Sep 19

gold-bars-737

- The Dow And S&P 500 Soar To Irrational Heights While The Ultra-Wealthy Rush To Buy Gold Bars (Economic Collapse, Sep 18, 2014):

Did you know that the number of gold bars being purchased by ultra-wealthy individuals has increased by 243 percent so far this year?  If stocks are just going to keep soaring, why are they doing this?  On Thursday, the Dow Jones industrial average and the S&P 500 both closed at record highs once again.  It is a party that never seems to end, and there are a lot of really happy people on Wall Street these days.  But those that are discerning realize that we witnessed the exact same kind of bubble behavior during the dotcom boom and during the run up to the last financial crash in 2007.  The irrational exuberance that we are witnessing right now cannot go on forever.  And the bigger that this bubble gets, the more painful that it is going to be when it finally bursts.  Those that get out at the peaks of the market are the ones that usually end up making lots of money.  Those that ride stocks all the way up and all the way down are the ones that usually end up getting totally wiped out. Continue reading »

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Sep 19

- Household Net Worth Hits Record $81.5 Trillion In Q2 Driven By Stock Market Surge (ZeroHedge, Sep 18, 2014):

When earlier today, the Fed released its latest Z.1 (Flow of Funds report) for the second quarter, there were few surprises: thanks to the relentless liquidity injections by global central banks (charter here) resulting in record stock market levels, total household net worth rose once more, increasing by $1.4 billion in the quarter (up from a downward revised $1.2 billion in the previous quarter) to a record $81.5 billion. This was the result of a $95.4 trillion in total assets, offset by $13.9 trillion in liabilities, mostly mortgage debt of $9.4 trillion, as well as some $3.2 trillion in consumer credit.

Which means that yet another quarter has passed in which the bulk of “wealth creation” has benefited only the richest component of US society, something that even French economists have finally noticed. As for the non-rich… well, recall: “America’s Poor Have Never Been Deeper In Debt.”

How much longer can the stealthy wealth transfer of the Fed and its central bank peers, in which only the super rich benefit, continue? The answer is unknown, but if nobody has noticed yet, after some $26 trillion in net worth increases benefiting only the wealthiest Americans, then we doubt anyone will ever notice.

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Sep 18

- Abenomics Crushes Sony: Electronics Giant Forced To Cancel Dividend For First Time Ever (ZeroHedge, Sep 17, 2014):

It was over a year ago, when contrary to the propganda spewed on a daily basis by the Japanese government hell bent on destroying the domestic economy, now suffering its Keynesian death rattle, just to push stocks to highs which nobody except for a few thousand people will be able to monetize on, that the CEO of Sony explicitly warned that “the preconception is that a weaker Yen is good overall. Unfortunately for us, versus the USD, it goes the other way… we are actually at a disadvantage.” He wasn’t kidding and just under a year later, back in May, Sony shocked everyone when the electonics giant not only posted a massive net loss of $1.3 billion, far worse than previously expected, but also slashed its profit outlook by 70%.

Fast forward to today, when minutes ago the Yen hit another multi-year low against the dollar, which sure enough, is great for the nominal value of Japanese stocks, if horrible for the actual Japanese companies, the Japanese middle class, and pretty much everyone except for a few superrich people. Such as Sony. Because the (now former) electronic giant, which once upon a time was the target of an activist campaign by none other than Dan Loeb who mysteriouly saw value in the company, once again stunned everyone when it reported overnight that it expects its annual loss to swell to $2 billion, but, far worse, canceled the payment of its dividend for the first time ever after writing down the value of its troubled smartphone business.

 Needless to say, Sony’s stock which doubled in 2013 for the completely wrong reasons, is now crashing. Continue reading »

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Sep 18

FYI.


- Seth Klarman: “We Are Recreating The Markets Of 2007″ (ZeroHedge, Sep 17, 2014):

Exceprted from Seth Klarman’s Baupost letter to investors,

We don’t know now (nor do we ever know) what the overall market will do. As we’ve discussed in recent letters, there are reasons for investors to be frightened but also numerous individual opportunities worth seizing. Today’s limited opportunity set means that we are still holding sizable cash balances, about 35% of the portfolio at June 30. This dry powder will become more valuable if the markets become more turbulent.

Equity markets continue to hit successive record highs, volatility remains strikingly low in equity and most other markets, and inflation is ticking higher. Investors have clearly grown weary of worrying about risky scenarios that never seem to materialize or, when they do, don’t seem to matter to anyone else. U.S. GDP, for example, was recently restated to minus 2.9% for the first quarter of 2014. Normally, this magnitude drop signals recession. Equities, nevertheless, marched relentlessly higher. Continue reading »

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Sep 14

Art Cashin

- Art Cashin: “Things Could Theoretically Turn Into What I Call A Lehman Moment” (ZeroHedge, Sep 13, 2014):

Courtesy of Finanz und Wirtschaft, interview by Christoph Gisiger

Wall Street veteran Art Cashin does not fully trust the record levels at the stock market and draws worrisome parallels between the geopolitical tensions over Ukraine and the Cuban missile crisis.

From the assassination of President Kennedy via the stock market crash of 1987 and the Fall of the Berlin Wall through to the burst of the dotcom bubble, the terror attacks of 9/11 and the collapse of Lehman Brothers: Art Cashin has experienced all the major world events of the last half century at the floor of the New York Stock Exchange. Currently, the highly respected Wall Street veteran keeps a close eye on the geopolitical tensions in the Middle East and on the situation in Ukraine which reminds him of the Cuban missile crisis «The markets are edgy and nervous», says the Director of Floor Operations for UBS Financial Services while constantly checking the quotation board. Like many traders here, he is somewhat skeptical of the huge stock market rally that started in March 2009. «I think it is a question of the extraordinarily low interest rates», he explains. Continue reading »

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Sep 10

“Why This Stock Market Will Never Go Down” (ZeroHedge, Sep 9, 2014):

While the last thing we would like to do is bring even more attention to today’s grand slam in financial trollery, the following article by the ironically-named MarketWatch author Michael Sincere is just too funny to pass by.

MW permamently high plateu

Presenting: Why this stock market will never go down” which contains such stunning pearls of financial insight as the following: Continue reading »

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Sep 09

Dr. Paul Craig Roberts was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal. He has held numerous academic appointments, including the William E. Simon Chair, Center for Strategic and International Studies, Georgetown University, and Senior Research Fellow, Hoover Institution, Stanford University.

- No Economy For Americans (Paul Craig Roberts, Sep 8, 2014):

Quarterly Request for Donations

As many of you know, a couple of years ago when I tried to retire you wouldn’t hear of it.
I resigned my syndicated column and said goodbye. In thousands of emails you described to me your reliance on my experience and education to help you to understand in a non-partisan way the events of our time. You made a convincing case. I came out of retirement, opened this website, and you have faithfully supported it.

This is your website. It will continue as long as you support it.

No Economy For Americans

Paul Craig Roberts

The Dow Jones stock average closed Friday at 17,137, despite the fact that the payroll jobs report was a measly 125,000 new jobs for August, an insufficient amount to keep up with the growth in the working age population.

The low 125,000 jobs figure is also inconsistent with the Bureau of Economic Analysis’ second estimate of second quarter 2014 US GDP growth of 4.2 percent–a figure beyond the capability of the present-day US economy.

Clearly, the economic numbers are out of sync with one another. They are also out of sync with reality. Continue reading »

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Sep 06

- Stocks Close At Record High On Worst Jobs Nuimber Of 2014 (ZeroHedge, Sep 5, 2014):

Worst jobs data of the year? BTFATH. For the 9th day in a row, S&P 2,000 was all that mattered. Thanks to the standard Friday v-shaped recovery, the Dow scrambled back to green on the week and S&P 500 hit its Maginot ‘retirement on’ line – all on the back of USDJPY 105.00 pinning. Trannies and S&P hit new record highs and S&P had its best day in 2 weeks (led by exuberant growthy Staples & Utilities this week). Russell ended the week red as the late-day buying-panic sent Nasdaq just green with Dow and S&P. But, away from stocks, US Treasuries had their worst week in a year with 30Y +16bps (but 2Y only +2bps). The US dollar rose to new 14-month highs with its biggest week in 10 months. Despite the USD strength, Copper manage to close marginally higher even as PMs dropped 1.6% and oil plunged almost 3% (WTI under $93) in a very volatile week. High-yield credit markets closed with their worst week in the last 5. Bad news is great news still – just six years into the ‘recovery’.

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Sep 05

Stock-Market-Crash

- Most People Don’t Believe It, But We Are Right On Schedule For The Next Financial Crash (Economic Collapse, Sep 4, 2014):

People have such short memories.  Even though we are repeating so many of the same patterns that we witnessed in 2000-2001 and 2007-2008, most people do not think that another financial crash is coming.  In fact, with the stock market setting record high after record high lately, I have been taking quite a bit of criticism for my relentless warnings about the coming financial storm.  Many of the comments go something like this: “Snyder you are a moron!  Nothing you say ever comes true.  The stock market is going to keep on rocking and Obama is going to lead this country back to greatness.  I hope that you choke on all of your doom and gloom.”  Of course these critics never offer any hard evidence that I have been wrong about anything.  They just assume that since the stock market has soared to unprecedented heights that all of us “bears” must have been wrong. Continue reading »

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Sep 05

- Icahn, Soros, Druckenmiller, And Now Zell: The Billionaires Are All Quietly Preparing For The Plunge (ZeroHedge, Sep 3, 2014):

“The stock market is at an all-time, but economic activity is not at an all-time,” explains billionaire investor Sam Zell to CNBC this morning, adding that, “every company that’s missed has missed on the revenue side, which is a reflection that there’s a demand issue; and when you got a demand issue it’s hard to imagine the stock market at an all-time high.” Zell said he is being very cautious adding to stocks and cutting some positions because “I don’t remember any time in my career where there have been as many wildcards floating out there that have the potential to be very significant and alter people’s thinking.” Zell also discussed his view on Obama’s Fed encouraging disparity and on tax inversions, but concludes, rather ominously, “this is the first time I ever remember where having cash isn’t such a terrible thing.” Zell’s calls should not be shocking following George Soros. Stan Druckenmiller, and Carl Icahn’s warnings that there is trouble ahead.

Billionaire 1: Sam Zell Continue reading »

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Sep 05

- Obviously Not A Bubble (ZeroHedge, Sep 4, 2014):

Just two charts…

Via John Hussman… no bubble, no consequences…

20140903_bubble1

and Via NewEdge’s Brad Wishak… realized volatility has only been lower once since 2006… Continue reading »

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Sep 03

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Aug 31

- It’s Settled: Central Banks Trade S&P500 Futures (ZeroHedge, Aug 30, 2014):

Based on the unprecedented collapse in trading volumes of cash products over the past 6 years, one thing has become clear: retail, and increasingly, institutional investors and traders are gone, probably for ever and certainly until the Fed’s market-distorting central planning ends. However, one entity appears to have taken the place of conventional equity traders: central banks.

Courtesy of an observation by Nanex’s Eric Hunsader, we now know, with certainty and beyond merely speculation by tinfoil fringe blogs, that central banks around the world trade (and by “trade” we mean buy) S&P 500 futures such as the E-mini, in both futures and option form, as well as full size, and micro versions, in addition to the well-known central bank trading in Interest Rates, TSY and FX products. Continue reading »

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Aug 28

jim_cramer

- Sometimes 0% Is Better Than -82% (ZeroHedge, Aug 27, 2014):

The Best Investment Article Ever Written:

The Winners of the World

February 29, 2000…

You want winners? You want me to put my Cramer Berkowitz hedge fund hat on and just discuss what my fund is buying today to try to make money tomorrow and the next day and the next? You want my top 10 stocks for who is going to make it in the New World? You know what? I am going to give them to you. Right here. Right now.

OK. Here goes. Write them down — no handouts here!: 724 Solutions (SVNX), Ariba (ARBA), Digital Island (ISLD), Exodus (EXDS), InfoSpace.com (INSP), Inktomi (INKT), Mercury Interactive (MERQ), Sonera (SNRA), VeriSign (VRSN) and Veritas Software (VRTS).

We are buying some of every one of these this morning as I give this speech.

And then this…

Jim Cramer - winner

*  *  *

Sometimes – it would appear – 0% is better than -82%

*  *  *

JimCramer

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Aug 23

Alternative upload:

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Aug 22

You know it’s bad when …


- Former Mafia Boss Who Did a Lot of Business with Wall Street: Buy Physical Gold and Silver, Because Wall Street Steals Your Money (Washington’s Blog, Aug 21, 2014):

Crime Boss: Wall Street Has No Ethics

The Colombo crime family’s former boss – Michael Franzese – says even he doesn’t trust Wall Street.

Franzese – played by Joseph Bono in the 1990 Martin Scorsese movie “GoodFellas” – spent 10 years in prison after he was convicted on federal racketeering charges.

When he was 35, Franzese ranked No. 8 on Fortune Magazine’s list of the 50 most wealthy and powerful mafia bosses (44 of those on the list are now dead, and three are doing life in prison without parole). He reportedly raked in up to $8 million a week.  Franzese is the only surviving high-ranking member of a major crime family to publicly walk away and refuse protective custody. Continue reading »

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Aug 16

Related info:

- Making $400,000 PER HOUR, The Best Paid Hedge Fund Manager In 2013 Was …


David-Tepper

- David Tepper Unwinds S&P, Nasdaq Calls; Liquidates QCOM, JPM; Adds To AAL, GM: Full 13F (ZeroHedge, Aug 14, 2014):

For everyone curious how the market’s favorite “balls to the wall” barometer did in the second quarter (which ended 45 days ago), here is the full breakdown.

First the notable liquidations: in the three months ended June 30, Tepper closed his SPY and QQQ Call positions, which had a total notional equivalent of over $1.5 billion, as well as liquidating his stakes in QCOM, JPM, Metlife, Trinity, Delphi, Hess, Valmont, Ingersoll-Rand, Omincom and Beazer.

Tepper entered new positions in Mohawk, Weatherford and Ryland Group. Continue reading »

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Aug 15

bubble burst_0

- 14 Reasons Why The U.S. Economy’s Bubble Of False Prosperity May Be About To Burst (Economic Collapse, Aug 14, 2014):

Did you know that a major event just happened in the financial markets that we have not seen since the financial crisis of 2008?  If you rely on the mainstream media for your news, you probably didn’t even hear about it.  Just prior to the last stock market crash, a massive amount of money was pulled out of junk bonds.  Now it is happening again.  In fact, as you will read about below, the market for high yield bonds just experienced “a 6-sigma event”.  But this is not the only indication that the U.S. economy could be on the verge of very hard times.  Retail sales are extremely disappointing, mortgage applications are at a 14 year low and growing geopolitical storms around the world have investors spooked.  For a long time now, we have been enjoying a period of relative economic stability even though our underlying economic fundamentals continue to get even worse.  Unfortunately, there are now a bunch of signs that this period of relative stability is about to end.

The following are 14 reasons why the U.S. economy’s bubble of false prosperity may be about to burst: Continue reading »

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Aug 13

- Bubble Market Stunner: Revenueless Biotech Goes Public, Drops, Trades For Six Days, Then Voids Entire IPO (ZeroHedge, Aug 12, 2014):

In what is certainly a historic, and quite stunning, market first, not to mention prima facie evidence that Janet Yellen was right about the biotech (and not only) bubble, last week the equity markets experienced something that has not happened in decades: a biotech firm went public, traded for six days, only to announce Friday that it would void its IPO and won’t issue shares after all, thanks to a key investor’s failure to follow through on a commitment to buy stock. In other words, days after going public, yet another darling of the momo bubble mania du jour, decided to undo everything, and went back to being private (and soon: bankrupt).

Huh?

You read that right: a precommitted, fully underwritten offering, in which the underwriter took the risk, if only on paper, to absorb all the shares sold to the public even if “key investors” mysteriously fail to show up, decided to pull the switch on the party a week after said buyer decided to not make an appearance after all, perhaps because after IPOing at $12, the stock promptly tumbled and never regained its going public level. As the WSJ summarizes,  “all the investors who thought they had bought or sold shares in Vascular Biogenics Ltd. since it began trading hadn’t.Continue reading »

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Aug 07

- Must Read: Fear And Loathing On The Marketing Trail  (ZeroHedge, Aug 5, 2014)

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Jul 31

Related info:

- Clintonians Join Vulture Flock Over Argentina

- Argentina: 1 Week Left Until ‘D’efault-Day (ZeroHedge, July 22, 2014)


- Argentina Defaults (ZeroHedge, July 30, 2014):

It’s all over but the crying: having explained Argentina’s position (i.e. not giving to so-called vulture funds), Economy Minister Kicilloff explains:

  • *KICILLOF SAYS HEDGE FUNDS NOT WILLING TO GIVE DELAY ON RULING
  • *KICILLOF SAYS HARD TO BELIEVE ARGENTINA IN DEFAULT IF HAS FUNDS
  • *KICILLOF SAYS ARGENTINA CAN’T COMPLY WITH COURT RULING
  • *HOLDOUTS DIDN’T ACCEPT ARGENTINE OFFER: KICILLOF

As Bloomberg notes, by defaulting today, Argentina may trigger bondholder claims of as much as $29 billion — equal to all its foreign-currency reserves. Just remember that the last 2 days have seen ‘smart money’ buy Argentine bonds and stocks to all-time record highs. Continue reading »

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Jul 30

- Moscow Stock Exchange Breaks – Trading Halted (ZeroHedge, July 30, 2014):

No reasons given but Moscow Stock Exchange has just suspended trading with no reasons specified…

20140730_micex

One can’t help but wonder if this is another ‘sanction’ that was not officially described by President Obama and Jack Lew…

20140730_MICEX1

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Jul 30

- Ron Paul: Stocks are in a bubble and will crash (CNBC, July 29, 2014):

Ron Paul, the former U.S. representative from Texas and perhaps America’s most popular libertarian voice, has long said that the nation’s monetary and fiscal policies would result in massive inflation. According to the common measures of inflation, this has not yet occurred. But Paul maintains that the inflation he has warned of has indeed come to fruition in asset prices, and that once it unravels, a market crash will ensue. Continue reading »

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Jul 30

Banco Espirito Santo Plunges: Shareholder Meeting Cancelled Due To “Unexpected Facts” (ZeroHedge, July 29, 2014):

With all other operating holdcos having already declared bankruptcy, the anxiety over Banco Espirito Santo is growing (despite DE Shaw and Goldman Sachs recommending investors buy the shares). Despite Bank of Portugal reassurance last night that “BES is able to raise capital), the stock is plunging on news of “unexpected facts” this morning…

  • *BANCO ESPIRITO SANTO SAYS SHAREHOLDER MEETING WAS CANCELLED DUE TO “UNEXPECTED FACTS”
  • *BANCO ESPIRITO SANTO FALLS MORE THAN 13% IN LISBON TRADING

Remember, this is systemic (as the Portugues President has warned), and the contagion is potentially global… not “contained.” Continue reading »

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Jul 29

marc-faber

- Marc Faber Responds To CNBC Mockery, Asks “How Has CNBC’s Portfolio Done Since 1999?” (ZeroHedge, July 28, 2014):

Having provided his clarifying perspective on why the markets are extremely fragile and due for a 20-30% correction, Marc Faber was assaulted by CNBC’s Scott Wapner reading off a litany of recent calls that have not worked out as planned. His response was notable: “I started to work in 1970, and over that career, somehow, somewhere, I must have made some right calls; otherwise I wouldn’t be in business.” What CNBC then edited out of the transcript was Faber pointing out his 22% annualized return in his publicly-viewable funds since then and asking – sounding somewhat frustrated at the anchor’s mockery (and background snickers) – “I wonder what the CNBC portfolio would look like since 1999?”The response: silence. Continue reading »

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Jul 29

- Here’s What Wall Street Bulls Were Saying In December 2007: Read And Take Cover! (David Stockman’s Contra Corner, July 28, 2014):

The attached Barron’s article appeared in December 2007 as an outlook for the year ahead, and Wall Street strategists were waxing bullish. Notwithstanding the advanced state of disarray in the housing and mortgage markets, soaring global oil prices and a domestic economic expansion cycle that was faltering and getting long in the tooth, Wall Street strategists were still hitting the “buy” key. In fact, the Great Recession had already started but they didn’t have a clue:

Against this troubling backdrop, it’s no wonder investors are worried that the bull market might end in 2008. But Wall Street’s top equity strategists are quick to dismiss such fears.

Indeed, with the S&P 500 at an all-time high of 1460, the dozen top Wall Street prognosticators surveyed by Barron’s anticipated still more index gains during 2008: Continue reading »

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Jul 23

- The Rot Within, Part I: Our Ponzi Economy (OfTwoMinds, July 21, 2014):

Depending on blowing the next bubble to temporarily prop up the economy is the height of foolhardy shortsightedness. Yet that’s our Status Quo, increasingly dependent on inflating bubbles to evince “economic strength” when the Ponzi paint will soon peel off the rotten wood of the real economy.

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Jul 21

- The Insiders’ Case for a Stock Market Mini-Crash  (Of Two Minds, July 21, 2014):

The trade only works if everyone is lulled into staying on the long side until it’s too late.

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Jul 18

- The Marginal “Benefit” Of A Terminated Microsoft Employee: $1.5 Million (ZeroHedge, July 17, 2014):

Since the advance reports of layoffs at Microsoft started circulating this Sunday, the giant tech company has surged over 8%. This has raised the market cap of the behemoth by almost $28 Billion. Today we get the ‘news’ that Microsoft was laying off a record 18,000 employees (more than tripled the 2009 dump of 5,900 employees).That means – for all activist investors out there looking to raise MSFT share price – a $1.5 million market cap boost for each scalp, which, in other words, is the marginal “value added” of every currently employed Microsoft worker.

20140717_MSFT

 

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Jul 16

- The Final Warning: Individual Investors Piling Into Stocks, Market Leverage Hits All Time Highs (SHFT, July 14, 2014):

The story goes that in the Winter of 1928 Joe Kennedy, father of President John F. Kennedy, went to have his shoes shined. When the shoe shine boy finished he offered Kennedy a tip. “Buy Hindeburg,” he said.

Kennedy promptly sold off all of his stock holdings. Within a year the United States saw a massive stock market crash that wiped out the life savings of millions of Americans and ushered in a decade’s long Great Depression.

When asked why he sold all his stocks Kennedy replied, “You know it’s time to sell when shoeshine boys give you stock tips. This bull market is over.”

Throughout history there have always been critical warning signs in the midst of financial exuberance that signaled the bursting of the bubble.

According to a report from Bloomberg the warning siren may have just gone off again. Continue reading »

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