Archive for 2015

Why The Big Banks Want Higher Interest Rates

Courtesy of John Rubino.

Something strange is happening in the banking business.

In theory, a low interest rate environment is good for banks because it allows them to borrow money for next to nothing and lend it to auto or home buyers for considerably more, making a nice fat spread.

And that’s pretty much how it’s been going. U.S. bank earnings were up 7% y-o-y in the second quarter, to a record $43 billion. Bank lending rose across the board from industrial to auto to mortgage loans, and delinquencies fell for the 21st consecutive quarter.

So the government’s care and feeding of the banks is a success, right? Well, no, apparently. From last week’s Wall Street Journal:

Fed Stance Squeezes Bank Profits

No wonder bank-stock investors are feeling a chill. The Fed has left them out in the cold.

 

This was supposed to be the year when superlow interest rates stopped squeezing net-interest income at U.S. banks. As recently as June, consensus estimates were that this would decline by just 0.8% in 2015 at large-capitalization banks, according to Sanford Bernstein’s John McDonald. Analysts thought next year would see a rebound with 6.6% growth.

That was predicated on the U.S. Federal Reserve raising short-term interest rates for the first time in nine years. Instead, the decision by the Fed Thursday to stand pat—along with the fact that the overall tone emanating from the central bank was more dovish than expected—is forcing investors to rethink banking prospects.

Namely, that it is now more likely that net-interest income and margins will remain flat, or possibly even decline further, in coming months. That will keep bank stocks under pressure as valuations had already been anticipating a more-favorable interest-rate environment.

Why is the outlook so grim if the Fed isn’t tightening policy? The primary driver of falling net-interest income has been a squeeze on net-interest margins, the difference between what a bank pays for deposits and the yield on its loans. The unusually long period of ultralow rates has compressed margins by more than 27% since 2010.

As a result, bank profits can shrink even if firms grow lending and market share. At some point, you just can’t make it up on volume.


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Going Back To What Works: Gold Is Money Again (Thanks To Utah)

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

As of today you really can pay your taxes, your credit cards, your mortgage, shop at Costco, and buy your groceries without so much as a bank account while using sound money.

As PopularLiberty.com explains,

The fact that Texas announced that it withdrawing its gold from Manhattan and is creating a state gold depository generated a good deal of interest because there would also be a way to transfer gold to others via said depository. So much interest that Texas received calls from all over the United States from folks that wanted to be part of such a system. The articles covering the future Texas depository cumulatively received millions of views. What was missed in all of this coverage is that a functional, and legal depository that allows anyone in the country to pay and save in gold dollars already exists. In Utah.

The United Precious Metals Association in Utah has gold and now separate silver accounts that act as checking accounts do at any bank or credit union. The way it works is that members deposit Federal Reserve Notes (or paper dollars) into their UPMA account which in turn translates them into golden dollars (or silver). The golden dollars are based off the $50 one ounce gold coins produced by the Treasury of The United States. They are legal tender under the law and are protected as such. So if I were to deposit $1,200 FRNs then I would have $50 golden dollars.

UPMA is the only institution in the country that I know of that doesn't have a buy/sell spread on their Golden Eagles or Silver Eagles. This means that all my $1,200 FRNs once converted to gold could be spent the next day without losing anything to any sort of premium. The price of a Gold Eagle is 5.8% above spot but when you 'cash out' you do so at 5.8% above gold spot. This effectively removes that barrier from sound money.

This year the UPMA released a gold backed debit card via American Express. The way it works is that a member may spend up to half of their gold or silver dollars in any given month period using the card. When I interviewed the founder of UPMA today, Larry Hilton, I learned that the way the card works is that


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Summing It All Up (In 1 Sad Cartoon)

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

It is true that income inequality has kind of gotten worse, but you can take the compensation of every CEO in America and make it zero and it wouldn’t put a dent into it. What really matters is growth. It’s not right to say we’re worse off … If you go back 20 years ago, cars were worse, the air was worse. People didn’t have iPhones.”

– Jamie Dimon

A reminder…

 

Main Street "doing God's work" for Wall Street…

h/t The Burning Platform





Guest Post: Safe Assets In A World Gone Mad

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Ton Chatham via Project Chesapeake,

Gold and silver are good assets to hold to insure the preservation of EXCESS wealth but there are other assets that are even more valuable longterm. Those things that can be used to produce a product are the elements that can be used to leverage your time, resources and talents to produce wealth. The ability to produce excess is the basis of the need for wealth preservation.

Physical goods in the form of equipment that can be used to create or produce goods needed by society are the basis of prosperity and wealth in the world. Gold and silver only become necessary when society begins to produce more products than the producer can use. This excess production is then traded for those things that can preserve the value of this excess production until it is needed by individuals.

Machines to build or repair such as saws and hammers, sewing machines, metal fabricating machines such as lathes and mills and machines to convert raw materials to value added products such as steel to I beams or pots and pans, wheat to flour or pasta, lumber to finished furniture and cotton to cloth are the assets that define how prosperous you are as a nation. A nation derives its wealth from having a product to sell. That will never change. It is true for nations as well as for individuals.

Individuals need to have the ability to produce something in excess of their needs to advance to the need to store that excess. This requires tools and equipment in most cases. You do not necessarily need to process your own resources to generate this excess. A miller can provide the equipment to grind grain for the community taking part of the production for his time and effort. This gives rise to the service economy where individual specialization is traded for other services and resources rendered. In most cases this service will require specialized equipment not possessed by the general population. This specialized equipment is an asset more valuable than gold and silver in many cases.

The goods need to exist before gold and silver can be traded for them and gold and silver need to exist to preserve this excess production for future use. Storing some of your excess…
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Global Stocks, EM FX Extend Losses Despite China Saying “No Collapse Is Nigh”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

US equity futures have retraced the late-day ramp from Friday with Dow down around 65pts. Asia is opening weaker (NKY -900 from Thursday highs) with EM FX appearing not to get the "but we didn't hike" message from The Fed with MYR the worst hit for now (after a few days of strength). EM outflows accelerated according to Morgan Stanley, down 6% AUM in 12 weeks. PBOC devalued the Yuan fix by 0.11% (the most in 2 weeks). While Fed uncertainty and fears about China have caused global derisking, PBOC chief Fan says "the economy is stable," and China's Beige Book suggests 'everything is awesome', as the survey summarizes, "perceptions of China may be more thoroughly divorced from facts on the ground than at any time in our nearly five years of surveying the economy." If that's the case, then why is Janet in panic mode?

Dow futures have retraced Friday's late-day ramp…

And Nikkei 225 is down 900 points from Thursday's peak BoJ manipulation highs…

EM FX continues to weaken..

  • *MALAYSIA RINGGIT EXTENDS DROP, NOW DOWN 0.8% TO 4.2397/DOLLAR

  • Baht declines 0.2% to 35.710 per dollar, set to snap two-day rally

EM equity fund outflows of $2.2b for week ended Sept. 16 mainly driven by Asia funds ($1.8b), compares with avg $6.5b outflow in last 4 weeks, Morgan Stanley analysts Jonathan Garner and Pankaj Mataney write in Sept. 18 note.

  • Cumulative 12-week outflow reaches US$40.2b, or 5.6% of assets under management
  • Taiwan, India, Korea had largest inflows
  • Philippines had biggest weekly outflow since Oct. 2013

New Zealand Consumer Confidence tumbled to 3 year lows…

*  *  *

With China open, the propaganda ramps up.. It appears it is time for some central banker credibility to be lost…

China’s economy isn’t as weak as it may look, according to a private survey that says it’s a myth that the nation’s slowdown is intensifying.

“No collapse is nigh” in the aftermath of the stock market plunge and currency devaluation, according to the third-quarter China Beige Book, published by New York-based CBB International and modeled on the survey compiled by the Federal Reserve on the U.S. economy. Capital expenditure rebounded slightly in the period and the services sector showed strength, the report said.

“Perceptions of China may


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Has the Fed Assumed a Third Mandate?

 

Weighing the Week Ahead: Has the Fed Assumed a Third Mandate?

Courtesy of Jeff Miller, Dash of Insight

Despite many signs of economic improvement, the Fed chose to maintain policy accommodation at emergency levels. In a week that is light on data and long on speeches, this news will be enough to keep Fed policy at the forefront. The punditry will be asking:

Has the Fed Assumed a Third Mandate?

Prior Theme Recap

In my last WTWA I predicted that it would be all Fed, all the time. That was an easy one! It was a sharply divided week, with a good-looking market into the Fed meeting and for a few minutes afterward. As he does each week, Doug Short’s recap describes the action with appropriate wariness about causality. As always, the full article includes several other helpful charts. (With the ever-increasing effects from foreign markets, you should also add Doug’s World Markets Weekend Update to your reading list).

The chart shows it as a flat week, but you can readily see why it did not feel that good. The week was good enough for the Texas boys to maintain the post-Cramer slot on CNBC, but another day or two of this will bring back “Markets in Turmoil.”

 

SPX-five-day

We would all like to know the direction of the market in advance. Good luck with that! Second best is planning what to look for and how to react. That is the purpose of considering possible themes for the week ahead. You can make your own predictions in the comments.

This Week’s Theme

We are in the period before the important new earnings season. The economic calendar is a bit light. There is a strong focus on international issues. I expect plenty of attention to the meeting of Israel’s Prime Minister Netanyahu with Russia’s Vladimir Putin. Chinese President Xi Jinping Has a state visit to the U.S., including a summit meeting with President Obama. Pope Francis will also continue his tour, including a Presidential meeting on Wednesday.

The international theme comes in the wake of last week’s FOMC decision, which acknowledged the influence of foreign markets on the U.S. economy. The Fed has two legal mandates:…
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Swing trading portfolio – week of September 21st, 2015

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

Optrader 

Swing trading virtual portfolio

Reminder: OpTrader is available to chat with Members, comments are found below each post.</p></body></html>

 





Middle-East Migration – The Problem/Opportunity Dilemma

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Authored by Ben Tanosborn,

Pictures of migrant-exiles from the Middle East, not just Syrians but Iraqis and Afghanis as well, are currently being transmitted by CNN, Aljazeera English and other news giants to homes all over the world in customary repetition which most of us would agree exceeds the canons of proper news reporting. 

Fodder news portraying human pain and misery are being presented to viewing masses, too often depicting unwarranted blame and/or lack of humanity from/by Europeans who are trying to cope with an inherited humanitarian crisis not entirely of their making.  Rich sister Germany is somehow expected to offer leadership, and problem-solving direction, in managing this new crisis for Europe.  Greece, Serbia, Hungary and Austria are becoming transit stations for this migrant humanity in the yellow-brick which extends from Turkey to the promised Oz: Germany.

Amid this crisis-in-progress, Viktor Orban’s racially-charged comments announcing a lack of desire by Hungary to increase its foreign-born population acquires the same timbre and tone as those of America’s presidential candidate, Donald Trump.  But aren’t these self-exiles supposedly “political” migrants, not the economic migrants entering the US overwhelmingly from Mexico and elsewhere in Latin America?  These migrant waves are branded, inaccurately perhaps, with the same umbrella term… whether their odyssey is motivated by economic, social or political reasons.  And, truth be said, the economic reason does weigh heavily or you wouldn’t have Germany and the United States as the two major preferred destination points.

There is ample reason to believe that this recent flood of migrants is economically, not politically-rooted.  Recent rumors in refugee camps heralded the strong probability that much of Europe was contemplating more restrictive policies for admittance.  Thus the onrush to reach the promised land of opportunity: Germany; with any other EU nation as a second, third, or nth choice.

As for who or what is at fault for this current situation, pointing to Bashar al-Assad and his autocratic regime may seem as the politically correct answer to most Americans, and thus justify US’ role in the world as a “benign and orderly empire.”  Except that this empire the US inherited from the Brits, and have transformed to its capitalist image and likeness, has proven to be neither benign nor orderly when it comes to Middle East matters as we evaluate historical American foreign policy…
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How The World Spends

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Have you ever wondered how much money Russians spend on alcohol and tobacco compared to the rest of the world? Or how much households in Saudi Arabia allocate to recreation?

Today’s data visualization from The Economist shows how much people in households around the world allocate to different expenses such as food, housing, recreation, transportation, and education.

The first thing to note is that this looks at private spending only, and does not include any public spending that could be allocated to each household. As a result, in places like Canada or the EU, spending on healthcare is much smaller than in comparison to the United States, where households spend 20.9% of their money.

Source: VisualCapitalist

Here’s a few interesting stats:

In Russia, where housing is subsidized, people spend way less on housing, fuel, and utilities with only 10.3% of money allocated. At the same time, they are the biggest relative spenders on food, alcohol and tobacco, and clothing.
 
Developed countries are more or less the opposite of Russia in this regard. In places like the United States, Canada, Japan, or the EU, about 20-25% of money is spend on housing, fuel, and utilities. Meanwhile, consumption of food, alcohol and tobacco, and clothing are on the lower ends of the spectrum. In fact, its actually the United States that spends the smallest portion on food altogether, at only 6.8%.
 
Contrast that to India, where GDP per capita is by far the lowest at only US$1498.87. With little disposable income, Indians spend a much higher proportion of money on necessities such as food (about 30%), while using much less income on things like recreation (1.5%) or restaurants and hotels (2.6%).




Game Over

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Via NorthmanTrader.com,

When the Fed embarked on its mission to rescue the economy in 2009 it did so on the following premise: Save the banks by re-inflating the housing and stock markets via easy money and, as a result, companies would hire and the eventual scarcity of labor would produce wage growth with the end result that the resulting inflation would permit for a tightening cycle to normalize rates.

The problem: After 7 years and trillions of dollars in debt and balance sheet expansion there is no inflation nor is there any wage growth. And the reason for this is a structural one that central banks have been refusing to acknowledge and admit: The massive underlying shift in technology that is radically changing the global labor market. Not for the better, but for the worse.

And this shift has enormous implications for investors, the economy, society at large and the stock market. And these implications have the potential to signal Game Over for this bull market.

Before we get into this let’s briefly address the recent history in the stock market:

For years investing was easy. You just threw money at a market that never stopped going up. And when it occasionally fell, it was because the Federal Reserve had just ended a QE program. But not to worry, the next one was just around the corner. And sure enough every Federal Reserve press release or press conference produced an orgasmic buying feast every time the word “accommodative” was mentioned. Easy money, we have your back, the Bernanke put. You know the gig. Then we had the taper tantrum when Ben Bernanke merely mentioned the possibility of QE ending. Oh, but not to worry, we will stay at ZIRP. Free money for a long time to come and don’t worry we will let you know way in advance when we will raise rates. And even better: QE will be everywhere. In Japan, in Europe. And if things were to get really bad (i.e. the Ebola scare) we will bring QE4 back (Bullard, October 2014). But not to worry any issues are just transitory. Inflation is just around the corner don’t you know?

And for years the narrative worked. Markets went on to make ever new highs, even in 2015 after QE3 ended, spurred on by an unprecedented move of global QE and…
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Phil's Favorites

Trump and the problem with pardons

 

Trump and the problem with pardons

Courtesy of Andrew Bell, Indiana University

As a veteran, I was astonished by the recent news that President Trump may be considering pardons for U.S. military members accused or convicted of war crimes. But as a scholar who studies the U.S. military and combat ethics, I understand even more clearly the harmful long-term impact such pardons can have on the military.

My researc...



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Zero Hedge

Silver Specs Signal It's Time To Start Buying

Courtesy of ZeroHedge. View original post here.

Authored by John Rubino via DollarCollapse.com,

The gold futures market took a big step towards bullish — or at least neutral — in the past week. Speculators (usually wrong at big turning points) scaled back their long bets while commercials (usually right at turning points) reduced their net short positions.

...



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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 ...



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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 readtheticker.com 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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Biotech

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

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

 

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

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

Courtesy of David M. Gilbert, Florida State University

...



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ValueWalk

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

By Jacob Wolinsky. Originally published at ValueWalk.

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

rawpixel / Pixabay

Friends and Fellow Investors:

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



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Members' Corner

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

Are you ready to retire?  

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

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

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



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

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

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



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OpTrader

Swing trading portfolio - week of September 11th, 2017

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

 

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

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

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

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



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

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

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

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

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

Some other great content in this free eBook includes:

 

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About Phil:

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

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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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