Here’s a snapshot of last week’s mini flash crash initiated by a false tweet. Trading programs scour social media and then trade on the information. See the early afternoon crack in the market? It may have ruined the back nine for the poor guy with the executed stop loss that never got back in. It’s yet another reason why I don’t like program trading or stop losses. [expand title="Click here to read more."] [/expand] … [Read more...]
Archives for April 2013
VIDEO: Stockman vs. Barro: What’s the Best Fed Policy?
April 29 (Bloomberg) -- David Stockman, former Budget Director under President Reagan, and Josh Barro, Bloomberg View Columnist, discuss and debate U.S. monetary and fiscal policy. They speak on Bloomberg Television's "Bloomberg Surveillance." (Source: Bloomberg) [expand title="Click here to see the video."] [/expand] … [Read more...]
VIDEO: Chanos: China Bubble Growing Bigger
The rampant growth of credit in China appears to be forming a bubble, Jim Chanos of Kynikos Associates told CNBC. Chanos, who has been bearish on China, said that its economy has been deteriorating. "I actually think it's gotten worse." He said that credit was to blame.-RealClearMarkets.com [expand title="Click here to see the video."] [/expand] … [Read more...]
What We’re Reading 4-26-13
Drop in Borrowing Squeezes Banks, Fitzpatrick and Raice, Wall Street Journal [expand title="Click here to read more."] Max Baucus' Retirement May Open Door To Tax Reform, But Not In Way He Thinks, Howard Gleckman, Forbes The FAA Strikes Again, the FAA Brags, Review & Outlook, Wall Street Journal Yellen’s Focus on Unemployment Adopted by Fed, Torres and Zumbrun, Bloomberg Thank You for Smoking, Donald J. Bourdreux, Wall Street Journal An Ethanol Spring, Review & Outlook, Wall Street Journal [/expand] … [Read more...]
Escalating Currency Wars an Imminent Threat
With the cabal of central bankers and finance ministers once again denying at the G-20 meetings last weekend that the world’s largest economies are engaged in clandestine currency wars we are reminded of the famous Groucho Marx quote, “Who you gonna believe, me or your lying eyes?” [expand title="Click here to read more."] It should be self-evident to even the casual observer that the world’s largest central banks are engaged in currency wars. Pick up the morning paper and you are bound to see evidence of this. From yesterday’s Financial Times: “But the central bank governor, Graeme … [Read more...]
Econ Data Disappoint but the Market Heads Higher: What to do?
Since March retail sales were released on the 12th, things have looked pretty ugly in the markets. The -0.4% drop in retail sales was broad based, with most of the components down. The realization you should take away from this is not that markets have suddenly begun showing weakness, but that instead markets are now showing how weak they would have been in absence of the artificial boost created by the stimulatory payroll tax holiday. [expand title="Click here to read more."] After retail sales disappointed, a number of other economic indicators underperformed expectations. The Empire … [Read more...]
Higher Medical Bills Hidden by Low Inflation
You can’t buy a break. Workers are making less. Retirees on a fixed income are getting squat from T-bills. And the government statistics on inflation hide some pretty important data. Let’s take a look. [expand title="Click here to read more."]In the latest release on the Consumer Price Index, the headline news is that inflation isn’t a problem. Well, that depends on who you are. Headlines often have nothing to do with you. One line item that caught my eye was the 3.9% 12-month increase in medical care services. That’s a pretty important cost to retirees, don’t you think? When T-bills … [Read more...]
VIDEO: Fed’s Lacker Would End QE Now
CNBC: Richmond Fed President Jeffrey Lacker told CNBC Thursday that "if you made me dictator" the Federal Reserve would stop its massive bond-buying program. [expand title="Click here to read more."] [/expand] … [Read more...]
Economic Battle: Dr. Copper vs. Dr. Bernanke
With the stock market just now correcting off all-time highs, a casual market observer may think that times are quite good. Prices are going up, right? Investors are getting wealthier, right? [expand title="Click here to read more."] That’s what you might think if you viewed markets narrowly, without taking into account that commodities prices are plummeting. Take for instance the price of copper. We often call it “Doctor Copper,” because the red metal “has a PhD in economics.” When prices for copper fall, an economic downturn is usually close behind, making it a great … [Read more...]
401(k): 411 or 911?
There’s talk about capping 401(k) savings at $3 million. What’s disturbing is the assumption behind this proposal: that it takes $3 million in savings to generate an annual income of $205,000. That’s a pipe dream. [expand title="Click here to read more."] I’m sorry, but to get $205,000 per year, you’re going to need much more money than $3 million. At a 4% draw, $3 million would kick off $120,000 per year. For my money, I wouldn’t recommend socking away a penny under $5,125,000 to guarantee $205,000 a year. But this gives you an inside look at how little attention is paid to prudent money … [Read more...]