Archive for 2019

Harvard Test-Taking Whiz At Center Of College Admission Scandal Pleads Guilty

Courtesy of ZeroHedge. View original post here.

Mark Riddell, one of the key pieces to the largest ever college admissions scandal, pleaded guilty before a federal judge in Boston late last week after arranging a deal with federal prosecutors. Riddell pleaded to fraud conspiracy and money laundering and faces 33 to 41 months in prison as a result. As part of his deal, he admitted to conspiring with William Rick Singer, the scam's ringleader.

Riddell is hoping for leniency at his sentencing as part of his plea deal. He has also agreed to forfeit $239,449. Prosecutors claim that Riddell was central to the cheating scheme.

“I’m being charged with conspiracy to commit fraud for cheating on the SAT and ACT,” Riddell admitted to the judge on Friday afternoon. Riddell previously said last month:

“I will always regret the choices I made, but I do also believe that the more than 1,000 students I legitimately counseled, inspired and helped reach their goals will paint a more complete picture of the person I truly am.

Riddell had been referred to as the "secret weapon" in the college admissions cheating scandal. U.S. attorney for the District of Massachusetts, Andrew Lelling, said last month: “He did not have inside information about the correct answers. He was just smart enough to get a near-perfect score.” 

Riddell is an alumnus of a private Florida prep school and Harvard, where he studied biology and played tennis before graduating in 2004. As a result of the scandal he was suspended indefinitely from his job as director of a college entrance exam preparation at his alma mater prep school.

Scheme ringleader Singer had previously said of Riddell that he could "nail a [test] score" of any kind. In one case when he was told not to score too high, he scored 1670 out of 2400 on the SATs for one student. He was being paid approximately $10,000 per test that he took.

Riddell isn't the only one who may face prison time. 16 parents were also recently indicted in the scandal last week. Two weeks ago, we noted that parents charged in the scheme were seeking out "prison life consultants" to find out what life would be like in the big house.…
continue reading

Lumber & Copper Prices Are Diverging – Which Is Signal & Which Is Noise?

Courtesy of ZeroHedge. View original post here.

Authored by Bryce Coward via Knowledge Leaders Capital blog,

The tale from some of the most cyclical and predictive economic indicators are telling investors two very different things at the moment. Copper, the metal with a PhD in economics is giving us the all-clear sign while lumber, which is perhaps only regarded as having a master’s or bachelor’s in economics, is saying, “be careful.”

Both indicators can’t be right, so which is actually the most useful in telegraphing economic activity? From my perspective, it’s lumber, despite its rather lesser educational attainment. The reasoning is simple. Lumber has a leading relationship with leading indicators of economic activity while copper has a coincident relationship with leading indicators of growth. Yes, you read that right: lumber prices are a leading indicator of a leading indicator, and the data bears it out.

In the second and third charts below I plot the lumber and copper prices, respectively, against the ISM new manufacturing orders series. ISM new manufacturing orders are regarded as one of the best and most consistent indicators of economic activity over the next quarter or so.

Lumber prices lead the ISM new manufacturing orders series by three months while copper prices act coincidentally.

Therefore, the message from lumber should be paid attention to. It’s currently telling us that ISM new manufacturing orders will peak in May and then struggle through at least July. But we also need to be vigilant to see where lumber prices move next. A break below levels of last Fall would be undoubtedly bearish for the economy and stocks too while a reversal right here could paint a more benign picture. As Tiger Woods is famous for saying, “expect the best, but prepare for the worst.” Indeed.

Emerging Markets As An Impressionist Painting

Courtesy of ZeroHedge. View original post here.

Authored by Andrew Sheets, chief cross-asset strategist at Morgan Stanley

Beautiful from a distance, a bit messy up close. That seems like a fitting description of emerging market assets at the moment, where a good top-down story is colliding with challenging country-level issues. Those issues shouldn’t disrupt the asset class overall, but they should encourage a divergence in flows between the haves and have-nots. We think this applies to both EM equities and fixed income.

Let’s start with the more attractive, top-down picture. If one wanted to create an ideal scenario for EMs, it might sound something like this: Growth that picks up, both outright and relative to developed market economies. Major policy easing from China that proves effective. Inflation that remains modest despite said improvement in growth. EM real rates that are already higher, reducing the need to tighten further. A Federal Reserve that’s struck a dovish tone. A dollar that is set to decline on the back of overvaluation, slowing US growth and that dovish Fed. And given this backdrop, EM valuations would be reasonable.

That paragraph, broadly, is the 2019 Morgan Stanley forecast. Our economists see EM growth rising from 4.3%Y in 1Q to 5.0%Y by year-end. We see EM inflation remaining low. We see the Federal Reserve on hold for the rest of the year (market pricing suggests even longer), and forecast the dollar to weaken significantly. And EM valuations, while varied, look reasonable. Equity forward P/Es, at ~12x, are a little above their 10-year average. Credit spreads are modestly cheap to the 10-year average. EM FX valuations remain well below average.

We are not alone in seeing these dynamics. Speaking to asset allocators over the last six months, there’s quite a bit of focus on the idea that, after a long period of underperformance, it is EM’s time to shine. Inflows into the asset class have picked up, and in meetings I’ve heard EM equities repeatedly mentioned as a sector investors feel comfortable allocating towards.

That popularity poses a risk, especially as valuations re-normalise. Our EM strategists currently have 6.6% total return upside to their year-end target, less than we see for equities in Japan, but still more than the US…
continue reading

Jim Grant: “The World-Wide Suppression Of Interest Rates Has Been A Crime”

Courtesy of ZeroHedge. View original post here.

Authored by Christoph Gisiger via,

James Grant, editor of the renowned investment newsletter «Grant’s Interest Rate Observer», warns about the growing herd of corporate «zombies» and other fatal market distortions caused by modern monetary policy.

Once again, the expedition to go back to normal has been postponed. After the big market scare at the end of 2018, central banks have abolished their plans to tighten interest rates further. Wall Street loves it. The first quarter has been the best one for risk assets in a decade, and after Lyft’s successful going public, a record year for IPOs seems to be in sight. Jim Grant observes the madding crowd from a sober distance. «Interest rates are the traffic signals of a market economy. Turn them all green, and errors and pileups abound», says the sharp thinking editor of the iconic Wall Street newsletter «Grant’s Interest Rate Observer. He states that a decade after the financial crisis, many companies are so heavily addicted to easy monetary policies that they wouldn’t be able to survive on their own. Consequentially, the proficient value seeker has a hard time to find attractive investments in today's markets. Where he spots rare opportunities, he tells «The Market» in this extended interview.

Mr. Grant, once again, the Federal Reserve is giving investors the green light. US equities are off to their best start since 1998. What’s your take on the current state of the global financial markets?

Stocks are up, bond yields are down and economists are speaking of full employment: Everything seems perfect and improving. But I remain a non-believer in these modern monetary methods. If it were this easy, mankind would have solved the economic problems a long time ago.

For quite some time, you have been warning that extreme measures like negative interest rates and quantitative easing will get us into trouble. But so far, the central banks remain confident that their policies are working.

What we see is an attempt to make things smooth and to forestall crises through keeping interest rates very low. But central banks are arsonists and firemen. They are arsonists because they strike the matches which set off

continue reading

Eric Peters: Are We Better Off For Knowing The Truth

Courtesy of ZeroHedge. View original post here.

Submitted by Eric Peters, CIO of One River Asset Management

"Our company will do everything possible to earn and re-earn trust and confidence,” said Boeing’s CEO, humbled, motivated, forced to face the facts. Data from the two 787 Max 8 black boxes had recorded the tragedies with perfect precision. “The goal is to ensure accidents like these never happen again.”

Across the planet, governments, airlines, and passengers had little doubt Boeing will now fix the problem. That’s the beauty of black boxes. They don’t lie. They don’t betray. They hold no allegiances, ideologies. They simply tell the truth.

Of course, speaking truth to power is exceedingly difficult, and the people who do, take great personal risks. Consequently, most are unusual individuals, complicated, controversial. Assange was arrested on the Ecuadorian embassy steps. Poor Khashoggi left his embassy in pieces. Snowden remains exiled in Russia.

Are we better off for having heard their truths? Depends who you ask. Most people only like to hear truths they already hold dear. And many only hear truths from those they like. They reject truths from those they despise, and often embrace deceits from loved ones.

Which is what paralyses governments when societies become politically polarized. This process is self-reinforcing, driving divided nations toward crisis, conflict. At which point, the overwhelming majority return to their senses, forced to face the black box truth of their undeniable reality.

Understanding central banking is even more complex, because it’s not clear that there is an immutable truth. And financial markets are hardest of all. Because no sooner does something appear unambiguously true, then the collective market conscience betrays the believers.

And what appears true today is that central bankers are in firm control, suppressing volatility, elevating valuations. Yet it is also true that the last time inequality hit these heights was in the late 1920s. And the last time bond and FX volatility touched this low was the 1960s. On the eves of two great upheavals.


“One thing that the British and Germans have in common is that they believe you should repay your debts,” said the political advisor, crisscrossing Europe in a determined search for a solution. “Imagine a European map, you have…
continue reading

College (As We Knew It) Is Broken In The USA

Courtesy of ZeroHedge. View original post here.

Authored by Alex Mitchell via,

College (as we know it) is broken.

The system of higher education in the United States is being rebuilt from the foundation and we’ve only just started to see the impact of this dramatic transformation.

  • The way students and parents pay for college is changing

  • The methods and the places students learn are changing (and have been for a while)

  • Our culture is changing to finally accept that “traditional” 4-year college isn’t the answer for everyone

But before we talk about all of the changes that are happening in higher education right now, let’s talk about why college is, to put it simply, broken in the United States.

College is Broken.

It’s impossible to miss the many ways college is broken today. And I’m not just talking about the high profile bribery scandal that broke several weeks ago.

While parents paying hundreds of thousands to millions of dollars to guarantee college admission through a “side door” is concerning, it pales in comparison to these other indicators of college broken-ness.

1. Student Loans Are Crippling Tens of Millions

44.2 Million Americans currently are carrying close to $1.5 Trillion in student loan debt (this is ~20% of the US adult population).

Even more astonishing, over 11% of these loans are delinquent (90+ days without payment or in default).

This delinquency rate is >5x the credit card delinquency rate!

Student loans have become such a burden that companies have been started to offer student loan repayment as a fringe benefit: Goodly.

Shout out to Goodly for helping the many already in debt, but we need to stop the problem at the source too!

Sources: Federal ReserveBloomberg

2. Tuition Increases Are Relentless

From 1988 to 2008, tuition increased on average by 3.5% per year. From 2008 to 2018, tuition continued to increase at a still-suffocating 3% per year.

In 1998, tuition at a private 4-year college was 77% of the average
continue reading

Lacy Hunt Blasts MMT, Fears Hyperinflation If Implemented

Courtesy of ZeroHedge. View original post here.

Authored by Mike Shedlock via MishTalk,

In the Hoisington First Quarter Review, Lacy Hunt blasts MMT as "self-perpetuating" inflation.

Please consider the Hoisington Investment Quarterly Outlook for the first quarter of 2019.

MMT Leads to Hyperinflation

Under existing statutes, Fed liabilities, which they can create without limits, are not permitted to be used to pay U.S. government expenditures. As such, the Fed’s liabilities are not legal tender. They can only purchase a limited class of assets, such as U.S. Treasury and federal agency securities, from the banks, who in turn hold the proceeds from this sale in a reserve account at one of the Federal Reserve banks. There is currently, however, a real live proposal to make the Fed’s liabilities legal tender so that the Fed can directly fund the expenditures of the federal government – this is MMT – and it would require a change in law, i.e. a rewrite of the Federal Reserve Act.

This is not a theoretical exercise. Harvard Professor Kenneth Rogoff, writing in (March 4, 2019), states “A number of leading U.S. progressives, who may well be in power after the 2020 elections, advocate using the Fed’s balance sheet as a cash cow to fund expansive new social programs, especially in view of current low inflation and interest rates.” How would MMT be implemented and what would be the economic implications? The process would be something like this: The Treasury would issue zero maturity and zero interest rate liabilities to the Fed, who in turn, would increase the Treasury’s balances at the Federal Reserve Banks. The Treasury, in turn, could spend these deposits directly to pay for programs, personnel, etc. Thus, the Fed, which is part of the government, would be funding its parent with a worthless IOU. In historical cases of money printing, the countries were not the reserve currency of the world, as the U.S. is today. Thus, the entire global system could be destabilized in very short order if this were to occur.

There would be no real increase in services or money since very little time would lapse before people realized increasing inflation was not increasing real purchasing power. If the

continue reading

Albert Edwards: “At This Point You Realize Something Has Gone Very Wrong”

Courtesy of ZeroHedge. View original post here.

In his latest note published last week, SocGen's Albert Edwards – never at a loss subjects that inspire his outrage – rages on the topic of Brexit, and specifically the often repeated assertion (as discussed here as well), that post-Brexit referendum UK has lost 2% of its GDP output, or about £800m a week.

We won't dwell on that for a simple reason: as UBS' chief economist Paul Donovan put is best last week, "A few things have happened in the EU-UK divorce. Does anyone care? No, they do not." Another reason why Brexit is largely meaningless despite resulting in countless newswire headlines each and every day: the final outcome is clear – with Theresa May a remainer, and with both sides seeking to perpetuate the status quo by delaying and delaying and delaying some more until it appears that it's the public's desire to reverse the outcome of the 2016 referendum, it is just a matter of time before the entire idea of Brexit is scuttled.

Instead we will focus on an anecdote that Edwards brings up in relation to his now 30-year-old son, Newcome, who was 10 back in 1999, and was reportedly stealing Albert's Financial Times "to look at Nasdaq share prices:"

It was at that point that I realised the tech bubble was really getting out of hand (I have reproduced part of this weekly explaining what happened, at the end of this note).

As Edwards further explains, "discovering my 10 year old son looking at Nasdaq share prices alerted me to the extent of the madness that had gripped the markets by end 1999. Similarly there are moments in this job when something you hadn’'t been following particularly closely is highlighted to you and you stagger back in shock. At that point you realise that something has gone very wrong." 

So unlike 1999, when it was Nasdaq prices that set Edwards off, this time it was the yield on the Greek 5Y government bond that inspired shock in the SocGen strategist, to wit: "I certainly think the decline in the 5y Greek government bond yield to 2.28%, below that of the US, counts as such
continue reading

Make Stock Buybacks Illegal?

Courtesy of ZeroHedge. View original post here.

Authored by Lance Roberts via,

Markets Climb Above 2900, All-Time Highs Next Stop?

Over the last couple of weeks, we have been discussing the market’s advance from the lows and why retesting old highs was quite probable. To wit:

“The markets are close to registering a ‘golden cross.’ This is some of that technical ‘voodoo’ where the 50-day moving average (dma) crosses above the longer-term 200-dma. This ‘cross’ provides substantial support for stocks at that level and limits downside risk to some degree in the short-term.”

As we discussed last week, the rally above, and retest of support at 280 sets up a test of all-time highs. I expect that will occur early next week. SPY is extremely overbought, so a test and failure at the highs will not be surprising.

  • Short-Term Positioning: Bullish

  • Last Week: Previously increased sizing to full weight.

  • This Week: Hold

  • Stop-loss moved up to $280″

More importantly, on Friday, the markets broke above short-term resistance and the psychological barrier of 2900. This will likely get the bulls all excited over the weekend to make an attempt for all-time highs.

While the bullish bias is definitely behind investors currently, there are concerns relative to the current risk/reward backdrop. 

As shown in the chart above, the market is not only back to more extreme overbought levels, it is also close to registering a short-term sell signal. With prices now compressed into a very tight range, the risk of a downside break has risen. Drew Zimmerman from Polar Futures Group also made some very astute observations on Friday.

“Is it the middle of April or the middle of August? The weekly trading volume of shares on the US indices and the number of futures contracts that traded this week was the lowest since last summer and among the lowest weekly levels of the past several years. This low volume has reduced price volatility with the VIX index trading back to down to

continue reading

A Collapse In 2009 Was Always A Sure Thing…Just Like Recession (Or Worse) In 2019

Courtesy of ZeroHedge. View original post here.

Authored by Chris Hamilton via Econimica blog,

I recently detailed why a recession is imminent based on a few factors, chiefly full employment among the working age segments of the population and minimal population growth among the same segments, detailed HERE.  However, today I wanted to outline the impact that women moving into the labor force had on growing the labor force, but why this growth has ceased.  I'll also point out that the 2008-'09 financial crisis was a demographically driven crisis that was set decades earlier.

15 to 24 Year Olds

The chart below shows 15 to 24 year old employed males and females, from 1960 to present.  Based on the peak 15 to 24 employment in 1979 (and subsequent four decades of decline), there was always sure to be a like peak (and like fall) among the 25 to 54 year old core population 30 years later…or 2009.  Noteworthy is the relatively larger decline in employment among males than among females…and the fact that men and women make equal parts of the total employed persons.

The 15 to 24 year old percentage of males and females employed, chart below.  The peak in the percentage of males employed was in 1979 at 67% and 1989 at 59% for females.  Both have been receding since and sit at 50%.

15 to 24 year old male population and employees, 1960 to present, below.  While the total 15 to 24 population has essentially been unchanged since 1979, the total number of 15 to 24 employed males has consistently been in decline since 1979, a fall of 2.7 million (a 21% fall) over the last 40 years.

15 to 24 year old female population and employees below, 1960 to present.  Peak 15 to 24 female employment came in 1979 and currently sits 1 million fewer than that peak (a 9% fall).

25 to 54 Year Olds

25 to 54 year old employed male and females, below.  From 1960 to 2000, male employment rose 23 million while female employment rose a massive 32 million.  Contrast that with since
continue reading


Zero Hedge

Trash Wars: Duterte Orders Tons Of Garbage Shipped Back To Canada Or Dumped In Territorial Waters

Courtesy of ZeroHedge. View original post here.

Outspoken Philippines President Rodrigo Duterte has ordered that containers carrying trash from Canada should be shipped back to the country. It is the latest chapter in a disagreement over more than 100 containers of trash that were shipped to the Philippines between 2013 and 2014, illegally, by a Canadian company. 

Canada had previously agreed to take the trash back, but has been slow in making arrangements for its return. Duterte threatened to leave the trash in Canadian waters if Ottawa refuses to take it back, according to Salvador Panelo...

more from Tyler

Phil's Favorites

Animal Spirits: The Absence of Stuff


Animal Spirits: The Absence of Stuff

Courtesy of 

Mention Animal Spirits to receive 20% off from YCharts (*New YCharts users only)

Stories Discussed

Best graduation ever


more from Ilene

Kimble Charting Solutions

DAX (Germany) About To Send A Bearish Message To The S&P 500?

Courtesy of Chris Kimble.

Is the DAX index from Germany about to send a bearish message to stocks in Europe and the States? Sure could!

This chart looks at the DAX over the past 9-years. It’s spent the majority of the past 8-years inside of rising channel (1), creating a series of higher lows and higher highs.

It looks to have created a “Double Top” as it was kissing the underside of the rising channel last year at (2).

After creating the potential double top, the DAX index has continued to create a series of lower highs, while experiencing a bearish divergence with the S...

more from Kimble C.S.

Chart School

Brexit Joke - Cant be serious all the time

Courtesy of Read the Ticker.

Alistair Williams comedian nails it, thank god for good humour! Prime Minister May the negotiator. Not!

Alistair Williams Comedian youtube

This is a classic! ha!

Fundamentals are important, and so is market timing, here at we believe a combination of Gann Angles, ...

more from Chart School

Insider Scoop

55 Biggest Movers From Yesterday

Courtesy of Benzinga.

  • Obalon Therapeutics, Inc. (NASDAQ: OBLN) shares jumped 233.3 percent to close at $1.30 on Wednesday after the company reported expanded data from a large scale commercial use study that was presented at the Digestive Disease Week.
  • Ascent Capital Group, Inc. (NASDAQ: ASCMA) shares jumped 51.4 percent to close at $1.37 after the company announced a restructuring support agreement with Monitronics International.
  • Valeritas Holdings, Inc. (NASDAQ: VLRX) shares dippe... more from Insider

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 ...

more from Bitcoin


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


more from Biotech


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 ...

more from ValueWalk

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...

more from Our Members

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...

more from M.T.M.


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 ...

more from OpTrader


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


more from Promotions

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...

Learn more About Phil >>

As Seen On:

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 >>