Posts Tagged ‘The Creature from Jekyll Island’

Thrilling Thursday – Will Jackson Hole Give us S&P 2,000?

SPY 5 MINUTEI could take today off.  

Why?  Because I already wrote this article last month, on a Thursday, when the S&P was at 1,988 and topped out at 1,991, which was $199.06 on SPY and, as you can see from Dave Fry's chart, SPY topped out at $199.16 yesterday (before plunging back to $198.90 on strong volume into the close).  

Will this time be different?  I certainly hope so because last time, we plunged about 5%, back to 1,904 over the next 10 sessions and it's taken us another 10 to claw our way back for another attempt at an all-time high.

In our Live Member Chat this morning, we shorted the run-up in the Futures at Dow 16,990 (/YM), S&P 1,985 (/ES), Nasdaq 4,045 (/NQ) and Russell 1,155 (/TF) because, as I said to our Members:

I'm sorry but I simply can't reconcile this news with what's going on in the markets so I'm going to continue to lose money hedging to make sure we keep what we have.  The alternative is going to cash but there is simply no way I can endorse getting more bullish on this market at this point.  

NDX WEEKLYOne major difference this time is we DON'T have money flowing out of SPY (as much), as we did last month and we DO have the Fed's Jackson Hole conference tomorrow, which looks to Global Investors like a Santa Claus convention with Yellen, Draghi, Carney and Kuroda sitting under the spruce trees with gigantic bags of FREE MONEY – and that's why traders are as giddy as kids before Christmas this week.

But, Virginia, is there really a Santa Claus, or are the bulls hopes and dreams about to be crushed by cruel economic realities they have, so far, been avoiding like the plague (or Ebola)?  Realities like China's horrific PMI this morning, that dropped from 51.7 to 50.3 (barely positive) and France's PMI, which is back in heavy contraction at 46.5 this morning.  Retail Sales…
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Monday Markets – Mr. Obama Goes to Wall Street

Today should be very interesting!

One year to the day after Lehman Brothers collapsed and precipitated a financial crisis that reverberated across the globe, President Obama will deliver a major speech on the financial crisis at Federal Hall in New York City at midday on Monday.  According to the White House: "He will discuss the aggressive steps the Administration has taken to bring the economy back from the brink, the commitment to winding down the government's role in the financial sector and the actions the United States and the global community must take to prevent a crisis like this from ever happening again."

As I had mentioned in our Year One Review of the Stock Market Crash, Obama and Wall Street did not get off to a great start but, even after the March crash, we are still up 20% since he was sworn in in January as the President has been EXTREMELY accommodative to Wall Street's needs (ie. free money) so far.  That has been the carrot - perhaps now it is time for the stick…

The Treasury just released a document entitled: "The Next Phase of Government Financial Stabilization and Rehabilitation Policies" which, at 51 pages, is a pretty neat review of the crash as well but I still prefer mine as it saves you an hour and has much better pictures.  There are many charts in the government's documents and they are not all that encouraging.  As the report concludes: 

We must address the structural weaknesses in our financial system that this crisis revealed. The Administration is working to gain approval of a detailed set of proposals to reform our regulatory system to address these weaknesses and keep our financial markets and economy on track to a sustainable recovery.

In addition to Obama speaking at noon, we have 3 Fed Governors making speeches today.  Duke speaks on Regulatory Reform at 8:30, Lacker talks about Financial Regulation at 12:30 (right after Obama) and Yellen gives an Economic Outlook at 3:50, just in time for a stick-save into the bell so we could have a wild ride this morning! 

Speaking of the Fed, I just read a great book called "The Creature from Jekyll Island," which our man Ron Paul calls: "What every American needs to know
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The Trouble with our Banking System

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The Trouble with our Banking System

Courtesy of Tom Burger at Applying the Lessons of Free Market Economics 

The modern US banking system came into existence with the passage of the Federal Reserve Act in 1913. This legislation established the Federal Reserve System as the central bank of the United States with monopoly privileges to create and manage the nation’s currency as it saw fit. After almost 100 years of experience with the Federal Reserve, most contemporary economists, it seems, can’t even imagine our economy without a central bank.

The Federal Reserve’s objectives were spelled out in the 1913 Act: "… to promote effectively the goals of maxi­mum employment, stable prices, and moderate long-term interest rates.” The Fed’s current web site goes on to discuss the expected benefits of its monetary stewardship: 

" When prices are stable and believed likely to remain so, the prices of goods, services, materials, and labor are undistorted by inflation and serve as clearer signals and guides to the efficient allocation of resources and thus contribute to higher standards of living. Moreover, stable prices foster saving and capital formation, because when the risk of erosion of asset values resulting from inflation—and the need to guard against such losses—are minimized, households are encouraged to save more and busi­nesses are encouraged to invest more."[1]

Of course, swallowing this line is a bit difficult for anyone with knowledge of economic history. Twenty five years ago, in 1984, Murray N. Rothbard noted an interesting fact:

"Since instability, inflation, and depressions have been far worse since the inception of the Federal Reserve, many economists have concluded that the Fed has failed in its task and have come up with various suggestions for reform to try and get it on the correct track." [2] 

Since the early 1980s, our central bankers proudly note, the Consumer Price Index has fallen steadily to levels that are currently very low. Nevertheless, the remainder of Rothbard’s statement appears to be just as valid in 2009 as it was in 1984. There may not be many economists criticizing the Fed itself today, but reformed bank regulation is now being discussed as one government response to our latest economic crisis.

So why is it that the Federal Reserve has been unable to


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Phil's Favorites

The Blacker Swan

 

The Blacker Swan

Courtesy of John Mauldin, Thoughts from the Frontline 

“A similar effect is taking place in economic life. I spoke about globalization in Chapter 3; it is here, but it is not all for the good: it creates interlocking fragility, while reducing volatility and giving the appearance of stability. In other words, it creates devastating Black Swans. We have never lived before under the threat of a global collapse. Financial institutions have been merging into a smaller number of very large banks. Almost all banks are now interrelated. So, the financial ecology is swelling into gigantic, incestuous, bureaucratic banks (often Gaussianized [bell curve] in their risk measurement)—when one falls, they all fall. ...



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Zero Hedge

Dr. Fauci Is No Nostradamus: How COVID-19 Ran Amok Under His Watch

Courtesy of ZeroHedge View original post here.

Authored by James Grundvig via Vaxxter.com,

Michel de Nostradamus was born in Saint-Remy, South of France, in 1503. Beyond the gifts he would one day explore in astrology, he pursued an education to become a physician. After his first year at the University of Avignon, an outbreak of the plague swept through France, forcing the University to close.

...

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ValueWalk

Coronavirus stimulus check 2: Get it together, Congress

By Michelle Jones. Originally published at ValueWalk.

Many Americans are waiting for coronavirus stimulus check number 2, and the June jobs report caused some to think there won’t be one. However, it sounds like a second round of IRS stimulus checks is still possible. In fact, we might even be able to say that it’s likely.

Q1 2020 hedge fund letters, conferences and more

Mixed unemployment numbers

The Department of Labor showed that the U.S. economy added 4.8 million jobs last month, which is the largest increase ever recorded. ...



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Biotech/COVID-19

Coronavirus deaths and swelling public sector debt share a data-quality problem

 

Coronavirus deaths and swelling public sector debt share a data-quality problem

Different countries report coronavirus data differently. Shutterstock.com

Courtesy of Marion Boisseau-Sierra, Cambridge Judge Business School

Watching scientists, politicians and journalists struggle to compare national death rates from the coronavirus pandemic, I had an acute case of déjà vu. Though the virus may be novel, the confusion generated by inconsistent data standards is anything but. It’s something I&...



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Chart School

Golds quick price move increases the odds of a correction

Courtesy of Read the Ticker

Every market corrects, maybe profit taking, maybe of allowing those who missed out, to get in!


The current open interest on the gold contract looks to high after a very fast price move, it looks like 2008 may be repeating. A quick flushing out of the weak hands open interest may take place before a real advance in price takes place. The correction may be on the back of a wider sell off of risk assets (either before of after US elections) as all assets suffer contagion selling (just like 2008).

This blog view is a gold price correction of 10% to 20% range is a buying opportunity. Of course we may see  a very minor price correction but a long time correction, a price or time is correction is expected, we shall watch and...

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The Technical Traders

Wild Volatility Continues As US Markets Attempt To Establish New Trend

Courtesy of Technical Traders

We’ve continued to attempt to warn investors of the risks ahead for the US and global markets by generating these research posts and by providing very clear data supporting our conclusions.  Throughout the entire months of May and June, we’ve seen various economic data points report very mixed results – and in some cases, surprise numbers as a result of the deep economic collapse related to the COVID-19 virus event.  This research post should help to clear things up going forward for most traders/investors.

As technical traders, we attempt to digest these economic data factors into technical and price analysis while determining where and what ...



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Kimble Charting Solutions

Nasdaq 100 Relative Strength Testing 2000 Highs

Courtesy of Chris Kimble

The tech bubble didn’t end well. BUT it did tell us that the world was shifting into the technology age…

Since the Nasdaq 100 bottomed in 2002, the broader markets have turned over leadership to the technology sector.

This can be seen in today’s chart, highlighting the ratio of Nasdaq 100 to S&P 500 performance (on a “monthly” basis).

As you can see, the bars are in a rising bullish channel and have turned sharply higher since the 2018 stock market lows. This highlights the strength of the Nasdaq 100 and large-cap tech stocks.

...

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Lee's Free Thinking

These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

 

These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

Courtesy of  

The COVID 19 pandemic is, predictably, worsening again in much of the US. Only the Northeast, and to a lesser extent some Midwestern states, have been consistently improving. And that trend could also reverse as those states fully reopen.

The problem in the US seems to be widespread public resistance to recommended practices of social distancing and mask wearing. In countries where these practices have been practi...



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Digital Currencies

Blockchains can trace foods from farm to plate, but the industry is still behind the curve

 

Blockchains can trace foods from farm to plate, but the industry is still behind the curve

App-etising? LDprod

Courtesy of Michael Rogerson, University of Bath and Glenn Parry, University of Surrey

Food supply chains were vulnerable long before the coronavirus pandemic. Recent scandals have ranged from modern slavery ...



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Members' Corner

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

 

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

No matter the details of the plot, conspiracy theories follow common patterns of thought. Ranta Images/iStock/Getty Images Plus

Courtesy of John Cook, George Mason University; Sander van der Linden, University of Cambridge; Stephan Lewandowsky...



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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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Mike will show off the TradeExchange's new platform which you can try for free.  

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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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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