Posts Tagged ‘consumer’

Telling Signs-of-the-Times: Layaways, Off-Brands, Goodwill Stores, Consignment Sales, Frugality, all Thrive in Middle-Class Suburbia

Telling Signs-of-the-Times: Layaways, Off-Brands, Goodwill Stores, Consignment Sales, Frugality, all Thrive in Middle-Class Suburbia

Courtesy of Mish

Boutique window display

Telling Signs-of-the-Times: In grocery stores, "No-Name" sales are up 2% and now represent 22% of total sales. Some full priced stores now offer consignment sections, an unheard of practice a couple years back.

Layaway sales are back in vogue at Toys-R-Us and jewelers alike. Layaways are a depression era phenomenon that all but died with the mass marketing of credit cards.

Old Stigmas Become New Badge of Honor

Frugality is the new "badge of honor" says the Yahoo!Finance report In a tough economy, old stigmas fall away

The Goodwill store in this middle-class New York suburb is buzzing on a recent weekend afternoon. A steady flow of shoppers comb through racks filled with second-hand clothes, shoes, blankets and dishes.

A few years ago, opening a Goodwill store here wouldn’t have made sense. Paramus is one of the biggest ZIP codes in the country for retail sales. Shoppers have their pick of hundreds of respected names like Macy’s and Lord &Taylor along this busy highway strip.

But in the wake of the Great Recession, the stigma attached to certain consumer behavior has fallen away. What some people once thought of as lowbrow, they now accept — even consider a frugal badge of honor.

At the supermarket, shoppers are buying more store-labeled products, like no-name detergents and cereal, and not returning to national brands.

And in a telling trend, Americans are turning to layaway more often when they buy expensive items such as engagement rings and iPads. The wealthy are also using layaway more often, a drastic change from the past.

"The old stigmas are the new realities," says Emanuel Weintraub, a New York-based retail consultant. "Now, people don’t have a problem saying, ‘I can’t afford it.’ It’s a sign of strength."

Two years ago, having second-hand clothes in the same store that sells regular-priced goods might have driven well-heeled shoppers away. Today, the concept works. The new consignment area, called My Secret Closet, has brought in new customers. Shoppers browse both the retail and consignment areas without hesitation.

"We are seeing a permanent change in how people shop, and we have to respond to that," says Tom Patrolia, who has owned the store for 24 years.

The growth in layaway also reflects Americans’ new willingness to set aside


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New Overdraft Rules Kick In But Do they Kick Hard Enough?

New Overdraft Rules Kick In But Do they Kick Hard Enough?

Courtesy of Jr. Deputy Accountant 

Overdrafts are big business for the big banks and even though the Fed has clamped down to protect the precious consumer (I’m sure that’s high up on their to-do list), they may have forgotten to bite down hard enough with those big sharp regulatory teeth.

Before we get to that, let’s talk about the impact overdrafts have on said sad consumer. And yes, that does read an annual percentage rate of 3,520%.

Bankrate:

The findings of an FDIC study of bank automatic overdraft programs — also called courtesy overdraft or bounce protection — are no surprise to consumer advocates. For years, studies by consumer groups of automatic overdraft programs have shown them to be short-term loans that cost consumers billions in fees, while often denying them the ability to make an informed choice.

The difference this time around is a federal banking regulator has arrived at statistics that paint the same picture — most customers aren’t informed of the overdraft until after the ATM or point-of-sale transaction has taken place, and high fees mean that someone who overdraws their account at the ATM by $20, and is charged the median overdraft fee of $27, would incur an annual percentage rate of 3520 percent if they repaid the loan in two weeks. Even payday lenders don’t charge that much.

How much does all this add up to for banks? A 2007 study by the Center for Responsible Lending said consumers are paying fees of $17.5 billion annually — on automatic overdraft loans of $15.8 billion per year.

"This is a huge amount of money for the banks," says Jean Ann Fox, director of financial services at Consumer Federation of America in Washington, D.C. "But aren’t we in trouble if the only way banks stay afloat is by sticking their most desperate customers with the highest priced credit that consumers have not applied for and don’t know they’re using?"

Meanwhile, new overdraft rules only apply to ATM and debit card transactions, not recurring transactions (like subscriptions) or check transactions. Which is ironic because we still call it "bouncing a check" even though few of us actually use them. Whatever, splitting hairs.

Anyway, banks can still unwittingly enroll customers in overdraft protection for these transactions and the sad little consumer will still be responsible…
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Consumer Demand Slowdown Gets Even Weirder

For more background information on why Rick collects his data and what he believes it reflects, please see my previous Interview with Rick Davis of the Consumer Metrics Institute, if you haven’t already. – Ilene 

Consumer Demand Slowdown Gets Even Weirder

Courtesy of Rick Davis at Consumer Metric Institute 

We have been commenting for some time that the profile of the current year-over-year contraction in consumer demand has been unique when compared to similar events in 2006 and 2008. The differences have only become more distinct as time has progressed:

Chart
(Click on chart for fuller resolution)

• The 2010 event has now gone on for nearly 150 days without forming a bottom. The 2006 event had already completely ended by the 110th day, while the much more severe 2008 event had at least formed a bottom by the 120th day. In contrast the downward slope of the 2010 event increased after passing the 140th day.

• The 2010 event has now passed the 2006 event in terms of maximum level of contraction. In 2006 our ‘Daily Growth Index’ bottomed at a year-over-year contraction rate of -2.28% on August 25th. On June 10th, 2010 our ‘Daily Growth Index’ dropped below that level for the first time during the current slowdown.

• The severity of contraction events is the product of the average negative ‘growth’ rate observed and the duration of the negative ‘growth’ period. This means that the two-dimensional ‘area under the curve’ is the best true indication of how much economic pain is associated with each event. In 2006 our ‘Daily Growth Index’ had a total of about 136 negative-percent-days of contraction over the 110 day event, and the BEA’s measurement of the GDP dropped to a barely positive .1% growth for the third quarter of 2006. During the current 2010 contraction event we have already accumulated over 210 negative-percent-days of contraction during the first 148 days, a figure that is more that 50% greater than in 2006 and still growing. (To keep these figures in perspective, however, the 2008 event reached 794 negative-percent-days of contraction over 223 days. This means that the current slowdown, although already 2/3 the length of the 2008 event, has to this date inflicted only about a quarter of the damage to the economy as experienced in 2008.) 

• What is troubling to our eyes is that the shape of the…
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TALKING OURSELVES OFF THE EDGE OF THE CLIFF

TALKING OURSELVES OFF THE EDGE OF THE CLIFF

WSOP No-Limit Texas Hold 'em World Championship

Courtesy of The Pragmatic Capitalist 

Yesterday’s WSJ MarketBeat blog took David Einhorn to task for his op-ed in the NY Times titled “Easy Money, Hard Truths“.  They make the argument that Einhorn is simply pushing his massive gold position.  I fear Einhorn is doing something much worse – helping to scare us all into continued recession.

First off, I have no problem when someone talks their book.  In fact, I almost prefer for people to talk their book.  There’s a certain trust in someone who is willing to “put their money where their mouth is”.  It’s the primary reason why I believe the hedge fund business is such a wonderful advancement beyond traditional mutual funds – the manager’s interests are generally aligned with those of the investor.  If you can find a manager who is not only intelligent, but has a sound moral compass you’ve wandered upon quite a gem.  From all accounts David Einhorn appears to fit the mold.  But I take very serious issue with his recent comments which I believe are filled with half-truths and propaganda that we continually hear from the inflationistas (all of whom have been terribly wrong thus far in terms of their macroeconomic outlook) who are driving the country towards the edge of the cliff.

Einhorn is a great investor and clearly a brilliant man, but for two years I have watched policymakers and fear mongerers misdiagnose the problems that we confront and this is, in my opinion, why we are still wrangling with these issues. In 2008 I wrote a letter to the Federal Reserve saying that this was a classic “balance sheet recession” with problems rooted in the private sector – specifically the consumer.  I told them that saving banks was not the solution and that monetary policy would prove as fruitless in the U.S. as it has in Japan.  I was shocked to receive a friendly response to my letter but not shocked to see Mr. Bernanke implement his Friedman-like monetarist campaign of “saving the world”.  Obviously it hasn’t worked (unless you’re a banker) as we sit here two years later still discussing this wretched credit crisis and the ranks of the unemployed continue to climb.  If we cannot properly diagnose the problems we cannot find a proper cure.  Thus far, we have failed.…
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Canaries in Coalmine: China, Asia, not Participating in Euro Bailout Lovefest; Beginnings of China Credit, Real Estate Bust

Canaries in Coalmine: China, Asia, not Participating in Euro Bailout Lovefest; Beginnings of China Credit, Real Estate Bust

Courtesy of Mish 

Taxidermy canary under glass dome.

Is China a canary in the coalmine of an impending global slowdown, or is China simply overloved as a beacon of growth as it was in 2008? I think it’s both.

China’s property and infrastructure bubbles are massive; that is for certain. Moreover, China’s biggest export trading partner is Europe, just as Europe is headed for numerous austerity programs.

While it’s doubtful the European austerity programs bring deficits down to where they are supposed to be, those programs will for a while cause a decline in European spending along with much social unrest.

Can China take a double whammy like this without overheating? I think not. And China will have to show things down, whether it wants to or not.

China Overheating, Tightening Coming

Please consider Hong Kong Stocks Fall as China Prices Prompt Tightening Concern

Hong Kong stocks fell as rising consumer inflation and housing prices in China stoked concern the country will act further to rein in its economy. The city’s developers pared losses after a government land sale.

“Domestic concerns are more important in terms of the policy measures coming out in China to cool things down,” said Binay Chandgothia, who oversees about $2.2 billion as chief investment officer at Principal Global Investors (Hong Kong). For Europe, “the question is the credibility of the billions of dollars of government debt that resides with European banks.”

“Domestic concerns are more important in terms of the policy measures coming out in China to cool things down,” said Binay Chandgothia, who oversees about $2.2 billion as chief investment officer at Principal Global Investors (Hong Kong). For Europe, “the question is the credibility of the billions of dollars of government debt that resides with European banks.”

“Price pressures have been building throughout the economy, strengthening the case for higher interest rates and a stronger yuan,” said Brian Jackson, a Hong Kong-based strategist at Royal Bank of Canada. “China is at risk of overheating, with spot fires breaking out in various parts of the economy.”

Chinese policy makers should focus on preventing excessive gains in asset prices and liquidity as Europe’s rescue package makes another global slump less likely, central bank adviser Li Daokui said in an interview yesterday. The increase in property prices across


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The “shop till you drop” economy

The “shop till you drop” economy

Courtesy of Benign Brodwicz, at THE ANIMAL SPIRITS PAGE

With the collapse of Investment, Consumption has roared to record highs as a percentage of GDP.  Data to 2009Q4.  Who would want to invest in the United States when there are fiscally solvent, rapidly growing emerging economies to invest in? 

consumption, gdp

GDPI = Gross Domestic Private Investment; PCEC = Personal Consumption Expenditures.  Both in current dollar terms. 

 


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Consumer Confidence Collapses, Missing Expectations Big Time As Present Situation Index Hits 27-Year Low

Consumer Confidence Collapses, Missing Expectations Big Time As Present Situation Index Hits 27-Year Low

consumer confidenceCourtesy of Vincent Fernando at Clusterstock/Business Insider 

Consumer confidence missed consensus expectations by a wide margin, coming it at just 46.0 vs. 55.0 expected. This was also a substantial drop form January’s 56.5 reading.

Markets are tanking.

The worst part of the report appears to be the Present Situation Index, which collapsed to a 27-year low:

Conference Board:

The Present Situation Index decreased to 19.4 from 25.2. The Expectations Index declined to 63.8 from 77.3 last month. The Consumer Confidence Survey® is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS. TNS is the world’s largest custom research company. The cutoff date for February’s preliminary results was February 17th.

Says Lynn Franco, Director of The Conference Board Consumer Research Center: "Consumer Confidence, which had been improving over the past few months, declined sharply in February.Concerns about current business conditions and the job market pushed the Present Situation Index down to its lowest level in 27 years (Feb. 1983, 17.5).

Moreover, there seems to have been a decline in near-term forward expectations as well.

Consumers’ short-term outlook also took a turn for the worse, with fewer consumers anticipating an improvement in business conditions and the job market over the next six months. Consumers also remain extremely pessimistic about their income prospects. This combination of earnings and job anxieties is likely to continue to curb spending." Consumers’ assessment of current-day conditions soured in February. Those claiming conditions are "good" decreased to 6.2 percent from 8.5 percent, while those claiming business conditions are "bad" increased to 46.3 percent from 44.7 percent. Consumers’ assessment of the labor market was also more pessimistic.…
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America Just Declared The Recovery Over So You’d Better Get Ready For The Double Dip

America Just Declared The Recovery Over So You’d Better Get Ready For The Double Dip

Courtesy of John Carney at Clusterstock/Business Insider  

american america flag usa u.s. us stars and stripes

Today’s bleak consumer confidence number is undoubtedly bad news for the economy. The bigger than expected drop suggests that consumers have lost confidence in the recovery, which will drive down home prices and consumer spending.

Consumer confidence is typically our "first look" at the state of the economy. While most government aggregated data come out with a two-month lag, or more, consumer confidence hits with just a one month lag. Studies have shown that consumer confidence is a good predictor of consumer spending numbers. Basically, people surveyed seem to be good at accurately reading their own economic situation, and those surveyed accurately reflect the broader economy. When consumer confidence drops to such deep unexpected levels--today’s were the worst in 27 years--then it is a flashing red-light about the economy.

There wasn’t anything good about today’s numbers. Every part of the survey was awful. On jobs, the optimistic folks who say jobs are plentiful fell to 3.6 percent from 4.4 percent. The pessimistic people who said jobs are hard to get increased to 47.7 percent from 46.5 percent. The gauge of expectations for the next six-months fell to 63.8, from 77.3 the prior month. The share of people who believe their incomes will increase over the next six months fell to 9.5 from 11 percent. The share of those expecting more jobs fell to 12.4 percent from 15.8 percent.

The message: the economy sucks.

The recovery we were supposed to have.
You’ll read a lot about how the consumer confidence numbers are a lagging indicator. Indeed, they are a lagging indicator when measured against the stock market. The real time data conveyed by the stock market is often a better indicator than any survey or government data. But that doesn’t mean you shouldn’t pay attention to the consumer confidence number, especially since stocks have declined for most of this year. 

Lets be clear here. The story-book recovery was dependent on a recovery of the consumer and a decline in the saving rate. If consumers lost some of their apprehension about future income prospects and future employment, they might begin to spend more on both retail goods and to purchase homes again. Anticipating this return of the consumer, businesses would increase capital spending and inventory.  

We got half of that equation. Business spending…
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New York Sales Tax Receipts In Unprecedented Collapse

New York Sales Tax Receipts In Unprecedented Collapse

New York City, high angle view

Courtesy of Joe Weisenthal at Clusterstock/Business Insider 

It’s a good thing Wall Street bonuses rebounded in 2009 because otherwise the State of New York would be totally screwed.

Yesterday the Comptroller released its survey of the state’s sales tax receipts — a proxy for consumer spending that shows a trend opposite to Wall Street.

Here’s the top-line view:

Counties across New York State, including New York City, saw one of the sharpest declines in sales tax collections on record, according to a report released by State Comptroller Thomas P. DiNapoli. The report, which compares 2009 to 2008 collections, found a 5.9 decrease in collections statewide. Only four counties saw an increase but these numbers were primarily due to administrative and technical adjustments, not better economic performance.

“This is yet another sign that the Great Recession is having a continuing impact on our communities across New York,” said DiNapoli. “These numbers are sobering. Fortunately, many local governments have taken sometimes painful budgetary steps to stave off disaster. It’s a struggle, but all levels of government have to make every taxpayer dime count.”

Among the report’s findings:

  • Fifty-three of New York’s 57 counties outside of New York City saw a sales tax decline and many of these counties share sales tax revenues with their municipalities;

  • The largest decline occurred in the Lower Hudson Valley, at 8.4 percent;

  • In state fiscal year 2009-10, the state’s sales tax base (value of all goods and services subject to the sales tax) shrank by 7.1 percent;

  • Among New York’s counties, Westchester saw the steepest drop at 10.3 percent;

  • The Mohawk Valley region saw the smallest downturn at 2.5 percent;

  • Only Oneida, Chautauqua, Schuyler and Seneca counties saw increases, but this growth was mostly attributable to factors other than economic growth; and

  • According to the New York State Association of Counties, most counties prudently budgeted little or no growth in their sales tax revenues for 2010.

A few charts exemplify the trouble the state faced: 

chart

Source: http://www.osc.state.ny.us/ 

And here’s a breakdown by notable region:

chart

Source: http://www.osc.state.ny.us/

At the same trime, Comptroller DiNapoli warned of a $2 billion budget shortfall for the current year.


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The Christmas Retail Rally Could Be Toast

The Christmas Retail Rally Could Be Toast (WMT, BBY, RTH)

Courtesy of Vincent Fernando at Clusterstock/business Insider

Shown below is a retail proxy, the Retail HLDRs Exchange Traded Fund (RTH). It’s outperformed the S&P500 on a three month basis. Yet Best Buy’s (BBY) warning today, that revenue will be driven by lower-ticket items in the fourth quarter, could mean that the pre-Christmas retail rally shown below is toast.

Note how Best Buy dropped a nasty 7% on just these decent earnings. A lot of holiday cheer is already priced-in.

bby

 


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Zero Hedge

1 In 4 Millennials Rely On Their Parents To Pay Some Bills - Even While Working Full Time

Courtesy of ZeroHedge. View original post here.

Time and time again, we've discussed how America's millennial generation is burdened by debt, effectively precluded from home ownership and increasingly ...



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Digital Currencies

"The House Always Wins": These Funds Made A Killing As Bitcoin Plunged

Courtesy of ZeroHedge. View original post here.

Volatility, neutral exposure and market making can still pay - at least for crypto hedge funds.

Despite the fact that cryptos have collapsed across the board so far in 2018, one investing axiom still holds true to this day: the house always wins. Those who have been making a market, keeping neutral net exposure and benefiting from exotic methods of trading cryptocurrencies have continued to have a positive year this year despite the fact that a lot of the underlying cryptocurrency assets have had a terrible year.

...



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Phil's Favorites

#DeleteFacebook is still feeding the beast - but there are ways to overcome surveillance capitalism

 

#DeleteFacebook is still feeding the beast – but there are ways to overcome surveillance capitalism

Not creepy at all. antb / Shutterstock.com

Courtesy of Yuwei Lin, University of Stirling

In the wake of the Cambridge Analytica scandal, many people are questioning whether or not to delete their Facebook accounts. It’s not the first time this has happened. I can’t recall how many times I have seen calls to boycott Facebook – on Facebook – ever since I started using the social media platform.

But many peopl...



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Insider Scoop

Cowen Says The Big Sell-Off In Skechers Is A Buying Opportunity

Courtesy of Benzinga.

Related SKX 25 Stocks Moving In Friday's Mid-Day Session Mid-Day Market Update: Skechers USA Falls After Weak Q2 Guidance; Ericsson Shares Climb...

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Chart School

Short Opportunity II

Courtesy of Declan.

The first chance for a short play got burned but there is a second one on offer for the S&P.

The S&P tagged channel resistance and while today's reversal off resistance didn't amount to a big percentage loss it did register as a distribution day. There wasn't any significant technical change so if this short does evolve it will do so with risk measured on a move above 2,717.


The Nasdaq may match a 'bearish evening star' but if this is the case there has to be a significant move lower tomor...

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ValueWalk

Buffett At His Best

By csinvesting. Originally published at ValueWalk.

Bear with me as I share a bit of my history that helped me create SkyVu and the Battle Bears games. The University of Nebraska gave me my first job after college. I mostly pushed TV carts around, edited videos for professors or the occasional speaker event. One day, Warren Buffet came to campus to speak to the College of Business. I didn’t think much of this speech at the time but I saved it for some reason. 15 years later, as a founder of my own company, I watch and listen to this particular speech every year to remind myself of the fundamentals and values Mr. Buffett looks for. He’s addressing business students at his alma mater, so I think his style here is a bit more ‘close to home’ than in his other speeches. Hopefully many of you find great value in this video like I have. Sorry for the VHS...



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Kimble Charting Solutions

The Stock Bull Market Stops Here!

 

The Stock Bull Market Stops Here!

Courtesy of Kimble Charting

 

The definition of a bull market or bull trends widely vary. One of the more common criteria for bull markets is determined by the asset being above or below its 200 day moving average.

In my humble opinion, each index above remains in a bull trend, as triple support (200-day moving averages, 2-year rising support lines, and February lows) are still in play ...



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Members' Corner

Cambridge Analytica and the 2016 Election: What you need to know (updated)

 

"If you want to fundamentally reshape society, you first have to break it." ~ Christopher Wylie

[Interview: Cambridge Analytica whistleblower: 'We spent $1m harvesting millions of Facebook profiles' – video]

"You’ve probably heard by now that Cambridge Analytica, which is backed by the borderline-psychotic Mercer family and was formerly chaired by Steve Bannon, had a decisive role in manipulating voters on a one-by-one basis – using their own personal data to push them toward voting ...



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Biotech

How your brain is wired to just say 'yes' to opioids

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

 

How your brain is wired to just say ‘yes’ to opioids

A Philadelphia man, who struggles with opioid addiction, in 2017. AP Photo/Matt Rourke

Courtesy of Paul R. Sanberg, University of South Florida and Samantha Portis, University of South Florida

...

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Mapping The Market

The tricks propagandists use to beat science

Via Jean-Luc

How propagandist beat science – they did it for the tobacco industry and now it's in favor of the energy companies:

The tricks propagandists use to beat science

The original tobacco strategy involved several lines of attack. One of these was to fund research that supported the industry and then publish only the results that fit the required narrative. “For instance, in 1954 the TIRC distributed a pamphlet entitled ‘A Scientific Perspective on the Cigarette Controversy’ to nearly 200,000 doctors, journalists, and policy-makers, in which they emphasized favorable research and questioned results supporting the contrary view,” say Weatherall and co, who call this approach biased production.

A second approach promoted independent research that happened to support ...



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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

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

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All About Trends

Mid-Day Update

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

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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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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