Archive for the ‘Appears on main page’ Category

Thursday Thrust – Powell’s Comments are Spun to Blast Market Higher

“The case for somewhat more accommodative policy has strengthened.” 

That is the phrase investors are taking to the bank from Powell's press conference yesterday.  While the Fed Chairman didn't bow to Trump's pressure to deliver an immediate cut – he did leave the door open to interpretation that he was willing to cut rates the moment the economy begins to falter – giving investors a "Powell Put" to the market.

It wasn't the US markets that took Powell's statement as bullish but overnight the spin was in and now the Dow Futures are up 250 points as the spin doctors chimed in overnight to take any stray word Powell said and treat is like it was policy:   

“The market now knows the Fed is going to ease unless the data dramatically reverse,” said Steven Blitz, chief U.S. economist at TS Lombard.

For the Fed to not cut rates at its July meeting, “it would take all of the data coming in to be consistently strong,” together with an end to trade-related uncertainty, said Seth Carpenter, chief U.S. economist at UBS.

The central bank’s rate-setting committee on Wednesday dropped language from its policy statement describing its stance as “patient”—which implied rates were on hold. Instead, it said uncertainties about the economic outlook have increased, a phrase it has used during past periods of rate cuts.  “The committee will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion,” the statement said.

Of course that means that IF Trump makes a Trade Deal with China or tensions with Iran calm down or earnings or economic data improve – then the Fed will have no reason to cut so will good economic news be bad news for the markets going forward?  We'll have to see but, for now, the madness continues. 

Behind this morning's rally is a collapsing Dollar as we're back to testing the 96 line, down 1% from yesterday's open so of course the markets are up 1% and it's hard to get excited about a 1% pop in the markets that coincides
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Cannabis quality involves careful science and carefree highs

 

Cannabis quality involves careful science and carefree highs

Cannabis producers must ensure the quality of their products is high, but not too “high.” Dimitri Bang/Unsplash

Courtesy of Michael J. Armstrong, Brock University

Canada’s legal cannabis industry continues to make progress. Product shortages are decreasing. Store numbers are increasing. And edible cannabis regulations have just been finalized.

With these basics falling into place, the industry and its regulators can focus more on competing with black markets. Product quality is one area where legal suppliers might have advantages. But to deliver good quality cannabis, producers must simultaneously aim for both careful science and carefree highs.

This dual goal is partly due to government policy. Cannabis producers and products are federally regulated, much like pharmaceuticals. Health Canada oversees producer licences, package designs and medical cannabis sales.

Meanwhile, cannabis retailing is provincially regulated, much as with alcohol. In Ontario, for example, one provincial agency runs wholesaling and online sales. Another handles retail licences and employee qualifications.

Preventing defects

This regulatory approach emphasizes conformance to rules and specifications. Such conformance quality helps prevent product defects and consumer harm.

For example, cannabis producers must follow Health Canada’s Good Production Practices (GPP). These include testing to ensure products don’t contain pesticides or mould, but do contain the promised levels of THC (tetrahydrocannabinol) and CBD (cannabidiol).

Such testing should help legal products be more reliable than black-market ones. Indeed, some consumers have found their moderate-strength legal products provide the same high as their supposedly high-strength illegal ones did. Evidently some illicit suppliers exaggerate their products’ attributes. They know they won’t be tested.

Health Canada also requires producers and distributors to track all their cannabis. Each month they must report the amounts harvested, processed, or sold.

Many organizations exceed these legal minimums. For instance, retailers aren’t required to test products. But Québec’s cannabis agency tests 10 products per supplier each month to confirm their contents.

Similarly, some producers have adopted international quality standards like ISO 9000. Others have formed a cannabis industry quality association.…
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Record High Wednesday – Will the Fed Pop Us or Drop Us?

We are so close – again.

Back on May 3rd, I explained how the market was confusing efficiency for a strong economy, noting that Corporations can make more money while the people starve.  At the time, I noted that materials sector performance looked too weak for a proper bull market and, for the quarter, we're still in very bad shape with Petrolum down 9%, Natural Gas down 19% and Copper down 7.5% – those are not signs of a strong recovery.

Speaking of Copper (/HGZ19), yesterdsay morning's long trade idea from our PSW Report (subscribe here if you don't want to miss our trade ideas) with contracts jumping from $2.64 to $2.70 for gains of $3,000 per contract before lunch!  Our options trade idea for Freeport-McMoRan (FCX) is slower-moving but that stock gained 1% yesterday and will really take off if there's progress with China.

Meanwhile, the indexes blasted higher as Trump tweeted out that he will be meeting with China's Xi at the G20 this weekend and, although that's kind of the point of the G20 – people are very excited about it.  Also, as noted in yesterday's Morning Report, Draghi fever spread across the markets and anticipation couldn't be higher that our Fed will also signal that it's ready to cut rates, buy bonds, buy assets – whatever it takes to keep the rally going becuase what on this Earth is more important than making rich people richer?  

Nonetheless, we are urging caution into the Fed Report and yesterday, in our Live Member Chat Room, we discussed a good 3-month hedge to take us, not just through today but through the summer:

Hedge/QC – Two factors in selecting a hedge is which index is ahead of the others (that's what the Big Chart is for) and which index is most likely to fail.  From the Big Chart, the Dow is now back to the May high S&P close and Nas lagging a bit and RUT lagging a lot so Dow or S&P and BA may come down more and drag the Dow and others if the trade talks blow up so


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With cryptocurrency launch, Facebook sets its path toward becoming an independent nation

 

With cryptocurrency launch, Facebook sets its path toward becoming an independent nation

The world’s newest country? railway fx/Shutterstock.com

Courtesy of Jennifer Grygiel, Syracuse University

Facebook has announced a plan to launch a new cryptocurrency named the Libra, adding another layer to its efforts to dominate global communications and business. Backed by huge finance and technology companies including Visa, Spotify, eBay, PayPal and Uber – plus a ready-made user base of 2 billion people around the world – Facebook is positioned to pressure countries and central banks to cooperate with its reinvention of the global financial system.

In my view as a social media researcher and educator, Facebook CEO Mark Zuckerberg is clearly seeking to give his company even more political power on a global scale, despite the potential dangers to society at large. In a sense, he is declaring that he wants Facebook to become a virtual nation, populated by users, powered by a self-contained economy, and headed by a CEO – Zuckerberg himself – who is not even accountable to his shareholders.

Facebook hasn’t behaved responsibly in the past, and is still wrestling with significant public concerns – and investigations – about its privacy practices, information accuracy and targeted advertising. Therefore, it’s important to see through the hype. People must consider who is reshaping the world, and whether they are doing it in the best interests of humankind – or whether they are just seeking to benefit the new class of elite technology executives.

Humanity needs ethical leadership, and time to think through the potential repercussions of rapid technological change. That’s why, in my view, Facebook’s cryptocurrency should be blocked by financial regulators until its design has been proved to be safe for all of global society.

You might not want to trust this man. Anthony Quintano/Wikimedia Commons, CC BY

Understanding Libra

Technology companies are interested in a global currency that is native to the internet. That could allow companies like Facebook and Twitter to bring in more…
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Facebook claims Libra offers economic empowerment to billions – an economist is skeptical

 

Facebook claims Libra offers economic empowerment to billions – an economist is skeptical

Courtesy of Jay L. Zagorsky, Boston University

Facebook is joining the cryptocurrency craze. Should we be concerned?

The social network site on June 18 said it’s launching a new cryptocurrency called Libra with the help of 27 partners, including MasterCard, Visa, ebay and Uber.

In simple terms, Libra is meant to replace the paper bills in your wallet or purse with a digital equivalent. But unlike other cryptocurrencies like bitcoin, Libra will be directly backed by assets.

The white paper describing the vision for this new currency is filled with laudable goals such as creating economic opportunity and advancing financial inclusion. But it will take time to completely understand the ramifications of Libra, which Facebook hopes to launch in 2020.

As a macroeconomist, I believe there are economic benefits to Facebook’s cryptocurrency – but also some big potential downsides.

The benefits of Libra

Existing cryptocurrencies are not tied to physical assets. This makes them immune to the whims of national governments but also makes them prone to speculative bubbles and flash crashes.

Libra, on the other hand, is going to be 100% backed by assets. Every unit of Libra currency will be backed by an equivalent basket of bank deposits and short-term government securities in various major currencies.

As a result, Libra will not suffer wild price fluctuations. And since it will be backed by a collection of international currencies and assets, it won’t be tied to the fortunes and policies of one country either.

Economist Friedrich Hayek believed in the decentralization of currency. The Mises Institute, CC BY

Another effect of being backed by assets is that it may help lower the risk of high inflation in countries across the world. Nobel Prize-winning economist Friedrich Hayek made this very point in his book “The Denationalisation of Money.” Hayek believed everyone would be better off if people could pick among different types of private money, like Libra, instead of using government-issued money. Hayek believed issuing private money would banish…
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Terrific Tuesday – Draghi Fever Hits the Markets, Blasting Higher

More free money! 

This is why Goldman Sachs put Mario Draghi in charge of the European Central Bank (ECB) – exactly for a moment like this when they need to boost the US markets and this statement couldn't have been timed better – just ahead of the start of the Federal Reserve's 2-day meeting that will lead to a policy announcement tomorrow at 2pm.  Draghi said the ECB is "ready to launch another round of stimulus" as inflation remains below targets.  

That target is, of course, 2% and if we were over 2%, they would be raising rates to fight it so the entire process is ridiculous but the most ridiculous thing is basing your entire monetary policy on a singly, unreliable data-point.  Of course, the inflation target is just an excuse because, over or under, we've seen Central Banksters call it "transitory" – meaning they will totally ingnore it when it suits them.  In this case – the Masters want to see all-time highs in the markets – so low inflation is our #1 excuse to jack up the markets.  

Low rates aren't free – taxpayers subsidize the wealthy by artificially reducting rates through Government Debt (where the wealthy lend the Government money to subsidize their rate cuts) and we are being forced to do this (year 10) in order to force the prices that we pay to go unnaturally higher (in order to increase Corporate Profits so the wealthy can have more money).  Are you beginning to see a pattern here?  It didn't take long for the Oligarch-In-Chief to weigh in on the subject:


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Inducing consumer paralysis: how retailers bury customers in an avalanche of choice

 

Inducing consumer paralysis: how retailers bury customers in an avalanche of choice

Three decades of behavioural experiments show consumers given too many choices are more likely to make a bad or no choice. www.shutterstock.com

Courtesy of Robert Slonim, University of Sydney

Do you think you are paying more than you should for energy, banking, insurance, internet and phone services? You are not alone, and you are probably right.

Companies offer a growing number of deals that supposedly enable you to choose what is best for you. Every basic economics textbook tells us greater choice should deliver cheaper prices. But in reality this isn’t necessarily the case.

So what’s going on?

A big part of the answer is that businesses are taking advantage of the behavioural phenomenon of “consumer paralysis” to maximise profits.

They provide us with many plans and deals to make us feel like we are in control, but too many choices actually leads most of us to make a bad (or no) choice.

Energy pricing

Let’s consider how this works in the context of Australia’s electricity market.

In most areas of the country, residential customers have at least half a dozen retailers to choose from.


Market share by generation capacity by region, January 2018. ACCC, Retail Electricity Pricing Inquiry Final Report


Nonetheless, according to the Australian Consumer and Competition Commission, electricity prices and profit margins are among the highest in the world, and rising. The consumer watchdog calculates that in the decade to 2018 the average residential electricity bill increased by 55% (or 35% in real terms) – and only a very small part of that had to do with alleged culprits such as renewable energy.

Australia’s biggest electricity company, AGL, made a net profit of A$1.6 billion in 2018 – 194% more than the year before.



Depending on where you live, AGL offers up to 11 energy plans to residential customers.…
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Monetary Monday – Market on Pause Ahead of the Fed

Image result for fed funds rate chartWe're wating on the Fed.

We have "the greatest stock market in history" and "the greatest economy in history" with "record employment" but, if the Federal Reserve doesn't lower rates below the current 2.5% they have set – it will be "a disaster".  Clearly, to any rational person, something must wrong with those statements existing at the same time but they all come from our President's lips and far be it for me to call Donald Trump a liar – so I guess we just have to accept that it's all true.  

30-Year Fixed Mortgages are still 3.5-4.0% yet Home Sales are still trending lower and that's impacting a lot of high-paying construction jobs which, in turn, impacts the materials industry and even banking, as less people look for loans to buy homes and then the Durable Goods crowd can't sell washing machines, refrigerators, couches and TVs and there's less hardware and paint sales, etc., etc. 

Image result for new home sales 2019Housing, as always, is a major driver of the economy and it's kind of hard to ignore it when it begins to falter – but that's exactly what the market is doing at the moment.  This is where the panic is coming from as even a 1% rise in rates last year has caused a 10% decline in housing activity and we NEVER came close to getting back to our pre-2008 levels in the first place.  

What Trump doesn't understand is that, for the average American, low rates aren't enough to get them to invest in real estate.  You can't "take advantage" of low rates on homes you can't afford and very few Americans have $50,000 to plunk down on a $250,000 home – not that there are many $250,000 homes left anymore anyway.  Not only that but Property Taxes have risen out of control and Trump has limited their deductability – making the rises much harsher and not many people in the bottom 90% have tax lawyers to get them out of paying their share.  

Image result for property taxes risingAs you can see from this fairly typical example from King
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Ray Dalio Is Kinda, Sorta, Really Wrong, Part 2

 

Ray Dalio Is Kinda, Sorta, Really Wrong, Part 2

Courtesy of John Mauldin, Thoughts from the Frontline

Last week we started a mini-series in the form of an open letter responding to a series of essays by Ray Dalio, the founder of Bridgewater Associates. I wrote that he was kinda, sorta wrong in Why and How Capitalism Needs to Be Reformed, Parts 1 and 2 but really, really wrong in It’s Time to Look More Carefully at ‘Monetary Policy 3 (MP3)’ and ‘Modern Monetary Theory,’ in which he basically endorsed MMT. Today I continue my response.

As I noted, Ray has done us all a service by pointing out some rarely-mentioned elephants in the room (some tinged with pink). We discuss various parts but seldom the entire creature. By that, I mean the rapidly growing potential for “progressive” control of both Congress and the White House. This stems from frustration over differences between haves and have nots, between the protected and unprotected, combined with a fascination for government solutions to our society’s perceived ills.

Last week, I basically agreed with Ray’s analysis of US income and wealth disparity. It obviously exists. The question is what, if anything, can we do about it? I think this is an important conversation, not just between two people but throughout the entire nation. The answers will make a huge difference to both our society and our children’s futures. Not to mention our own futures.

And if the response from my readers is any indication, you are also passionate about this conversation. Last week’s letter generated many long, thoughtful reader comments. Clearly, it is not just Ray and I who are worried about the country’s future direction. I find that encouraging. A national conversation is precisely what we need in these serious times.

So let’s pick up where we left off last week.

Dear Ray,

…As you can see, I really agreed with almost all of Part 1of your essay. In Part 2, I begin to see things a little differently, especially your suggested actions.

I am going to quote somewhat liberally from Part 2, primarily some portions you put in bold thus highlighting those points. They…
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Colorado Hits $1 Billion In Marijuana State Revenue

Courtesy of ZeroHedge

Colorado has passed another major marijuana milestone, surpassing $1 billion in state revenue since it legalized the drug in 2014.

Source: Colorado.gov

Up to May of this year, Statista's Niall McCarthy notes that the state has seen more than $6 billion in total marijuana sales since the industry was given the green light.

Infographic: Colorado Hits $1 Billion In Marijuana State Revenue | Statista

You will find more infographics at Statista

According to CNBC, Colorado now has 2,917 licensed marijuana businesses and 41,076 people licensed to work in the industry.

As SafeHaven.com's Alex Kimani notes, marijuana companies face a pretty hostile tax environment.

First off, they are not allowed any tax deductions or credits for business expenses which can mean effective federal tax rates of as high as 90 percent. Hemp producers are luckier since recent changes to the law now allows them to deduct ordinary business expenses for tax purposes on condition that their products contain no more than 0.3 percent THC.

Second, most banks and financial institutions will not touch them with a 10-foot pole, meaning they have to pay their taxes in cash and not through checks or electronic means.

Yet, they continue to tough it out, making an important mark where they are officially recognized. According to the Tax Policy Center, states with marijuana taxes are obligated to put a portion of their funds toward important social programs ranging from education programs in Colorado and Nevada to administrative costs in California and crime reduction in Alaska.

Luckily, the IRS is trying to get a handle on the situation and hopefully, cannabis companies will soon be able to enjoy the same benefits that other industries take for granted.





 
 
 

Phil's Favorites

Being on the wrong side of this decade's investing mega-trend

 

Being on the wrong side of this decade’s investing mega-trend

Courtesy of 

Josh Brown and Michael Batnick discuss the recent post “I did everything I was supposed to do”, which is the story of a man whose spent his whole career working for asset management firms and now finds himself on the wrong side of the active vs passive debate. There are real world consequences of the massive outflows of cash coming from actively managed mutual funds. This was Josh’s attempt to look at the issue from the other side.

The post spread around the financial web like wildfir...



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Zero Hedge

BMO: Everything Will Change After Tomorrow's "Quad Witching"

Courtesy of ZeroHedge

Don't look to the Fed to explain today's torrid, global rally: according to a controversial take by BMO's bearish technical analyst, Russ Visch, yesterday’s FOMC announcement was a non-event "as markets shrugged off the interest rate decision and follow-up presser with Chairman Powell", and today's action has an entirely different catalyst, resulting in "no change" to Visch's short-term outlook.

And in another contrarian take, Visch claims that "the quality of the rally since late May (narrow participation, extremely light volume) suggest it’s nothing more than a relief rally within an ongoing medium-term downtrend" as shown in the chart below.

...



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Kimble Charting Solutions

Silver; Multi-Year Bull Market Getting Started?

Courtesy of Chris Kimble.

Is a multi-year bull market about to start in Silver? We should find out soon!

This chart looks at Silver since the early 1970s. It has spent the majority of the past 35-years inside of rising channel (1).

It created a series of flat bottoms and lower highs in the late 1990s. When it broke out at (2), it rallied for years to come, where it gained several hundred percent.

Silver hit the top of this channel back in 2011 at $50, where a long-term bear market started. The 65% decline over the past 8-years has it testing the bottom of this mul...



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Insider Scoop

Baird Applauds Tapestry's New CFO Pick

Courtesy of Benzinga.

Tapestry Inc (NYSE: TPR) announced its new chief financial officer hire Wednesday.

The Analyst 

Baird analyst Mark Altschwager reiterated an Outperform rating on Tapes...



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Biotech

Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

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

 

Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

If you’ve got the raw data, why not mine it for more info? Sergey Nivens/Shutterstock.com

Courtesy of Sarah Catherine Nelson, University of Washington

Back in 2016, Helen (a pseudonym) took three different direct-to-consumer (DTC) genetic tests: AncestryDNA, 23andMe and FamilyTreeDNA. She saw genetic testing as a way...



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Chart School

Silver Review

Courtesy of Read the Ticker.

The folks in the federal reserve will debase the US dollar currency to an extreme degree silver will finally lift off the floor.. 

Note: Readers should re watch the silver back screen news video, here.

The following video looks at price action and Wyckoff logic.

More from RTT Tv






Chart in video

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If gold moves, silver wi...

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Digital Currencies

Cryptos Are Crashing As Asia Opens, Bitcoin Back Below $8k

Courtesy of ZeroHedge. View original post here.

Having survived the day's bloodbath in US tech stocks, cryptos are crashing in the early Asian session, apparently playing catch-down to the day's de-risking.

While no catalyst is immediately evident, there are some reports noting 13 large global banks are preparing to launch digital versions of major global currencies next year, though we suspect this drop was more algorithmic that fundamental-driven.

...



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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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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.

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