Author Archive for ilene

The Stock Market and Crypto Market Are The Ultimate Platform and Game

 

The Stock Market and Crypto Market Are The Ultimate Platform and Game

Courtesy of Howard Lindzon

When I was a kid I played ‘Pong’ and ‘Space Invaders’ and Coleco Football and Mattel ‘Intellivision’.

In college I stopped.

Maybe if there were smartphones and no women, I would still be a ‘gamer’, but my generation was looking up not down.

I found the markets because I needed a first job and I was hooked.

It has been a battle of wits and behavior since. The markets have brought me to panic and fear on many occasions but mostly they bring me joy.

I have no time or energy for the grind of ‘poker’ which so many of my friends tell me to try, or any video or mobile games. I do see Rachel playing mobile smartphone games while watching Netflix shows.

I have spent the last year mostly at home and staring at my laptop so I have been happily fascinated by the insane growth in new investors/traders and the investor in me continues to wonder what is next.

Gaming is such a part of the human life experience, but as a non gamer it is very hard for me to participate in the mega trend because I don’t use the products. Between Tencent, Riot, xBox, Nintendo, Skillz, Zynga, Roblox, Playtika…I have no idea how to analyze the sector and opportunities.

The great thing about the markets as I think about the gaming platforms is the markets have basically one playing field…price and volume. Of course there are tickers and now a whole world of decentralized tickers and exchanges, but it is still just one giant platform of tickers and prices and fundamentals and opinions and behavior and wit.

I think this ‘game’ of the markets is more a game than ever because onboarding is so much easier and fractional ownership allows for people to play the game in a much more enjoyable way.

So while everyone is yelling that the markets and stocks are overvalued and due for a long bear market and that this ‘bubble’ will pop I am contemplating the idea that we just have a massive supply/demand imbalance and the game creators (bankers and founders and venture capitalists and SPACers) need to create more supply. They are of course.





Trump revived Andrew Jackson’s spoils system, which would undo America’s 138-year-old professional civil service

 

Trump revived Andrew Jackson's spoils system, which would undo America's 138-year-old professional civil service

A picture of Andrew Jackson hung in the Oval Office during Trump’s tenure. AP Photo/Patrick Semansky

Courtesy of Barry M. Mitnick, University of Pittsburgh

The federal government’s core civilian workforce has long been known for its professionalism. About 2.1 million nonpartisan career officials provide essential public services in such diverse areas as agriculture, national parks, defense, homeland security, environmental protection and veterans affairs.

To get the vast majority of these “competitive service” jobs – which are protected from easy firing – federal employees must demonstrate achievement in job-specific knowledge, skills and abilities superior to other applicants and, in some cases, pass an exam. In other words, the civil service is designed to be “merit-based.”

It wasn’t always so.

From Andrew Jackson until Theodore Roosevelt, much of the federal workforce was subject to change after every presidential election – and often did. Known as the spoils system, this pattern of political patronage, in which officeholders award allies with jobs in return for support, began to end in the late 19th century as citizens and politicians like Roosevelt grew fed up with its corruption, incompetence and inefficiency – and its role in the assassination of a president.

Less than two weeks before Election Day, Donald Trump signed an executive order that threatens to return the U.S. to a spoils system in which a large share of the federal government’s workforce could be fired for little or no reason – including a perceived lack of loyalty to the president.

While President Joe Biden appears likely to reverse the order, its effects may not be so easily undone. And he may have his own reasons for keeping it temporarily in place.

An old picture shows a crowd of people in front of the White House in 1829.

People seeking government jobs crashed the White House on the day of Andrew Jackson’s inauguration. Library of Congress

Birth of the spoils system

The government of the early republic was small, but the issue of whether civil servants should be…
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Clips From Today’s Halftime Report

 

Clips From Today’s Halftime Report

Courtesy of Joshua Brown, The Reformed Broker 

Valuation is a bad timing mechanism: Liz Young from CNBC.

 

Final Trades: PayPal, Disney, Jumia & more from CNBC.





Highlights from Janet Yellen’s Confirmation Hearing for Treasury Secretary

Courtesy of Pam Martens

Senator Ron Wyden

Senator Ron Wyden at Senate Finance Committee Hearing, January 19, 2021

The mood among Democrats in Washington was captured at the Senate Finance Committee’s confirmation hearing on Tuesday for former Fed Chair Janet Yellen to become the new Treasury Secretary. Senator Ron Wyden, Democrat of Oregon and the Ranking Member of the Committee (who is expected to become the new Chair), said this in his opening remarks:

“This is the second time in 12 years that a Republican President leaves office with the economy in ruins. Today there’s also a surging pandemic and armed troops guarding our Capitol from far-right insurrectionist attack. The Biden administration isn’t going to begin with inaugural balls; it’s going to begin with all-out triage.”

Wyden also made clear that he doesn’t intend to be bullied into the same failed strategy that governed the response to the Wall Street implosion of 2008. Wyden stated:

“My top economic priority going forward is avoiding the mistake Congress made in the last recession – which was taking a foot off the gas pedal before recovery took hold. Congress didn’t do enough in 2009 to help the unemployed and struggling homeowners. If stepping off the gas wasn’t bad enough, two years later House Republicans passed policies that yanked out the spark plugs and let the air out of the tires, as well. In Oregon, it took seven and a half years for unemployment to return to its pre-recession level. That cannot happen again, or else millions and millions of people will go through years of needless hardship. Some will never recover the lives that they had prior to the pandemic.”

Senator Maria Cantwell

Senator Maria Cantwell at January 19, 2021 Senate Finance Committee Confirmation Hearing for Janet Yellen as Treasury Secretary

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Animal Spirits: Micro Bubbles

 

Animal Spirits: Micro Bubbles

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Trump’s big gamble to gut US power plant emissions rules fails in court, opening door for powerful new climate rules

 

Trump’s big gamble to gut US power plant emissions rules fails in court, opening door for powerful new climate rules

Fossil fuel power plants contribute to climate change by releasing greenhouse gases that trap heat near Earth’s surface. AP Photo/J. David Ake

Daniel Farber, University of California, Berkeley

Joe Biden got a big judicial win for his climate agenda just hours before his inauguration as U.S. president. The case involved plans for cutting power plant emissions and a big gamble by the Trump administration.

Nearly a third of the U.S. carbon emissions driving climate change come from electricity generation. To try to cut those emissions, the Obama administration in 2014 issued the Clean Power Plan – a set of rules targeting high-emitting power plants, particularly those burning coal.

The industry sued, and before the Clean Power Plan could go into effect, the Supreme Court suspended it so the legal disputes could be resolved. It was still in limbo in 2019 when Donald Trump’s Environmental Protection Agency formally repealed the Clean Power Plan and issued an extremely weak substitute called the Affordable Clean Energy rule that had far looser limits on pollution.

In issuing its own rule, the Trump administration took a big gamble. Trump’s goal was not only to replace the Obama administration rule but to ensure that no future president could ever adopt anything similar.

Trump’s substitute rule merely required limited retrofits of existing coal fired power plants, whereas Obama’s rule involved moving the power system toward cleaner energy sources. To prevent similar future actions, Trump’s EPA placed all its chips on an argument that EPA had no legal power to do anything beyond the retrofits.

On Jan. 19, 2021, a U.S. appeals court rejected the Trump EPA’s sole legal argument, potentially opening the door for Biden to issue something like Clean Power Plan 2.0.

Getting to the next Clean Power Plan

The appeals court vacated Trump’s rule and sent it back to the EPA to reconsider, with just hours left in the Trump administration.

It’s conceivable but unlikely that one of the other parties to the case can get the U.S. Supreme…
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When Secular Trends Reverse…and Economic Time Bombs

 

When Secular Trends Reverse…and Economic Time Bombs

Courtesy of Howard Lindzon

My partner Charlie (who runs the advisory business Compound Advisors) and I have been chatting for a month or so about the possibilities of secular changes in the markets. Charlie put together a great post on the changes that have my attention. It begins:

The most significant investing trends over the last 10 years can be summarized as follows…

1. Large Caps over Small Caps.
2. US over International.
3. Growth over Value.
4. Tech over Everything.
5. Long Duration over Short Duration (Yields Falling, Curve Flattening).
6. Stocks over Commodities.
7. When Covid-19 first hit the US last February and March, all of these pre-existing trends accelerated.

And that made perfect sense.

The narrative: a global Depression coming, and during a Depression a) large companies were more likely to survive than smaller companies, b) the US should do better than much of the world given the enormous monetary/fiscal stimulus, c) growth companies would be bid up in a world starved for it, d) technology would thrive as people were forced to stay at home, e) bond yields would plummet as deflationary pressures took hold, and f) commodities would crash from the lack of demand.

These narratives seemed inevitable, and prices were confirming.

But then, with no advance warning, a strange thing started happening. One by one, these trends began to reverse course…

Take the time to read because it is excellent and you will have an idea of the subtle changes we are keeping an eye on, but the gist of the research on these big trend changes is as follows:

When secular trends reverse, no bell is rung, and no one can believe that a shift has actually occurred.

But as narratives follow prices, the longer they are sustained, the more the story changes and the more people believe it.

That has already begun, with the current narrative of a Depression averted, with a) small companies benefitting more from stimulus measures than their larger counterparts, b) global stocks benefitting from a falling dollar


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Biden is inheriting a wrecked economy, but Democrats have a record of avoiding recession and reducing unemployment

 

Biden is inheriting a wrecked economy, but Democrats have a record of avoiding recession and reducing unemployment

Democrats control both the White House and Congress for the first time in 10 years. AP Photo/Alex Brandon

Courtesy of William Chittenden, Texas State University

On day one, President Joe Biden will have to manage a devastated economy – much as he and former President Barack Obama did 12 years ago.

What can the country expect?

Forecasting how the economy will perform under a new president is generally a fool’s errand. How much or how little credit the person in the White House deserves for the health of the economy is a matter of debate, and no economist can confidently predict how the president’s policies will play out – if they even go into effect – or what challenges might emerge.

Regardless, voters tend to believe it makes a difference. And going into the election, 79% of registered voters – and 88% of Donald Trump supporters – said the economy was their top concern. Given that, historical data suggests that those who are concerned with the economy have reason to be fairly satisfied with the election results: The economy generally fares better under Democratic presidents.

Inheriting a struggling economy

Biden inherits an economy with serious problems. Things have improved markedly since last spring, but the economy remains in a dire state.

The latest jobs report shows that almost 11 million people remain unemployed – over a third of whom have been without a job for at least 27 weeks – down from a peak of 23 million in April. Tens of thousands of small businesses and dozens of major retail chains have closed or filed for bankruptcy. Many states, cities and municipal agencies are reeling from the tremendous costs of spring lockdowns. And the economy has contracted 3.4% since the end of 2019.

And that doesn’t yet include the impact of what some officials – including Biden – have dubbed a “dark winter,” as severe coronavirus outbreaks in many regions of the U.S. have prompted new economic restrictions.


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The Money Trail to the Siege at the Capitol Leads to Charles Koch and Koch Industries

Courtesy of Pam Martens

Republican Senators Who Challenged Biden Presidential Election

By Pam Martens and Russ Martens

Charles Koch

Charles Koch, Chairman and CEO of Koch Industries

The FBI has asked the public for help in collecting evidence surrounding the siege at the Capitol on January 6 — an insurrection that left five people dead, dozens injured, and Congressional members’ offices ransacked and laptops stolen. The violent scenes at the Capitol played out live on TV, humiliating the United States around the world. The world will watch President-Elect Joe Biden’s inauguration today, surrounded by 25,000 National Guard Troops in Washington, D.C. These images will further undermine the standing of the United States among world leaders.

Because the FBI seems to have ignored for decades the serial warning signs regarding Charles Koch, Koch Industries and their intrusions into  elections, we’re providing the FBI a simple and clear roadmap today.

Charles Koch is the billionaire Chairman and CEO of Koch Industries, one of the largest private corporations in the world. Koch Industries is a conglomerate with interests in fossil fuels, refineries, chemicals, paper products and extensive trading operations. For the past forty years, Charles Koch has been involved in a stealthy network of front groups that seek to gut the federal government of its regulatory functions and kill off popular federal programs like the U.S. Post Office, Social Security and Medicare.

To understand the full scope of Koch’s involvement in the events of January 6, let’s first remember what actually fomented the attack on the Capitol. It was based on the Big Lie that the election had been stolen from Donald Trump through voter fraud — something that Trump’s own cyber security chief, Chris Krebs, and Attorney General, William Barr, dismissed as lacking a factual basis. The playbook for the Capitol attack on January 6 was to intimidate Republican members of the Senate and House into refusing to certify the election results, thus withholding the Presidency from Joe Biden.

These are the red flags that lead to the doorstep of Charles Koch and Koch Industries and should play a significant role in any serious investigation conducted by Congress, the FBI, or U.S. intelligence agencies.

Red Flag # 1: There were…
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They’re on Fire

 

They’re on Fire

Courtesy of 

Small businesses got absolutely decimated by the economic shutdown. It’s no surprise, therefore, that small stocks also led the decline. The S&P 500 had a peak-to-trough decline of 34%, whereas the Russell 2000 fell 41% and the even smaller Russell Micro Cap index fell 43%.

Over the last few weeks and months, however, all that was lost was made up and then some. It’s hard to believe, but over the last year, microcap stocks have done twice as well as large-cap stocks. Given that small businesses are still in a world of pain, generally speaking, the market must be discounting a combination of continued fiscal stimulus and a reopening of the economy.

I wanted to look under the hood to see what’s driving the returns in small stocks. The answer, mostly everything. 83% of stocks in the Russell 2000 have positive returns over the last 6 months.

Here’s a wild data point: The top 10 stocks by market cap in the Russell 2000 are up 160% on average over the last 6 months. Over the last 6 months, the index is up 26%.

How is it possible that the 10 biggest stocks have done six times as well as the index? Because unlike the S&P 500, the Russell 2000 does not have any concentration issues.

Please allow me to explain what you’re about to see. I tried creating a pie chart of the Russell 2000 to compare it with the S&P 500, but since the slices are so thin, it just didn’t work. You could only see a quarter of the chart and the rest was just white space. In order to correct for this, I sorted by alphabetical order. Feast your eyes. 

The takeaway for me is that the Russell 2000 is way more diversified than the S&P 500.

1% of the S&P 500 make up nearly a quarter of the index. The Russell 2000 also exhibits a top-heavy construction, but not nearly to the extent that large-cap stocks do. 5% of the index holds a quarter of the market cap.

Josh and I got into this and much more in the latest episode of What Are Your Thoughts?

Subscribe to the channel, you’ll get a notification as the show is about to premiere each week.

Image by Vladimir Maric from Pixabay





 
 
 

Phil's Favorites

The Stock Market and Crypto Market Are The Ultimate Platform and Game

 

The Stock Market and Crypto Market Are The Ultimate Platform and Game

Courtesy of Howard Lindzon

When I was a kid I played ‘Pong’ and ‘Space Invaders’ and Coleco Football and Mattel ‘Intellivision’.

In college I stopped.

Maybe if there were smartphones and no women, I would still be a ‘gamer’, but my generation was looking up not down.

I found the markets because I needed a first job and I was hooked.

It has been a battle of wits and behavior since. The markets have brought me to panic and fear on many occasions but most...



more from Ilene

ValueWalk

Aviation Lawsuit Filed Against Boeing Regarding Hard Landing in Turkey

By Jacob Wolinsky. Originally published at ValueWalk.

(Chicago IL, January 21, 2021) Today, lawyers representing victims of Pegasus Flight 2193, announced that a lawsuit was filed against The Boeing Company and the aircraft owner. The lawsuit asserts claims of Negligence, Product Liability, and Breach of Warranty regarding a Boeing aircraft that crashed in Istanbul, Turkey.

Q4 2020 hedge fund letters, conferences and more

Hard Landing Of Pegasus Flight 2193

On February 5, 2020, a commercial flight operated by Pegasus Airlines was scheduled to depart from Izmir Adnan Menderes Airport and arrive in Istanbul-Sabiha Gökçen ...



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Zero Hedge

China Appeals To "Kind Angels" Of Biden Administration, Blames Trump For "Burning Bridges"

Courtesy of ZeroHedge View original post here.

While essentially placing sole blame on Trump and his top officials, foreign ministry spokeswoman Hua Chunying said in the latest press briefing remarks that "kind angels can triumph over evil forces" in America.

"In the past years, the Trump administration, especially (former Secretary of State Mike) Pompeo, has laid too many mines that need to be removed, burned too many...



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Kimble Charting Solutions

A Repeat Of The 2000 Dot.com Highs In Play?

Courtesy of Chris Kimble

Since the 2000 tech bubble and crash, tech stocks have regained their leadership form. Especially large-cap tech stocks.

Headlines have varied in focus from the “4 horseman” to “FANG” and “FANGE”, but one thing remains: Large-cap tech stocks have been the bull market leader.

So what about when large-cap tech lags the market? Not so good.

In today’s chart, we look at a “monthly” chart of the performance ratio of the Nasdaq 100 Index to the Nasdaq Composite. It’s basically a look at how large-cap tech stocks perform against the broader tech stocks world.

As you ca...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Saturday, 11 July 2020, 05:26:16 PM

Click for popup. Clear your browser cache if image is not showing.


Comment: This is lack of liquidity means support is likely to break if it is tested hard!



Date Found: Saturday, 11 July 2020, 09:51:58 PM

Click for popup. Clear your browser cache if image is not showing.


Comment: Nasdaq losing momentum.



Da...

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Politics

What is the 'boogaloo' and who are the rioters who stormed the Capitol? 5 essential reads

 

What is the 'boogaloo' and who are the rioters who stormed the Capitol? 5 essential reads

Rioters mass on the U.S. Capitol steps on Jan. 6. Samuel Corum/Getty Images

Courtesy of Jeff Inglis, The Conversation

In the wake of the insurrection on Jan. 6, the U.S. is bracing for the possibility of additional violent demonstrations and potential riots at the U.S. Capitol and state capitol buildings around the nation. W...



more from Politics

Biotech/COVID-19

The simple reason West Virginia leads the nation in vaccinating nursing home residents

 

The simple reason West Virginia leads the nation in vaccinating nursing home residents

By mid-January, only about a quarter of the COVID-19 vaccines distributed for U.S. nursing homes through the federal program had reached people’s arms. Paul Bersebach/MediaNews Group/Orange County Register via Getty Images

Courtesy of Tinglong Dai, Johns Hopkins University School of Nursing

The urgency of vaccinating nursing home residents is evident in the numbers. The COVID-19 pandemic has claimed the lives of mo...



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Mapping The Market

The Countries With The Most COVID-19 Cases

 

The Countries With The Most COVID-19 Cases

By Martin Armstrong, Statista, Jan 12, 2021

This regularly updated infographic keeps track of the countries with the most confirmed Covid-19 cases. The United States is still at the top of the list, with a total now exceeding the 22 million mark, according to Johns Hopkins University figures. The total global figure is now over 85 million, while there have been more than 1.9 million deaths.

You will find more infographics at ...



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Digital Currencies

Bitcoin: why the price has exploded - and where it goes from here

 

Bitcoin: why the price has exploded – and where it goes from here

B is for blast-off (but also bubble). 3DJustincase

Courtesy of Andrew Urquhart, University of Reading

Bitcoin achieved a remarkable rise in 2020 in spite of many things that would normally make investors wary, including US-China tensions, Brexit and, of course, an international pandemic. From a year-low on the daily charts of US$4,748 (£3,490) in the middle of March as pandemic fears took hold, bitcoin rose to ju...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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

Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

...

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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. Contact Ilene to learn about our affiliate and content sharing programs.