Archive for 2017

Latest Projections Show Hurricane Irma Headed For Florida

Courtesy of ZeroHedge. View original post here.

As Hurricane Irma continues to move  west as a Category three storm, in what still is said to be an indeterminate path, according to the latest projections from Met Scientist Michael Ventrice, it now looks like Florida has the highest probability of a US landfall…

Latest 12Z Calibrated ECMWF Ensembles indicates that Florida now has the highest probability to see Hurricane #Irma impacts/landfall ????

— Michael Ventrice (@MJVentrice) September 3, 2017

…though that doesn’t mean the Gulf of Mexico can rest easy. Hurricane forecasting is notoriously inaccurate one or two weeks out…

Not a shift in guidance anyone wanted to see. Looks like #Irma threat growing again for Gulf States. Forecast remains extremely difficult

— Michael Ventrice (@MJVentrice) September 3, 2017

Before it nears the US, however, the storm is headed toward the Northern Caribbean, threatening to bring flooding rain and damaging winds to the Leeward Islands. Preparations for the storm should already be taking place in these areas, according to

“Rain and gusty winds may start as early as Tuesday,” AccuWeather Senior Meteorologist Rob Miller said.

According to Accuweather, Irma’s intensity has vacillated over the past few days. But the storm is expected to strengthen to a category four hurricane with sustained winds of 130-156 mph as it approaches the islands. Thereafter, the storm will turn to the north and west over the coming days. This track will put Antigua and Barbuda, Montserrat, St. Kitts and Nevis, Anguilla and the British Virgin Islands, in the brunt of the storm's rain and wind spanning Tuesday and Wednesday.

Hurricane watches issued for portions of the Leeward Islands. Latest information on #Irma available at

— NHC Atlantic Ops (@NHC_Atlantic) September 3, 2017

Cruise and shipping vessels in the hurricane’s path will need to reroute.

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China Battles “Impossible Trinity”

Courtesy of ZeroHedge. View original post here.

Authored by James Rickards via Daily Reckoning blog,

Just because something is inevitable does not mean it cannot be postponed.

The popular name for this is “kicking the can down the road,” which is a perfectly good description.

I prefer more technical terms such as dynamic systems in “subcritical” and “supercritical” state space, but it amounts to the same thing.

A financial crisis can be a long time in the making, but it will definitely erupt. When it does, there will be huge losses for those who ignored the warning signs.

China is in a pre-crisis situation today.

It is confronting the harsh logic of the “Impossible Trinity.”

The Impossible Trinity theory was advanced in the early 1960s by Nobel Prize-winning economist Robert Mundell. It says that no country can have an open capital account, a fixed exchange rate and an independent monetary policy at the same time.

You can have one or two out of three, but not all three. If you try, you will fail – markets will make sure of that.

Those failures (which do happen) represent some of the best profit-making opportunities of all.

Understanding the Impossible Trinity is how George Soros broke the Bank of England on Sept. 16, 1992 (still referred to as “Black Wednesday” in British banking circles. Soros also made over $1 billion that day).

The reason is that if more attractive total returns are available abroad, money will flee a home country at a fixed exchange rate to seek the higher return. This will cause a foreign exchange crisis and a policy response that abandons one of the three policies.

But just because the trinity is impossible in the long run does not mean it cannot be pursued in the short run. China is trying to peg the yuan to the U.S. dollar while maintaining a partially open capital account and semi-independent monetary policy. It’s a nice finesse, but isn’t sustainable.

China cannot keep the capital account even partly closed for long without drying up direct foreign investment. Similarly, China cannot raise interest rates much higher without bankrupting state-owned enterprises.

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This sector will leap if there’s a U.S.-China trade war

By marcuss. Originally published at ValueWalk.

In case you can’t see the graphic on your screen, it reads, “Trump set to launch first major trade action targeted at China”.

This was the first shot in what will likely be trade war with the world’s second-largest economy – which also happens to be a crucial party to de-escalating tensions with North Korea.

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Getting into a trade tussle with China is a Trump campaign promise that’s relatively easy to keep, as it doesn’t require the cooperation of anyone else in the U.S. government.

It also caters to the sentiments of the 34 percent of Americans who approve of the U.S. president’s job performance. And it’s over an issue where the U.S. actually has a legitimate gripe, no less. The Financial Times explains…

“Donald Trump is set to launch his first major trade action targeted at China… by ordering his top trade negotiator to begin an investigation into intellectual property rules that Beijing uses to force foreign investors to turn over valuable technologies.”

And (also says the FT), “The step could lead to US tariffs and other restrictions on Chinese imports within a year in what many see as the potential first step towards a trade war between the world’s two largest economies.”

The measure came a few weeks after negotiations over a Chinese proposal to cut steel production overcapacity were rejected by President Trump, over the counsel of his advisors – because he preferred to impose tariffs on Chinese steel.

The timing of the launch of a trade war with China could hardly be worse, as the war of words with North Korea threatens to become a real war. Still, cracking down on intellectual property violations…
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VIX Set For Lowest Annual Average Ever, But…

Courtesy of ZeroHedge. View original post here.

While intra-month the CBOE Volatility Index reached its highest since November, before plunging back to earth into the end of the month, VIX is still on track to post its lowest annual average on record.

Bloomberg notes that in the past decade, VIX gains in August were followed by September declines in all but one instance.

While VIX has collapsed so far this year, it may not last.

Though VIX ended up paring its August gain to 3.2% – a gauge tracking longer-term wagers posted its biggest increase since January 2016.

In fact, after last month’s 11 percent gain, the CBOE S&P 500 3-Month Volatility Index has reached its highest level relative to the VIX since Aug 2012's European credit crisis.

The September Federal Reserve gathering and debt-ceiling discussions are among events that could lead to increased market volatility at a time when the S&P 500 Index trades near a record high.

China Raises Radiation Threat Level, Begins “Emergency Monitoring” Along North Korean Border

Courtesy of ZeroHedge. View original post here.

Shortly after North Korea conducted what’s believed to be its first successful test of a hydrogen bomb (and its sixth nuclear test in total), China’s Nuclear Safety Administration said on Sunday that it would begin emergency monitoring for radiation along its northeastern border with North Korea, according to Reuters.

The emergency response was set at “level 2,” the second-highest grade on a four-tier system, according to the Times of Japan. The NSA did not indicate whether any radiation had been detected.

“’At present, the automatic radiation monitoring stations in the provinces of Heilongjiang, Jilin, Liaoning and Shandong are functioning properly,’ Xinhua reported, citing the Ministry of Environmental Protection, which administers the safety agency.”

Earlier in the day, the presidents of China and Russia agreed to “appropriately deal with” North Korea’s sixth and most powerful nuclear test, according to the South China Morning Post. Beijing strongly condemned Pyongyang’s actions and threatened to work with the United Nation’s Security Council to add sanctions. The agreement came as Chinese President Xi Jinping met his Russian counterpart Vladimir Putin on Sunday night in Xiamen, Fujian province, ahead of Monday’s BRICS leaders’ summit, according to the SCMP.

The test late Sunday morning triggered a 6.3-magnitude quake followed by a 4.6-magnitude tremor, and was felt throughout northeastern China.

Here’s more from the SCMP:

“The Chinese government resolutely opposes and strongly condemns this,” the Chinese foreign ministry said after North Korea confirmed the test.

“We urge North Korea to recognise the determination of the international community to achieve a denuclearised Korean peninsula … and to return to the path of resolving conflicts through dialogue,” it said adding that China will continue to implement UN sanctions against Pyongyang in ‘comprehensive manner.’”

As one analyst who spoke with the SCMP suggested, the North may have timed its nuclear test to coincide with the BRICS conference that begins tomorrow in Xiamen. World leaders from some of the world’s largest emerging-market countries have traveled to China for the conference, and by testing the nuke Sunday, not only did the North overshadow the conference, which was supposed to be about economic issues, but it also provided world leaders with a first-hand look at its nuclear capabilities.

Trump Commits To Using “Nuclear Capabilities” To Defend US Terroritory, Allies

Courtesy of ZeroHedge. View original post here.

In what we believe is a significant escalation and potentially a hint as to the president's thinking, President Trump said during a phone call with Japanese Prime Minister Shinzo Abe that the US remains committed to defending its territories and allies using all "diplomatic, conventional and – here's the big one – nuclear – capabilities at our disposal." This is the first time Trump has explicitly referenced possible involvement of nuclear weapons in a US response to its isolated antagonist, and also means that the two world leaders discussed the possibility of a nuclear response.


The White House released a statement about what the two leaders discussed on the call. It’s available in full below:

JUST IN: White House issues statement on call between President Trump and Japan's Prime Minister Shinzo Abe

— NBC News (@NBCNews) September 3, 2017

The call was held to discuss how the two countries should respond to North Korea's sixth nuclear test – and possibly its first successful test of a hydrogen bomb. The test came after multiple provocations from the North over the past week, including two missile tests. Earlier, Defense Secretary James Mattis, using the couched language of international diplomacy, said any threat to the US or its territories would be met with a “massive military response.”

The full White House statement on the 6th North Korean nuclear test, as delivered by Mattis shortly after 3pm ET, is below:

"Any threat to the US or its territories including Guam or our allies will be met with a massive military response, a response both effective and overwhelming. Kim Jong Un should take heed in the United Nations' Security Council's unified voice. All members unanimously agreed on the threat North Korea poses and they remain unanimous in their commitment to the denuclearization of the Korean peninsula. We are not looking to the total annihilation of a country, namely North Korea, but as I said we have many options to do so."

China also strongly criticized the nuclear

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How Welfare States Encourage Bad Economic Thinking

Courtesy of ZeroHedge. View original post here.

Authored by Jakub Bozydar Wisniewski via The Mises Institute,

The greatest intellectual accomplishment of the laissez-faire liberal theorists was the recognition of the “hard” and “soft” institutions that are crucial prerequisites of productive accomplishment and material prosperity. The hard institutions include private property rights, market prices, and sound money. The soft institutions include those that reinforce values such as prudence, thrift, resourcefulness, innovative courage, and respect for success.

However, this accomplishment was accompanied by a proportionately great intellectual error – the belief that these institutions can be safeguarded exclusively by monopolistic apparatus of aggressive violence, commonly known as states. Since states necessarily parasitize on the productive output of market society, the belief that they are necessary for its emergence, let alone that they can remain “minimal” after its emergence, is fatally misguided. On the contrary, it appears perfectly predictable that they will grow in step with the increase in market output.

Unfortunately, this is not the end of the story. As powerful as states may be in terms of sheer physical force, their survival is ultimately rooted in favorable public opinion, and the best way to secure such opinion is to share their plunder as widely as possible. Thus, with sufficiently wealthy hosts at their disposal, states invariably turn into “welfare” states. And it is at this point that they start sawing off the branch on which they are sitting.

With productive achievement institutionally separated from consumption opportunities, the wealth-generating soft institutions start to erode particularly fast. When there is great abundance all around, but it seems that it can be enjoyed without putting in any productive effort, increasingly many of those who do not so enjoy it come to believe that abundance is a free good, and that the only reason why it is not free for them is because someone unfairly withholds it from them.

In other words, the prevalence of welfare-statist “redistribution” spells the death of economic thinking – that is, thinking in terms of resource scarcity, opportunity costs, and incentive structures. This temporarily strengthens the state even further – since at this point the state immediately steps in as an entity that is able and willing to punish the malevolent withholders – but it also further accelerates the

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Gold Pops, Stocks Drop As Futures Open After Korean Chaos

Courtesy of ZeroHedge. View original post here.

In an echo of last week's move following North Korea's teating of missiles across Japan's territory, futures markets are opening in a decidedly risk-off mannwr following North Korea's "hydrogen bomb" test. Dow Futs down 100 points, Gold jumping and Treasury bonds bid…

Gold is back above $1340…

USDJPY broke below 110.00

Of course, what happens next is anyone's guess as last week saw the BTFDers panic-buy stocks to their best week in 10 months1

What makes a country great in the first place?


What makes a country great in the first place?

Courtesy of 

My real name is Braun. It’s the German word for Brown. When my people came through Ellis Island, it was changed from Braun to Brown, even though the two words mean the same thing.

In 1990, I was Bar Mitvzah’d by Rabbi Brown. We’re not related. But he explained the story of why so many Jews in America have colors in their surnames.

Here’s a list of colors in German.

  • schwarz – black.
  • weiss – white.
  • rot – red.
  • gelb – yellow.
  • blau – blue.
  • grün – green.
  • braun – brown.

Now think about the names: Goldberg and Greenstein and Silverman and Schwartzman and Weiss and Gelbaum and Grunwald and Rothman, etc.

In Hungary during the 19th century, as in many other Eastern European countries at that time, Jews were confined into specific areas of the cities. The Italians called them ghettos. In these ghettos, the area was divided up into quadrants, so that the residents could be tracked and monitored. You lived in the white quadrant or the brown quadrant or the greenor the gold. Then, when an authority asked you where you belonged, you would tell them the color. This is where the last names came from.

When they came over, the Weisses and Schwartzes kept their names while the Rots and the Brauns had theirs anglicized.

My ancestors came here from Hungary, but also from Ireland and from Germany – that I am aware of. And probably lots of other places too. If you’re reading this and you’re an American in 2017, it’s most likely that your ancestors didn’t arrive on the Mayflower either.

The fact that people from all over the world have been able to come here, cooperate and create things is what made America great, going back to the very beginning. America didn’t start out great and then just take in all kinds of people. It’s the people who were taken in that made it this way.

Bret Stephens reminds us of this in a new column at the New
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South Korea Holds Ballistic Missile Drill “Targeting North Korea Nuclear Test Site”

Courtesy of ZeroHedge. View original post here.

As has become custom, shortly after North Korea engages in some provocative activity, in this case its first ever hyrdogen bomb test, South Korea has traditionally responded with its own military drill, and today was no difference, with Yonhap reporting "that South Korea's military said Monday it conducted a combined live-fire exercise targeting North Korea's nuclear test site."

To be sure, it's not exactly clear how a "drill" can "target" a foreign military site, but we'll assume someone just used Google translate in this case.

As Yonhap adds, the training came in response to the North's sixth nuclear test a day earlier, and involved the country's Hyunmoo ballistic missile and the F-15K fighter jets.

In the drill, the Hyunmoo surface-to-surface missile and the F-15K's long-range air-to-ground missile accurately hit designated targets in the East Sea, according to the Joint Chiefs of Staff (JCS).

The South's military, in particular, said the range to the simulated targets were set in consideration of the North's Punggye-ri nuclear test site in its northeastern province.

The Hyunmoo was unveiled for the first time one week ago, when South Korea released the following video clip showing the test-firing of the 500-kilometer-range ballistic missile.


Phil's Favorites

Overpriced tech IPOs sell grand visions but aren't worth their valuations


Overpriced tech IPOs sell grand visions but aren't worth their valuations

rblfmr /

Courtesy of John Colley, Warwick Business School, University of Warwick

The year of the tech IPO is 2019. Uber went public on May 10 with a US$82.4 billion valuation. Fellow ride-sharing app Lyft floated in March with a U$24 billion valuation and Pinterest had a US$10 billion IPO in April...

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Zero Hedge

Futures Slides As Trade Tensions Escalate

Courtesy of ZeroHedge. View original post here.

S&P futures were lower on Wednesday as investors sought safety in bonds, the Japanese yen and Swiss franc in muted trade amid renewed worries over the U.S.-China spat after reports Washington is considering cutting off the flow of American technology to as many as five Chinese companies including Hangzhou Hikvision Digital Technology, the world's largest supplier of video surveillance products, expanding the US crackdown on China beyond Huawei to include world leaders in video surveillance. The dollar and 10Y yield were unchanged ahead of today's FOMC Minutes.


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Kimble Charting Solutions

Emerging Markets About To Submerge If 3-Year Support Breaks?

Courtesy of Chris Kimble.

Are Emerging Markets about to “Submerge” and head a good deal lower? What they do at (3) will go a long way in answering this question!

Emerging Markets ETF (EEM) has been lagging the broad market for the past 15-months. They hit their 50% retracement level of the last year’s highs and lows and falling resistance at (2) recently. The weakness of last has EEM trading below its 200-MA line.

EEM has spent the majority of the past 3-years inside of rising channel (1), which reflects that this trend remains up. The weakness of late has it testing the bo...

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Insider Scoop

Amgen To Buy Danish Collaborator Nuevolution For $167M

Courtesy of Benzinga.

Amgen, Inc. (NASDAQ: AMGN) took a logical step forward in buying a preclinical biotech it has been collaborating with since 2016. 

What Happened

Amgen announced Wednesday an agreement to buy Copenhagen-based Nuevolution for $167 million.

Th... more from Insider

Chart School

Weekly Market Recap May 18, 2019

Courtesy of Blain.

China – U.S. trade talk continued to dominate the week.   A heavy selloff Monday was followed by 3 up days, with Friday moderately down.

On Monday, Chinese officials announced retaliatory tariffs against the U.S., hitting $60 billion in annual exports to China with new or expanded duties that could reach 25%.

Then on Wednesday:

The Trump administration plans to delay a decision on instituting new tariffs on car and auto part imports for up to six months, according to media reports.


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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control


Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...

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

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


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

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

Courtesy of David M. Gilbert, Florida State University


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

By Jacob Wolinsky. Originally published at ValueWalk.

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

rawpixel / Pixabay

Friends and Fellow Investors:

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

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Members' Corner

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

Are you ready to retire?  

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

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

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

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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism


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

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

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Swing trading portfolio - week of September 11th, 2017

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


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

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

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

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

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Free eBook - "My Top Strategies for 2017"



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

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

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

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

Some other great content in this free eBook includes:


·       How 2017 Will Affect Oil, the US Dollar and the European Union


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About Phil:

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

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>