Short term trades in the stock market •$$$$$•

[SpasticGramps]

Here is Soros stating the obvious.

SOROS: Eurozone Crisis Could Be Worse Than Lehman

Legendary investor George Soros says the lack of central European authority could make this crisis worse than 2008. He tells the New York Times:

“This crisis has the potential to be a lot worse than Lehman Brothers. That is why the problem is so serious. You need a crisis to create the political will for Europe to create such an authority, but there is still no understanding as to what the authority will do.”

Soros has said that Europe needs three things: a central authority, eurobonds and an exit mechanism for failing countries.

Soros is bearish in general these days, predicting a new recession in the U.S. and closing his hedge fund to outside investors.

 

[SpasticGramps]

Dow 10,992 -304 -2.69%

Nasdaq 2,468 -61 -2.42%

S&P 500 1,154 -32 -2.67%

GlobalDow 1,785 -57 -3.09%

Gold 1,859 +2 +0.10%

Oil 87.26 -1.79 -2.01%

Toady was the sixth straight triple digit move. Everything is fine. Move along please.

Greece is frantically dispelling rumors that they will default. They've never lied in the past so we know all is good.

 

[Hydrosun]

What is global Dow? Is that kind of like the Wilsher 5000?

 

[SpasticGramps]

The Global DOW is the global ponzi average.

The Global Dow

The Global Dow℠ is a 150-stock index of the most innovative, vibrant and influential corporations from around the world. The underlying philosophy of The Global Dow℠ is much like that of the Dow Jones Industrial Average. For example, the index includes companies with a long history of success, and a wide following among investors. Its components, like those of The Dow, are selected by an Averages Committee comprised of the Managing Editor of The Wall Street Journal, the head of Dow Jones Indexes research and the head of CME Group research. While the stock selection process is somewhat subjective, a stock typically is added only if the company has an excellent reputation, demonstrates sustained growth, is of interest to a large number of investors and accurately represents the market sectors covered by the average.

But unlike the Industrial Average, The Global Dow℠ tracks leading companies from around the world - and not just based on size and reputation, but also on their promise for the future. In recognition that global wealth is no longer concentrated in a few countries, The Global Dow℠ has been designed to cover both developed and emerging economies - as well as companies from emerging sectors, such as alternative energy. The index reflects, as closely as possible, the global stock market as it is today, in terms of industries and regions. But emphasis is placed on also representing the global leaders of tomorrow. Index Components

 

[SpasticGramps]

Liquidity is starting to evaporate again. Severe counter party risk with no more backstop. Markets may be crushed on Monday? Is Mr Market popping his head out of the sand about the ponzi being out of gas?

Here Comes The Non-Boring Weekend: G7 Says "Central Banks Ready To Provide Liquidity As Required"

The G-7 is in full panic mode. The organization for the prevention of harm to the Status Quo was expected to release a communique possibly over the weekend, but the speed with which one was dropped for mass circulation is stunning and confirms that its members are in full meltdown as the weekend comes. It is now certain that the G-7 will attempt some major intervention over the next 48 hours to inject a last dose of hope into capital markets, or else the Monday open will be an epic collapse.

G-7 Statement on Tackling Slowdown, Supporting Banks
“We met at a time of new challenges to global economic recovery, with significant challenges to growth, fiscal deficits and sovereign debt, stemming from past accumulated imbalances.

This is reflected in heightened tensions in financial markets.

There are now clear signs of a slowdown in global growth. We are committed to a strong and coordinated international response to these challenges.

“We are taking strong actions to maintain financial stability, restore confidence and support growth. :jerit: In the U.S., President Obama has put forward a significant package to strengthen growth and employment through public investments, tax incentives and targeted job measures, combined with fiscal reforms designed to restore fiscal sustainability over the medium term. Euro area countries are implementing the decisions taken on July 21 to address financial tensions, notably through the flexibilization of the EFSF, reaffirming their inflexible determination to honor fully their own individual sovereign signatures and their commitments to sustainable fiscal conditions and structure reforms. Japan is implementing substantial fiscal measures for reconstruction from the earthquake while ensuring the commitment to medium-term fiscal consolidation.

“Concerns over the pace and future of the recovery underscore the need for a concerted effort at a global level in support of strong, sustainable and balanced growth. We must all set out and implement ambitious and growth-friendly fiscal consolidation plans rooted within credible fiscal frameworks.

Fiscal policy faces a delicate balancing act. Given the still fragile nature of the recovery, we must tread the difficult path of achieving fiscal adjustment plans while supporting economic activity, taking into account different national circumstances.

“Monetary policies will maintain price stability and continue to support economic recovery. Central Banks stand ready to provide liquidity to banks as required. We will take all necessary actions to ensure the resilience of banking systems and financial markets. In this context we reaffirm our commitment to implement fully Basel III.

“We reaffirmed our shared interest in a strong and stable international financial system, and our support for market- determined exchange rates. Excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability. We will consult closely in regard to actions in exchange markets and will cooperate as appropriate.

“We look forward to working with our colleagues in the G20 and the IMF in the coming weeks to rebalance demand and strengthen global growth. As previously agreed, structural reforms will make an important contribution in this regard.”

 

[VanVulpen]

It's not. There are trader talk rumors of a Greek default over the weekend. It's pretty easy to understand. Sovereign debt defaults will cause a banking crisis much larger than the home mortgage crisis.

Once one big domino goes they will all go. Systemic risk is worse now than 2008, but there is no more backstop this time. Central banks have already blown their load over the last 3 years propping us up so we could have an even bigger collapse.

The Neo-Keyensian experiment is over. Onto the next round.

The Greek government has recently announced his intention to decriminalize consumption and possession of all drugs, following Portugal's example for that matter. If this is what it takes for the decriminalization of cannabis in the rest of Europe i will be the first one to salute the collapse of the euro union... nor that i have too much to lose from it

 

[SpasticGramps]

The Greek government has recently announced his intention to decriminalize consumption and possession of all drugs, following Portugal's example for that matter. If this is what it takes for the decriminalization of cannabis in the rest of Europe i will be the first one to salute the collapse of the euro union... nor that i have too much to lose from it

That's great about decriminalizing drugs. It should be that way everywhere IMO.

Just a matter of time now.

FOREX WEEK AHEAD: Greece Default Fears Keep Pressure On The Euro WSJ

NEW YORK (Dow Jones)--Concerns about Greece's debt remain the focus of the currency market's attention, which should keep the euro under pressure for at least another week.

Fresh Greece default worries on Friday sent the single currency to as low as Y105.30, its lowest point since January 2001. The euro fell to February lows against the dollar at $1.3626 from $1.3882.

Greece is not the only country with debt problems, as fears of contagion to peripheral countries including Italy, Spain, Portugal and Ireland are also rising. The cost to insure the debt of Greece and its neighbors is moving in tandem. But credit default swaps on Greece hit a record high Friday, indicating investors have little faith in the country's ability to repay its debt.

"We have to continue to remind ourselves of how tiny Greece is, but if one of their members fail that puts strain on the euro-zone economy, and the euro as well," said John Doyle, a trader at Tempus Consulting. "Greek bond yields tell it all, and people are worried about" a default or restructuring.

Strident calls from Germany for Greece to get its financial house in order are adding to the stress, since the next bailout check depends on a satisfactory response to the demands of the euro zone's largest economy.

The International Monetary Fund's executive board is scheduled to meet informally on Greece's austerity program next week, and talks between the European Union, European Central Bank, the IMF and Athens could resume next week, an official said.

Several people close to the matter said IMF Managing Director Christine Lagarde is planning to meet Greek Prime Minister George Papandreou on Sept. 20 ahead of the IMF's annual meetings.

Hopes are relatively high that this weekend's G-7 meeting will result in a co-ordinated response to stimulate the global economy and support risk. With "differences in ability and inclination" to change fiscal policy, the G-7 countries may offer differing proposals, Barclays analysts wrote.

The Greek debt crisis could well spread to other countries and create more funding and credit problems throughout the euro zone and beyond.

Funding stresses in Europe climbed toward the end of the week. The euro dollar cross currency basis swap, which measures how expensive it is to swap euros into dollars and indicates dollar scarcity, touched its widest level since late 2008.

"The pressure on dollar funding is clearly there," said Brian Smedley, interest-rate strategist at Bank of America Merrill Lynch.

This time though, "unlimited liquidity is available through the Fed's foreign exchange swap lines." In the weeks after Lehman's collapse, "the capacity of the swap lines was capped, which allowed funding costs to rise very sharply as funding markets froze," Smedley said.

Still, the cost of obtaining dollars is going up and banks are not keen to lend to one another, leaning on the central banks for their funding instead, even though this option is more expensive.

Capitulation?

German Finance Minister Prepares for Possible Greek Bankruptcy Spiegel

German Finance Minister Wolfgang Schäuble, who is reportedly doubtful that the country can be saved from bankruptcy, is preparing for the possibility of Greek insolvency. Officials in his ministry are currently reviewing scenarios for handling such a situation, exploring what it might mean for the rest of the euro zone. Under the first scenario for a Greek bankruptcy, the country would remain in the euro zone. Under the other, Athens would abandon the common currency and reintroduce the drachma.

The European bailout mechanism, the European Financial Stability Facility (EFSF), is playing a key role in those considerations. Soon the EFSF is expected to be given new powers agreed to by European leaders at a special euro crisis summit in late July. Two instruments at the EFSF's disposal are at the forefront of the Finance Ministry's scenarios.

Bankruptcy Could Create Credit Crunch

One of these key instruments would be credit lines provided to countries like Spain or Italy if investors stop lending them money after a Greek bankruptcy. If banks were forced to write off the billions in Greek government bonds on their books, they could become reliant on billions in rescue fund aid in numerous euro-zone countries. Both developments are to be expected in a Greek insolvency, regardless of whether the country exits the euro or not.

Volker Bouffier, the governor of the state of Hesse, which is home to Germany's financial capital Frankfurt, is a member of Chancellor Angela Merkel's conservative Christian Democratic Union (CDU) party, as is Schäuble. Bouffier is now urging that the possibility for countries to leave the euro zone be created quickly. Current European Union treaties provide no provisions for a country to abandon the currency.

"If the savings and reform efforts of the Greek government aren't successful, then we need to ask the question of whether we need new rules to make it possible for a euro country to leave the currency union," Bouffier told SPIEGEL.

Bye Euro.

 

[SpasticGramps]

And it's a another global bloodbath. Looking pretty ugly out there.

 

[Dislexus]

Is a Ponzi scheme that can print its own money still a Ponzi scheme?

 

[SpasticGramps]

Good question. I would say yes, because the victim of the scam (in this case the victim is the global population) ends up with nothing.

What the US is doing right now is defaulting via money printing. The Fed is liquidating the debt via debasement of the currency. We are just as insolvent as Greece, but are choosing the hyperinflationary path to debt settlement as opposed to outright default or austerity.

This has never been tried before with the world's reserve currency thus who knows how all this shakes out. It's truly unprecedented.

 

[Hydrosun]

Is a Ponzi scheme that can print its own money still a Ponzi scheme?

Zimbabwe

Weimar Republic

Need I say more.

 

[SpasticGramps]

People say I fear monger lol. Let's see what Art Cashin, a regular on CNBC from UBS bank has to say? This is reality now and there are some good reasons to be concerned. Given that I do understand many people (idealist mostly) will keep their heads buried deep in the sand until it's far too late.

Art Cashin: "The New Battle Of Thermopylae Is On The Way"

Nothing actually new here, but listening to Art Cashin retall the latest end of the world episode in that wise, grizzled voice of his brings a soothing element to what is set to be another dramamine-friendly week.

From UBS:

Friday’s stock market crumbled under the weight of rumors and worries about the Eurozone. Would Greece default over the weekend? Was Jurgen Stark’s sudden resignation from the ECB a power play by Merkel or the first shot of bringing the bailout debate to the German public? Would the weekend G-7 meeting result in a surprise policy lift? All those concerns, and more, crushed stocks on both sides of the pond.

Over the weekend, the battle has shifted. German authorities talk openly of the likelihood of a Greek default. They are said to be developing a plan to backstop German banks in the event of a Greek default. That puts pressure on other banks, especially French banks, since there is no Gallic backstop plan. Collateral damage could be to bring no bids to the next Greek auction, or make them pay such high rates as to make the auction toxic. The Euro crisis is quickly evolving into a Gordian Knot.

Although it is called a sovereign debt crisis, it was not the sovereigns who were in the front lines of the battle. It was the European banks that held a portion of the bonds issued by the weak sovereigns. If the market value of the sovereigns they held fell to, say, 50 cents on the dollar, those losses could make those banks insolvent. They would become the new Bear Stearns and Lehman. That’s why the rescue effort quickly shifted from simply bailing out Greece and the others to buying the sovereign debt to put a floor under those bonds. The rumored German backstop would, as we noted, shift focus back to the sovereigns with Greece running out of funds, possibly by month’s end.

U.S. markets are at near-critical levels. The uptrend line that caused the last bounce (S&P 1140) is around 1145. Key support levels are 1140, 1132, 1120 and ultimately 1101. The new Battle of Thermopylae is on the way.

Rumors of French nuclear accident has European markets reeling.

1120 is a major holding point. If we break through it hard in the next few days it's all the way down to ~1000 IMO. Cue QE3 at that point.

 

[Hydrosun]

Here is what I think to be some free money.

PGH

I don't make many calls but when I do I am normally bottom feeding for you guys. The CDE on 8/8/11 is really working out for you.

PGH pays $.84 in divs ($.07 / mo) and is trading near the 52 week low a buy here at $10.20 should be profitable for you guys.

 

[bentom187]

you guys should check out the daily show forums, almost zero moderation.

lots of kensians and socialist overthere lol.

""The US Dollar down 18% in value since Obama got elected"

Compared to what exactly? Value is relative, and there's really no way to measure it. If you take the CPI for example, the value has fell 7.1% (http://www.fintrend.com/inflation/Consumer_Price_Index/HistoricalCPI.aspx). The normal rate of inflation is supposed to be ~4%/year. If you throw the CPI data into the compound interest equation, (225.9/211)^(1/3.5)-1 = ~2%/year on average. So, actually the USD hasn't fallen enough since Obama has become president.

"There is one currency in the world, and it's been the world's currency for 5,000 years. It's called "gold"."

Gold is much too volatile to be used a currency. Long term loans, and any type of long term financial planning would be impractical. If gold was the U.S. currency, the only sort of "investment" people would make would be to stuff gold dust in their mattress As I said before, I would prefer cigarettes and vodka as a currency They are perishable, which very important for a currency.

Over the past 5,000 years, economic growth has been terribly slow. After we started using fiat, it has been extremely high. It's quite amazing: http://www.youtube.com/watch?v=jbkSRLYSojo Of course, currency didn't cause all of it, but I believe it was a significant contributing factor. Mainly because predictably inflating currencies encourages investment.

"i hope it was ironie"

No. I guess I should have made myself clear though. I was talking about the original Bancor proposal (see http://en.wikipedia.org/wiki/Bancor and http://en.wikipedia.org/wiki/International_Clearing_Union). I have not read about the version proposed to the IMF, but I have a feeling it's much different.

"you mean those Keynesian bankers who wanna get baildout so hard cause otherwise the world would came to an END ?"

Private banks don't practice macroeconomics, they just try to do what's best for their shareholders. Of course they'll always want to get bailed out, just like any company or person. Economics has nothing to do with it; profit motive does."






If the volatility of gold was caused by the volatility in the USD, then you'd see the volatility everywhere, on all prices, including the CPI. Which you don't. Inflation of the USD since January 2008 was ~7.1%. If you look at gold as a currency, deflation since January 2008 was (1855-913)/913 = 103% with lots of rallies and mini-crashes in between. With gold as a currency, if you took out the equivalent of a $50,000 ~3.5 year loan at 0% interest in January 2008, you would have had to pay back the equivalent of ~$101,500. And zero-percent interest is the lowest a company can go and without taking a loss of value. With negative interest, it would be better for the company to just sit on the currency.

There is no shortage of individuals, companies, and countries willing to buy U.S. bonds (even now when they'll probably take a small loss of value by investing in bonds). In fact, buying bonds is one way that countries manipulate their currencies relative to the USD and participate in currency wars. The originally proposed Bancor would solve that problem, and move trade deficits and surpluses toward equilibrium.

it would be nice if the intillectuals here would chime in as all i know is whats constitutional and its not fiat paper and central banking.

 

[bentom187]

also i posited the idea that backing a currencey with bonds(debt) was a problem,so they really push u.s. bonds and they (media) have been pushing it cause the buyers get payed back with a devalued dollar.

 

[SpasticGramps]

Stocks soared into the close today on the resurgence of the Chinese White Knight story. China has agreed to bailout Italy. Rome is safe from fire for a little bit longer. This is about 4th time the Chinese White Knight story has popped to to save the markets. When it comes down to it though the Chinese purchases of bonds have been relatively small. It makes for a good headline for the machines to read and switch from sell to buy. Literally kicking the can down the road hours at a time now.

Pretty clear that the IMF is now an irrelevant bailout partner. China looks to be the lender of last resort. The Neo-Keyensian bailout bonanza goes full retard.

 

[bentom187]

......

 

[SpasticGramps]

236pt move today on hopium.

U.S. stocks break higher on Italy hopes MarketWatch

U.S. stocks break higher on Italy hopes
Report: Italy in talks with Chinese fund about buying bonds

NEW YORK (MarketWatch) — U.S. stocks on Monday ended higher for the first day in three, erasing losses in a late-session turnaround as indexes tested some key support levels and as a report said China was considering buying Italian bonds.

The Dow Jones Industrial Average DJIA +0.63% closed up 68.99 points, or 0.6%, to 11,061.12, led by a 2.9% gain in Intel Corp. INTC +0.35% shares. Twenty-two of 30 Dow components rose.

The blue-chip index had fallen more than 167 points, and traded lower for much of the trading session, as the latest barrage of headlines about Europe suggested it was more likely one or more euro-zone members would default on its debt.

But the indexes came off their lows after the Financial Times reported Italy was in talks with China’s sovereign-wealth fund over a sale of Italian bonds. Read more on Italy and China.

“[Italians] would have a buyer they know they can turn to,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott LLC.

Details of the deal were lacking, but that didn’t stop markets from interpreting the report as a sign Italy, a much larger economy than the countries that have been bailed out so far, might avoid Greece’s destiny.

“The market was looking for anything positive to come out of the European debt crisis,” added Luschini.

The day’s gains showed stock indexes bouncing off some recent low points.

The S&P 500 Index SPX +0.70% ended up 8.04 points, or 0.7%, at 1,162.27, led by tech and financial stocks, after falling as low as 1,136.07. The day’s gain kept the index of large-cap U.S. stocks above lows touched last week.

“They made a run for technical support at 1,140 to 1,141; we’ll see if it holds,” said Robert Pavlik, chief market strategist at Banyan Partners LLC.

I'm guessing the half life of this is ponzi pep talk is a few hours.

From Reuters "Italy says Asia asking why why ECB isn't buying bonds":

Italian Economy Minister Giulio Tremonti said on Thursday that Asian investors are reluctant to buy Italian bonds because it sees they are not being bought by the European Central Bank.

Speaking at a news conference, Tremonti also said it would be desirable for the central bank to follow the lead of the Japanese and Swiss central banks in taking expansionary steps to tackly the euro zone's crisis.

"I note that the Bank of Japan today launched quantitative easing and the Swiss cen bank cut rates to zero, we are waiting for decisions if possible, but desirable (from the ECB)," Tremonti said.

When you talk to Asia they say: "We don't understand what Europe is," he continued. "The second point is that they say 'if your central bank doesn't buy your bonds, why should we buy them"?

Mutually assured destruction.

 

[SpasticGramps]

And here is the reality of the Chinese White Knight BS rumor that has popped up four times in the past couple of years in order to rally the market from it's crash. It's amazing how easy it is to control these markets. Throw out a headline for the headline reading computers to trade off of and let them rip. Truth or logic be damned. The rumor mill this morning was off the charts. Leaders and banks scrambling around with their heads cut off.

Analysts: China Unlikely to Rescue Italy

BEIJING—China's government isn't likely to ride to the rescue of the debt-hobbled Italian government, analysts said, after news of meetings between Chinese sovereign-wealth officials and Italian leaders fueled a short-lived rally in world markets.

Italy's Finance Ministry, in a bid to persuade Beijing to buy large amounts of Italian bonds, last week met with Lou Jiwei, chairman of sovereign-wealth fund China Investment Corp., and officials from China's State Administration of Foreign Exchange, which oversees China's currency.

The two Chinese organizations, which typically don't disclose details of their investments, declined to comment Tuesday on whether they would act on the offer. Foreign Ministry spokeswoman Jiang Yu said Tuesday that while China has confidence in the stability of Europe and the euro, it hopes the European Union can take effective measures to ensure the safety of Chinese investments on the continent.

Still, reports of the meeting Monday fueled investor hopes that it would result in help for Italy. The Dow Jones Industrial Average rose 0.6% on Monday, reversing losses earlier that day.

Sentiment cooled significantly Tuesday, as a €6.5 billion ($8.89 billion) Italian bond auction ended poorly. The spread, or interest-rate differential, between Italian 10-year public debt and equivalent German bunds broke through the 4% level for the first time in the era of Europe's single currency.

The only institution that has the capacity to kick the can down the road anymore is the ECB. They can print and hyper-inflate the debt away. Good luck getting the Germans on board.

 

[SpasticGramps]

Wow. Neo-Keyensian bailout bonanza rumor mill has definitely gone full retard and I thought yesterday was bad. And this is how it will eventually end. Daily bailouts will become hourly bailouts until the market realizes that bailouts are pointless and the system finally implodes on itself.

European Rumormill Goes Full Retard

Update: Italy Hasn’t Asked for Any Help From China, Deputy Min Says... Yeah. Full Retard

Wondering why stocks are soaring and the EURUSD is above 1.37 again? Why, nothing short of the latest rumor, this time that Russia will bail out Europe. Bloomberg reports that Russia may use its international reserves to buy common euro-area bonds if European policy makers back joint debt issuance, Reuters reported, citing an interview with Finance Minister Alexei Kudrin... Sorry, we just report them. Time for the trader diary to get its latest update. The only problem we see with this strategy of rolling daily bailouts is that after China and Russia, who would be far smarter to participate in a stalking horse bid of European assets than to invest general unsecured pre-petition claims, there will be nobody left to "rescue" Europe: after all who else is out there? Zimbabwe? Japan? Argentina? Iceland? We doubt even the 80286's will buy that...

Aside from all this. BNP (big French Bank) came out and said they couldn't get American funding anymore and where fucked. Then they came right back out and denied that they had said they were having funding problems. Full fucking retard.