Archive for the ‘Topic’ Category

Divisive economics


Guest author David Brin — scientist, technology consultant, best-selling author and futurist — explores the records of Democrats and Republicans on the US economy in the following post. For David's latest posts, visit the CONTRARY BRIN blog. For his books and short stories, visit his website. And don't miss David's latest article, Maddow, Mueller and the dems push a dare at McConnell.


Divisive economics

Courtesy of David Brin 

Let's step away from politics…. till the end of this missive… and look instead at economics:

Fiscal Management

The Evonomics site — where Adam Smith would post, today — offers this: Economists Agree: Democratic Presidents are Better at Making Us Rich. Eight Reasons Why.

The difference is stunning and inarguable… an average of 4.4% annual growth vs. a piddling 2.5%… and it has been consistent across 70 years. How to explain it?

The eight hypotheses offered here are interesting and consistent with modern economics. (Which "Supply Side voodoo" is not.) But #7 will resonate with what I have been saying to so-called market conservatives for years:

7. Fiscal Prudence. True conservatives pay their bills. From the 35 years of declining debt after World War II (until 1982), to the years of budget surpluses and declining debt under Bill Clinton, to the radical shrinking of the budget deficit under Obama, Democratic policies demonstrate which party merits the name “fiscal conservatives.”

Now, in fairness, a cogent Republican would answer: "Hey, weren't there Republican Congresses during some of that time?" Yes, and that actually mattered once – during the anno mirabilis year 1995, when Newt Gingrich corralled enough GOP support and negotiated with Bill Clinton to give us both Welfare Reform and the Budget Act. We almost got a third miracle, when the bipartisan Danforth-Kerrey commission proposed a compromise Entitlements Reform package that would have secured our finances for decades while ensuring every American child got health care. 

We know what happened then. Led by Dennis "friend to boys" Hastert, the Murdochian Republicans rendered the Danforth kind extinct, ending all semblance of adult politics in America. (And Newt knuckled under, instead of fighting for America.)

Proof that Clinton, not the GOP, merits credit

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Now Show Japan


Now Show Japan

Courtesy of 

I did a post a couple of weeks ago about the potential benefits of dollar cost averaging.

To recap:

  • It’s automated
  • It’s a great way to force you to save money
  • It gives you the ability to systematically buy low, with the cherry being that you’re buying more the lower stocks go.

I explained that it was no panacea and that the only reason why this had higher returns than the market over this period was because of sequence of returns, which cuts both ways.

But this disclaimer wasn’t good enough, because every time you write about the benefits of long-term investing, specifically of the buy and hold variety, you have people who say “now show Japan.”

It’s true that the efficacy of buy and hold investing is challenged through the lens of a Japanese investor. As the chart below shows, you could have made regular contributions from 1971 through 2012 and still have not made any returns on your investment.

Had 100 Yen been invested every month into the Nikkei from 1971 through October 2012, after contributing 50,000 Yen, the account would be worth just 49,568 Yen. Saving 50,000 Yen is better than spending it, but you took a lot of risk and were provided with zero reward.

So, is Japan proof of the fact that buy and hold is for the birds? I don’t believe that. I wrote a post a few months ago about how people who say this might have learned the wrong lessons from the epic Japanese stock market bubble.

Josh and I speak about this in the video below.


How Central American migrants helped revive the US labor movement


How Central American migrants helped revive the US labor movement

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Salvadoran immigrants were pivotal in the Justice for Janitors campaign in Los Angeles in 1990. It earned wage increases for custodial staff nationwide and inspired today’s $15 minimum wage campaign. AP Photo/Chris Pizzello

Courtesy of Elizabeth Oglesby, University of Arizona

In the United States’ heated national debate about immigration, two views predominate about Central American migrants: President Donald Trump portrays them as a national security threat, while others respond that they are refugees from violence.

Little is said about the substantial contributions that Central Americans have made to U.S. society over the past 30 years.

For one, Guatemalan and Salvadoran immigrants have helped expand the U.S. labor movement, organizing far-reaching workers rights’ campaigns in migrant-dominated industries that mainstream unions had thought to be untouchable.

Migrants and unions

More than 1 million Salvadorans and Guatemalans came to the United States between 1981 and 1990, fleeing army massacres, political persecution and civil war.

Since the 1980s, I have researched, taught and written about this wave of migrants. Back then, President Ronald Reagan warned apocryphally that Central America was a threat to the United States, telling Congress in 1983 that “El Salvador is nearer to Texas than Texas is to Massachusetts.”

Just 2 percent of Salvadorans and Guatemalans received asylum in the 1980s – so few that a 1990 class action lawsuit alleging discrimination compelled the U.S. government to reopen tens of thousands cases. Today, about 10 to 25 percent of their asylum petitions are granted.

Then, as now, many undocumented immigrants in the U.S. worked in agriculture or service industries, often under exploitative conditions. Unionization barely touched these sectors in the 1980s.

More broadly, the bargaining power of labor unions was suffering under Reagan, whose presidency started with his firing of 11,0000 striking air traffic controllers. Downsizing and outsourcing at American companies in the 1980s also eroded union membership and pushed wages down.

Many Guatemalans and Salvadorans were veteran community organizers. They had faced down government terror to participate in unions, peasant leagues, Catholic social
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What’s an index fund?


Embed from Getty Images


What’s an index fund?

Courtesy of Jordan Schoenfeld, Georgetown University

The creation of the index fund in 1975 revolutionized investing, lowering costs for millions of ordinary investors.

Their inventor John Bogle died on Jan. 16 at the age of 89.

Bogle took a complex universe of thousands of stocks and reduced it to a simple, singular entity, the index fund. Through index funds, investing in the stock market became easy, and one could do so at low cost while minimizing risk.

Practitioners and academics have researched the drivers and consequences of index fund investing – myself included. Here is some of what we know.

Investing before index funds

In the 1970s, academics and others began finding that many highly paid stock pickers do not outperform broad market indices. That is, investors could earn higher returns by simply holding a diversified portfolio of stocks and avoiding speculation altogether.

But at the time, the average investor didn’t have an easy way to this because an investment vehicle for such diversification did not yet exist.

So Bogle stepped in and created the index fund.

An easy way to diversify

In a nutshell, index funds are designed to give investors exposure to a diversified set of stocks at a very low cost.

The name “index” reflects the idea that by buying the fund an investor in effect immediately owns a broad index of the underlying stocks. All you must do is pay an intermediary – like Vanguard, the investment company Bogle founded, which now manages US$5.1 trillion in assets – a small, built-in fee in exchange for spreading your money out across the market.

In part, that’s because index funds are bought and sold just like individual stocks and many even have their own stock symbols.

For example, if you want exposure to a mix of all the companies in the S&P 500 index, you can buy the stock VOO, and your money will automatically be invested in a value-weighted portfolio of the S&P 500 companies. If you want to divest, simply sell your…
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Razor burned: Why Gillette’s campaign against toxic masculinity missed the mark


Razor burned: Why Gillette's campaign against toxic masculinity missed the mark

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Who knew a razor blade company could become so controversial? Gillette/YouTube

Courtesy of Alan Abitbol, University of Dayton

Gillette has launched a new marketing campaign, “The Best Men Can Be,” with an ad that has gone viral.

The ad begins by depicting boys bullying other boys, women being harassed and cat-called, and a group of men excusing all of it as “boys will be boys.” Gillette then asks if this is “the best a man can get.” The rest of the ad portrays men pushing back against other men’s bad behavior.

Gillette’s controversial new ad tackles toxic masculinity head on.

It’s been polarizing, to say the least.

On one side, the campaign is being praised for tackling masculine stereotypes and challenging men to be better.

On the other side, some are saying that Gillette risks turning off customers who think the brand is shamelessly capitalizing on the #MeToo movement and practicing “leftist” politics. There are already calls for the brand to be boycotted.

So why has this ad caused such a large divide?

In my research on companies’ use of pro-social messages, backlash usually arises due to some combination of the cause itself, a poor fit between the brand and the cause, and suspicion of the company’s true motives.

An authentic pairing matters

Companies have backed various social issues for decades. Marriott, for example, organized fundraisers for the March of Dimes, a nonprofit organization that works to improve the health of mothers and babies, in the 1970s.

Today, customers expect companies to stand for something. According to a 2018 Edelman Earned Brand report, nearly two-thirds of consumers believe companies should take a stand on social or political issues.

However, studies have shown that, in order for the corporate activism to be warmly received, the cause usually needs to be connected to the company’s product line or brand in some way.

This can happen when a company and…
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Former SEC Attorney James Kidney Is Captured Regulators’ Worst Nightmare

Courtesy of Pam Martens

James Kidney, Former SEC Attorney

James Kidney, Former SEC Attorney

A jaw-dropping video of a lecture James Kidney delivered at Lake Forest College outside of Chicago on October 12 arrived in our incoming email last Friday. The courage and frankness of that lecture took our breath away. It has also, no doubt, caused major ripples among the top brass at what is supposed to be the nation’s most formidable Wall Street cop, the Securities and Exchange Commission (SEC).

In the lecture, Kidney calls the leadership of the SEC when he worked there “self-serving cowards” who didn’t go after the higher ups on Wall Street following the crash of 2008 because they were simply “looking to move on, to return to their Wall Street job.” (We don’t think much has since changed at the SEC. See SEC Nominee Has Represented 8 of the 10 Largest Wall Street Banks in Past Three Years.)

Kidney was a trial attorney at the SEC for 25 years until his retirement in 2014. He had never lost a case. According to Jesse Eisinger’s book, The Chickenshit Club, which features a full chapter on Kidney, in 2001 Kidney had “won the agency’s Irving M. Pollack Award,” named after the original head of enforcement at the SEC, “for his dedication to public service.”

In other words, Kidney had enjoyed a stellar career at the SEC until one day in 2009 when a Goldman Sachs case, now infamously known as Abacus, was assigned to him. Abacus became a civil suit brought against Goldman Sachs and one of its lowly salesmen, Fabrice Tourre. Goldman Sachs settled its charges with a payment of $550 million and never went to trial. Not only did the corporation not stand trial, but neither did the American hedge fund owner, John Paulson, who, according to Kidney, plotted with Goldman Sachs to create a bundled pool of assets designed to fail so that he could make  $1 billion betting against it (known as shorting). Unsuspecting investors lost approximately the same $1 billion that Paulson’s hedge fund made.

Tourre was found guilty by a Manhattan jury on six out of seven fraud counts and agreed to pay more than $825,000 in fines. He was never criminally charged and did not go to jail.

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Transparency and privacy: Empowering people through blockchain


Transparency and privacy: Empowering people through blockchain

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Blockchain technologies can empower people by allowing them more control over their user data. Shutterstock

Courtesy of Ajay Kumar Shrestha, University of Saskatchewan

Blockchain has already proven its huge influence on the financial world with its first application in the form of cryptocurrencies such as Bitcoin. It might not be long before its impact is felt everywhere.

Blockchain is a secure chain of digital records that exist on multiple computers simultaneously so no record can be erased or falsified. The redundancy of the system ensures many backups, and the lack of a central storage place ensures there is no one target for hackers. Some suggest that blockchain could become a component of the next generation of the internet.

Many blockchain systems provide a technology called “smart contract:” these are the rules by which records can be accessed and modified by creating new versions. These rules define, for example, who gets access to the stored records, under what conditions, for what declared purpose and in exchange of what (payment or virtual credit). Smart contracts also record every access to the data in the blockchain.

In this way, users can permanently and securely store their data, set their own conditions and control who accesses the data and for what purpose. Because of these features, blockchain technology can be used to store user profile data.

Political scientist and blockchain researcher Bettina Warburg explains blockchain in five levels of difficulty. WIRED Magazine.

Hoarding the data

Currently, social media giants hoard user data and use it to sell targeted advertisements (their main source of revenue). These social media networks don’t give users a real choice or awareness of what data about them are kept. They provide very few control options and no rewards for users in exchange of their data.

Recently, we have seen many cases when user data has been stolen by hackers, leading to breaches of privacy, the possibility for identity theft or exploitation of the data to manipulate people and influence public opinion towards voting. This…
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Leaders always ‘manufacture’ crises, in politics and business


Leaders always 'manufacture' crises, in politics and business

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Trump recently called the border a crisis during a televised address. AP Photo/Carolyn Kaster

Courtesy of Bert Spector, Northeastern University

“This is a humanitarian crisis, a crisis of the heart and a crisis of the soul.”

That’s how President Donald Trump framed his demand for funds to build a “border wall” and end the partial government shutdown. That declaration was met with counter-claims that the crisis at the border was indeed real – but one of Trump’s own making.

I’m currently completing a book on the use and abuse of the word “crisis” by political and business leaders to create a sense of urgency.

While it is true that Trump and his administration are especially reckless in their deployment of the term crisis, they are far from alone in doing so.

Crises galore

You’ve undoubtedly heard nongovernmental organizations talk about humanitarian crises in countries like Yemen and Syria and pundits warn about a crisis in liberal democracy.

And as the Earth warms, the polar caps melt and storms regularly devastate communities around the globe, human beings are said to face an environmental crisis that threatens our very existence. In the world of business, crises arise from declining stock prices, bankruptcy and malfeasance on the part of CEOs.

Some of the instances of crisis claims may seem quite legitimate to you. Others may strike you as dubious. What they all have in common is this: None of them are real things.

‘Uh oh!’ – it’s a crisis

Political leaders frequently use these claims to advance a particular agenda.

For example, in 1964, President Lyndon B. Johnson used the supposed urgency of an attack on an American battleship to rally support for escalating the war in Vietnam. George W. Bush claimed a similar rationale for ousting Saddam Hussein from Iraq in 2001.

In every case, leaders reference real things in their claims: an attack on a battleship, possession of nuclear weapons, the number of immigrants entering a country, the observable effects of climate…
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Trump’s interpreters for Putin meetings face ethical dilemma


Trump's interpreters for Putin meetings face ethical dilemma

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Russian President Vladimir Putin, right, makes a statement, as U.S. President Donald Trump, left, looks on. AP Photo/Pablo Martinez Monsivais

Courtesy of Laura Burian, Middlebury

President Donald Trump met several times with Russian President Vladimir Putin while no other American was privy to the communication except for a State Department interpreter.

In July 2018, Democratic members of the House Intelligence Committee had proposed to subpoena the interpreter and her notes to find out what was said in the meeting, but the motion was rejected by Republican committee members.

Now, reports allege that President Trump took possession of the interpreter’s notes at the end of at least one private meeting with Putin and instructed the linguist not to discuss the content of the meeting with anyone, including other administration officials.

Democrats, now in control of the U.S. House, are reconsidering a subpoena to the interpreter to learn what was said.

I teach M.A. students of translation and interpretation and work as a conference interpreter. Here’s a brief overview of the role of interpreters and the ethics of the profession regarding confidentiality.

‘Strictest secrecy’

The role of an interpreter is to facilitate communication between parties who use different languages.

Interpreters are not responsible for the content of what is said by either party. They are responsible for ensuring that everything that is said is conveyed accurately in the other language.

The code of ethics for professional conference interpreters states that they “shall be bound by the strictest secrecy, which must be observed towards all persons and with regard to all information disclosed in the course of the practice of the profession at any gathering not open to the public.”

Diplomatic interpreters are a subset of these professionals who must pass security clearances, and be mindful of diplomatic protocol and national interests. However, the ethics of confidentiality remains the same in diplomatic settings. Officials must be able to fully trust that interpreters will not reveal confidential information.

Diplomatic tradition has therefore respected the norm that interpreters should not be obliged to give…
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Netflix Slides On Revenues Miss, Light Guidance As It Burns $15 Million In Cash Daily

Courtesy of Zero Hedge

Last October, when Netflix reported stellar Q3 earnings and guidance there were many skeptics who said there is no way Netflix could possibly hit its impressive forecasts. They were right, because moments ago the video streaming company reported Q4 earnings which missed on revenue and revealed light guidance for Q1 even as it reported strong subscriber numbers.

Specifically, Q4 EPS was $0.30 (which included a $22MM non-cash gain on FX remeasurement of Euro-denominated debt), well below the $0.41 reported a year ago if slightly above consensus expectations of $0.24. Revenue of $4.187BN however came in light, missing expectations of $4.21 billion. The revenue miss, according to Bloomberg, "is a sign that all those new shows and movies that Netflix is churning out isn't drawing enough new paying subscribers."

Looking ahead, Netflix reported that Q1 forecast revenue would be $4.494BN, which while 21% higher Y/Y is below the exp. $4.6BN, with EPS of $0.56 also missing consensus expectations of $0.94.

Netflix also announced that Q4 operating margin dropped to 5.2% vs 7.5% a year ago due to "so many titles launching in the quarter."

Perhaps more importantly the company reported a record 8.84 million paid net streaming additions, which while below the 9.40 million guidance from last quarter, is not apples to apples as starting this quarter the company is only reporting paying subs not total subs. That said the paid number was higher than the beginning of quarter expectation of 7.6MM paid subs. That said the number is an 8% increase from a year ago, and will largely be thanks to international subs, which were an addition of 7.31MM in the quarter, up from 5.07MM in Q3, while domestic paid subs rose 1.53MM, up from 1.00MM in Q3.  Finally, for the full year, Netflix added 29MM new paid subs vs 22MM in 2017.

The problem is that in Q1, Netflix expects a decline in International sub growth, from 7.31Mm to 7.30MM, resulting in a total of 88.07 million international paying subs, even as Paid Domestic Subs increase by 1.60MM in Q1 to 60.09 million subs.

In other words, the recent torrid growth pace now…
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Zero Hedge

Johns Hopkins, Bristol-Myers Face $1 Billion Suit For Infecting Guatemalan Hookers With Syphilis 

Courtesy of ZeroHedge. View original post here.

A federal judge in Maryland said Johns Hopkins University, pharmaceutical company Bristol-Myers Squibb and the Rockefeller Foundation must face a $1 billion lawsuit over their roles in a top-secret program in the 1940s ran by the US government that injected hundreds of Guatemalans with syphilis, reported Reuters.

Several doctors from Hopkins an...

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Phil's Favorites

This Is The One Chart Every Trader Should Have "Taped To Their Screen"

Courtesy of Zero Hedge

After a year of tapering, the Fed’s balance sheet finally captured the market’s attention during the last three months of 2018.

By the start of the fourth quarter, the Fed had finished raising the caps on monthly roll-off of its balance sheet to the full $50bn per month (peaking at $30bn USTs, $20bn MBS, although on many months the (balance sheet) B/S does not actually shrink by this full amount which depends on the redemption schedule) and by end-Q4 markets also experienced some of the largest volatility and drawdowns in nearly a decade.

As Nomura&...

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The Competition For Capital Has Made Stocks Cheap

By Michelle Jones. Originally published at ValueWalk.

The new year is upon us, and now is the time many investors look at what 2018 was and prepare for what 2019 might be. Recession jitters are starting to pick back up again, especially now that the full picture of 2018 is in the books. But what if you could pick only one theme for 2018? Jefferies strategist Sean Darby and team have a suggestion which is especially timely given that it appears to mark the end of an era.

StockSnap / PixabayVolatility carries into the new year

This past year was one of extremes, and the markets ended i...

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Kimble Charting Solutions

Stock declines did not break 9-year support, says Joe Friday

Courtesy of Chris Kimble.

We often hear “Stocks take an escalator up and an elevator down!” No doubt stocks did experience a swift decline from the September highs to the Christmas eve lows. Looks like the “elevator” part of the phrase came true as 2018 was coming to an end.

The first part of the “stocks take an escalator up” seems to still be in play as well despite the swift decline of late.

Joe Friday Just The Facts Ma’am- All of these indices hit long-term rising support on Christmas Eve at each (1), where support held and rallies have followed.

If you find long-term perspectives helpf...

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Digital Currencies

Transparency and privacy: Empowering people through blockchain


Transparency and privacy: Empowering people through blockchain

Blockchain technologies can empower people by allowing them more control over their user data. Shutterstock

Courtesy of Ajay Kumar Shrestha, University of Saskatchewan

Blockchain has already proven its huge influence on the financial world with its first application in the form of cryptocurrencies such as Bitcoin. It might not be long before its impact is felt everywhere.

Blockchain is a secure chain of digital records that exist on multiple computers simultaneously so no record can be erased or falsified. The...

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Insider Scoop Explores Strategic Alternatives, Analyst Sees Possible Sale Price Around $30 Per Share

Courtesy of Benzinga.

Related 44 Biggest Movers From Yesterday 38 Stocks Moving In Wednesday's Mid-Day Session ... more from Insider

Chart School

Weekly Market Recap Jan 13, 2019

Courtesy of Blain.

In last week’s recap we asked:  “Has the Fed solved all the market’s problems in 1 speech?”

Thus far the market says yes!  As Guns n Roses preached – all we need is a little “patience”.  Four up days followed by a nominal down day Friday had the market following it’s normal pattern the past nearly 30 years – jumping whenever the Federal Reserve hints (or essentially says outright) it is here for the markets.   And in case you missed it the prior Friday, Chairman Powell came back out Thursday to reiterate the news – so…so… so… patient!

Fed Chairman Jerome Powell reinforced that message Thursday during a discussion at the Economic Club of Washington where he said that the central bank will be “fle...

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Members' Corner

Why Trump Can't Learn


Bill Eddy (lawyer, therapist, author) predicted Trump's chaotic presidency based on his high-conflict personality, which was evident years ago. This post, written in 2017, references a prescient article Bill wrote before Trump even became president, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...

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Opening Pandora's Box: Gene editing and its consequences

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


Opening Pandora's Box: Gene editing and its consequences

Bacteriophage viruses infecting bacterial cells , Bacterial viruses. from

Courtesy of John Bergeron, McGill University

Today, the scientific community is aghast at the prospect of gene editing to create “designer” humans. Gene editing may be of greater consequence than climate change, or even the consequences of unleashing the energy of the atom.


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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...

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Swing trading portfolio - week of September 11th, 2017

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


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

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

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

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

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Free eBook - "My Top Strategies for 2017"



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

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

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

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

Some other great content in this free eBook includes:


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


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About Phil:

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

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About Ilene:

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

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