Archive for 2015

Bernanke Says “No Large Mispricings In US Securities”; These 5 Charts Say Otherwise

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Retired central banker, blogger, bond guru and hedge fund consultant Ben Bernanke just uttered the following total rubbish…

  • *BERNANKE: NO LARGE MISPRICINGS IN U.S. SECURITIES, ASSET PRICES

In an effort to save whoever it is that will pay him $250,000 next for these wise words, we offer five charts.

One of these things is not like the others…

nope, no mispricing there at all…

Almost imperceptible amount of mispricing here…

So now "relative" mispriings at all..

How about "absolute" mispricings?

Cyclically, even Yellen thinks stocks are expensive…

and the median stock has never been more expensive…

But apart from that – nope – no mispricing whatsoever.

*  *  *

Which is why it seems odd that Bernanke would conclude his speech with this statement:

  • *BERNANKE: HOW TO MANAGE ASSET PRICE DROP SCENARIO MORE CRUCIAL

Why would asset prices drop if they are not mispriced?





Another Decapitator-in-Chief Of America’s Working Class

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Ben Tanosborn,

It is not Senators Elizabeth Warren and Bernie Sanders who don’t get it.  It is our near-sighted Globalist-in-Chief who really doesn’t get it, following in the footsteps of that other Republican-lite president, William Jefferson Clinton.  But what can one expect, given the advice he’s getting from a cadre of Wall-Streeters working with, or influencing, the White House?  Or, from a president who has confessed to being a “great admirer” of celebrated JP Morgan Chase chief, Jamie Dimon?

A few days ago President Obama honored our Portland (Oregon) area with a visit to promote the Trans-Pacific Trade Partnership (TPP) agreement; which for all intents and purposes is but another addition to the gallery of NAFTA, CAFTA, and PNTR ugly siblings.  Perhaps an even uglier sibling in this period of expanding economic inequality!

It seems comical, yet ill-omened, how Barack Obama is herding the already decimated middle class along a path sure to reach economic oblivion, while maintaining support from much of the old guard of school-government-trade unionists which has kept the Democratic Party afloat during the last five decades in a conservative sea dominated by currents of old-time religion and misguided patriotism.

Common sense and humanity, and not just blind acceptance of global economics, tell us that eventually most barriers to competition should be coming down; and that there will be a significant trend towards greater homogenization in both productivity and personal income throughout much of world.  But we might still be two or three generations away from such happening, assuming changes take place in an orderly and least painful fashion… without allowing our politicians, Democrats or Republicans alike, to follow the will of the elite that place them in power… and, correspondingly, expect a payback.

And that’s where we are today in Congress, ominously on the eve of passing this terrible TPP legislation sure to reach a smiling Obama, pen in hand ready to sign, instead of rejecting it with a forceful and merited veto.

Could it be that Obama is suffering from the same illusionary political disease as Bill Clinton, after the latter’s receipt of unmerited kudos for all the low-paying jobs created during his two terms in office?  Is it so difficult to understand that job numbers can have a profoundly different significance in economic, social and political terms
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From the Very Creation of the Internet, U.S. Spy Agencies Fought to Block Encryption

Courtesy of ZeroHedge. View original post here.

Submitted by George Washington.

American spy agencies have intentionally weakened digital security for many decades. This breaks the functionality of our computers and of the Internet. It reduces functionality and reduces security by – for example – creating backdoors that malicious hackers can get through.

The spy agencies have treated patriotic Americans who want to use encryption to protect their privacy as extremists … or even terrorists.

As Gizmodo’s Matt Novak points out, this attack started at the very birth of the internet:

In the 1970s, civilian researchers at places like IBM, Stanford and MIT were developing encryption to ensure that digital data sent between businesses, academics and private citizens couldn’t be intercepted and understood by a third party. This concerned folks in the U.S. intelligence community who didn’t want to get locked out of potentially eavesdropping on anyone, regardless of their preferred communications method. Despite their most valiant efforts, agencies like the NSA ultimately lost out to commercial interests. But it wasn’t for lack of trying.

 

***

 

When the NSA got wind of the research developments at IBM, Stanford and MIT in the 1970s they scrambled to block publication of their early studies. When that didn’t work, the NSA sought to work with the civilian research community to develop the encryption. As Stowsky writes, “the agency struck a deal with IBM to develop a data encryption standard (DES) for commercial applications in return for full pre-publication review and right to regulate the length, and therefore the strength of the crypto algorithm.”

 

Naturally, in the Watergate era, many researchers assumed that if the U.S. government was helping to develop the locks that they would surely give themselves the keys, effectively negating the purpose of the encryption. Unlike IBM, the researchers at Stanford and MIT didn’t go along with the standard and developed their own encryption algorithms. Their findings were published (again, against the wishes of the NSA) in the late 1970s after courts found that researchers have the right to publish on the topic of cryptography even if it makes the government uncomfortable. According to


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Hanergy Contagion Sparks Chinese Investor Rotation From Shenzhen “Ponzi” To Shanghai “Safety”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

It appears the reality that we exposed in all its unbelievable ponzi-ness has filtered into the psyche of Chinese investors.. though ever so gently for now. Hanergy’s self-dealing self-referential loans collateralized by stock and Goldin financial’s farcical flop, along with 500% return year-to-date stocks by the dozen, has sparked some selling with CHINEXT down around 4%, Shenzhen down 1-2% (both heavily dominated by these high-flying idiot-maker stocks) while Shanghai Composite and CSI-300 (China A-Share proxy) is bid…

because why wouldn’t you greatly rotate to the index that is only up 47% YTD and not 92%?

Charts: Bloomberg





How iTunes Destroyed The Music Business In 1 Simple Chart

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

The music industry was the first entertainment business to confront the digital transition, although it was not exactly a willing pioneer. Rather, it was thrust into this role as a matter of survival, as it grappled with the rapid rise of online piracy in the early 2000s.

The music industry was incredibly slow to respond to the digital transition. Napster, the original music piracy site, burst onto the scene in 1999, but it wasn’t until 2004 when Apple iTunes debuted that consumers grew more and more primed to free music.

This was a serious error and haunted the music industry for years thereafter, costing the industry multi-billions in annual sales. The rest of the entertainment industry has taken note and, as a result, all other entertainment sectors, including video, have been comparatively quick to embrace digital distribution.

The music industry, rather than focusing on a legal digital download service, initially focused all its effort on shutting down Napster by way of a copyright infringement lawsuit. Ultimately, the industry prevailed and the courts shut down Napster in mid-2001; however, this was a pyrrhic victory. By the time Napster was shut down, the pirates had moved on to the next new thing: decentralized peer-to-peer file sharing, led by Gnutella. Unlike Napster, these piracy sites were virtually impossible to shut down because there was no central server storing the files. Shutting down Gnutella would have been tantamount to shutting down the entire internet.

In addition to the failure to launch a legal alternative to the pirate sites, the music industry was, understandably, paralysed by its fear of album unbundling. Piracy had given consumers a taste for singles and there was no going back to albums.

Against this backdrop of piracy and absent a legal digital alternative, music sales plummeted. From a peak of nearly US$15 bn in 1999, US music sales declined cumulatively by 15% to US$12 bn in 2003 (previous exhibit). The decline in song units (assuming 10 songs per album) was even more dramatic, declining by 29% cumulatively to 7.7 bn over the same time. Little did the industry know that this was only the beginning of the decline. By 2004, the music industry was in dire straits. Physical sales were in free fall and its own efforts to launch a digital download service were failing.
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Ron Paul: The Case For Truly ‘Free’ Trade

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Ron Paul via The Misess Institute,

With recent DC politicking on both the Export-Import Bank and the Trans-Pacific Partnership, we revisit Ron Paul's 1981 essay "The Case for Free Trade" which explains the basics of truly free trade: 

Although we think of ourselves as a free-trading nation, it takes more than 700 pages just to list all the tariffs on imported goods, and another 400 to inventory all the non-tariff restraints, such as quotas and "orderly marketing agreements."

A tariff is a tax levied on a foreign good, to help a special interest at the expense of American consumers.

A trade restraint or marketing agreement—on the number of inexpensive Taiwanese sneakers that Americans can buy, for example—achieves the same goal, at the same cost, in a less forthright manner.

And all the trends are towards more subsidies for U.S. exporters, and more prohibitions and taxes on imports.

Trade is to be subsidized or restrained, not left to the voluntary actions of consumers and producers.

In 1930, Congress passed the Smoot-Hawley tariff bill, imposing heavy tariffs on imports, with the avowed motive of "protecting" U.S. companies and jobs. Within one year, our 25 major trading partners had retaliated with their own tariffs on American goods. World trade declined sharply, and the depression was made world-wide and longer-lasting.

Today the policy of protectionism is again gaining favor in Congress, and in other countries. But it must be fought with all our strength.

Not only does protectionism make everyone poorer—except certain special interests—but it also increases international tensions, and can lead to war.

"If a foreign country can supply us with a commodity cheaper than we ourselves can make it," wrote Adam Smith in 1776, "better buy it of them with some part of the pro duce of our own industry, employed in a way in which we have some advantage. The general industry of the country will not therefore be diminished… but only left to find out the way in which it can be employed to the greater advantage."

An important economic principle is called the division of labor. It states that economic efficiency, and therefore growth, is enhanced by everyone doing what he does best.

If I had to grow my own food, make my own clothes, build my own house, and teach my


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McDonalds Responds To Minimum Wage Protests

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

But all they wanted was $15 per hour?

h/t @Stalingrad_Poor





Whatever Happened to Antitrust?

 

Whatever Happened to Antitrust?

Courtesy of Robert Reich

Last week’s settlement between the Justice Department and five giant banks reveals the appalling weakness of modern antitrust. 

The banks had engaged in the biggest price-fixing conspiracy in modern history. Their self-described “cartel” used an exclusive electronic chat room and coded language to manipulate the $5.3 trillion-a-day currency exchange market. It was a “brazen display of collusion” that went on for years, said Attorney General Loretta Lynch. 

But there will be no trial, no executive will go to jail, the banks can continue to gamble in the same currency markets, and the fines – although large – are a fraction of the banks’ potential gains and will be treated by the banks as costs of doing business.

America used to have antitrust laws that permanently stopped corporations from monopolizing markets, and often broke up the biggest culprits. 

No longer. Now, giant corporations are taking over the economy – and they’re busily weakening antitrust enforcement. 

The result has been higher prices for the many, and higher profits for the few. It’s a hidden upward redistribution from the majority of Americans to corporate executives and wealthy shareholders. 

Wall Street’s five largest banks now account for 44 percent of America’s banking assets – up from about 25 percent before the crash of 2008 and 10 percent in 1990. That means higher fees and interest rates on loans, as well as a greater risk of another “too-big-to-fail” bailout.

But politicians don’t dare bust them up because Wall Street pays part of their campaign expenses. 

Similar upward distributions are occurring elsewhere in the economy. 

Americans spend far more on medications per person than do citizens in any other developed country, even though the typical American takes fewer prescription drugs. A big reason is the power of pharmaceutical companies to keep their patents going way beyond the twenty years they’re supposed to run.

Drug companies pay the makers of generic drugs to delay cheaper versions. Such “pay-for-delay” agreements are illegal in other advanced economies, but antitrust enforcement hasn’t laid a finger on them in America. They cost you and


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The “New Era” Is An Old Story

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Excerpted from John Hussman's Weekly Market Comment,

Among the recurring features of speculative episodes across history is the appearance of “new era” arguments to justify the elevated prices, coupled with arguments that historically reliable measures no longer apply. In our view, the problem is not that investors search for new, more reliable tools of market analysis – that should always be an objective. The problem is when investors adopt theories and models that embed the most optimistic assumptions possible, run contrary to historical evidence, or embed subtle peculiarities that actually drive the results (see, for example, the “novel valuation measures” section of The Diva is Already Singing). Eventually, the final refuge of speculation is to abandon historically reliable measures wholesale, resting faith instead on the advent of some new era in which the old rules simply don’t apply.

John Kenneth Galbraith noted this phenomenon decades ago in his book The Great Crash 1929: “It was still necessary to reassure those who required some tie, however tenuous, to reality. This process of reassurance eventually achieved the status of a profession. However, the time had come, as in all periods of speculation, when men sought not to be persuaded by the reality of things but to find excuses for escaping into the new world of fantasy.”

In late-1929, Business Week observed: “This is the longest period of practically uninterrupted rise in security prices in our history… The psychological illusion upon which it is based, though not essentially new, has been stronger and more widespread than has ever been the case in this country in the past. This illusion is summed up in the phrase ‘the new era.’ The phrase itself is not new. Every period of speculation rediscovers it… During every preceding period of stock speculation and subsequent collapse business conditions have been discussed in the same unrealistic fashion as in recent years. There has been the same widespread idea that in some miraculous way, endlessly elaborated but never actually defined, the fundamental conditions and requirements of progress and prosperity have changed, that old economic principles have been abrogated… that business profits are destined to grow faster and without limit, and that the expansion of credit can have no end.”

“This time” is not different. There’s no question that investors have come…
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Angry Voters Hand Spain’s Ruling Party Heavy Regional Losses; Podemos Scores Upset Victories in Barcelona, Madrid

Courtesy of Mish.

The Spanish economy will supposedly grow at three percent. The bad news is Spanish employment is well over 20 percent and is also expected to stay that way.

Angry voters unhappy with that setup took it out big time on PP, the party of prime minister Mariano Rajoy.

Please consider PP Suffers Heavy Regional Losses.

Spain’s ruling Popular party suffered heavy losses in Sunday’s string of regional and local elections, as two upstart movements made dramatic gains at the expense of the country’s established parties.

The PP still emerged as the biggest party in nine of the 13 regional contests, but its ability to head governments at both the regional and local level was severely curtailed. According to preliminary results, the party of Mariano Rajoy, Spain’s prime minister, failed to obtain an absolute majority even in its historical strongholds — meaning it can govern only with the support of at least one of its rivals.

The PP suffered a particularly marked decline in Madrid. Esperanza Aguirre, its high-profile candidate for mayor, beat a coalition of leftwing groups only by the smallest of margins but has little prospect of forming an administration. A similar leftist alliance also scored an upset triumph in Barcelona, meaning Spain’s two principal cities are now likely to be led by a pair of charismatic, leftwing women from outside the political establishment: Manuela Carmena in Madrid and Ada Colau in Barcelona.

The ruling party’s losses were mostly the gain of two political newcomers, the anti-austerity Podemos movement and the centrist Ciudadanos party. Both were on track to enter regional parliaments in force in several key regions, potentially handing them the role of kingmakers. Podemos was also the leading force behind the two municipal victories in Madrid and Barcelona.

Sunday´s elections took place in 13 of Spain’s 17 regions and in more than 8,100 municipalities, providing a crucial test of the national mood ahead of general elections later this year. The overall picture, based on preliminary results, confirm what polls have been saying for months: frustrated voters are turning away from the established parties in ever greater numbers, converting Spain’s decades-old two-party regime into a much more volatile four-horse race.

Like Syriza in Greece, Podemos had been running on an anti-austerity platform. Podemos went even further, threatening to exit the euro.


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Zero Hedge

Enemy Of The People?

Courtesy of ZeroHedge. View original post here.

Via The Zman blog,

There has never been a time when normal people did not know the media was biased and biased in a predictable direction. For every non-liberal in the media, there were at least ten liberals. The ratio was probably higher, but then, as now, some lefties liked to pretend they were independents or some third option.

The media used to invest a lot of time denying they had a bias and an agenda, but the only people who believed them were on the Left, which had the odd effect of confirming they had a bias and an agenda.

...



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Phil's Favorites

A 2019 Earnings Recession?

 

A 2019 Earnings Recession?

Courtesy of 

Shout to Leigh!

On the new Talk Your Book – Josh Brown is joined by Leigh Drogen of Estimize, one of the leading providers of crowdsourced financial and economic data to talk about the trend in corporate profits that could potentially lead to an earnings recession later this year.

What is the thing that Leigh is seeing in the data that Wall Street isn’t yet picking up on? What segment of the stock market is most at risk? Why is the crowd smarter than the narrow consensus of Wall Street analysts?

Check out Estimize ...



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ValueWalk

D.E. Shaw Investment Calls For Leadership Change At EQT

By ActivistInsight. Originally published at ValueWalk.

Elliott Management has offered to acquire QEP Resources for approximately $2.1 billion, contending the oil and gas explorer’s turnaround efforts have done little to lift the company’s share price. The company responded and said that a thorough review of the proposition is imperative in order to properly act in the best interests of shareholders, “taking into account the company’s other alternatives and current market conditions.” The news came only a month after Travelport Worldwide agreed to sell itself to Siris Capital Group and Elliott’s private equity arm Evergreen Coast Capital for $4.4 billion in cash and two months after Athenahealth was bought by Veritas and Evergreen for $5.7 bi...



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Kimble Charting Solutions

Gold & Silver Testing Important Breakout Levels!

Courtesy of Chris Kimble.

Gold and Silver from a long-term perspective have created a series of lower highs over the past 8-years. Will 2019 bring a change to this trend? A big test is in play!

Gold since the lows in 2016 has created a series of higher lows, while Silver may have created a double bottom.

Gold & Silver are currently facing break attempts a (1) and (2). These falling resistance lines have disappointed metals bulls for the past few years.

The direction of Gold and Silver weeks and months from now should be highly influenced by what each does as they are attempting to break above important resistance levels.

To become a member of Kimbl...



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Insider Scoop

UBS Says Disney's Streaming Ambition Gives It A 'New Hope'

Courtesy of Benzinga.

Related DIS Despite Some Risks, Analysts Still Expecting Double Digit Growth From Communications Services In Q4 ...

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

Digital Currencies

Russia Prepares To Buy Up To $10 Billion In Bitcoin To Evade US Sanctions

Courtesy of Zero Hedge

While the market has been increasingly focused on the rising headwinds in the global economy in general, and China's economic slowdown in particular, while the media is obsessing over daily revelations that Trump may or may not have colluded with Russia to get elected, a far more critical, if underreported, shift has been taking place over the past year.

As we reported in June, whether due to concerns over draconian western sanctions and asset confiscations following the poisoning of former Russian military officer Sergei Skripal, or simply because it wanted to diversify away from the dollar, Russia liquidated virtually all of its Treasury holdings in the late spri...



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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 failure based on his personality, which was evident years ago. This article, written in 2017, references a prescient article Bill wrote before Trump became president, in July, 2016, 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:

 

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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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