Posts Tagged ‘John Maynard Keynes’

Will We Hold It Wednesday – S&P 2,000 Edition

SPX WEEKLY2,000.02 – We did it!!!

Unfortunately, we can't afford to pop the champagne because the 0.03 we spend on it would put us back under – so we'll watch and we'll wait another day before celebrating a milestone we've been expecting since last week (see "Will Jackson Hole Give Us S&P 2,000?") and we went with that TNA trade we discussed in yesterday's post to cover the expected bull run

We also picked up long plays on BAC and DBA in our Live Member Chat Room and BAC has already rocketed on the settlement news but DBA is only just making the turn and still makes an excellent play that we'll be adding to our Buy List (Members Only) along with 10 more picks we'll be making this week. 

SPY 5 MINUTEAs you can see from Dave Fry's SPY chart, we have set a new record for this decade for low volume on a full market day.  Last Christmas Eve was 43M on a half day, for example, but the Christmas Eve before that was 53M and those were the lowest two days I could find before I got bored looking (very scientific).  

Anyway, the point is that 38.9M is VERY LOW VOLUME – so low that paying attention to a dot on a chart that is drawn in such a light touch is just silly.  That makes yesterday's jaunt over 2,000 completely meaningless and more so with the additional evidence of the intraday action which, as Dave notes, could not have been more manipulated.

This is why we have been pressing our bear bets.  Even though we have peace in Gaza and peace in Ukraine (for today) and even though we've forgotten about Europe's negative GDP and China's plunging property prices and Ebola – we still couldn't find more than 38.9M buyers for SPY – that's just sad!  

FXI WEEKLYSpeaking of China, last Monday, for FREE, right in the morning post, we picked the following on FXI:

We shorted India last week (EPI) and now FXI has got my mouth


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Red Flags for the Economy

Red Flags for the Economy

Courtesy of MIKE WHITNEY at CounterPunch

Bonds are signaling that the recovery is in trouble. The yield on the 10-year Treasury (2.97 percent) has fallen to levels not seen since the peak of the crisis while the yield on the two-year note has dropped to historic lows. This is a sign of extreme pessimism. Investors are scared and moving into liquid assets. Their confidence has begun to wane. Economist John Maynard Keynes examined the issue of confidence in his masterpiece "The General Theory of Employment, Interest and Money." He says:

"The state of long-term expectation, upon which our decisions are based, does not solely depend, therefore, on the most probable forecast we can make. It also depends on the confidence with which we make this forecast — on how highly we rate the likelihood of our best forecast turning out quite wrong….The state of confidence, as they term it, is a matter to which practical men always pay the closest and most anxious attention."

Volatility, high unemployment, and a collapsing housing market are eroding investor confidence and adding to the gloominess. Economists who make their projections on the data alone, should revisit Keynes. Confidence matters. Businesses and households have started to hoard and the cycle of deleveraging is still in its early stages. Obama’s fiscal stimulus will run out just months after the Fed has ended its bond purchasing program. That’s bound to shrink the money supply and lead to tighter credit. Soon, wages will contract and the CPI will turn from disinflation to outright deflation. Aggregate demand will weaken as households and consumers are forced to increase personal savings. Here’s how Paul Krugman sums it up:

"We are now, I fear, in the early stages of a third depression….And this third depression will be primarily a failure of policy. Around the world … governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending. … After all, unemployment — especially long-term unemployment — remains at levels that would have been considered catastrophic not long ago, and shows no sign of coming down rapidly. And both the United States and Europe are well on their way toward Japan-style deflationary traps.

"I don’t think this is really about Greece, or indeed about any realistic appreciation of the tradeoffs between


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Hayek vs. Keynes – An Economic Smackdown (Redux)

Back in Januaray I made the anti-Keynesian comment and now that we are 6 months into the year, I think my point (and Hayek’s) is being made very clearly as this global end-game unfolds:

Ordinarily I wouldn’t care if a new bunch of suckers gets fleeced buying shiny bits of metal and gooey liquids but the rising commodity prices suck capital away from the entire rest of the planet and that damages the global economy.

The World did not suddenly fall apart last week, we are only finally dealing with the myriad of problems that have been swept under the rug during 2009 as the market mindlessly ran up 30% off our June/July consolidation without a significant break.  Could things really have been that good?  Of course not, it was silly.  Actually it was reckless and stupid and, ultimately, damaging because, as I said in my 2010 Outlook, it causes a MIS allocation of capital away from new companies and sectors that can thrive and create jobs – instead plowing money into the same idiotic commodity investments that popped just 18 months ago.

Now ordinarily I don’t want to get into long drawn-out academic discussions of various economic philosophies in my morning posts (that’s what weekend posts are for!) but who knew the whole thing could be set to music?  Well, Zero Hedge did and I thank them for posting up this video, which I hope does a little to bring attention to poor Hayek who, although well honored himself, had to endure a 93-year life where everyone knew what "Keynesian" meant and everyone thought Hayek was "that hot Mexican actress."   

Freidrich (as opposed to Salma) Hayek belived that the central role of the state was to maintain the rule of law, with as little arbitrary intervention as possible and that interventionist policies caused dangerous mis-allocations of capital that were damaging to the system.   In The Use of Knowledge in Society (1945), Hayek argued that the price mechanism serves to share and synchronize local and personal knowledge, allowing society’s members to achieve diverse, complicated ends through a principle of spontaneous self-organization. He used the term catallaxy to describe a "self-organizing system of voluntary co-operation." 

Although both Thatcher and Reagan based much of their econonomic policies on his work in the 80s, Hayek himself laid out the case for "Why I AM Not A Conservative."  He’s a complicated guy – I like that…

 


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Hayek vs. Keynes – An Economic Smackdown

In yesterday’s morning post I made the anti-Keynesian comment:

Ordinarily I wouldn’t care if a new bunch of suckers gets fleeced buying shiny bits of metal and gooey liquids but the rising commodity prices suck capital away from the entire rest of the planet and that damages the global economy.

The World did not suddenly fall apart last week, we are only finally dealing with the myriad of problems that have been swept under the rug during 2009 as the market mindlessly ran up 30% off our June/July consolidation without a significant break.  Could things really have been that good?  Of course not, it was silly.  Actually it was reckless and stupid and, ultimately, damaging because, as I said in my 2010 Outlook, it causes a MIS allocation of capital away from new companies and sectors that can thrive and create jobs – instead plowing money into the same idiotic commodity investments that popped just 18 months ago.

Now ordinarily I don’t want to get into long drawn-out academic discussions of various economic philosophies in my morning posts (that’s what weekend posts are for!) but who knew the whole thing could be set to music?  Well, Zero Hedge did and I thank them for posting up this video, which I hope does a little to bring attention to poor Hayek who, although well honored himself, had to endure a 93-year life where everyone knew what "Keynesian" meant and everyone thought Hayek was "that hot Mexican actress."   

Freidrich (as opposed to Salma) Hayek belived that the central role of the state was to maintain the rule of law, with as little arbitrary intervention as possible and that interventionist policies caused dangerous mis-allocations of capital that were damaging to the system.   In The Use of Knowledge in Society (1945), Hayek argued that the price mechanism serves to share and synchronize local and personal knowledge, allowing society’s members to achieve diverse, complicated ends through a principle of spontaneous self-organization. He used the term catallaxy to describe a "self-organizing system of voluntary co-operation." 

Although both Thatcher and Reagan based much of their econonomic policies on his work in the 80s, Hayek himself laid out the case for "Why I AM Not A Conservative."  He’s a complicated guy – I like that…

 


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Zero Hedge

Shocktober: Stocks Suffer Worst Pre-Election Plunge In History

Courtesy of ZeroHedge View original post here.

The Hunt for a Red October is over... must be the Russians...

Global stocks suffered their worst week since March as it appears the constant liquidity pukage is losing its impact...

Source: Bloomberg

And US stocks (down 6-7% across the board) also saw their biggest weekly drawdo...



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ValueWalk

Mixed Trick or Treat Bag for US Retailers this Halloween

By Refinitiv. Originally published at ValueWalk.

As a result of the coronavirus restraining normal activities, including traditional Halloween events, such as trick or treating and costume parties, retailers are feeling the pinch of a scary Halloween season.

Q3 2020 hedge fund letters, conferences and more

In collaboration with StyleSage, Refinitiv reviews this year’s Halloween discounts and consumer purchasing behavior in the report: It’s a Mixed Trick or Treat Bag at Hallowee...



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Kimble Charting Solutions

Are the S&P 500 Index and Crude Oil Peaking Together Again?

Courtesy of Chris Kimble

The price of crude oil has been an important indicator of the economy for quite some time. When oil is in demand and performing well, the economy likely is. And when oil is not performing well, the economy likely isn’t either.

Taking this one step further, it’s easy to see how crude oil can be a solid indicator of the stock market as well.

Often times, investors receive a bearish or bullish message from this relationship. In today’s chart 2-pack, we illustrate how the relationship between the S&P 500 Index and the ...



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Phil's Favorites

Despite Its Five Felony Counts, the Federal Reserve Has Entrusted $2 Trillion in Bonds to JPMorgan Chase

Courtesy of Pam Martens

Imagine that your neighbor across the street had been criminally charged with five felony counts for financial crimes in the past six years and admitted to committing each and every crime to the U.S. Department of Justice. Would you put one-third of all of your money in a safe, give that neighbor the combination, and ask him to hold the safe in his house for you? You would probably be suited up for a straight jacket if you did something like that.

That’s effectively what the Federal Reserve, the central bank of the United States, has done when it comes to JPMorgan Chase. As of this past Wednesday, the Fed ...



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Biotech/COVID-19

Achieving COVID-19 herd immunity through infection is dangerous, deadly and might not even work

 

Achieving COVID-19 herd immunity through infection is dangerous, deadly and might not even work

Under relaxed public health restrictions, deaths will spike far before herd immunity is achieved. AP Photo/Mark Lennihan

Courtesy of Steven Albert, University of Pittsburgh

White House advisers have made the case recently for a “natural” approach to herd immunity as a way to reduce the need for ...



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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: Monday, 18 May 2020, 03:35:21 AM

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


Comment: Ooh so pretty, so pretty, ooh so!



Date Found: Thursday, 21 May 2020, 01:03:17 AM

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


Comment: Charlie Lee: All Things Litecoin (#MimbleWimble, ...



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Politics

How to track your mail-in ballot

 

How to track your mail-in ballot

Make sure you know when your ballot is arriving, and whether it’s been accepted for counting back at your election office. erhui1979/DigitalVision Vectors via Getty Images

Courtesy of Steven Mulroy, University of Memphis

Many voters who want to participate in the election by mail are concerned about when they’ll receive their ballot – and whether it will get back in time to be counted.

The pandemic has caused interest in ...



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Digital Currencies

Bitcoin: the UK and US are clamping down on crypto trading - here's why it's not yet a big deal

 

Bitcoin: the UK and US are clamping down on crypto trading – here's why it's not yet a big deal

Where there’s a bit there’s a writ. Novikov Aleksey

Courtesy of Gavin Brown, University of Liverpool

The sale and promotion of derivatives of bitcoin and other cryptocurrencies to amateur investors is being banned in the UK by the financial regulator, the Financial Conduct Authority (FCA). It is a...



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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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Promotions

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Feb. 26, 1pm EST

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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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