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Finance 0
E Coining A Profit On Our FXY Put Spread
Ladies and gentlemen, we have another winner. The Currency Shares Japanese Yen Trust (FXY) May, 2016 $91-$94 in-the-money vertical bear put spread is showing a mark to market this morning of $3.00, its maximum expiration value on Friday. So, I’m going to give you two cents to get it done. If you can’t execute at this price, run the position into the Friday expiration. This trade brought in a 10.37% profit in 17 trading days. It brings our May return up to a spectacular 11.25%, our 2016 year to date to 12.45%, and the Trade Alert service to yet another all time high of 204.10%. If you have the ProShares Ultra Short Yen ETF (YCS) outright k... -
Finance 0
There’s No Quick Fix For This Alarming Retirement Dilemma
The retirement crisis will eventually come to a head. And when it does, it’s not going to be pretty. As shown by the record number of seniors living in poverty, it’s no longer feasible to rely on “the system.” In this week’s Two-Minute Retirement Solution, Steve McDonald tackles the problem head on. He proves that ignorance is certainly not bliss when it comes to fixing our nation’s alarming retirement dilemma. Transcript: This is your once-a-quarter “wake up and smell the roses” Two-Minute Retirement Solution. I do this only four times a year because I get too depressed looking at these numbers. There are now around 40 m... -
Finance 0
Fed Threats
“Stock market bubbles don’t grow out of thin air. They have a solid basis in reality, but reality as distorted by a misconception.” George Soros We saw choppy action in stocks today as they continued to setup for a break lower, then Fed speak late in the day sparked a selloff when they said they’re still considering a June rate-hike. Markets do not want a rate-hike. That said, I’m now short TSLA, AMGN and SPY and we can make a killing in short positions if the Fed does indeed follow-though on their threat of a June hike. SPY is right at the neckline now and set to break lower right away. I’m short 15% in SPY as it broke at 205... -
Finance 0
More On Uncertainty In Open Economy Macro
In my last post, I noted a conference on uncertainty in macroeconomics. Here are two papers of particular interest to me. The first, by Kimberly A. Berg and Nelson Mark, was entitled “Global Macro Risks in Currency Excess Returns”: We identify country macroeconomic fundamentals, whose first and higher-ordered moments have predictive power for currency excess returns. Using this identification in conjunction with the carry trade, we form portfolios of profitable currency excess returns and study the determinants of their cross-sectional variation. We find that global macro factors are priced in currency excess returns. The high-minus-low... -
Finance 0
EC When You Exit The Stock Market, Don’t Let The Door Hit You On Your Way Out
You cannot make this stuff up. The median stock in the S&P 500 has never been more overvalued on price-to-earnings growth (PEG) and price-to-sales (P/S). On a forward price-to-earnings (P/E) basis – where profitability expectations already reflect pie-in-the-sky speculation – the median company’s shares trade in the 96th percentile. That’s pretty darn pricey! Credit Goldman Sachs for the assessment. For that matter, give the financial conglomerate kudos for acknowledging the strong possibility that one might be wise to “sell in May” after all. Hedge fund legend Stanley Druckenmiller, who spoke at an investment conference ... -
Finance 0
16 Months And Counting
In his 2016 State of the Union Address, President Barack Obama accused those claiming the American economy is in decline of “peddling fiction”. Few economic prognosticators have actually stated that the U.S. economy is in decline. However, many including ourselves have pointed out that economic growth has been declining for years and the key drivers of future growth – productivity and demographics – are quickly becoming economic headwinds. All the while, the nation’s ability to enhance economic growth by increasing an already burgeoning debt load is greatly limited. We write this article to warn our clients and readers that recent W... -
Finance 0
April 2016 Industrial Production Remains In Contraction Year-Over-Year But Monthly Data Improves
The headlines say seasonally adjusted Industrial Production (IP) improved. The year-over-year data remains in contraction – so improvement is always relative. Headline seasonally adjusted Industrial Production (IP) increased 0.7 % month-over-month and down 1.1 % year-over-year. Econintersect‘s analysis using the unadjusted data is that IP growthaccelerated 1.6 % month-over-month, and is down 0.7 % year-over-year. The unadjusted year-over-year rate of growth accelerated 0.3 % from last month using a three month rolling average, and is down 1.6 % year-over-year. The market was expecting (from Bloomberg): Headline Seasonal... -
Finance 0
Can LinkedIn Corp. Withstand The Facebook Charge?
123RF LinkedIn (NYSE:LNKD) is facing its biggest challenge yet, from Facebook (NASDQ:FB). Facebook has launched a number of new business services and is making a serious effort to win the business market. LinkedIn, meanwhile, seems to have reached its limit within the initial niche of job recruitment, and education revenues have been slow to appear. So far LinkedIn stock is down 43% for the year, its market cap briefly falling below $17 billion, as revenues seem to have peaked at around $860 million/quarter and losses have accelerated. The stock crashed early in the year with a loss of $8.43 million, six cents per share, but the company the... -
Finance 0
The Australian Dollar Swings Wide On Repeat Information
In the wake of poor inflation data, a rate cut from the Reserve Bank of Australia (RBA), and then a dovish Statement on Monetary policy, speculators decided that this was not the time to have such a large net long exposure to the Australian dollar (FXA). Speculators back off net longs for the second straight week Source: Oanda’s CFTC’s Commitment of Traders Roll forward to May 16th – the Australian dollar rallied afresh in the wake of the release of minutes from the RBA’s last policy meeting. The text was very consistent with the announcement from the meeting and was not nearly as informative as the Statement On Monetary Pol... -
Finance 0
Fed Running Out Of Excuses On Interest Rates
Fed Has A Difficult Job In terms of government policy, the economy has two primary types of stimulus, fiscal and monetary. The Fed controls monetary policy. Congress is the primary driver of fiscal policy. In recent years, Congress has left all the heavy lifting to the Fed. Having stated the Fed is in a difficult position, their focus in recent years appears to have shifted almost solely to keeping asset prices propped up, a concept that has not gone unnoticed by the financial markets. 2012 Plan Was To Raise Rates When Unemployment Hit 6.5% In December 2012, the Federal Reserve provided a 6.5% unemployment target with respect to allowing rate...
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