Archive for 2017

Weekly Market Recap Sep 17, 2017

Courtesy of Blain.

A sharp rally Monday was followed by 4 relatively quiet days as gains were efficiently consolidated.   After a brief respite, bears are back on the run again.  No real catalyst Monday other than “less damage than expected from Irma” and no weekend hijinks from the North Koreans.  For the week the S&P 500 gained 1.6% and the NASDAQ 1.4%.

Katie Stockton is giddy:

“The U.S. stock market is exhibiting positive short- and long-term momentum, and breadth has expanded enough to lift the S&P 500 to a new all-time high,” said Katie Stockton, chief technical strategist at BTIG Research.  “Short-term overbought conditions have returned for the S&P 500, but they tend to be managed well when associated with breakouts, which are abundant,” Stockton said.

On the economic front, household incomes have finally reached (inflation adjusted) levels once seen in the NASDAQ bubble; it took nearly 2 decades for that to happen!

Median household income last year was $59,039, up an inflation-adjusted 3.2% from 2015, the Census Bureau said Tuesday. It was a new high for the figure, surpassing the previous peak for household income reached in 1999.

A reading on consumer prices, known as the consumer-price index, showed an increase of 0.4% in August, beating consensus estimates for a rise of 0.3%.  U.S. industrial output fell 0.9% in August, its first drop in seven months. The Federal Reserve said the decline was mostly due to the recent impact of Hurricane Harvey.    A Commerce Department report on Friday showed retail sales fell 0.2% in August, bucking economists’ expectations for a gain, following a 0.3% increase in July. Both July and June retail sales were revised lower.

Remember all that talk about reducing deficits and such during the last election (like ALL elections)??  Yeah not so much:

The U.S. officially hit $20 trillion in debt, with about half of that added over the past decade or so.

Mastercard (MA) is up quietly nearly 40% for the year.

Here is the 5 day weekly “intraday” chart of the S&P 500 .. via Jill Mislinski.

Waiting for a…
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How Rich Chinese Use Visa Fixers To Move To The U.S.

Courtesy of ZeroHedge. View original post here.

Authored by Peter Robison, Karen Weise, Wenxin Fan, and Yan Zhang via Bloomberg.com,

Have a spare $500,000 to invest in an economically distressed American area (that actually isn’t distressed at all)? China’s EB-5 fixers will help you every step of the way

One summer Saturday in 2013, Vivian Ding took the stage in the grand ballroom of Shanghai’s Shangri-La Hotel to hold forth on a subject in which she was both an expert and an inspiration: emigrating to the U.S.

Tall, with a commanding presence, Ding is what you might get if Tony Robbins were a Chinese woman capable of both pumping up a cavernous ballroom and filling out an I-526, the Immigrant Petition by Alien Entrepreneur form. Standing next to a 6-foot-high pyramid draped in black velvet, she recounted her own move to America and described the prestigious U.S. high school her daughters attended, thanks to a program that lets immigrants invest in new commercial enterprises in exchange for permanent residency visas—green cards. The cloth was pulled to reveal a model of a Manhattan building: the glassy residences on the Hudson River now known as Via 57 West. Sign a contract that day to lend $500,000, help build a “landmark for mankind”—and take home a prize, Ding implored the audience. That day, the prize was an iPad mini.

Ellis Liu, a finance manager at a company that runs internet cafes, was in the audience. He didn’t sign up on the spot, but he couldn’t shake the idea. Shanghai had become so smoggy; his young son was constantly sneezing. A few months later, he paid $50,000 in fees to Ding’s company, Qiaowai, and got money from his father to make a $500,000 investment in another New York project, to bring Wi-Fi to the city’s subway system. Then he settled in for the four-year wait before, conditional visa in hand, he’d be able to begin job hunting in Los Angeles.

Some immigrants pile into rafts or fishing boats to get to America. Others try to slip past the cameras and sensors along the southern border. And many simply pay up via the EB-5 visa program, through which U.S. Citizenship and Immigration Services issues 10,000 conditional


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Muddy Waters’ Carson Block Sues Equifax For $500,000

Courtesy of ZeroHedge. View original post here.

Disgraced credit-monitoring company Equifax, which has seen its stock drop by nearly 40% since disclosing what will likely be remembered as one of the most damaging data breaches in US history, eliciting dozens of class-action lawsuits, calls for investigations by at least one state attorney general, and requests from multiple Congressional committees for more information about the exact timeline of when Equifax learned about the hack, and when it was disclosed – because somewhere between those two events, several of the company’s executives, including its CFO, cashed out of some $2 million in stock and options.

In the latest humiliating blow to a company that failed at its only job – safeguarding Americans’ sensitive personal and financial data – famed short-seller Carson Block has announced that he has decided to sue the company over its “abysmal” handling of the hack.

And here’s the kicker: He doesn’t even have an open short position against the company. In other words: There’s no profit motive here. Block – like millions of Americans – is just really, really pissed.

Here’s the Financial Times:

“Veteran short-seller Carson Block has launched a private lawsuit against Equifax, accusing the credit-reporting company of an “abysmal” handling of one of the worst cyber security incidents in history. Equifax said on September 7 that its systems were breached by criminals in a raid that went on for more than two months — an admission that has prompted a flood of regulatory inquiries, dozens of private lawsuits and a more than one-third collapse in the company’s share price. The data of up to 143m Americans was compromised, the company said, along with up to 400,000 people in the UK.

One of those was Mr Block, whose suit filed on Friday accuses Equifax of negligence in failing to safeguard and protect his personal identifying information from criminals, as well as a failure to disclose the breach in a timely fashion.”

Apparently, Block has learned that his personal information was compromised in the hack because he’s suing for personal damages. He has also accused the company of failing to disclose the breach in a timely fashion. The company’s CEO, Rick Smith, who is expected to deliver Congressional


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Guaranteed Income and Living Wage Schemes Cannot Possibly Work

Courtesy of Mish.

Facebook founder Mark Zuckerberg Supports Universal Basic Income.

In its basic form, universal basic income means “everyone gets a paycheck, whether they have a job or not.”

Many expect even more. They want a guaranteed “living wage”.

Useless Trials

Such schemes cannot possibly work. But that does not stop fools from trying.

For example, Finland is giving out a guaranteed monthly income of nearly $600 to 2,000 citizens.

Canada’s province of Ontario, which includes Toronto, started a pilot program in April that provides 4,000 citizens with an unconditional income of about $12,600 a year. Applicants must be between ages 18 and 64 and living on a limited income.

Those studies cannot prove anything, no matter what the results.


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Pension Storm Coming: “This Will Become One Of The Most Heated Battles Of My Lifetime”

Courtesy of ZeroHedge. View original post here.

By John Mauldin from Mauldin economics

This time is different are the four most dangerous words any economist or money manager can utter. We learn new things and invent new technologies. Players come and go. But in the big picture, this time is usually not fundamentally different, because fallible humans are still in charge. (Ken Rogoff and Carmen Reinhart wrote an important book called This Time Is Different on the 260-odd times that governments have defaulted on their debts; and on each occasion, up until the moment of collapse, investors kept telling themselves “This time is different.” It never was.)

Nevertheless, I uttered those four words in last week’s letter. I stand by them, too. In the next 20 years, we’re going to see changes that humanity has never seen before, and in some cases never even imagined, and we’re going to have to change. I truly believe this. We have unleashed economic and technological forces we can observe but not entirely control.

I will defend this bold claim at greater length in my forthcoming book, The Age of Transformation.

Today we will zero in on one of those forces, which last week I called “the bubble in government promises,” which I think is arguably the biggest bubble in human history. Elected officials at all levels have promised workers they will receive pension benefits without taking the hard steps necessary to deliver on those promises. This situation will end badly and hurt many people. Unfortunately, massive snafus like this rarely hurt the politicians who made those overly optimistic promises, often years ago.

Earlier this year I called the pension mess “The Crisis We Can’t Muddle Through.” Reflecting since then, I think I was too optimistic. Simply waiting for the floodwaters to drop down to muddle-through depth won’t be enough. We face an entire new ocean, deeper and wider than we can ever cross unaided.

Storms from Nowhere?

This year marks the first time on record that two Category 4 hurricanes have struck the US mainland in the same year. Worse, Harvey and Irma landed directly on some of our most valuable and vulnerable coastal areas.


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China Orders No Market Turbulence Ahead Of Party Congress

Courtesy of ZeroHedge. View original post here.

The most important event in China in five years is about to take place, and Beijing isn't taking any chances.

Ahead of the Communist Party’s twice-a-decade congress – an event so massive that according to Bloomberg "nothing escapes its pull" – which is slated to start on October 18 in Beijing, regulators have made it clear to the nation’s top brokers, bankers and financiers that they don’t want to see any major turbulence in markets.

In a repeat of the fiasco that followed the bursting of China's equity bubble in the summer of 2015 when Beijing effectively nationalized the stock market, and went so far as to throw prominent hedge fund managers and assorted "speculators" in prison, the China Securities Regulatory Commission has ordered local brokerages to "mitigate risks" and ensure stable markets before and during the Communist Party’s leadership congress next month, according to Bloomberg. Additionally, to leave virtually nothing to chance – and to have ready scapegoats in case someone does in fact sell – the CSRC also banned brokerage bosses from taking holidays or leaving the country from Oct. 11 until the congress ends.

Brokerage bosses were told to avoid travel of any kind from Oct. 11 until the congress ends, including business trips.

Luckily for them, China’s national day holidays are coming up in the first week of October. Local markets will be shut for an entire week, providing plenty of time to recharge for the congress.

Since the congress, which is expected to replace about half of China’s top leadership, is of paramount importance to President Xi Jinping who will use it as a foundation to cement his influence into the next decade, nothing is allowed to spoil the optics of supreme control at this critical moment.

And while China routinely takes steps to reduce market swings during key political gatherings, the travel ban on brokerage chiefs illustrates how seriously regulators are taking next month’s meeting, according to Bloomberg.

Still, the news will hardly come as a surprise to most market participants, and explains why Chinese markets have already rallied significantly this year amid expectations of government support, while equity volatility has tumbled to


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Kyle Bass: China’s $40 Trillion Banking System Has “Largest Imbalances I’ve Ever Seen”

Courtesy of ZeroHedge. View original post here.

Kyle Bass’s Hayman Capital has been having a rough year thanks to its widely publicized bet against China’s currency, which has more than reversed its 2016 decline – its largest annual drop since 1994 – as the People’s Bank of China has cracked down on potentially destabilizing capital outflows.

However, Bass – unlike a handful of other former China bears who’ve been forced to scale back, or even reverse, their positions – has said that he is standing by his belief that China’s corporate sector is massively overleveraged, and overdue for a collapse that could destabilize the global economy. Chinese banks, according to Bass, have more than $40 trillion in assets held against $2 trillion in equity.

The dollar’s bull run against the yuan last year helped spark capital outflows as wealthy Chinese worried about the depreciation of their currency. In response, the PBOC tightened restrictions on foreign-exchange transactions for individuals, local companies – quashing a roaring international M&A boom – and even foreign companies, which in some cases have struggled to pull their money out of the world’s second-largest economy.

“So what's going on right now? Let's get the elephant out of the room. Let's talk about China.

Kyle Bass: OK, how much time do we have?

RP: As long as you need. Where are we? What the hell's going on?

KB: We're in the such late stages of a game that is the largest global imbalance I've ever seen in my life. When you look at on balance sheet and off balance sheets, you look at on balance sheet in the banks, you look in the shadow banks. The number of total credit in the system, China is right at $40 trillion. Think about the number I just said. $40 trillion. And that's using an exchange rate of call it 6.7 to the dollar, right? So it's grown 1,000% in a decade. And we're on a $40 trillion credit system on $2 trillion of equity on maybe $1 trillion of liquid reserves.

RP: Where do you get the equity and liquid reserves from?

KB: Well, it's the amount of equity in the banks of China. It's right at about $2 trillion.


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India May Issue Its Own Bitcoin-like Cryptocurrency As Legal Tender

Courtesy of ZeroHedge. View original post here.

Less than a year after India launched a shocking "war on cash" when on November 8, 2016 it unveiled a demonitization campaign in an effort to wipe out huge amounts of so-called 'black money' and streamline its largely cash-based economy, which however was called a colossal failure which cost innocent lives and ruined the economy" by Rahul Gandhi earlier this month after it was revealed that 99% of the high denomination banknotes cancelled last year were in fact deposited or exchanged for new currency, even as India's GDP tumbled to 2 year lows…

… on Saturday, the Business Standard reported that while working on creating a legal framework for bitcoin and other digital currencies, the Indian government is considering launching its own bitcoin-like cryptocurrency.

Preempting a report by the BIS released on Sunday, and which recommended that central banks should seriously consider launching cryptocurrencies of their own, the Indian press reports that the Indian government is considering “a proposal to introduce its cryptocurrency similar to bitcoin,” and which will be issued by the Reserve Bank of India (RBI). This state-run cryptocurrency will be called “Lakshmi,” the name of the Hindu goddess of wealth, fortune, and prosperity.

The proposal was reportedly "discussed by a committee of government officials, and the panel found the idea of setting up and running blockchain for financial services useful."

The report comes just days after RBI Executive Director Sudarshan Sen talked about the central bank’s discomfort with Bitcoin at the India Fintech Day conference. He hinted at the time that the government may be introducing its own fiat cryptocurrency which will be issued by the RBI.

“Right now, we have a group of people who are looking at fiat cryptocurrencies. Something that is an alternative to the Indian rupee, so to speak. We are looking at that closely,” he said. Echoing China's own displeasure with the soaring popularity of cryptocurrencies, the RBI executive stressed that the central bank is not comfortable with non-fiat cryptocurrencies such as bitcoin.

Despite the growing resentment toward bitcoin, the Indian government has also been working on creating a legal framework for bitcoin and other


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US Dollar Breakdown: What’s Next?

Courtesy of Mish.

The US dollar index is down about 12% from the highs of late last year. It has broken support, no matter where you draw the trendline.

What’s Next?

No one can say for sure “what’s next”, certainly not me. But I can say that European investors need significant annual gains in US equities just to match the declining value of the US dollar.

Last week, Pater Tenebrarum at the Acting Man blog pinged me with this comment: “People underestimate how sticky currency trends are.”

Given the significance of what this trend change means for the monetary cycle and the current bubble in U.S. ‘paper’ assets, it’s eerie to watch this rollover in the dollar unfold in utter silence.

Mike “Mish” Shedlock


Original article here.





 
 
 

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 / Shutterstock.com

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...



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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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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:

 

·       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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