The OECD report shows that in some countries this has an important impact, most notably in the Netherlands and the UK (see the light red bar in Figure 2).

Other than that, R&D reclassifications tend to be the item with the largest impact on GDP recalculation, whereas reclassification of military weapon systems has very limited impact, with the exception of Greece. In Europe, the…
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Blackstone Buys America’s Most Iconic Skyscraper With Rent Collected As “America’s Landlord”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

As we’ve noted previously, the post-crisis, Fed-subsidized rush to acquire distressed real estate resulted in none other than Blackstone becoming the US’s largest landlord. The giant PE firm — which borrowed $3.6 billion in seed money from Deutsche Bank to get its real estate empire up and running — accumulated a portfolio of some 50,000 single family homes after spending billions buying foreclosures at bank auctions. The properties were quickly converted to rental units and the rent checks were (naturally) securitized into the first ever rental-home-backed-securities. All of this has had the predictably sad effect of driving down US home ownership and driving up rents. 

More recently, Blackstone introduced the “landlord loan” wherein the firm lends prospective real estate speculators cash to buy homes, then securitizes the loans. Deutsche Bank intends to bring the first landlord-loan-backed securities to market over next several weeks. 

Now we learn that the firm, whose real estate ambitions apparently know no bounds, is set to buy Chicago’s Willis Tower (formerly the Sears Tower) in a deal worth some $1.5 billion. 


Private equity giant Blackstone Group LP is in advanced discussions to buy the Willis Tower in Chicago, the country’s second-tallest skyscraper, for about $1.5 billion according to a person briefed on the talks.

If completed, it would be by far the highest price paid ever for a building in Chicago, and well above the $841 million that the iconic black tower—formerly known as the Sears Tower—last traded for in 2004 when it was sold to a group that includes New York investors Joseph Chetrit and Joseph Moinian…

The 1,451-foot tower is often viewed within Chicago as second-tier real estate despite its soaring views and height, given that much of the city’s top-quality property is concentrated on the other side of the Chicago River and closer to Lake Michigan.

The potential deal with Blackstone, reported Friday evening by Crain’s Chicago Business, comes as the ownership group has long been eyeing a sale.


The bottom line: Wall Street destroyed the housing market, waited for prices to collapse, stepped in and bought up all of the foreclosures turning a nation of homeowners into a nation of renters in the process, securitized rental cash flows, and used the proceeds to buy the nation’s second largest skyscraper. 

CEO Stephen Schwarzman made $690 million last year. 

‘Bull Traps’ in Dow and S&P

Courtesy of Declan.

Friday was the first real move bears have successfully pulled off in recent weeks, at least for the S&P and Dow. In the case of the S&P, there was a decisive undercut of 2093 and 20-day MA, with the index finishing just 9 points above its 50-day MA. As the latter moving averages offered little in the way of support in January or February, the likelihood it that we will see another challenge on the 200-day MA. Volume climbed to register a confirmed distribution day, and came with a technical bearish cross between -DI and +DI. Any rally back to 2093 will likely get shorted on Monday.

It was a similar story for the Dow as for the S&P, although it finished a little closer to its 50-day MA. Again, a move back to test 200-day MA would appear to be the preferred next step; rallies back to 18103 will likely be sold against.

The Nasdaq took a hit alongside Large Caps, but it remains well above support and successfully defended its 20-day MA. The index triggered a ‘sell’ in the MACD.

The Nasdaq Summation Index turned a ‘sell’ trigger, along with a ‘sell’ in the relative relationship between the Summation Index and Bullish Percents. The last time there was a ‘sell’ in this relationship the Nasdaq headed lower.

The Russell 2000 closed below its 20-day MA and just a shade below breakout support. Any further loss on Monday would confirm, although aggressive buyers could use this as an opportunity to go long.  There are bearish technicals, perhaps enough to keep some buyers out for now, but ready to participate when technicals recover.

The relative-indices tracker shows a FTSE and S&P at peaks, a dollar in rally, and a euro in decline. A strengthening dollar eventually hurt the indices in 2000/01, but indices peaked in 2007/08 on the back of a weakening dollar. In either case, the rally in the dollar/decline in euro doesn’t look done.

For Monday, look for a rally in the Russell 2000 and Large Cap indices. Rallies in the latter may be shorted as they approach former breakout support, turned resistance. However, bull strength in the market would likely best reward Russell 2000 traders.

You’ve now read my opinion, next read Douglas’ and Jani’s.


Zero Hedge

Will The US Slap Sanctions On Nord Stream 2?

Courtesy of ZeroHedge. View original post here.

Authored by Nick Cunningham via,

There is a growing push in the U.S. Congress to slap sanctions on the Nord Stream 2 pipeline.

The pipeline under construction would carry Russian natural gas to Germany, and has been a lightning rod of controversy both in Europe and across the Atlantic. Many governments and officials from Eastern Europe fear deeper dependence on Russia for gas supplies, a sentiment echoed by the U.S. government. Meanwhile, many in Western Europe are less concerned,...

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Phil's Favorites

US is already fighting a conflict with Iran - an economic war that is hurting the wrong people


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US is already fighting a conflict with Iran – an economic war that is hurting the wrong people

Courtesy of David Cortright, University of Notre Dame

Many are worried about the risk of war with Iran after the Trump administration leaked discussions of a troop deployment in response to claimed threats to U.S. warships in the region.

And in r...

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Insider Scoop

Jefferies Sees 60-Percent Upside In Aphria Shares, Says Buy The Dip

Courtesy of Benzinga.

After a red-hot start to 2019, Canadian cannabis producer Aphria Inc (NYSE: APHA) has run out of steam, tumbling more than 31 percent in the past three months.

Despite the recent weakness, one Wall Street analyst said Friday that the stock has 30-percent upside potential. 

The Analyst

Jefferies analyst ... more from Insider

Kimble Charting Solutions

DAX (Germany) About To Send A Bearish Message To The S&P 500?

Courtesy of Chris Kimble.

Is the DAX index from Germany about to send a bearish message to stocks in Europe and the States? Sure could!

This chart looks at the DAX over the past 9-years. It’s spent the majority of the past 8-years inside of rising channel (1), creating a series of higher lows and higher highs.

It looks to have created a “Double Top” as it was kissing the underside of the rising channel last year at (2).

After creating the potential double top, the DAX index has continued to create a series of lower highs, while experiencing a bearish divergence with the S...

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Chart School

Brexit Joke - Cant be serious all the time

Courtesy of Read the Ticker.

Alistair Williams comedian nails it, thank god for good humour! Prime Minister May the negotiator. Not!

Alistair Williams Comedian youtube

This is a classic! ha!

Fundamentals are important, and so is market timing, here at we believe a combination of Gann Angles, ...

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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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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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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


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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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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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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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.

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