Archive for 2015

Carly Fiorina’s No-Fly Zone Proposal Now Viewed as Impossible; Good News, Bad News

Courtesy of Mish.

Carly Fiorina's No-Fly Zone Proposal Dead?

(Previous article by Mish questioning "our" no-fly zone here.)

The Financial Times reports Moscow Scuppers US Coalition Plans for No-Fly Zone in Syria

Russia’s bombing of anti-regime rebels in Syria has been described as a disaster for the US-led coalition’s efforts to destroy Isis, the Islamist militant group, but the Kremlin’s real challenge to Washington is in the skies above the war-torn country.

Alongside a modest Latakia-based contingent of two dozen Su-24 Fencer and Su-25 Frogfoot jets — planes designed to strike land targets — Moscow has deployed assets which render the prospect of no-fly zones enforced by the US or its allies over Syria impossible to enact.

“The ultimate reason all this is happening is because of the renewed focus on Syria and the need for some sort of political solution there — something which we thought we could achieve by enforcing no-fly zones, safe zones,” said one senior European diplomat.

But any hopes of military co-ordination with Russia to achieve this, even in the wake of its disruptive deployment, are swiftly being dashed.

Deployment of S-300s — or other similarly sophisticated systems, also known as triple-digit Sams — has long been one of the Pentagon’s biggest fears in the Middle East. The S-300 system, which has an operating range of 150km, is capable of striking down all but the most sophisticated stealth aircraft. It means most missions flown by Washington’s coalition allies — Jordan, for example, uses F-16 jets — are now highly vulnerable. Even the UK’s deployment of Tornados and Typhoons at the Royal Air Force’s base at Akrotiri, Cyprus, is threatened by the missiles.

“The Russian forces now in place make it very, very obvious that any kind of no-fly zone on the Libyan model imposed by the US and allies is now impossible, unless the coalition is actually willing to shoot down Russian aircraft,” says Justin Bronk, research analyst at the Royal United Services Institute.

“The Russians are not playing ball at deconfliction — they are just saying, ‘keep out of our way’. The coalition’s operations in Syria will be vastly more complex from a risk assessment point of view and from a mission-planning point of view.”


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Before you get excited about the big reversal…

 

Before you get excited about the big reversal…

Courtesy of 

friday

There was a lot of excitement about the market’s dramatic reversal to the upside on Friday. What began as a down 250-open for the Dow Jones Industrial Average ended with an up-200 close. It is understandable to see investors cheering this type of action – it’s quite a relief to see early morning losses turn to gains so quickly and forcefully.

Unfortunately, it would be ahistorical to think that this is somehow indicative of the resumption of the bull market. The reality is that the biggest intraday point swings in history have all taken place in the context of downtrends and bear markets.

The below table goes back to 1987 and obviously points are not the same as percentages, but I think you’ll get the idea:

Screen Shot 2015-10-04 at 9.53.15 AM

15 of these 20 large intraday point swings for the Dow occurred on days during which the Dow ended with a loss, 5 of 20 were on up-days. Every single of one of these large swings took place during a market crash (we can debate the 2010 “Flash Crash” on the merits of time frame) save for the latest entrant, August 24th of this year. 9 of the top 10 intraday point swings took place during the infamous 4th quarter of 2008.

The point is that massive intraday point swings, regardless of direction, are not synonymous with “healthy” action, they are indicative of deep confusion and fear within the various layers of the investor class firmament. Friday’s action could be the beginning of a classic October “Bear-killer” rally, but it is way to soon to be drawing that conclusion.

Why? Because there’s still a lot of work to do within the stock market, not just on price itself.

The next chart I created is meant to show that the episode we’re contending with now has been long in the making. Anyone searching for day to day “reasons” as to why the market makes a volatile move would do well to understand that the internals had been portending the correction for a long time now; the sins beneath the surface had been piling up, despite the seemingly benign lack…
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Lawrence Wilkerson: “The American ‘Empire’ Is In Deep, Deep Trouble”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Former US army colonel and Chief of Staff for Colin Powell, Lawrence Wilkerson unleashed a most prescient speech on the demise of the United States Empire.

As Naked Capitalism's Yves Smith notes, Wilkerson describes the path of empires in decline and shows how the US is following the classic trajectory. He contends that the US needs to make a transition to being one of many powers and focus more on strategies of international cooperation.

The video is full of rich historical detail and terrific, if sobering, nuggets, such as:

"History tells us we’re probably finished.

The rest of of the world is awakening to the fact that the United States is 1) strategically inept and 2) not the power it used to be. And that the trend is to increase that."

Wilkerson includes in his talk not just the way that the US projects power abroad, but internal symptoms of decline, such as concentration of wealth and power, corruption and the disproportionate role of financial interests.

Wilkerson also says the odds of rapid collapse of the US as an empire is much greater is generally recognized. He also includes the issues of climate change and resource constraints, and points out how perverse it is that the Department of Defense is the agency that is taking climate change most seriously. He says that the worst cases scenario projected by scientists is that the world will have enough arable land to support 400 million people.

Further key excerpts include:

“Empires at the end concentrate on military force as the be all and end all of power… at the end they use more mercenary based forces than citizen based forces”

“Empires at the end…go ethically and morally bankrupt… they end up with bankers and financiers running the empire, sound familiar?”

“So they [empires] will go out for example, when an attack occurs on them by barbarians that kills 3000 of their citizens, mostly because of their negligence, they will go out and kill 300,000 people and spend 3 trillion dollars in order to counter that threat to the status quo. They will then proceed throughout the world to exacerbate that threat by their own actions, sound familiar?…This is what they [empires] do particularly when they are getting ready to collapse”

“This is what empires in


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Emerging Market Meltdown May Plunge Global Economy Into Recession

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

When the Fed effectively telegraphed its new reaction function last month, the FOMC served notice to the world that it was not only acutely aware of what’s going on in emerging markets, but also extremely worried about the possibility that hiking rates could end up triggering something far worse than the “tantrum” that unfolded across EM in 2013.

The dire scenario facing the world’s emerging economies has by now been well documented.

In short, slumping commodity prices, depressed raw materials demand from the Chinese growth engine, a slowdown in global trade, and a loss of competitiveness thanks to the yuan devaluation have conspired with a number of idiosyncratic, country-specific political risk factors to wreak havoc on EM FX and put an immense amount of pressure of the accumulated stash of USD-denominated reserves.  

For the Fed, this presents a serious problem. Hiking rates has the potential to accelerate EM capital outflows and yet not hiking rates does too. That is, a soaring dollar will obviously ratchet up the pressure on EM FX but then again, because the uncertainty the FOMC fosters by continuing to delay liftoff contributes to a gradual capital outflow, not hiking rates endangers EM as well. 

As we’ve been keen to point out, DM central banks aren’t operating in a vacuum. That is, if a policy “mistake” serves to tip EM over the edge, the crisis will feed back into the world’s advanced economies forcing DM central banks to immediately recant any and all hawkishness. For more evidence of EM fragility and the link between an emerging market meltdown and DM stability, we go to FT:

Emerging economies risk “leading the world economy into a slump”, with lower growth and a rout in financial markets, according to the latest Brookings Institution-Financial Times tracking index.

Released ahead of the annual meetings of the International Monetary Fund and World Bank in Lima, Peru, the index paints a much more pessimistic outlook than the fund is likely to predict later this week.

According to Eswar Prasad of Brookings, weak economic data across most poorer economies has created “a dangerous combination of divergent growth patterns, deficient demand, and deflationary risks”.

The Tiger index — Tracking Indices for the Global Economic Recovery — shows how measures of real activity, financial markets and investor confidence


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And Scene: Ben Bernanke Says More People Should Have Gone To Jail For Causing The Great Recession

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

For those who may be unfamiliar – which would mean roughly 90% of the US population who believe the Federal Reserve is a national park – Ben Bernanke was Fed chairman from 2006 until 2014. He is better known as the Fed chairman who never launched a tightening cycle during his tenure. He is best known for not only bailing out Wall Street from the folly of his and his predecessor’s bubble-creating monetary policy and boosting the Fed’s balance sheet to $4.5 trillion, but also for the following selection of quotes:

10/1/00 – Article published in Foreign Policy Magazine

A collapse in U.S. stock prices certainly would cause a lot of white knuckles on Wall Street. But what effect would it have on the broader U.S. economy? If Wall Street crashes, does Main Street follow? Not necessarily.

7/1/05 – Interview on CNBC

INTERVIEWER: Ben, there’s been a lot of talk about a housing bubble, particularly, you know [inaudible] from all sorts of places. Can you give us your view as to whether or not there is a housing bubble out there?

BERNANKE: Well, unquestionably, housing prices are up quite a bit; I think it’s important to note that fundamentals are also very strong. We’ve got a growing economy, jobs, incomes. We’ve got very low mortgage rates. We’ve got demographics supporting housing growth. We’ve got restricted supply in some places. So it’s certainly understandable that prices would go up some. I don’t know whether prices are exactly where they should be, but I think it’s fair to say that much of what’s happened is supported by the strength of the economy.

7/1/05 – Interview on CNBC

INTERVIEWER: Tell me, what is the worst-case scenario? We have so many economists coming on our air saying ‘Oh, this is a bubble, and it’s going to burst, and this is going to be a real issue for the economy.’ Some say it could even cause a recession at some point. What is the worst-case scenario if in fact we were to see prices come down substantially across the country?

BERNANKE: Well, I guess I don’t buy your premise. It’s a pretty unlikely possibility. We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that
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The Perilous Misperception That Central Bankers Have Mitigated Market Risk

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Via Doug Noland's Credit Bubble Bulletin,

This week provided further evidence that the bursting global Bubble has progressed to a critical juncture, afflicting Core markets and economies. Ominously, few seem aware of the profound ramifications – or even the unfolding hostile market backdrop. Even many of the most sophisticated market operators have been caught off guard. There is, as well, scant indication that Federal Reserve officials appreciate what’s unfolding.

I was again this week reminded of an overarching theme from Adam Fergusson’s classic, “When Money Dies: The Nightmare of Deficit Spending, Devaluation, and Hyperinflation in Weimar German”: throughout that period’s catastrophic monetary inflation, German central bank officials believed they were responding to outside forces. Somehow they remained oblivious that the trap of disorderly money printing had become the core problem.

Dr. Williams’ comment, “It's okay to have the party. It’s okay to get the party going…”, would be laughable if it were not so tragic. At this point, let’s hope the true story of this period gets told. I’m trying: monetary policies for almost 30 years now have been disastrous, a harsh reality masked by epic global market Bubbles.

It’s incredible that confidence in central banking has proved so resilient, though this dynamic no doubt revolves around a single – and circular – dynamic: “whatever it takes” central banking has thus far succeeded in sustaining securities market inflation. And it’s astounding that central bankers at this point are professing “It’s ok to get the party going.” The central bankers’ beloved Party is going to get crashed.

My mind this week also drifted back to a CBB written weeks after the tragic 9/11/2001 attacks. Shock had hit the markets, confidence and the real economy. Officials were determined to stimulate. I recall writing something to this effect: “If stimulus is deemed necessary, please rely on some deficit spending rather than monkeying with the financial markets. Market intervention/manipulation is such a slippery slope.” Back then no one had any idea how far experimental monetary policy could slide into the dark caverns of the deep unknown. Economic, financial, terror, geopolitical – or whatever unanticipated risk that might arise – all-powerful central bankers had an answer that would make things right.

I read with keen interest a Q&A with Jim Grant (Grant’s Interest Rate Observer) reproduced at Zero Hedge. Like…
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The American ‘Recovery’ In 1 Chart

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

If this is the ‘recovery’ just what will the next recession look like?

Chart: Bloomberg





There Will Be Blood – Part II

Courtesy of ZeroHedge. View original post here.

Submitted by Capitalist Exploits.

By Chris at www.CapitalistExploits.at

Following right along from “Letters from a Hedge Fund Manager – Part I”, today we have “part deux” as a follow up for you…

—————————— 

Date: 10 December 2014

Subject: There Will Be Blood – Part II

Let me be clear: I am no expert on shale wells. I’m not even an “almost” expert in the shale sector. If you called me an idiot when it comes to shale drilling, I wouldn’t argue with you. With that caveat out of the way, I’m going to generalize about the shale sector (anyway).

In oil and gas, most of the money is spent up front in acquiring the drilling rights and putting the well into production. You then have revenue and hopefully some profit in the period afterwards, as the well produces for you. Unfortunately, shale wells are very different from conventional wells. Shale wells see the vast majority of their total production in the first two years after they are drilled. This means that you have to keep drilling more wells just to stay at a constant level of production. In many ways this is akin to a hamster wheel – except you can never get off – or your production collapses. If you want to grow production, you need to drill even more wells – all of which see significant declines after two years.

Let me show this by using some data from WPX Energy (WPX: USA):

WPX Energy

Basically, in order to keep production roughly constant, they borrowed a bunch of money, spent a bunch of money and lost globs of money in the process – yet production remained constant. Amazingly, this is a $2.5 billion dollar company. Don’t feel bad for WPX. Their numbers aren’t all that different from plenty of other shale companies.

In essence, since shale wells have a short lifespan of intensive production and they are highly leveraged to the prevailing energy price over this peak production period – particularly since the land acquisition and drilling expenses are already sunk costs. What if you drill a well based on $100 oil and it’s at $60 today? Hope you hedged your production. What about all the money you borrowed
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China’s President Confirms Practice Of Moving Official Reserve Assets To Other Entities In China

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

By Louis Cammarosano of Smaulgld

  • Shanghai Gold Exchange withdrawals were 65.681 tonnes of gold during the week ended September 25, 2015.
  • Total gold withdrawals on the Shanghai Gold Exchange year to date are 1,958 tonnes.
  • Withdrawals on the Shanghai Gold Exchange are running 37.2% higher than last year and 17.88% higher than 2013’s record withdrawals.
  • Hong Kong gold kilobar withdrawals pass 565 tonnes in 2015.
  • Chinese President Xi Jinping admits “some assets in foreign exchanges were transferred from the central bank to domestic banks, enterprises and individuals”

Shanghai Gold Exchange

The Shanghai Gold Exchange (SGE) delivered 65.681 tonnes of gold during the week ended September 25,2015. During prior trading week ended September 18 2015, the SGE withdrawals were 63.22 tonnes of gold.

The two week total of withdrawals is 128.90 tonnes of gold and the year to date total is 1,958 tonnes, for an annualized run rate of approximately 2,650 tonnes.

Shanghai Gold Exchange vs. Global Mining Production

Total global gold mining production in 2014 was 2,608* tonnes. The volume of gold withdrawn on the Shanghai Gold Exchange this year is pacing to be about 2,650 tonnes or roughly equivalent to the total global mining production of last year. This leaves little or no mining supply to satisfy global gold demand in India (expected 2015 gold demand of about 1,000 tonnes) and the rest of the world.

Shanghai Gold Exchange and HongKong Kilo Bar Withdrawls vs. Global Mining Production

Through September 25 2015, Shanghai Gold Exchange withdrawals are 1958 tonnes and through September 30, 2015 Hong Kong Kilo bar withdrawals (see below) are 565 tons.

Combined year to date the withdrawals on both exchanges are 2,523 tonnes through the first nine months of 2015. Modest projections could take the combined gold withdrawals from Hong Kong Kilo bars and the Shanghai Gold Exchange to 2,900 tonnes in 2015.

Shanghai Gold Exchange Withdrawals vs. Comex Deliveries

In “Silver and Gold Short and Long Positions on Comex” we noted:

Comex is a place where banks trade gold and silver they don’t have to banks who buy gold and silver they don’t want.

These following two charts illustrate the point:

Two Week Withdrawals on the Shanghai Gold Exchange in September 2015 vs. Comex 2014

Withdrawals on the Shanghai Gold Exchange…
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Ron Paul Trounces Trump, Exclaims Election Is Entertainment “Orchestrated By Major Media”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Former congressman and presidential candidate Ron Paul has unleashed a harsh (but entirely fair) criticism of the current presidential campaign. Talking to RT's Ameera Davis this week, Paul lambasted the media's control of the U.S. electoral process, Donald Trump’s candidacy, and the stock market…

"So I think some of this stuff in the presidential campaigns is orchestrated by the major media. It is entertainment. They have competitions going on and on. So I don't put a lot of stock [in the presdential process], this is still pretty early. …

Donald Trump is an authoritarian and he brags about it. "I'm the boss and I tell people what to do."

Well government happens to be a little different than that.

An authoritarian is the opposite of a libertarian. A libertarian wants to release the individuals, get government out of our lives, out of the economy, and out of all these places around the world…"





 
 
 

Zero Hedge

Johns Hopkins, Bristol-Myers Face $1 Billion Suit For Infecting Guatemalan Hookers With Syphilis 

Courtesy of ZeroHedge. View original post here.

A federal judge in Maryland said Johns Hopkins University, pharmaceutical company Bristol-Myers Squibb and the Rockefeller Foundation must face a $1 billion lawsuit over their roles in a top-secret program in the 1940s ran by the US government that injected hundreds of Guatemalans with syphilis, reported Reuters.

Several doctors from Hopkins an...



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Phil's Favorites

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

Courtesy of Zero Hedge

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

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

As Nomura&...



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ValueWalk

The Competition For Capital Has Made Stocks Cheap

By Michelle Jones. Originally published at ValueWalk.

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

StockSnap / PixabayVolatility carries into the new year

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



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Kimble Charting Solutions

Stock declines did not break 9-year support, says Joe Friday

Courtesy of Chris Kimble.

We often hear “Stocks take an escalator up and an elevator down!” No doubt stocks did experience a swift decline from the September highs to the Christmas eve lows. Looks like the “elevator” part of the phrase came true as 2018 was coming to an end.

The first part of the “stocks take an escalator up” seems to still be in play as well despite the swift decline of late.

Joe Friday Just The Facts Ma’am- All of these indices hit long-term rising support on Christmas Eve at each (1), where support held and rallies have followed.

If you find long-term perspectives helpf...



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Digital Currencies

Transparency and privacy: Empowering people through blockchain

 

Transparency and privacy: Empowering people through blockchain

Blockchain technologies can empower people by allowing them more control over their user data. Shutterstock

Courtesy of Ajay Kumar Shrestha, University of Saskatchewan

Blockchain has already proven its huge influence on the financial world with its first application in the form of cryptocurrencies such as Bitcoin. It might not be long before its impact is felt everywhere.

Blockchain is a secure chain of digital records that exist on multiple computers simultaneously so no record can be erased or falsified. The...



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Insider Scoop

Cars.com Explores Strategic Alternatives, Analyst Sees Possible Sale Price Around $30 Per Share

Courtesy of Benzinga.

Related 44 Biggest Movers From Yesterday 38 Stocks Moving In Wednesday's Mid-Day Session ...

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

Chart School

Weekly Market Recap Jan 13, 2019

Courtesy of Blain.

In last week’s recap we asked:  “Has the Fed solved all the market’s problems in 1 speech?”

Thus far the market says yes!  As Guns n Roses preached – all we need is a little “patience”.  Four up days followed by a nominal down day Friday had the market following it’s normal pattern the past nearly 30 years – jumping whenever the Federal Reserve hints (or essentially says outright) it is here for the markets.   And in case you missed it the prior Friday, Chairman Powell came back out Thursday to reiterate the news – so…so… so… patient!

Fed Chairman Jerome Powell reinforced that message Thursday during a discussion at the Economic Club of Washington where he said that the central bank will be “fle...



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Members' Corner

Why Trump Can't Learn

 

Bill Eddy (lawyer, therapist, author) predicted Trump's chaotic presidency based on his high-conflict personality, which was evident years ago. This post, written in 2017, references a prescient article Bill wrote before Trump even became president, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...



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Biotech

Opening Pandora's Box: Gene editing and its consequences

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

 

Opening Pandora's Box: Gene editing and its consequences

Bacteriophage viruses infecting bacterial cells , Bacterial viruses. from www.shutterstock.com

Courtesy of John Bergeron, McGill University

Today, the scientific community is aghast at the prospect of gene editing to create “designer” humans. Gene editing may be of greater consequence than climate change, or even the consequences of unleashing the energy of the atom.

...

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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

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

 

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

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

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

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



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

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

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

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

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

Some other great content in this free eBook includes:

 

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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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