Archive for 2016

The Prospects For Money

Courtesy of ZeroHedge. View original post here.

Submitted by Alasdair Macleod via,

In my view, this new bout of turmoil in financial markets is the prelude to the final demise of government currency.

If I’m right, a long-expected collapse in the purchasing power, and of the very concept of fiat currency, will evolve from current events. The purpose of this article is to explain why monetary theory predicts a currency collapse.

The question at the heart of today’s market instability is the validity of fiat currency; that is to say, forms of money issued and sanctioned by individual governments, with no backing other than faith in those governments’ creditworthiness, and the enforcement of its use by law. The risks they impose on all of us will be evidenced one day by both the speed of the fall in each individual fiat money’s purchasing power, and inevitably by their comparison with gold’s more stable purchasing power. Essentially, an awareness of the dangers of unsound money will gradually become evident to every economic actor.

So far, or at least since the days when fiat money was freely exchangeable for gold, central banks have managed to enforce upon us their currencies as money, originally on the basis they were gold substitutes. That pretence was finally dropped in 1971. The purchasing power of fiat currencies has never been seriously challenged since, except in relatively few extreme cases, such as Zimbabwe and Venezuela. Not even the financial crisis eight years ago threatened a collapse in fiat currencies, when banks had to be rescued with unlimited extra quantities of money and credit.

The current crisis has commenced while there are determined efforts to stop the purchasing power of the major currencies from rising, even leading to the deployment of negative interest rates in this quest. None of the central banks’ policies appear to have worked. The increasing purchasing power of the yen, despite all attempts to lessen it, is the clearest example of the abject failure of a central bank to achieve its monetary objectives. The same can be said of the ECB and the euro, a currency even more synthetic than those it replaced. It is clear that the central banks are setting monetary policy more in hope than in a true appreciation of their own hopelessness.

They place an undue emphasis on empirical evidence. That’s why charts

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“I Do Not Like This Uncle Sam…”

Courtesy of ZeroHedge. View original post here.

With markets and monetary policy already reduced to Seussian fantasy, and the average insta-American incapable of comprehending anything but snapchat-’memes’, we thought the following summed up the state of US politics perfectly…

Source: The Burning Platform

Nintendo Shares Soar As Pokeman Go Overtakes Porn On Google Trends

By Jacob Wolinsky. Originally published at ValueWalk.

Shares of Nintendo are  soaring again this evening during the Japanese trading session, amid the craze over the new app, Pokemon Go. The stock seems to have really taken off over this weekend with some wild stories already including dead bodies found, people entering restricted military bases, and we are still awaiting our first fatality from the game. Shares were also higher on Friday up by about 10 percent. A quick search of Google trends shows that the game has even beaten one of the most popular search terms (albeit for a short period of time) on Saturday and looks to be pulling ahead today, a feat which Brexit also recently pulled off, and supposedly does not happen often….

Below are what the analysts are saying in terms of what this means for Nintendo stock and other video game makers followed by some of the best tweets on the topic

Pokemon go game

Deutsche Bank

Despite the substantial success of Pokémon Go in the initial few days since its launch into only three countries, we still view Pokémon Go as a “leadoff hitter” for Nintendo’s foray into mobile gaming. We view Animal Crossing and Fire Emblem, slated for fall 2016, and Zelda for mobile possibly coming in spring 2017, as the real big hitters to drive Nintendo to score high in mobile. FX headwinds may be a near-term drag, but we would see any dips as a particularly attractive buying opportunity, as we consider FY3/2017 a transitional/watershed year. Buy. Pokémon Go off to a strong start, but retention to be key to financial success

We highlight three components to enduring mobile success: 1) maximizing downloads; 2) retaining as many as possible of these users with good content; and 3) ensuring longevity through smooth operations. With regard to the first point, Pokémon Go has gone beyond success to become a phenomenon, topping the revenue grossing charts in the three regions into which it has been launched: the US, Australia and New Zealand. The company has stopped rolling out to new countries, as demand is overloading its server capacity. How Niantic deals with issues in the coming weeks will determine the longer-term financial success of Pokémon Go, in our view.


Positive example of Nintendo IP leverage, but careful assessment of the earnings impact is necessary: Nintendo’s share price increased sharply…
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The Federal Reserve’s Grand Scheme Exposed (In 1 Simple Chart)

Courtesy of ZeroHedge. View original post here.

For 138 years, consumer prices in America slightly declined. After The Federal Reserve was created, things changed…

The ‘scheme’ exposed…


But, not satisfied with that shift, in 1971, Nixon unhooked American economics from any rationality, because – as we detailed previously – ‘The 1%’ hate the Gold Standard… between 1930 and 1970, it was only the “bottom 90%” that saw their incomes rise, as can be seen on the next chart.

In other words, the ascent of the non-1% peaked when the Deep State forced Nixon to depart from the gold standard’s constraint on largesse.

Which should also clarify just why to the “1%”, including their protectors in the “developed market” central banking system, their tenured economist lackeys, their purchased politicians and their captured media outlets, the topic of a return to a gold standard is the biggest threat conceivable.

Breaking News And Best Of The Web

Courtesy of John Rubino.

Stocks recover on US payrolls beat and Abe’s reelection in Japan. Gold and interest rates stabilize with yield curves flattening to 2007 levels. Civil unrest in the US, as sniper kills five police in Dallas. UK Conservative party appears to have chosen a leader. Clinton gets a pass from FBI on emails, GOP is enraged.

Best Of The Web

Wall Street Monkeyshines – look Ma, no hands! – David Stockman

The great market tide has now shifted to risk-off assets – Peak Prosperity

Sovereign market dislocation and derivatives turmoil – Credit Bubble Bulletin

Firm that called 08-09 crash doesn’t like most stocks or bonds – MarketWatch

What if the US Treasury yield curve nulls out? – Seeking Alpha

Gold stocks’ record summer surge – Zeal

European banks and Europe’s never-ending crisis – Acting Man

When narratives go bad – Salient

World faces deflation shock as China devalues yuan at accelerating pace – Telegraph

Lacy Hunt on negative multiplier of government debt – Mish

Nigel Farage’s farewell press conference – EU Parliament

“Incredibly stupid” Juncker opens Pandora’s Box – Automatic Earth

Just a game – Janus Capital


Breaking News

The Economy

7/11    Abe set for upper house super majority after Japan election – Bloomberg

7/11    China pension readies $300 billion warchest for market foray – Bloomberg

7/11    Brexit seen biting profit for years at US banks – Bloomberg

7/11    Bank born out of Black Death struggles to survive – Bloomberg

7/11    Fed’s Labor Markets Conditions Index tumbles for 6th straight month – Zero Hedge

7/11    Tokyo welcomes Treasury investors to ‘world of Japanification’ – Confounded Interest

7/11    Asia markets jump; Nikkei surges after Abe’s election landslide – CNBC

7/11    Deutsche Bank chief economist: “Europe is seriously ill” – Mish

7/11    Japan Prime Minister’s coalition appears headed for election – CNBC

7/11    Debt rattle – Automatic Earth

7/11    Belgian premier warns Eu won’t help UK out of “black

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Theory Of “Conspiracy Theorists”

Courtesy of ZeroHedge. View original post here.

Submitted by Marcus Godwyn via,

It seems to have become one of the most popular ways of ridiculing somebody’s argument or position, calling into question someone’s sanity or even somebody’s right to their very own existence in recent years are “You’re a conspiracy theorist!”, “That sounds like a conspiracy theory to me!”  We hear such accusations let fly in TV and radio debates all too often as soon as anyone begins to question a perceived, generally excepted “truth”.  The accuser always seems supremely confident that this accusation is enough to immediately put the accused beyond the pale of all human reason and that all participants and viewers of the debate should be expecting men in white coats to arrive at any moment and the accused to be led away in the interests of all for “corrective treatment”.

The definition of conspiracy of the on-line dictionaries insists on the “evil, harmful, bad” side of things.  In other words; in the English language, it is impossible to conspire to do good.  This is one of the reasons why the accusation of being a conspiracy theorist remains an effective put down as it implies that the accused believes that their government, company bosses and colleagues, military or police commanders, friends and acquaintances or even members of their own family and partaking in secret, evil deeds and plots for harmful ends which have happened or are going to happen and hence at best implies lack of good faith and paranoia and at worst, extreme negativity, treachery; being a fifth columnist.  All labels with which most of us would wish not to be tarnished.

Here however are some alternative definitions of “conspiracy theorist”:

  • someone who has seen through the bullshit (David Icke);
  • someone who questions the statement of known liars (unknown).

It is clearly not possible to see these definitions as morally negative unless we are creators of bullshit or known liars.

Could it be that the time has come for a reappraisal of the definition of the word conspiracy because the following is palpably undeniable.  Every development in politics and affairs of state, every war, every campaign within a war, every attack and counter attack, every putsch, every terrorist act, every revolution and even every democratic election manifesto and campaign, every new bill passed, every budget or construction

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“The World Is Walking From Crisis To Crisis” – Why BofA Sees $1,500 Gold And $30 Silver

Courtesy of ZeroHedge. View original post here.

With both stocks and US Treasury prices at all time highs the market is sensing that something has to give, and that something may just be more QE, which likely explains the move higher in gold to coincide with both risk and risk-haven assets. As of moments ago, gold rose above $1,370, and was back to levels not seen since 2014. Curiously, the move higher is taking place after Friday’s “stellar” jobs report, suggesting that someone does not believe the seasonally-adjusted numbers goalseeked by the BLS.

And while we reported last week that one way investors are rushing into the anti-QE safety of gold is by buying paper gold derivatves such as ETFs, which rose above 2,000 tons for the first time since 2013, many others have bypassed paper claims on gold such as GLD entirely, and are rushing into physical.

Case in point, Japanese savers who, fearing domestic confiscation, have been accumulating gold in Switzerland. It’s not just the Japanese: as Nick Laird shows, the past week saw the second largest ever increase in physical gold holdings, as the total published holdings of physical funds rose by 2.5 million ounces to 85.8 million, second only to the 4 million ounce increase in early 2009.

Finally, with even the sellside starting to turn, there may be more upside as the slow money starts to move in. In a whimsical note released on Friday, Bank of America’s metals team writes “Gold: always believe in your soul. Glad you are bound to return. You’re indestructible.”

Yes, we were surprised too, but it’s true.

Strange golden “poetry” aside, this is why BofA thinks gold is going to $1,500 and silver’s next stop is an “overshoot” to $30.

The world has been walking from crisis to crisis and we see risks that this may not change. The importance of that dynamic for the precious metals is mirrored by the high correlation between potential US GDP growth and gold quotations. Many of the underlying issues affecting the global economy are structural, with Brexit merely a symptom of the problems many countries are facing. To that point, we called a bottom in gold in February and Brexit reinforces our view. As such we are upgrading next year’s gold

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News You Can Use From Phil’s Stock World


Financial Markets and Economy

Hare or tortoise? U.S. economy is both (Market Watch)

The snapback in hiring in June suggests the U.S. jobs market is strong enough to meet the Federal Reserve’s test for raising interest rates. Yet persistently low inflation is likely to stave off any increase probably through the end of the summer.

Crude Falls in New York as U.S. Rig Count Gains Amid Global Glut (Bloomberg)

Oil dropped after U.S. drillers increased the number of rigs operating there amid a global glut of supply.

G20 trade ministers agree to cut trade costs, increase policy coordination (DW)

Trade ministers from the world's major economies have agreed to cut trade costs and increase policy coordination. They met in Shanghai amid a slowing global economy and rising calls for protectionism.

Wall Street has a few big worries about Google’s results this quarter (Business Insider)

Investors are cautious going into Q2 earnings for Google parent company Alphabet, according to SunTrust's Robert Peck.

New All-Time High for S&P 500 Total Return Index (The Reformed Broker)

You’re free to point out all the reasons, conditions, qualifications, if’s and or but’s you’d like, but today the S&P 500 Total Return Index is printing a new all-time high.

spy tr

Few Small Businesses Take Advantage of Mini-IPOs (Wall Street Journal)

Roughly a year after the passage of new rules making it easier for fledgling businesses to tap U.S. capital markets, just a handful of them have succeeded in doing so.

Hedge Funds’ Tech Metamorphosis Seen in Citadel’s Microsoft Hire (Bloomberg)

Silicon Valley watch out. The finance industry is coming after your top managers.

Bridgewater’s Flagship Fund Falters as Another Thrives (Wall Street Journal)

The world’s largest hedge-fund firm posted billion-dollar swings in its largest funds during the first half of the year, highlighting how unpredictable markets are roiling many of Wall Street’s most prominent traders.

Asian Stock Futures Pace U.S. Jump After Payrolls;
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When the Future Becomes Today


When the Future Becomes Today

Courtesy of John Mauldin, Thoughts from the Frontline

“There are decades where nothing happens, and there are weeks where decades happen.”

– Vladimir Lenin

“However beautiful the strategy, you should occasionally look at the results.”

– Winston Churchill

First, I want to express my shock and quiet despair over the events in Dallas this weekend. The shock comes from this actually happening in Dallas. If anything, Dallas police are accommodating and work with the community as well as any police force in the country. But this event is a reminder that tragedies don’t just happen somewhere else. All it takes is one or two lone actors, and the world of somewhere else lands on your doorstep. This sad spectacle is part and parcel of what we will be discussing today: a world where common sense and reasonable discourse are breaking down, leaving us with social outcomes that only a few years ago would have seemed impossible. As Buffalo Springfield sang, “There’s something happening here; what it is ain’t exactly clear.”

I offer my prayers and express my condolences and deep sympathy to the families whose loved ones were killed and injured. (I’ll include some additional personal thoughts at the end of the letter.)

When the Future Becomes Today

Why do investors spend so much time thinking about the future? Any conclusions we reach are necessarily speculative. No one has a crystal ball. The efficient market advocates are correct when they note that we can’t predict the future. However, they’re wrong to say forecasting is useless (and they are off base with many of their other conclusions!). While we can never be 100% confident about tomorrow, we can often get close. Just as the universe abides by known physical laws, the economy follows known principles of human behavior. People try to minimize pain and maximize pleasure. If you can anticipate how they will do so, you can forecast economic results, not with perfect reliability but with high confidence. And so we spend a great deal of time forecasting outcomes for our businesses and investments.

Timing is the main challenge. We may know (or at least think we have a good idea)…
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China To Use Pension Funds As $300 Billion “Plunge Protection Team”

Courtesy of ZeroHedge. View original post here.

One of the more troubling stories to hit the tape last week was that despite, or rather due to, roughly $100 billion in losses in the past 5 quarters, Japan’s gargantuan $1.4 trillion state pension fund, the GPIF, which has desperately been selling Japan’s best performing asset – Japanese Government Bonds – in order to buy local stocks and the Nikkei at its decade highs only to see its equity investment plunge, is now forced to buy even more stocks, i.e. double down, as part of a ridiculous rebalancing which will lead to even more losses.

Japan is not alone.

After China did everything to prop up its own stock market, including arresting hedge funders, sellers, “rumormongers”, halting short selling, eliminating futures trading, and ultimately culminating with the “Buttonwood SPV” in which the PBOC finally threw in the towel and admitted it was directly buying stocks,  we now learn that Chinese pensioners are about to become unwitting stock funds.

As Bloomberg reports, “China’s pension funds are about to become stock investors.”

The country’s local retirement savings managers, which have about 2 trillion yuan ($300 billion) for investment, are handing over some of their cash to the National Council for Social Security Fund, which will oversee their investments in securities including equities. The organization will start deploying the cash in the second half, according to China International Capital Corp. and CIMB Securities.

For the rhetorical answer to the rhetorical question of “what can possibly go wrong” here is the one-title answer, also from Bloomberg:

Why is China – for whom social stability is absolutely paramount and thus gambling with people’s retirement funds is truly a foolish initiative – doing this? Simple: whereas in the US legions of clueless investors buy any and every stock mentioned by such “legends” of crony capitalism as Warren Buffet, in China it is the pension fund. To wit:

For the nation’s equity markets – which are dominated by retail investors and among the world’s worst performers this year – the state fund’s presence is even more valuable than its cash, said Hao Hong, chief China strategist at

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Zero Hedge

Bloomberg System Goes Down Ahead Of US Open

Courtesy of ZeroHedge. View original post here.

For the second time in a few months, the Bloomberg Terminal system appears to be down and is causing panic across Wall Street ahead of the US market open...

Traders are not happy...

When Bloomberg panels go down 8 minutes before the open......

— NOD (@NOD008) January 17, 2019 ...

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Kimble Charting Solutions

Triple Breakout Test In Play For S&P 500!

Courtesy of Chris Kimble.

Is the rally of late about to run out of steam or is a major breakout about to take place in the S&P 500? What happens at current prices should go a long way in determining this question.

This chart looks at the equal weight S&P 500 ETF (RSP) on a daily basis over the past 15-months.

The rally from the lows on Christmas Eve has RSP testing the top of a newly formed falling channel while testing the underneath side of the 2018 trading range and its falling 50-day moving average at (1).

At this time RPS is facing a triple resistance test. Wil...

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Phil's Favorites

Brexit deal flops, Theresa May survives -- so what happens now?


Brexit deal flops, Theresa May survives -- so what happens now?

Courtesy of Victoria Honeyman, University of Leeds

As the clock ticks down to March 29 2019, all of the political manoeuvring, negotiating, arguing and fighting is coming to a peak. In the two and a half years since the 2016 EU referendum, views on both sides have hardened and agreement still seems as far away as it was the day after the referendum.

With Theresa May’s withdrawal agreement disliked by all sides, and voted down by an unprecedented majority in the House of Commons, everyone is wondering what can and should be done next?


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Digital Currencies

Crypto-Bubble: Will Bitcoin Bottom In February Or Has It Already?

Courtesy of Michelle Jones via

The new year has been relatively good for the price of bitcoin after a spectacular collapse of the cryptocurrency bubble in 2018. It’s up notably since the middle of December and traded around the psychological level of $4,000... so is this a sign that the crypto market is about to recover?

Of course, it depends on who you ask, but one analyst discovered a pattern which might point to a bottom next month.

A year after the cryptocurrency bubble popped


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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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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 ... 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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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

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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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.

Market Shadows >>