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Author: Subject: Exploitation of the global economy, the coming collapse
DerAlte
International Hazard

Posts: 779
Registered: 14-5-2007
Location: Erehwon
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Mood: Disgusted

To-morrow, and to-morrow, and to-morrow, creeps in this petty pace from day to day… It is a tale told by an idiot, full of sound and fury, signifying nothing. (Courtesy of Bill Shakespeare, Macbeth).

Such is the white noise out of Europe and the political rhetoric in the US.

Signs We Are Approaching a Zombie Economy
http://www.cnbc.com/id/48096924
Running Out of Options, Euro Zone May Face a Stark Choice
http://www.cnbc.com/id/48094098

Politically, a zombie economy must be the result of zombie policies. Since the buck stops here, the man responsible is, of course the Chief Zombie. The solution to a zombie in a position of power, as seen by logicians and men of business, and all of at least modest IQ, is to remove said Zombie from power before further damage ensues.
A change of state is better than endless entropy increase.

QE3? A further twist of the dish-rag makes a hell of a lot of sense when the damn thing is almost dry and the last drips made no perceptible difference. If current interest rates are so low that cash=trash, and yet no one wants or is able to borrow nor wants to invest, what the hell would be the point of QE3?

QE1 alone was little better than the flushing of the financial toilet, requiring the reprinting of that financial tissue known as the dollar. Business in general (large and small) is afraid to hire because of the costs, still properly unknown, of that 1000 page bill called Obamacare. How is it that the Founding Fathers managed with only a few sheets in writing a blueprint for a new order of society?

Add that to financial uncertainty and bingo! economic zombies walk.

Ranting as usual, Der Alte
franklyn
International Hazard

Posts: 3027
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I really should heed the advice of Bernard Baruch who said
" I made my money by selling too soon "
" No one ever lost money taking profit ".

Those who heeded my May 14 advisory to possibly sell half your position ,
will have done about as well , as if you closed out now. Later on you will
have made around 5 - 6 times your bet , or more , as you made further
gains on the subsequent rise.
If you're a wild and crazy guy like me that goes for high stakes gambling ,
making even 10 times your money isn't persuasive enough to have sold
your calls at the end of May start of June.
Unfortunately that is unlikely to be realized again before expiration of July 21 Calls.
Volatility which was then over 23 is down now to over 15 . Predominant price
moves will depend on the TLT price itself , which given the grim outlook of the
European soap opera , will likely go back up this coming week out of it's trading
range between 125 -127 where it is as of the close Friday. A doubling of the
call price to over $3 , is not too shabby , take it , or else you will end up with only a story of the one that got away. July 21 Call option price over the previous month top graph [file]19437[/file] TLT fund price over the previous month bottom graph ____________________________________________ The grim outlook of the European soap opera http://seekingalpha.com/article/706191-u-s-stock-market-comp... " it is now clear to everybody except the willfully ignorant , that Spain cannot and will not meet those commitments." http://www.guardian.co.uk/business/2012/jul/06/turmoil-spain... Agenda for this week _ • 9-10 July: Eurogroup/ECOFIN ( Council of Finance Ministers of the European Union ) meeting. • 10 July: Greece auction. Bills. • 12 July: Italy auction. Bills. • 13 July: Italy auction. Bonds. Dates from calender here _ http://www.zerohedge.com/news/complete-european-sovereign-ev... Detailed summary http://seekingalpha.com/article/706841-coming-week-20-must-w... ____________________________________________ It's not just small banks going bust any longer , and yet of all the players , the U.S. remains the least AIDS afflicted crack house brothel in the developed world. http://www.independent.co.uk/news/world/americas/broken-amer... . DerAlte International Hazard Posts: 779 Registered: 14-5-2007 Location: Erehwon Member Is Offline Mood: Disgusted Worth a quick read: Earnings season won't pause Wall Street's wild ride By Rodrigo Campos, Reuters http://marketday.msnbc.msn.com/_news/2012/07/08/12626341-ear... Der Alte franklyn International Hazard Posts: 3027 Registered: 30-5-2006 Location: Da Big Apple Member Is Offline Mood: No Mood It's almost inevitable now http://www.reuters.com/article/2012/07/09/us-eurozone-bankin... http://finance.fortune.cnn.com/2012/07/09/europe-bank-run-av... More shit coming down the pike http://seekingalpha.com/article/709341-german-constitutional... Bad for some good for others http://www.bloomberg.com/news/2012-07-09/dealers-decline-ber... . AndersHoveland Hazard to Other Members, due to repeated speculation and posting of untested highly dangerous procedures! Posts: 1986 Registered: 2-3-2011 Member Is Offline Mood: No Mood I think "quantitative easing" was absolutely terrible. The central bank is just buying up more assets, printing money to do it. This is going to make it more difficult for people to buy a house and pay off their mortgage, since the central bank is holding so much of the equity. It is also likely to cause inflation— especially dangerous since this inflationary effect is being temporarily masked by dollars/euros being seen as a "safe haven" from outside risk. The quantitative easing we are saying is also likely to be used as an excuse for monetizing government debt— or in other words printing more worthless money to pay for things the government cannot afford now. AndersHoveland Hazard to Other Members, due to repeated speculation and posting of untested highly dangerous procedures! Posts: 1986 Registered: 2-3-2011 Member Is Offline Mood: No Mood  Quote: Originally posted by DerAlte Read this next one carefully. Consider the probable difference between the draftee troops of WWII and the volunteer troops of today in regard to The GI Bill. It would be interesting to have drop-out statistics in both cases. A mind conditioned by the military is not ideal for the pursuit of academic studies. Without some sort of filter, the entrance requirements for a real university (not like those quoted in the article) are very different. Thousands of veterans failing in latest battlefield: college http://usnews.msnbc.msn.com/_news/2012/07/02/12509343-thousa... One of reasons no one seems to like to talk about is that these days the American military forces are taking in the riff raff. Military salaries are simply not high enough to attract the bright and competent. The American military was even taking in undocumented (illegal) immigrants, and offering them citizenship for serving for a period of time. http://www.nytimes.com/2009/02/15/us/15immig.html?pagewanted... The plain truth is that not everyone was meant to go to university, and certainly not three quarters of the population. Expecting everyone to get a university degree just shows how out of touch with reality the government policymakers are. We can already see how this sort of thing worked out in South Korea: http://www.ft.com/intl/cms/s/0/b5bb3868-3b36-11df-a1e7-00144... I certainly believe we need more apprenticeships and internships for our young people, to help transition them into the world of work. But more education, at least of the type currently being taught in universities, is NOT the answer. Our children should be taught useful things, not have to gain ever increasing "qualifications" to compete with everyone else for limited job opportunities. All too often, government policy makers make the mistake of assuming that there will be enough good-paying jobs to go around, if only everyone was educated. To a large extent, the more everyone is educated, the higher the necessary educational qualifications will be raised by employers. I do not see why the state should be paying so much to fund what is essentially a screening process for future employees. franklyn International Hazard Posts: 3027 Registered: 30-5-2006 Location: Da Big Apple Member Is Offline Mood: No Mood Reality of finance based economy http://www.zerohedge.com/news/guest-post-global-economy-its-... . dann2 International Hazard Posts: 1523 Registered: 31-1-2007 Member Is Offline Mood: No Mood I believe the current situation can be described a debt ponzi scheme. Keep piling on more and more debt on top of the debt that is already there (by selling debt and selling on the already sold debt via securitization of debt (you CAN turn shit into gold(seemingly))). When WILL the system detonate? One year, ten? anotheronebitesthedust Hazard to Others Posts: 189 Registered: 24-6-2007 Member Is Offline Mood: No Mood  Quote: Originally posted by dann2 I believe the current situation can be described a debt ponzi scheme. Keep piling on more and more debt on top of the debt that is already there (by selling debt and selling on the already sold debt via securitization of debt I know right! If they can simply delete bad debt off the books, isn't that pretty much communism? <iframe sandbox width="420" height="315" src="http://www.youtube.com/embed/y7ywpfOOn7k" frameborder="0" allowfullscreen></iframe> dann2 International Hazard Posts: 1523 Registered: 31-1-2007 Member Is Offline Mood: No Mood What bad debt? There is no bad debt, only good debt. If anyone in here mentions bad debt again they will be 'spoken to' by some gallant comrades........ It actually far worse that simply writing bad debt (oops) off the books. The bad debt is transformed (by some pen strokes and 'intelligent' formula) into a valuable asset thats worth ten (perhaps hundreds) times it's weight in Gold. This valualbe asset is then passed on and on. The shit is not being flushed down the drain (and the loss taken on the nose and worked around as best as possible). The shit is being declared more valuable than gold and being leveraged up (and up and up and up). Try and make sure you are opposite a chair when the music stops. (Musical chairs, a trivial party game). Sorry about the crude language. 497 International Hazard Posts: 778 Registered: 6-10-2007 Member Is Offline Mood: HSbF6 Less than 100 more posts to go and this will be the most replied thread on the forum! Keep it up guys! Go Ron Paul! www dot zerohedge dot com/contributed/2012-18-05/ron-paul-going-republican-national-convention-and-%E2%80%93-believe-it-or-not-%E2%80%93-it%E2%80%99s- blog dot alexanderhiggins dot com/2012/05/10/politico-rubs-fake-delegate-counts-face-132101/ Most interesting reading: blog dot alexanderhiggins dot com/2012/03/22/fbi-homeland-security-caught-spying-visitors-prepper-sites-102321/ blog dot alexanderhiggins dot com/2012/05/02/mk-ultra-2012-cops-caught-feeding-teens-drugs-dropping-occupy-minnesota-129221/ news dot cnet dot com/8301-1035_3-57468316-94/cell-carriers-see-dramatic-increase-in-surveillance-requests/ www dot technolog.msnbc.msn.com/technology/technolog/what-know-july-9-internet-doomsday-arrives-869336 To be more fully prepared for likely future strife, it would seem wise to consider the best ways to weather the war/martial law type scenarios that appear to be popular desperate measures used to prop up a declining civilization. I think the "zombie apocalypse" every man for himself type of collapse seems very overemphasized. World war scenarios may be even more disturbing, thus less discussed? Does anyone have any ideas about how to prepare for it? www dot thetotalcollapse dot com/china-joins-russia-orders-military-to-prepare-for-world-war-iii/ blog dot alexanderhiggins dot com/2012/03/10/chinese-hackers-infiltrate-23-spacecraft-nasa-jet-propulsion-labs-93502/ blog dot alexanderhiggins dot com/2011/09/19/life-emp-attack-power-food-transportation-banking-internet-69021/ blog dot alexanderhiggins dot com/2011/06/13/highlevel-american-officials-admit-united-states-false-flag-terror-warn-future-attacks-26711/ www dot redstate dot com/gaspeegazette/2012/05/09/leaked-army-re-education-camp-manual-verified-as-authentic-by-nc-blogger/ A word to the wise: NEUROFEEDBACK http://citizenworks.org/corp/dg/s2r1.pdf http://www.newscientist.com/mobile/article/mg21228354.500-re... http://www.shadowstats.com/article/no-414-hyperinflation-spe... "To expose a 15 Trillion dollar ripoff of the American people by the stockholders of the 1000 largest corporations over the last 100 years will be a tall order of business." Buckminster Fuller "No problem can be solved from the same level of consciousness that created it." Albert Einstein franklyn International Hazard Posts: 3027 Registered: 30-5-2006 Location: Da Big Apple Member Is Offline Mood: No Mood Get ready to rumble http://www.zerohedge.com/news/full-frontal-ecbs-zirp-record-... Check the 30 year Bond after 1:00 p.m. http://www.bloomberg.com/quote/USGG30YR:IND This was hovering at 48 yesterday , it's been down to 31 today. http://money.cnn.com/data/fear-and-greed __________________________________ I sold out of TLT July Calls @$ 2.70 this afternoon for just over 5 times return
on my money. No sense going for broke , A G A I N.
I made back everything I lost last year. I expect I'll do better with August TLT Calls ,
we'll see.

" When I have to depend on hope in a trade , I get out."
- Jesse Livermore

__________________________________

Money flows to where it is regulated the least - isn't that the truth.
Of the most prosperous countries in per capita income , 7 of these
are arabic states , the other 3 are carribean enclaves.
http://www.cnbc.com/id/48054006
click arrow at top - 10 in sequence

__________________________________

Further worries

http://www.telegraph.co.uk/finance/financialcrisis/9396843/M...

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/...

Why ECB's LTRO has had only transient effect
http://soberlook.com/2012/07/decline-in-spanish-banks-contri...
because of capital flight it's like trying to fill a bucket with a hole in it.

The most remarkable observation I 've yet seen.
What really drives the market - proof that it is central bank actions.
http://www.fool.com/investing/general/2012/07/13/whos-really...
" Since 1994,stock returns are essentially flat if the three-day windows around
scheduled Federal Open Market Committee ( FOMC ) announcement days are
excluded."

http://www.zerohedge.com/news/chart-year-fed-has-doubled-sp-...

.

[Edited on 13-7-2012 by franklyn]
franklyn
International Hazard

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www.guardian.co.uk/commentisfree/2012/jul/16/euro-endgame-be...

Never mind that we have our own problems.
http://bloom.bg/PYSDVX

This morning the TLT is over the previous all time high of 130.38 .
30 year Treasury bonds are 2.53 , just above the all time low yield of 2.52
Of course Calls are trading higher , I just hate it when I get snookered.

____________________________________________________

The S & P 500 had been meandering across the 50 day moving average for a
while now driving the 50 day average down. Meanwhile the 200 day moving
average bouyed by the past trend is still moving up. The dreaded Death cross
when the 50 day average dips below the 200 day average is surely soon at
hand. This event is taken by many as an indicator of the future trend and will
likely precipitate a downward move that can become a self reinforcing down
trend leading to a panic selloff.

http://seekingalpha.com/article/722361-3-reasons-why-the-mar...

www.forexpros.com/analysis/why-friday’s-'rally'-will-reverse-soon-128172

If the stock market is such a hot buy why are these guys sitting it out ?
http://www.reuters.com/video/2012/06/29/reuters-tv-david-cay...

.
497
International Hazard

Posts: 778
Registered: 6-10-2007
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Mood: HSbF6

http://www.counterpunch.org/2012/07/16/the-real-libor-scanda...

This is easy enough to understand even for me... Can anyone with more experience in the markets comment on its accuracy?

http://www.counterpunch.org/2011/12/30/the-sunni-shia-wars/

This seems to be coming true as they predicted... Maybe stock up on petroleum products while the price is low? Seems inevitable middle east violence will mean inevitable large jumps in oil price.

A word to the wise: NEUROFEEDBACK

http://citizenworks.org/corp/dg/s2r1.pdf
http://www.newscientist.com/mobile/article/mg21228354.500-re...

"To expose a 15 Trillion dollar ripoff of the American people by the stockholders of the 1000 largest corporations over the last 100 years will be a tall order of business."
Buckminster Fuller

"No problem can be solved from the same level of consciousness that created it."
Albert Einstein
DerAlte
International Hazard

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Mood: Disgusted

At last an article that talks sense about “safe havens”. I pointed out the obvious fact that a large elephant cannot hide in a small cave some time above in this thread. Prices in Switzerland are ridiculous these days and its economy being destroyed by outside money, and the same contagion threatens other small currencies outside the Eurozone, but in Europe, of countries with small populations and hence low GDP.
http://www.cnbc.com/id/48221654

And, on the same theme,
Can Hedge Funds Survive After Such Dismal Returns?
Hedge Funds Future: Time to 'Separate Men From Boys'
http://www.cnbc.com/id/48175819

If you are within the 5%, take note of this ominous wind from Europe. Be careful who you elect this year!
Forcing the Rich to Bail Out Europe
http://www.cnbc.com/id/48224435
Der Alte
franklyn
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This isn't a joke thread but this properly belongs here _

Recently two noted Spanish economists were interviewed. One was always an
optimist and one was always a pessimist. The optimist droned on and on about
how bad things were in Spain, the dire situation with the regional debt, the huge
problems overtaking the Spanish banks and the imminent collapse of the Spanish
economy. In the end he said that the situation was so bad that the Spanish people
were going to have to eat manure. The pessimist was shocked by the comments
of his colleague who had never heard him speak in such a manner. When it was
the pessimist’s turn to speak he said that he agreed with the optimist with one
exception; the manure would soon run out.

I don't know about that , the spanish have an unlimited capacity for producing
new bullshit.
* Note Spanish 10 Year bonds just today are back at the 7 % pre-Summit
level when everything was supposedly fixed.

.
franklyn
International Hazard

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What did I just say

http://video.cnbc.com/gallery/?video=3000104335&play=1

Spanish 30 year bond yield is up to 7.35 % , their 10 year bond rose to 7.27 %
mere points from the record high of 7.285 just weeks ago.

From here _
http://www.investopedia.com/articles/basics/06/invertedyield...
" Historically, an inverted yield curve has been viewed as an indicator of a
pending economic recession. When short-term interest rates exceed long-term
rates, market sentiment suggests that the long-term outlook is poor and that
the yields offered by long-term fixed income will continue to fall."

The problem here is that long term rates will continue rising
driving short term rates to the sky , just as with Greece

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/...

A minor point : How big was the Irish real estate bubble ?
15 % of existing Irish homes lie vacant. Many in construction
are now bulldozed because it is cheaper than finishing them.

.

[Edited on 21-7-2012 by franklyn]
DerAlte
International Hazard

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@Anders Hoveland;
I have been away from the internet since your post, due to cataract surgeries and chasing down a bug in my computer system. Almost a vacation in some ways!

You wrote on 9/7/2012:
 Quote: The plain truth is that not everyone was meant to go to university, and certainly not three quarters of the population...

 Quote: I certainly believe we need more apprenticeships and internships for our young people, to help transition them into the world of work. But more education, at least of the type currently being taught in universities, is NOT the answer. Our children should be taught useful things, not have to gain ever increasing "qualifications" to compete with everyone else for limited job opportunities… …. To a large extent, the more everyone is educated, the higher the necessary educational qualifications will be raised by employers...

It is happening already. Minimum qualification is shifting to an MS rather than the old BS.
Have a look at:

Here are a few excerpts:
‘Russell Group':... This is a group of twenty universities with the best research reputation in the country and who receive a large proportion of the government's research funding. The Russell Group is made up of: Birmingham, Bristol, Cambridge, Cardiff, Edinburgh, Glasgow, Imperial College, London, King's College London, University College, London, Leeds, Liverpool, LSE, Manchester, Newcastle, Nottingham, Queen's University, Belfast, Oxford, Sheffield, Southampton and Warwick. Getting a job or becoming a student at one of these institutions is very competitive indeed…
The term ‘golden triangle' refers to the Universities of Oxford, Cambridge and those in London. These institutions are also strongly research-focussed.

Many people argue that, as a rule, the older the university, the better its standards. They believe this is especially true for the post-1992 universities which often require considerably lower grades for its students.

And see:
UK Telegraph: More students forced to sit university admissions tests
http://www.telegraph.co.uk/education/educationnews/9396122/M...

The fact is quite simple: the term ‘University’ has been redefined for the purposes of Political Correctness. The term, as understood in my day, no longer applies. It is applied today to any ‘higher’ educational establishment, regardless of merit. Many of these probably teach at a level (or below) of the old ‘S’ level (3rd year sixth) of the UK, if any remember that.
This has long been true in the US, where ‘universities’ have always abounded. Nowadays you can see what I call ‘storefront’ establishments which offer ‘degrees’ in a strictly for-profit business. It is becoming the norm for the UK too, after the 1992 act or whatever it was.

The following analysis is not for those that follow the PC philosophy. They will probably be offended. In it I use the concept of IQ, which is by no means a measure of talent, but, applied to a coherent ethnic group is some measure of logical and critical ability, which used to be what a University education was for. But academic performance is not everything by any measure.

First, take the case of the UK in the late 1950s (my college era). IIRC, about 5% of school leavers went on to a university. Assuming IQ is normally distributed about 100 with standard deviation 15 (a common estimate from the distribution) , and that those with the higher scores would tend to be motivated to continue their education, we would find that 5% should have an IQ >= 126. It was common assumed among students of the era that the minimum IQ for college was 120, which accords, allowing for the fact that hard work can often make up for brilliance. Of those that started with me, about 85% got a BS finally.

Now take the present US case where 25% are taking, or have taken, ‘college’ courses. On the same basis, this would put the computed lower limit at IQ>=110, with 100 for the well motivated hard worker. But only about 9% graduate with a first degree or higher.

Now take the ‘Korean’ case. The lower limit computes at IQ>= 90 (and I suspect no amount of hard work would allow anyone with IQ ~80-85 to follow the course material!)

The following quote is from Wiki on IQ (qv)

Real-life accomplishments
Average adult combined IQs associated with real-life accomplishments by various tests:[88][89]
MDs, JDs, or PhDs 125+ (WAIS-R, 1987)
College graduates 112 (KAIT, 2000; K-BIT, 1992), 115 (WAIS-R)
1–3 years of college 104 (KAIT, K-BIT), 105-110 (WAIS-R)
Clerical and sales workers 100-105
High school graduates, skilled workers (e.g., electricians, cabinetmakers) 100 (KAIT, WAIS-R), 97 (K-BIT)
1–3 years of high school (completed 9–11 years of school) 94 (KAIT), 90 (K-BIT), 95 (WAIS-R)
Semi-skilled workers (e.g., truck drivers, factory workers) 90-95
Elementary school dropouts (completed 0–7 years of school) 80-85
Have 50/50 chance of reaching high school 75

Average IQ of various occupational groups:
Professional and technical 112
Clerical workers; sales workers; skilled workers, craftsmen, and foremen 101
Semi-skilled workers (operatives, service workers, including private household) 92
Unskilled workers 87
Type of work that can be accomplished:[88]
Adults can harvest vegetables, repair furniture 60
Adults can do domestic work 50
Adults can mow lawns, do simple laundry 40

There is considerable variation within and overlap between these categories. People with high IQs are found at all levels of education and occupational categories. The biggest difference occurs for low IQs with only an occasional college graduate or professional scoring below 90.

Lastly, consider the case of China. Recently about 6E6 graduated from universities there out of a population of 1.35E9, i.e. 0.44%. Is it any surprise that Chinese graduates are some of the smartest in the world? Or that China still has enormous potential? Or that Asian immigrants and their children often academically outshine the indigenous population? A similar case can be made for India, I don’t have the numbers but Indians too are prominent in areas like science. I suspect that creeping liberalism and Political Correctness are dooming the West.

Regards,
Der Alte

franklyn
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This article plots the yearly recurrence of 10 year U.S. treasury bond interest rates
http://www.zerohedge.com/news/t-30-days-10y-treasuries-yield...
Note the correspondence as the rates drop , with the following chart plotting
the action in the last few years of the appreciation of the
30 year Treasury bond (TLT Fund) relative to the €uro / Dollar currency pair (FXE Fund)
http://www.marketwatch.com/investing/fund/FXE/charts?country...

On our way there , this morning treasury rates are surpassing the historic lows of last
May / June . U.S. treasury 30 year bond now 2.5 % , 10 year is 1.42 %

Are we in for a reprise ?
Last year in response in part to the debt ceiling debate that came to a head in August ,
the S&P began to decline on July 22nd 2011 the week after the July option expiration
and crashed - 25.6 %.

Coincidentally as it is likely Greece will be refused new loans and it must pay off
some billions in bond redemption on August 20 , it will either default payment
or run out of money by September and therefore have to exit the European Union
to circulate the Drachma once more. So it goes.
http://www.bloomberg.com/news/2012-07-22/greece-back-at-cent...

Don't you love it when a plan comes together.

____________________________________________

The more things change , the more they stay the same.
Isn't this one cause that got us into trouble in the first place ?

It was reported by the Financial Times this week that Wall Street Banks are delving
deeper into the business of supplying oil as they increasingly compete with oil traders
and merchants selling crude to refineries. For example, “ JPMorgan, Morgan Stanley
and Goldman Sachs have all recently struck deals to supply US refiners. Goldman Sachs
is now the largest supplier of crude and the largest customer of refined products for
refineries owned by Alon USA in California, Louisiana and Texas.”
Morgan Stanley and JPMorgan are lobby-ing regulators to remove from the Volcker rule
“ forward ” commodity contracts for future delivery of stock. This would allow banks
to trade these contracts for their proprietary accounts. The Volcker rule currently
prohibits this. Morgan Stanley recently complained that restricing the bank’s ability to
compete in commodies forced customers to use “ trading houses, energy merchant
companies, oil companies with trading desks, or other types of traders.” So, on top
of warehousing copper, nickel, pot ash, etc, the banks are moving to further control the
oil industry.

.

[Edited on 23-7-2012 by franklyn]
franklyn
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- A T T E N T I O N -

U.S. treasury bonds continue plumbing bicentennial lows ,
30 year below 2.46 % , 10 year below 1.40 %
iShares bond fund ( TLT ), passed $132 , but with low volatility despite TLT price being$1.50 higher , options are just now back up to their June 1 high.
We can see $133 -134 by this friday. Aug$ 128 is now up to ~ $4.40 Sep$ 130 is now up to ~ $5.20 I recommend selling at least half your position now. leave a runner if you like but beware my experience with July calls , if you'll hate yourself later for waiting. http://www.sciencemadness.org/talk/viewthread.php?tid=17281&... ___________________________________________ The American market is riding on helium and waiting for something to stick a pin in the bubble. The crummy economic statistics keep beating down any lingering hope of a better outlook. The Italians have forbidden " short selling " in their market for " A WEEK " ? ? My guess is that after this weekend it won't matter because another round of kick the can will save the day and markets will pop up once again. http://www.guardian.co.uk/business/2012/jul/25/spanish-bond-... __________________________________________ http://oilprice.com/Finance/the-Markets/How-the-Fed-Will-Tri... http://seekingalpha.com/article/743501-greece-needs-3rd-bail... http://seekingalpha.com/article/742921-without-bailouts-spai... http://finance.fortune.cnn.com/2012/07/24/spain-bailout-2 . DerAlte International Hazard Posts: 779 Registered: 14-5-2007 Location: Erehwon Member Is Offline Mood: Disgusted So Draghi speaks and the US market sighs in relief and shoots up 200 points? Surely you jest! This is as much nonsense as when old Greenspan used to rock markets by opening his mouth, yet even he could not stop ‘irrational exuberance’ and spoke in a special version of English known as Greenspanese. But I’ll take it, if offered. The US economy may be in dire straits but my portfolio is doing quite nicely due to certain purchases made in the dip last Aug./Sept. http://www.cnbc.com/id/48332357 See the video on cnbc.com, Cashin: Why I'm 'Skeptical' About Today's Rally Also: http://www.cnbc.com/id/48331158 Greek Exit in 2013 Now 90 Percent Probability: Citi I also like this one Think US Stocks Are Bad? Try Everywhere Else First http://www.cnbc.com/id/48302869 History Suggests Euro's Obituaries Are Premature Reuters http://www.cnbc.com/id/48254273 Quote from above: "The break-up of the monetary union is not something that can ever be forced by financial markets." That is because the European Central Bank, like any other central bank, could if necessary expand its balance sheet, or "print money", without limit to contain capital flight or buy up the debt of besieged member states. In other words, accelerate the fall of the Euro and ultimately cause rapid inflation. If the Euro does survive, expect parity with the$ soon.

Euro Zone as We Know It Has Two Years Left: Jim O’Neill
http://www.cnbc.com/id/48314618

If you take a step backwards and look at the situation logically, we are expected to believe the logical fallacy x≠x where x is both that Euro supporting a 7.5% yield on Spanish bonds and also the paltry 1.26% net negative return on similar term German bonds. In fact x cannot be fixed; it is x1 for Spain, the euorpeseta, and x2 for Germany, the eurodeutschmark, ready to transmute, if need be. And x1 ≠ x2, except in Eurospeak, the PC language of the EU.
………

In this era of pathetically low yields, the Telecomms shine out as a beacon, still providing c. 5% dividends. I am overweigthed in them as old farts like me seek yield with a fair guarantee of principal stability. But not all are equal, as Sprint (#3 in the US) shows with its latest results. However, both T and VZ are not only providing income but also share value (also UK’s VOD, a partner to VZ) ( I own all except Sprint; also Pharms., another income producer.) I have always had a play in telecoms., including GTE, Nextel, etc. I dumped Sprint when it acquired Nextel in a fatal move.

But the same is not true for the equipment makers. Today Alcatel-Lucent announced it was laying off 5000 workers. To me this is particularly poignant, as this organization absorbed the branch of ITT I spent many years serving. And also, via ATT-Lucent it acquired Bell Labs., the premier Telecommunications research establishment in the world, by far. Everyone in the industry eagerly awaited the next issue of BSTJ.

If you want a history of total mismanagement by financial bureaucrats and bottom-liners look at the history of Alcatel and ITT. In it many great companies of the past have been systematically destroyed. ATT survives, as strong as ever, thank god. But Bell Labs, the shining star of industrial research and development, was allowed to fall into foreign hands and destroyed. This unique organization had 7 Nobel laureates and its alumni were such as Shannon, Shockley etc. It invented the transistor and most of what we accept today in the electronics, telecomm and computer world.

Der Alte
franklyn
International Hazard

Posts: 3027
Registered: 30-5-2006
Location: Da Big Apple
Member Is Offline

Mood: No Mood

http://bloom.bg/NwDn2u

http://bloom.bg/LW9l2m

http://bloom.bg/NyXeOA

It's the strength of Germany which pegs the value of the €uro , even though
it is starting to slip now after Moody's has put Germany on negative watch.
The poorly productive economies of the PIIGS must endure the unendurable
of being bad credit risks yet having to borrow real money at high interest
and pay back in that same appreciating currency at even higher interest even
as their domestic economy is strangled by austerity or expanding deficit
spending. Are these people crazy or what ? The ash on this cigar is 4 inches
long and everyone is spellbound in amazement it still hasn't broken.
( The famous lawyer Clarence Darrow used this theatrical gimmick of
inserting a wire lengthwise into the cigar to keep the jury inattentive to the
prosecutions oratory, by keeping the jury's focus on wondering when the
ash would fall off.

they should stop calling this debt restructuring and call it what it is - charity ,
or fraud , depending on which side of the trade you're on.
http://www.reuters.com/article/2012/07/27/us-eurozone-greece...

and now the other shoe drops , well good luck with that.
http://www.reuters.com/article/2012/07/27/us-eurozone-spain-...

[file]19667[/file]

_______________________________

True to form TLT fund is down five dollars and options are back down to
a third of what they were two days ago when I warned to sell. A PUT bought
then would have nearly tripled your money in that time. I don't try to out guess
the volatility of these things and I'm staying pat , though I may buy more Calls.
The good thing is that volatility will now increase pricing Call options up
on the rebound. The fund will gain this all back and then some on August 1
when the FED declines once again to satiate the salivating hoards with more
QE and sends the €UR / USD exchange back down.

Coordinated central bank action coming
http://www.marketwatch.com/story/geithner-to-meet-with-top-e...
August 1 - Next Wednesday Federal Open Market Committee (FOMC) press announcement
August 2 - European Central Bank (ECB) press announcement

[file]19669[/file]

http://www.marketwatch.com/story/more-trouble-as-funds-aband...

http://seekingalpha.com/article/757701-market-jumps-on-eu-sp...

http://seekingalpha.com/article/757661-china-s-giant-catch-2...
http://humblestudentofthemarkets.blogspot.com/2012/07/what-i...

.

[Edited on 28-7-2012 by franklyn]

franklyn
International Hazard

Posts: 3027
Registered: 30-5-2006
Location: Da Big Apple
Member Is Offline

Mood: No Mood

Fairy tales can come true , it can happen to you , or ,

how to make 56 times your money in a week without

really trying , either that or outrageous insider trading.

www.cnbc.com/id/48401383

______________________

Wednesday August 1

• 8:15 AM - ADP Employment Report

• 10:00 AM - ISM Mfg Index announcement ( will it be under 50 ? )

2:15 PM - FOMC ( Federal Open Market Committee ) announcement
. . ( to QE or not to QE , that is the question )

Thursday August 2

• 4:00 AM - Spanish Bond auction 2 , 4 , 10 year

8:30 AM - ECB ( European Central Bank ) Meeting , Draghi speaks !

• 8:30 AM - Jobless Claims , will it spike again ?

Friday August 3

• 8:30 AM - US Non-Farm Payrolls , another downer ?

__________________________________

Reality bites

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/...

http://www.reuters.com/article/2012/07/31/us-greece-idUSBRE8...
Just as I said here _

.

[Edited on 31-7-2012 by franklyn]
franklyn
International Hazard

Posts: 3027
Registered: 30-5-2006
Location: Da Big Apple
Member Is Offline

Mood: No Mood

http://www.bloomberg.com/news/2012-08-01/treasury-plans-floa...
As I had mentioned here _

Elsewhere _
http://seekingalpha.com/article/769101-switzerland-s-money-p...

Old reliable never disappoints
http://soberlook.com/2012/08/more-evidence-of-capital-flight...

I'm out of here
http://www.zerohedge.com/news/investing-legend-louis-bacon-h...

______________________________________________

This morning (Eastern Standard Time) Draghi " explained that his plan to promise a
plan which plans to promise a solution was nothing but another promise and not an
actual plan " , hey , didn't we know that already.

.

[Edited on 2-8-2012 by franklyn]
DerAlte
International Hazard

Posts: 779
Registered: 14-5-2007
Location: Erehwon
Member Is Offline

Mood: Disgusted

@franklyn et alia,
Thursday indeed promises to be an interesting day after the Fed was non-commital today. Jobless numbers, hot air and BS from the Eurpeans could swing the market either way; the US has not, and to a certain extent cannot dissociate itself from this mess. I made the point about Switzerland and the krone bunch a few posts back. There are no safe havens, one has to seek the safest, and Der Schweitz has disqualified itself. They might as well just trade options on the euro with SNB money.

Today’s NYSE event was the unusual volume caused by a probable computer glitch AM. Idiocy untouched by human hand like all algorithmic trading. Long ago I learned to mistrust the pundits’ and analysts’ prediction. I had a spell myself studying about technical analysis (so-called) some 35 years ago and convinced myself that it is 95% BS. A good knowledge of probability theory can help you see why most technical indicators are more BS than truth.

The only indicators worth a damn, sometimes, are short term moving averages. Longer term averages tend to be out of date too quickly, due to the filter lag. Nothing beats the fundamentals. But the key is always that unquantifiable, sentiment. And just now, that one stinks. If you are contrarian, that’s good! However, it was good to see good companies rewarded for good results in the last quarter, in the traditional fashion. And bad ones properly punished, one might add.

Which leads me on to FB. I hope any of you who shorted it will take your 40%+ at this point and not be greedy. You might go to 50% at a pinch, but it’s always better to have a target. (Although I still feel it will go a lot further south, at >100P/E) FB deserves to be punished for failing to give any guidance whatever and failing revenues, with a very slim visible chance of improvement. I would put the capital into some solid preference shares and the profit into Apple, which is again showing distinct promise.
Der Alte
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