Archive for the ‘Phil’s Favorites’ Category

Both Citigroup and JPMorgan Have Now Received Huge Fines for Crimes the Regulators Won’t Reveal

Courtesy of Pam Martens

Maybe it’s because Wall Street On Parade has been shining a bright light on the serial crimes and rap sheets of Citigroup and JPMorgan Chase. Or maybe it’s because the nonpartisan watchdog, Better Markets, published a report last year titled “Wall Street’s Six Biggest Bailed-Out Banks: Their RAP Sheets & Their Ongoing Crime Spree.” Or maybe it all comes down to what Senator Dick Durbin of Illinois said after the financial crisis of 2008: “And the banks – hard to believe in a time when we’re facing a banking crisis that many of the banks created – are still the most powerful lobby on Capitol Hill. And they frankly own the place.”

Whatever the reason, the darkness that started growing around the crimes committed by the big Wall Street banks during the Obama administration has now evolved into such a complete dark curtain that regulators are refusing to say what the crimes actually are that are being settled for huge amounts of money.

On October 7, the Federal Reserve and Office of the Comptroller of the Currency (OCC) announced consent decrees with Citigroup, the third largest bank in the country. The OCC imposed a $400 million fine on Citigroup’s federally-insured commercial bank, Citibank, and stated in its Consent Order that it had “identified unsafe or unsound practices with respect to the Bank’s internal controls, including, among other things, an absence of clearly defined roles and responsibilities and noncompliance with multiple laws and regulations.”

But for the first time in more than 35 years of our reading these Consent Orders against Wall Street banks, the documents from both the OCC and Federal Reserve failed to specify exactly what crimes the bank had committed. We were so stunned by a $400 million fine for crimes that can’t be put in print or shared with the public, that we penned the headline: Citigroup Is Slapped with a $400 Million Fine for Doing Something So Bad It Can’t Be Spoken Out Loud.

Yesterday, as further proof that this is a pattern coming out of the Trump administration, the OCC did the exact same thing with JPMorgan Chase, the largest bank in the country which on September 29 admitted to its fourth and fifth criminal felony charges brought by the U.S. Department of Justice in the past six years.

Yesterday,…
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Coronavirus Could Cause Shipping Costs To Rise By Up 15% In 2020

By Jacob Wolinsky. Originally published at ValueWalk.

Shipping Budgets Shipping Container

Managing Shipping Budgets in 2021: The Old Normal, the New Normal, or the Unknown?

As they plan their shipping budgets for the coming year, distributors and retailers are struggling to assess the pandemic-driven changes of 2020. SkyPostal’s A.J. Hernandez suggests a two-sided approach: be as careful as you can, while also being prepared for anything.

Building A Shipping Budget

(Miami, FL) November 23, 2020—While shipping managers would like to see some relief from the shocks and surprises of 2020, there are, says A.J. Hernandez, President and CEO of SkyPostal, Inc., a lot of reasons they’re probably not going to get it. According to a recent survey of industry experts, for example, rather than the 5%-7% increase in truckload costs predicted for next year, shippers could instead see a 10%-15% increase. Parcel cost increases, predicted at under 5%, could run in the range of 6%-7%.(1) “Meanwhile,” says Hernandez, “shippers are trying to build 2021 budgets around a possible return to pre-pandemic market patterns, and an equally possible transition to a ‘new normal’ whose economics are not yet understood.”

One major background issue, notes Hernandez, whose company is the largest private mail and delivery network in Latin America, is that the global economy has been battered by the pandemic, and that recovery, when it comes, could be slow. To allow for this, he recommends that shippers cling to what stability there is: extend existing contracts where possible, and where not possible, seek shorter-term contracts for smaller parts of their business. At the same time, he says, they need to budget for wide, sudden, and unpredictable cost increases, such as the recent 80% jump in short-term ocean container rates to the U.S. West Coast.(2)

Flight Schedules

In Latin America, where as much as 70% of shipped merchandise travels in the cargo holds of passenger aircraft(2), the key variable is not shipping container availability but flight schedules. While air travel volume has recovered somewhat since last spring, it is still nowhere near normal; for the week of November 9, the number of scheduled flights. worldwide,…
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TRUMP CONCEDES (SORT OF)

 

TRUMP CONCEDES (SORT OF)

Courtesy of Teri Kanefield

The Trump Legal team filed more documents today in the appellate court. I tweeted a bit about how silly they were (let me know if you all want me to march through them). Then this happened:


Trump giving the go-ahead for the transition to get underway was (I believe) the closest he will get to conceding the election. Two amusing things happened. First, Trump tweeted this about 10 minutes after Emily Murphy submitted a letter saying she would move forward, and that she has made her decisions solely on her own and not at anyone’s direction. Looks like Trump wanted people to think that she was, in fact, acting at his direction.

The other amusing part was that Trump’s lawyer spun this certification of elections as a “procedural step.” I suppose that when Biden is inaugurated, that, too, will be a “procedural step.”


I think lawyers are the ones who tended to believe we’d get through this. Interesting because I only represented indigents (I’ve never represented anyone who could afford to pay), so I’ve seen the dark side of the legal system. I never thought I’d be on Team Optimism.

But it’s been the courts that have held out. I think Trump genuinely thought “conservative” judges would just hand him the election. And it is totally unnerving that he asked the courts to do that.


I went back and forth. Was it a fundraising or media stunt? Or did Trump really think it would work? It was that press conference with Giuliani’s hair dye dripping that persuaded me. Trump thought he’d win it.

This not going to make Trump happy:


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Who are you listening to?

 

Who are you listening to?

Courtesy of 

This is a repeated theme I come back to time and again. Who are you listening to? Not who as in what is their intelligence level or what is their pedigree – who as in what are the incentives that drive their commentary? Are they investors answering to clients or just guys doing newsletters, with no skin in the game and no accountability for their extreme opinions?

If you don’t face investors who reap the rewards or consequences for the s*** you’re saying, you can say much more outrageous things and scare people for attention. But if you actually have to talk to clients and answer for performance, your opinions are likely to be more humble, restrained and realistic. Because there’s a cost attached to them.

Here’s Michael Cembalest at JP Morgan yanking the trophy away from “the Armageddonists” who may have thought they’d be doing a victory lap after COVID-19 turned the world upside down earlier this year.

Nope. Stocks are back at all time highs and the penalties for having “gone to cash” over the last decade continue to pile up.

Talking people out of investing for their future because of this or that macro concern will always be a long-term loser, even if there are moments along the way where it looks temporarily smart. Everyone understands that there are potential drawdowns and negative developments that could occur. It doesn’t take talent to continuously harp on them. It takes talent to say “Yes, I understand these problems, but I’m going to push on through regardless.”

Smart people allocate assets, take appropriate risks and accept the uncertainty that comes along with the territory – they don’t twitch like squirrels every time someone snaps a twig in the forest.

Investing requires courage and the belief that, even if it takes awhile, things will work out and risk will be rewarded.

So I ask you again – Who are you listening to?

Source:

Thanksgiving Eye on the Market
JP Morgan – November 18th, 2020





How Biden and Kerry could rebuild America’s global climate leadership

 

How Biden and Kerry could rebuild America's global climate leadership

President-elect Joe Biden picked former Secretary of State John Kerry, shown with him in 2015, to be U.S. climate envoy in the next administration. Andrew Harnik

Courtesy of Dolf Gielen, Colorado School of Mines and Morgan Bazilian, Colorado School of Mines

John Kerry helped bring the world into the Paris climate agreement and expanded America’s reputation as a climate leader. That reputation is now in tatters, and President-elect Joe Biden is asking Kerry to rebuild it again – this time as U.S. climate envoy.

It won’t be easy, but Kerry’s decades of experience and the international relationships he developed as a senator and secretary of state may give him a chance of making real progress, especially if that work is conducted in the spirit of mending relationships rather than “naming and shaming” other countries.

Over the past four years, the Trump administration pulled out of the international Paris Agreement on climate change, rolled back policies that were designed to cut greenhouse gas emissions, and tried to prevent any discussion of climate change at international gatherings like the G-7 and G-20 summits.

The international community, meanwhile, largely moved forward. Many countries and regions have pledged to move their economies toward “net zero” greenhouse gas emissions by the middle of the century, including China, the European Union, South Korea and Japan. An increasing number of cities and states have set similar goals. Trump’s hard-line stance may have actually emboldened some, notably China, to make such announcements.

Getting those pledges implemented is what matters now, and that will require leadership, detailed planning and careful diplomacy. The U.N. climate conference in November 2021 will be special. It will be the first time countries will evaluate their progress on the Paris Agreement, and they will be expected to strengthen their commitments. Biden has already signaled that he will bring the U.S. back into the agreement as soon as he takes office.

As energy policy experts involved in international climate policy for over two decades, we have watched how countries responded to U.S. involvement, and how their…
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The FOMO Is Back…BUT…What If This Is The Start Of The Bull Market?

 

The FOMO Is Back…BUT…What If This Is The Start Of The Bull Market?

Courtesy of Howard Lindzon

We have come a long way since the panic in March. At one point on March 12th, the $VIX hit 90 and the Stocktwits Social $VIX was 2.5 (2.5 bullish messages to bearish messages). Here is my blog post from that day.

That panic led to a bottom in prices over the next week and a rally that has been epic in nature.

Yesterday, the indexes all closed at or near all-time highs, the $VIX closed down at 22 and the Stocktwits Social $VIX was THIRTEEN (13). Thitrteen is the highest ratio I can remember in my 12 years looking at the data. Stocktwits users are giddy for good reason. Their IPO’s, SPAC’s, Chinese Electric Vehicle stocks, Semiconductor stocks, weed stocks and Crypto tokens rise every day. They don’t have time for FAANG anymore!

March was misery and November is giddy.

I am neither amused, or excited or worried… I am just in awe.

Ryan Detrick shared a chart of the small cap sector yesterday that showed it having its best month in history. Here it is:

Only February 2000 was as close to this good. What followed that spike was years of misery and poor returns.

I have no idea what lies on the other side of this incredible rally but I do know that anytime I say something the least bit optimistic on Twitter I get tweets yelling back ‘THE TOP’ at me.

Market bottoms, at least for me have, are much easier to spot than tops.

Like I said yesterday, this positive momentum is something I will keep riding, not trade against.

It is rare to see this strength in small caps and usually bullish

Most interesting is this chart of the $VIX that shows if the $VIX can close below 21, it will end one of the longest streaks above 21. What has followed from previous high streaks is a long bull market…

I can feel the FOMO in the air and in the tweets, but what if this is just the start of another bull market?

Have a great day.





The Wall Street Journal Nominates Janet Yellen as Treasury Secretary

Courtesy of Pam Martens

Fed Chair Janet Yellen Appears Before the House Financial Services Committee, November 4, 2015

Late yesterday afternoon, while the stock market was still open, three reporters at the Wall Street Journal penned an article with this opening statement: “President-elect Joe Biden plans to nominate former Federal Reserve Chairwoman Janet Yellen, an economist at the forefront of policy-making for three decades, to become the next Treasury secretary, according to people familiar with the decision.”

Within the next half hour, every major newswire and many of the largest newspapers in the U.S. were repeating the Journal’s story.

The Journal noted that the Biden camp wasn’t expected to make a “formal announcement” of the Yellen nomination until November 30. Nonetheless, the Journal decided it had the self-anointed right to stand in for the Biden transition team and make the announcement a week ahead of time.

To induce a nice big stock market rally on the news (the Dow closed up 327.7 points) the Journal article carried this pivotal paragraph:

“Ms. Yellen is an ‘excellent choice for Treasury secretary,’ said Gary Cohn, President Trump’s former top economic adviser, in a statement. ‘Having had the opportunity to work with then-Chair Yellen, I have no doubt she will be the steady hand we need to promote an economy that works for everyone, especially during these difficult times.’ ”

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Why the Oxford AstraZeneca vaccine is now a global game changer

 

Why the Oxford AstraZeneca vaccine is now a global game changer

Courtesy of Michael Head, University of Southampton

In the long dark tunnel that has been 2020, November stands out as the month that light appeared. Some might see it as a bright light, others as a faint light – but it is unmistakably a light.

On November 9, Pfizer announced the interim results of its candidate vaccine, showing it to be “more than 90% effective” in preventing symptomatic COVID-19 in late-stage human trials. The news was greeted with joy.

A couple of days later, the Russian Direct Investment Fund announced that the candidate vaccine they are funding – dubbed Sputnik V – showed 92% efficacy in late-stage trials. Not to be outdone, Moderna then announced that its candidate vaccine showed 94.5% efficacy.

The latest COVID-19 vaccine announcement comes from Oxford University. And, as with all of the above announcements, it came via press release. Its vaccine candidate, developed in partnership with AstraZeneca, showed an overall effectiveness of 70.4%.

In case that sounds disappointing, bear in mind that these are interim results and the figures might change. Also, the Oxford vaccine was given to one group of volunteers as two standard doses, which showed 62% effectiveness, and another group of volunteers as a smaller dose followed by a standard second dose. This raised effectiveness to 90%.

It’s not immediately clear why this is the case. Professor Andrew Pollard, one of the lead researchers on the project, described the results as “intriguing”. He also highlighted that the use of lower doses means that there would be more vaccine doses available.

There were no cases of severe COVID-19 in those who received the vaccine. And it seems to generate a protective immune response in older people. Although we’ll have to wait for the final breakdown of results to get clarification on that.

Not the only measure

Despite the Oxford vaccine having lower overall effectiveness than the Pfizer or Moderna vaccines – at least at this interim stage – there are other success factors to consider. Safety is one, and the Oxford vaccine is so far reported to have a good safety record…
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There’s Always a Chart

 

There’s Always a Chart

Courtesy of 

If you’re looking for evidence that shorts have thrown in the towel, and therefore now’s the time to get cautious, there’s a chart for that.

If you’re looking for evidence that actually, an absence of bears doesn’t mean an overwhelming amount of bulls, there’s a chart for that too.

In this tweet from @MacroCharts, he writes:

“Equity Futures traders have cut exposure aggressively – even as $SPX broke to new highs. The 3-week positioning change is one of the most negative in history – only seen at bottoms, and once when the market was at a high (2017).”

If you’re looking for evidence that strong breadth is bullish and not bearish, you guessed it; there’s a chart for that too. Here’s Jonathan Krinsky in his note from over the weekend.

“We have seen a handful of similar ‘booster shots’ over the last 25 years and while the near-term returns have been mixed, the important aspect is that none of them marked a meaningful market top.”

If you’re looking for something to confirm your view, you’re going to find it. Whether it’s a data point that supports your ideas or a contra data point that negates it, thereby making you even more confident, then you’re going to find that too.

We’re all guilty of seeing the world as we want it to be. It’s hard to hack our software, no matter how many Charlie Munger quotes you throw out there. “Invert, always invert” seems like a logical one here. The best we can do is make sure that we never rely on a single data point to tell an entire story.





Move Over, Millennials

 

Move Over, Millennials

Courtesy of 

Not all young people share the same daily habits or the same views of the world.

Millennials are cutting the cord. Gen Z doesn’t know what the cord is. 45% of Millennials still watch broadcast tv, compared with 26% of 16-17 year olds.

Millennials play fantasy sports. Gen Z watches eSports. Only 18% of 18-24 year olds watch traditional sports, compared with 30% of Millennials.

 

According to a new report from BofA Global Research called OK Zoomer, “Gen Z will spend nearly 6 years of their life on social media. That’s more time spent than eating, studying & socializing combined.”

We’re all probably tired of hearing about Millennials. It’s time to shift our attention to the next generation, Gen Z. These are the 2.5 billion people born between 1996 and 2016.

Gen Z is the single largest age cohort, representing 32% of the global population,

Nine in 10 of these young people live in emerging markets…

…half a billion of them are in India, more than the combined population of Gen Zers in China and the United States.

While Gen Z is the largest age cohort, it’s not enough to offset the aging population in the rest of the world. According to Euromonitor, in the early 2030s, people over 60 will outnumber the population under 10. This will be the first time that’s ever happened.

Once we drill down a little, we see that demographics are not evenly distributed worldwide. Europe, an aging continent, is the only one with more people over 65 than under 15. Africa, on the other hand, has a ton of young people. 41% of the continent is under 15.

Demographics have big implications for everyone. It shapes societies. It transforms political systems. It makes economies run.

Check out the whole report if you want to learn more about where we’re going.

Source:

OK Zoomer





 
 
 

ValueWalk

iPhone 12 demand for Apple stock is already priced in

By Michelle Jones. Originally published at ValueWalk.

Well-known analyst Ming-Chi Kuo said in a report that demand for the iPhone 12 is strong, although that may not have much of an impact on Apple stock. Analyst reports are mixed on what the iPhone 12, the first model with 5G, will mean for Apple stock.

Q3 2020 hedge fund letters, conferences and more

Demand for iPhone 12 looks strong, but it's already priced into Apple stock

According to 9to5Mac, Kuo said demand for the iPhone 12 Pro and Pro Max is better than expec...



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Zero Hedge

JPMorgan Makes $1 Billion From Gold Trading After Paying $1 Billion Fine For Manipulating Gold Trading

Courtesy of ZeroHedge View original post here.

This, in a nutshell, is how Wall Street works: just two months after JPMorgan was fined a record $1 billion criminal monetary penalty (to make sure not a single banker would end up going to prison) for rigging the gold and silver markets, Reuters reported that JPM - having clearly "learned" the tools of the gold rigging trade, has earned a record $1 billion in revenue so far in 2020 from trading, storing and financing precious metals, vastly outperforming rival banks.

The math simplified: JPM has spent $1 billion over the l...



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Phil's Favorites

Coronavirus Could Cause Shipping Costs To Rise By Up 15% In 2020

By Jacob Wolinsky. Originally published at ValueWalk.

Managing Shipping Budgets in 2021: The Old Normal, the New Normal, or the Unknown?

As they plan their shipping budgets for the coming year, distributors and retailers are struggling to assess the pandemic-driven changes of 2020. SkyPostal’s A.J. Hernandez suggests a two-sided approach: be as careful as you can, while also being prepared for anything.

Building A Shipping Budget

(Miami, FL) November 23, 2020—While shipping managers would like to see some relief from the shocks and surprises of 2020, there are, says A.J. Hernandez, President and CEO of SkyPostal, Inc., a lot of reasons they’re probably not going to get it. According to a recent survey of industry exp...



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Politics

TRUMP CONCEDES (SORT OF)

 

TRUMP CONCEDES (SORT OF)

Courtesy of Teri Kanefield

The Trump Legal team filed more documents today in the appellate court. I tweeted a bit about how silly they were (let me know if you all want me to march through them). Then this happened:

Trump giving the go-ahead for the transition to get underway was (I believe) the closest he will get to conceding the election. Two amusing things happened. First, Trump tweeted this about 10 minutes after Emily Murphy submitted a letter saying she would move forward, and that she has made her decisions solely on her own and not at anyone’s direction. Looks like Trump wanted people to think that she was, in fact, acting at his direction.

The other amusing part was that Tr...



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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: Friday, 12 June 2020, 08:06:43 PM

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


Comment: Interesting (2)



Date Found: Saturday, 13 June 2020, 12:27:02 AM

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


Comment: Recession Forecasts Time Frame



Date Found: Monday, 15 June 2020, 11:07:52 PM

...

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Biotech/COVID-19

Why the Oxford AstraZeneca vaccine is now a global game changer

 

Why the Oxford AstraZeneca vaccine is now a global game changer

Courtesy of Michael Head, University of Southampton

In the long dark tunnel that has been 2020, November stands out as the month that light appeared. Some might see it as a bright light, others as a faint light – but it is unmistakably a light.

On November 9, Pfizer announced the interim results of its candidate vaccine, showing it to be “more than 90% effective” in preventing symptomatic COVID-19 in late-stage human trials. The news was greeted with joy.

A ...



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Kimble Charting Solutions

Transports Sending Strong Bullish Message To Other Dow Indices?

Courtesy of Chris Kimble

Are Transportation stocks about to send a quality bullish message to other Dow indices this month? Sure could be!

This 3-pack looks at the Dow Jones Industrials, Transports, and Utilities indices on a monthly basis.

One week from the end of a month, the DJ Transports are attempting an important bullish breakout at (1). Unless a sharp reversal takes place in the next week, Transports could close out the month at new monthly closing highs!

The Dow is attempting to close at all-time highs this month, while the Dow Utilities Index remains a few percent below 2020 highs....



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Digital Currencies

Dalio Admits "I Might Be Missing Something" As Bitcoin Surges Above $18,000

Courtesy of ZeroHedge

Since the US election, Bitcoin prices (in USD) have surged a stunning 40%, also lurching higher after each vaccine headline hit.

Source: Bloomberg

Getting ever closer to its all-time record high...

Source: Bloomberg

As crypto prices soared overnight, Bridgewater Associates founder Ray Dalio stepped back into the fray, saying in a Twitter thread that “I might be missing something about Bitco...



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Mapping The Market

COVID-19 Forces More Than Half of Asset Management Firms to Accelerate Adoption of Digital Marketing Technology

By Jacob Wolinsky. Originally published at ValueWalk.

There is no doubt that the use of technology to support client engagement initiatives brings both opportunities and threats but this has been brought into sharp focus this year with the COVID-19 pandemic.

The crisis has brought to the fore the need for firms to enable flexibility in client engagement – the expectation that providers will communicate to clients on their terms, at their speed and frequency and on their preferred channels, is now a given. This is even more critical when clients are experiencing unparalleled anxiety from both market conditions and their own personal circumstances.

...

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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.
...

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

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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.