A place where a skillful caddy always offers cool contemplation when it comes to your "stick" selection.
"QE or no QE, I run things here Mr. Bear"
Creditcane™: ADP, Initial Claims, NFP. All are touched in some form. The only thing real is the air you breathe. And that may be in question.
SPXBullish long day (BS). Midpoint above EMA(10). Above all SMA's. Held above trend line (3/6/09-7/1/10). Holding well above the 38.2% retrace#2 (1312.78). New high on daily 3LB (reversal is 1307.41). QE2infinity.
DXYSpinning top day (failed three white soldiers). Midpoint above EMA(10). Tested and failed the 61.8% retrace#2 (74.94). Still above SMA(21). Failed test of SMA(89). Holding its weekly 3LB mid. No daily 3LB changes (reversal is 73.78).
VIXBullish long day (didn't confirm inverted hammer). Midpoint below EMA(10). Below all SMA's. Tested and held its 0.0% retrace#1 (15.79). No daily 3LB changes (reversal is 21.32). Extradited back to the "no fear" zone.
GOLDSpinning top day (evening star forming?). Midpoint above EMA(10). Held its 38.2% retrace#2 (1529.89). Tested and held SMA(21). No daily 3LB changes (reversal is 1557.30). Holding above upper trend line. Must have the precious.
EURCHFBullish harami day. Midpoint below EMA(10). Tested and held its 50.0% retrace#2 (1.2083). Tested and held SMA(21). No daily 3LB changes (reversal is 1.2304).
JNKBullish long day (another failed hanging man). Midpoint above EMA(10). Held SMA(89). Held its 61.8%% retrace#1 (40.20). Back above trend line (2/5/10-2/12/10). New high on daily 3LB (reversal is 39.93).
10YR YIELDSpinning top day. Held SMA(55). Midpoint above EMA(10). Held its 38.2% retrace#1 (31.19). Still above the upper trend line. No daily 3LB changes (reversal is 29.09).
WTIBullish long day (confirmed bearish thrusting). Held SMA(21). Midpoint above EMA(10). Tested and held its 38.2% retrace#2 (97.62). New high on dally 3LB (reversal is 91.02).
SILVERBullish short day. Held SMA(21). Midpoint above EMA(10). Still below the upper trend line. Held its 61.8% retrace#1 (35.20). No daily 3LB changes (reversal is 37.88).
BKXBullish long day (confirmed hammer). Midpoint above EMA(10). Tested and held SMA(55). Held its 61.8% retrace#1 (48.82). No daily 3LB changes (reversal is 46.64).
HYG/LQDBullish long day. Held SMA(55). Midpoint above EMA(10). Closed at its 61.8% retrace#1 (0.8312). No daily 3LB changes (reversal is 0.8146).
XRTBullish long day. Midpoint above EMA(10). Above all SMA's. Now above its 0.0% retrace#1 (54.72). New high on daily 3LB (reversal is 54.44).
IT HAS BEGUN. BE WARNED.
48 comments:
I'd like to stir the hornets nest a little bit, if only for the anons who need to hash some things out
"Usual Suspects Now Heavily Involved with Commodity Warehousing"
the 'usual suspects'.... rather than getting off track by calling them banks and then getting into all the evil that is banks, lets call them money hunters, for profit companies looking for....well, more profits.
Let me ask you all a question then and stay focused just on the question.
Which group is worse:
a: These money hunters that only care about making more money and the next deal
or
b: the growing subset of the population that deeply desires and even demands that the government take control of these 'bad actors'....fat cats if you will, and thus control all key areas of trade and commerce
Both offer problems, but there is no doubt in my mind which one I think is worse....
how about the rest of the group?
One begets the other, Ben.
You also overlook the fact the money hunters took control of all areas of trade and commerce, to their benefit, by selectively deregulating risk while guaranteeing rewards.
ben22
B is worse. I could deal with A if there are position limits where no one is grandfathered in.
No issue with 'usual suspects' except the parameters in which they are permitted to work: insane leverage and a bailout when they mess up.
Limit the leverage, stop the bailouts and 'the usual suspects' can make money to their hearts content.
The government should do nothing except ensure the 'rules' to engage in profit making do not cause harm to the citizens. Insane leverage is causing harm through speculation in commodities leading to higher prices of necessities and systemic risk throughout the financial markets.
I read somewhere that in 2008 there were $198 TRILLION in derivatives and now there is $248 TRILLION 3 years later. Nobody has learned a g-dam f'ing thing because nobody making the decisions had any consequences for their actions.
The money hunters own Washington and a greater percentage of assets than ever. And, Ben, you want to blame the powerless for wanting power, somehow, some way?
It's way past time to de-distribute the wealth. What's stopping it is a very successful propaganda machine -- and DINO's like Obama who rolled over.
Ben, Amen, that example boils down the situation into a false choice of who to blame and omits the very favorable position the deal chasers have created for themselves. The greater the deficit, the greater the flow of money on Wall Street, the more they cycle back into election campaigns.
If you're in the biz though, it's probably hard for you to see it that way. Like Upton Sinclair said.
"...that example boils down the situation into a false choice..."
wunsa--
too True. CrackyMac aka McB, aka Ben22, presents a False Dichotomy.
~~~
this,
http://finviz.com/quote.ashx?t=SODA
tho..looks like a 'raging' Sell signal, no?
AAIP
Take away "mark-to-myth" and force the banks to write down their assets. Then, we'll see how much they have left over to:
- buy/hold commodities
- lend to others to buy/hold commodities
Enforce the laws against insider trading (against Wall Street and against Congress critters) and we'll see whether they "earn" 20% ROI year after year.
Hey, *I* buy/hold commodities and I think "speculation" gets a bad rap. But, I don't do it with 0% loans after selling my worthless investments to the Fed for full value.
----
AAIP, funny, yes, it looks overpriced. But, coincidentally, I would like a way to add carbonation to my drinks at home/work, to replace my expensive addiction to Perrier. Too bad I read reviews for some of these devices (not sure of the brand) and was turned off...
@ben22
CV,
pardon me, but I hardly think that's exactly the theory you proposed
it's not as if that article validated that Goldman or JPM were taking over the worlds supply of gold and silver via some covert operations, not at all in fact
---
Ben
I like you... So I don't want to go to the mat & take you down hard like Stone Cold Steve Austin... or put you in a Chief Jay Strongbow headlock...
But this is EXACTLY what I've been:
- sheepishly insinuating about
- comedically lampooning about
- outright being stupidly snotty about
for the past year...
If it hasn't permeated that level of conscioness yet to you (or other readers here) then I'd say you're either 'lost' or otherwise preoccupied...
I'm rather surprised that it's you who is saying this (because I truly believe that you put 100% effort into trying to read deeply into things)...
I think Hoffer is the only one who has really 'caught the vibe' all along...
No bother... It's not an indichtment...
In any case... If you require further generic proof that THIS IS WHAT I'M EFFIN TALKING ABOUT... The VERY FACT that I'm not authoring this blog right now (coupled with, what has been commented upon many times now, as my 'sudden' change in attitude & concern for my state of mind) is the justification for all of the above...
My THEORY began its formulation about a year ago... I've type many words in its defense (mostly met with laughter - and FURTHER with 'annoyance' [case in point - karen & I-Man are no longer part of this blog because they think I'm FOS and have chosen to take their anger with that out on Andy & Amen by not posting... because Andy & Amen are diplomatic enough types to give CV a voice]...
Instead... Others 'delicacies are exhorbitant' (as KOMOROVSKY might put it)... Pages 264-268 on the link... If anyone REALLY cares to understand anything CV ever says...
http://www.dailyscript.com/scripts/drzhivago.pdf
---
Ben... I don't care if I'm wrong about this... It's just my THEORY...
I just woner why Prechter & Neely's faces aren't pressed so close to the grill when they 'miss it'...
---
To all... I'll treat you all with respect... I'll FIGHT YOU... But it will be a 'gentlemens battle'...
I'm sorry to say that I don't have much time for those who skulk off into the corner only so as to avoid a fight...
& that's why I LIKE ben... :-)
Ben brings 'fight' to the game... & as CV penned many moons ago... "If you back down from the fight - they WILL NOT remember your name"...
http://traders-anonymous.blogspot.com/2010/11/morning-audibles_23.html
Y'all peeps ought go back and recollect some of the MORNING AUdIBLE threads of 2010... like THAT one...
beautiful drenching thunderstorm going on here right now...
I love this stuff... It make me feel more ALIVE than anything else I can think of...
A couple things as I wait for more responses
1. My intent is not to blame anyone, I'm failing to see where I do that in my question or where I even hint at it, it's a basic question that I asked, stop reading into what you think I mean and simply read what I wrote, I don't do hidden meaning posts.
2. I'm getting the impression that some of you think there is a happy utopia in between the two groups that I describe. Please explain it to me, I do not believe that this exists but perhaps I miss it. In other words, since I've been accused of presenting a false dichotomy, explain the other options to me that I miss and then explain how they don't, in the end, boil down to one of those two options above.
3. Wunsacon in particular, this idea that someone like me walks in the same, or even similar shoes as the investment banker at goldman or even the prop desk trader...or whats left of them, and therefore I don't "see it", it's really quite laughable and would only make sense to someone outside the industry, our jobs, the way we are paid, how we work with people and are held responsible, etc etc.....it couldn't be more night and day. You also seem to really want to push this idea that most people making it rain in the US today have put themselves in a position to do so through shady dealings. Am I reading that right?
"that example boils down the situation into a false choice of who to blame and omits the very favorable position the deal chasers have created for themselves"
what are you trying to imply exactly?
CV,
I enjoy wrestling you, so before I say more in response to the WSJ article, I'd kindly ask you read the whole article instead of the snip selected for the other article linked here.
I took most of your comments as follows:
1. Banks are buying commods with freshly printed notes, they are hoarding them, I'm not going through all the explanations you've given for how you think they are doing this but this was the general idea
2. That this is all by design, they slowly destroy the dollar and the banks are left with all the physical assets
Isn't that what you have been saying generally?
again, please read the article, that's all I ask
and as for prechter and neely they run theories rooted in the idea that what you describe doesn't move markets, it shouldn't be a mystery why the aren't in on it then.
*Also, I do not think what you say about Karen and the I-man is entirely fair or even all true. Those two aren't haters, I really do believe that and I'm quite fond of both of them.
@ben
& BTW... So as to avoid creating confusion once again...
this...
it's not as if that article validated that Goldman or JPM were taking over the worlds supply of gold and silver via some covert operations, not at all in fact
Sure, you're probably partly right (in saying that they're NOT 'taking over' the worlds supply)...
Neither am I saying that... (& this is the part that distinguishes the THINKERS from the THINKEES)...
1. You don't have to 'take over the worlds supply' to wreak havoc & profit handsomely for yourself... You only need to have a meddling hand in the crucial bottleneck aspect... Ask a farmer... It's raining cats & dogs right now (here)... For 20 minutes... Gallons upon gallons of free water falling from the sky as we speak... Enough to nourish enuf crops for many to eat... Most of it will flow into sewers & en up in the sea... CV has 'capture' it tho... CONTAINERS & CONdUITS bitchez!
2. JPM & GS aren't doing it 'covertly'... Instead - they know that you're so fucking stupid (& mesmerized with PAPER), they're doing it in broad daylight right in front of your fucking eyes)...
"I'm getting the impression that some of you think there is a happy utopia in between the two groups that I describe. Please explain it to me, I do not believe that this exists but perhaps I miss it. In other words, since I've been accused of presenting a false dichotomy, explain the other options to me that I miss and then explain how they don't, in the end, boil down to one of those two options above."
For me I think I might have been brain washed by Karl Denninger but my comment at 6:43 has 2 wishes (or desires if you will):
1. a return of Glass-Steagall,
2. a return of capitalism and enforcement of laws whereby those who takes the risks reap the rewards and live with the consequences (i.e. both financially and legally responsible).
"you know I'm a dreamer...."
http://www.youtube.com/watch?v=tbRfYDP5P28
@ben (7:44)
I'm gonna try to reply... But I'm struggling with the prose... I'm not 'getting it' yet (my bad - I'll figure it out)...
Your thoughts are ALWAYS worth a reply (even if its in the form of a "sock in the jaw" :-)
re: SODA
that was one hell of a day right?
but sell signal.....how do you mean?
Maybe stick a stop loss on if you are long the common but it just had a massive breakout so this isn't entirely abnormal at all.
pull up a one month chart of closing prices and you'll see today pulled it like a magnet right back to the 50 sma. Coincidence? , I believe that is the highest it traded above the 50 since it went public but with the bullish 50/200 cross in late june, the volume trend, RSI confirmation and so on
it's hard to call it a sell, the trend is most certainly still bullish, I'd also mention people keep trying to short the stock, check this out:
http://www.nasdaq.com/aspxcontent/shortinterests.aspx?symbol=SODA&selected=SODA
clearly everybody has this idea it's overpriced, but stocks trend right?
NFLX was overpriced at $100, at $150, at $200
effing LULU was probably overpriced at $55 around that giant gap on the chart, which I contend will be filled eventually.
all those shorts represent buyers
I'm not suggesting for anyone to go crazy with the common, do your own work, but that stock was $60 when I mentioned it here for the first time and I've watched options on it swing several hundred percent over that period of time
of course, I'm a greedy money bastard who holds a job that nobody respects, so you know, read this for what it is. ;-)
Ben, we must be close to a top - you're a raging bull!
jk
McHappy,
that comment was not intended for you, and I basically agree, bring back Glass St. and free markets
of course, that will never eliminate the money grabbers, I find them to be a constant in all systems
so back to the accusation of false dichotomy, while I find those arguments more than valid, I'm not sure where they eliminate the one of two groups I still describe above, you'll end up with one or the other no matter the system as I see it, so which do people prefer?
raging bull
that's funny man, but I have been bullish a couple weeks at least, I admit it.
but nah, in all places but when I come to this blog Im the biggest bear I know
it's all relative
@ben (7:50)
- you're right... karen & I-Man aren't 'haters'... (I didn't say that either)... They're... well.. 'traders'...
Problem is... succinctly... CV... unfortunately... Has this big BARRY WHITE motherfucking voice that echoes thru the chambers... I can't change that (because if I do - it changes my BEINGNESS - & I can't do that or else I lose the only thing that makes me a FREE HUMAN BEING)...
I always have & always WILL be FREE (even to the point of bloodshed)... In a certain sense... that part of me 'acknowledges' the expressed freedom of someone else to abstain from a fight (which - perhaps - manifests itself in the form of non-participation [even while said participation might be welcome &/or cajoled - 2 the chagrin of many])
I... at least... try to reach out to broader participation aspects and say "hey - don't mind me - I'm just the fly in the ointment... the monkey in the wrench"...
Nobody needs to be fearful of that...
---
You know what?
It would be EASY for this blog to just go back to basic chart analysis & leave it at that...
Just ask yourself... truthfully... Might u be missing something?
It's the SCIENCE vs. GOd argument (to point u in the right direction)...
I view it as black and white.
Those who reap the rewards in a system where they can go bankrupt if they make a mistake or go to prison if acting in violation of the law deserve all they get.
Forgetting the fact those in group 2 have a valid argument at the present time, those who complain in a system of enforced laws and Glass-Steagall are the same people who complain that top actors make too much, sports stars make too much, lawyers make too much, etc. etc. People make what others are willing to pay for their goods and services - that is suppose to be a free market. There will always be haters, arm chair quarters backs, and the 'Coulda-Shoulda-Woulda's' of the world.
Take the corruption and bought-and-paid for nature of current government out of the current system and those who complain about banker profits are complaining about anyone else's success as well.
I wish there was more chart analysis on this blog, and, I wish cv had a brother that blogged also, or a cousin, I like it all, I also like my beer that I'm almost out of... brb
oh, not really sure I understand the two questions but if I do, I'd pick "A". Because "B" could never happen, never.
@ben (7:50)
...on this
I took most of your comments as follows:
1. Banks are buying commods with freshly printed notes, they are hoarding them, I'm not going through all the explanations you've given for how you think they are doing this but this was the general idea
2. That this is all by design, they slowly destroy the dollar and the banks are left with all the physical assets
Isn't that what you have been saying generally?
---
Yeah... That's basically what I've been saying for awhile now... (& WHY the run over the past 12 months)...
---
To further iterate... (& I've stated this be4, but probably most were 2 busy reading charts to understand)...
What might be the 'success factor' of those attempts?????
Answer: Anybody's guess
This is where I align myself with most of your stalwart positioning...
---
IOW - I'm not challenging Neely & Prechter on 'socioeconomics' (or any of the final ramifications)...
Instead... I challenge the, as yet, 'not acknowledged' HIJACKING PROCESS that has occurred since 2009...
If you fail to factor in theories such as mine... Then Neely & Prechter waves will continue to be re-drawn for the next decade or two...
To bring it all into context... If anyone really effin cares what CV thinks...
S&P wise???
---
I FRANKLY (this is true)... Think that Andy T is the best effin WAVE SPECIALIST that I've ever had the pleasure of looking at charts from...
Period...
---
My vibe?
It's 'more' than the FIBOS... & it requires incredible dexterity...
3LB combo with EWI... CV really thinks... Puts you in the ballpark (better than any combo I've seen)... But you still have to stay NIMBLE in an untrustworthy environmemt - & FOR THAT, you have to have an open min to kooky theory)...
here's something I want to throw out
I sort of expected a lot of comments about regulation and Glass St. etc. for the question. I don't think these are bad ideas but just want to say that we had a credit bubble before it went away, sure it got way worse after, but it would be pretending to say it didn't exist prior to Summers and the rest doing what they did. The repeal of that type of law near the end of a credit bubble is fairly common throughout history, just goes by different names.
CV,
cool, so I do generally get what you are cooking, just go read that article when you find some time, the entire WSJ article, not the one linked.
>> You also seem to really want to push this idea that most people making it rain in the US today have put themselves in a position to do so through shady dealings. Am I reading that right?
Ben, the finance industry has turned from "servicing the economy" into the economy. It turned into a leech and now it has grown so big that it is killing its host.
That Potemkin village of "private" banks in lower Manhattan exists because of shady dealings to obtain all the backing of The State without taking the punishment. That benefits everyone (remaining) in the industry, while hurting everyone outside it.
It hurts fair players though. If I were to switch to the FIRE sector -- (if you're not stealing, you're being robbed) -- I would try to work for a *partnership*, where "IBGYBG" is less part of the lexicon.
>> of course, I'm a greedy money bastard who holds a job that nobody respects, so you know, read this for what it is. ;-)
It's not "personal", Ben.
Some friends and relatives are in businesses that I wholly disapprove of. But, they aren't nearly powerful enough to set policy. (That's the "hideous beauty" of most large corporations -- no one is.) So, do I want them to feel bad? No! Do I want them to quit their biz? No! Because a few people quitting won't achieve anything. So, not only do I not lay into them, I avoid reminding them of the ugly s*** they probably already know.
The system sucks. But, I'm not interested in being a martyr and don't expect others to become one either by quitting their jobs. The electorate has to wise up and change it somehow.
...
McHappy, yeah, I like Denninger a lot, too.
Wunsacon,
I liked this comment:
"You also overlook the fact the money hunters took control of all areas of trade and commerce, to their benefit, by selectively deregulating risk while guaranteeing rewards"
Is that how you see that this all played out? I view the world a little different I guess. In my mind I can agree, they helped deregulate risks where they figured they could then get a huge advantage, but to call it a guaranteed reward is way off in my mind. Is that really what it was? These guarantees nearly brought down the whole system, these companies you speak of, this statement fails to acknowledge that many of them no longer even exist, in fact, our government chose to keep many of the worst one's alive.
But Lehman, Bear, and so many more.....
perhaps if you want to bring it down to the individuals operating here, as I was doing at the very top, you can say that Dick Fuld and Stan Oneill and all the rest, they still exist and are rich
but the entity, the business where it all happened....poof, like pixie dust......hardly a guarantee from where I'm sitting, it only seemed that way for what is, in the big picture, a very short period of time.
Wunsacon,
I never take any comments about what I do for a job personal, I really could care less that a lot of people hate brokers, advisors whatever title you want to use, was just playing around there, I don't feel bad about saying I'm trying to make money either.
it doesn't really bother me if people do give me a hard time about it, I know why people think that way, a lot of it is valid, some of it is not, people are going to think whatever they want.
@ben
2 birds with one stone 841 & 837
---
I'll indulge you on the WSJ article... But let me tell u first...
I don't NEEd a WSJ article to confirm to me whether this is happening or not...
IT IS... It's the ONLY LOGICAL CONCLUSION... It's 'simplistic' in the most simplistic form... It's the ultimate conclusion to THE dEATH of FIAT (until the 'next' fiat emerges - of course)...
How long will it take? Who the hell knows? I'm probably too old to worry about it...
But take my advice u don't stand a chance...
Freaks are so bad they got their own dance...
So if u wanna live a nice quiet life...
do urself a favor don't go out at night...
http://www.youtube.com/watch?v=JLYC7ltxOrk
---
Glass St...????
LMFAO
OK... Theoretically, it's an argument... REALITY? We're way beyond that at the moment...
NOT THE GAME!
http://www.youtube.com/watch?v=exOxUAntx8I
any big brother fans out there?
woo hoo!
Ben, the TRILLIONS given out by Fannie, Freddie, the Fed, and AIG (as a conduit to the other players) were given in exchange for NOTHING. Bondholders and shareholders of MANY MORE banks should have been wiped out. The government should have taken over the businesses and auctioned them back off in subsequent years to private bidders.
Now, of course, many FIRE professionals have been laid off. But, how does the percentage contraction compare to American construction workers? To IT workers? To other industries? FIRE professionals got it GREAT by comparison.
Whoa. I got late start on my afternoon routine. Will need some time to catch up with Ben's provacative question.
-AT
>> I never take any comments about what I do for a job personal,
Well, maybe I'm just "projecting", because I take things personally sometimes. (E.g., I'm still "bothered" you accused me a few months back of subscribing to EMH, just because I was trying to reason about the after effects of QE2!) ;-)
To be sure, I think advisers can be good people and can do good by their clients. I hate aspects of the game but not most of the players.
that is a huge engulfing candle on SODA, gotta imagine that's going down more near term
see what it does back at 60-63, that should provide natural support
lots of options plays available on this name imo....
@wunsa (9:13)
I might b coming to ur defense here (but I'm not sure - just speck-a-latin, as always - my 'Jed Clampett' jones)...
QE2??? or 3... or 18... (as the case may be - because the ALL will happen, in one form or another... which will 'confound' the EWI analysts)... but of course, the 'numbering' will change accordingly...
Anyway... QE2... (3-18)...
Factor it in... Then... trade accordingly...
I've already been doing so for over a year now (in words & actions)... ACTIONS haven't done me wrong thus far... WORds have force me to relinquish this blog...
Which doesn't reduce value thereof... If u kno what I mean...
@ben
SOdA bitchez! (just had 2 say it)... For the fun... u kno... THE FUN!...
---
Actually, if u wanna kno...
CV 'likes' the PRACTICAL idea of it all... It's the way it should be... F*** St Warren & his jive @ss coca cola...
I'm down wit dat!
CV, remember how you said The Bernank will bring down commodity prices during the summer before starting up QE3? Do you think we're there yet?
With wheat down, I'm wondering about buying back in. Just not sure the Latin American and Russian exports won't come back in and flood the market, driving down prices despite QE3.
Wunsacon,
well, I'm sorry you took that personal, but I do believe your a subscriber, still think that. It simply puts you in the majority so I'm not sure that should be offensive, but I didn't mean it that way, next time I'll instead suggest looking at the markets a different way to draw conclusions than discussing EMH.
agree with you that all those companies should have been let go, every single one, and shareholders and bond holders taking a bath as well, I'm IN on that idea
here's the thing about employment, the globe is still demanding financial services that Wall St. provides so for better or worse there's work to be done. Construction domestically simply doesn't have the demand it did before so the jobs go away. IT, that is perhaps a more complex story. This construction comparison isn't "unfair" in isolation in my view, there's been a shit-ton of stimulus thrown at the RRE markets as well, thats life, demand for things ebbs and flows, I bet Wall St gets even smaller in the next 5-6 years as we enter another bear market.
>> well, I'm sorry you took that personal, but I do believe your a subscriber, still think that. It simply puts you in the majority so I'm not sure that should be offensive
Ben, to be sure, it would be highly irrational for me to actually be "offended" by what you said. I am kidding. But, I remember the discussion because I'm pretty sure I disagree with "strong" EMH. And, AFAIK, "weak EMH" just puts a label on some old ideas for which I don't think the creators of "EMH" deserve credit.
>> I bet Wall St gets even smaller in the next 5-6 years as we enter another bear market.
Well, if I apply for an IT job there, it'll surely happen. ;-)
...
So long for now, folks. Gotta go do some exercise.
Ben, I would obviously choose "a" to your question above. I'm not surprised that banks and large trading firms have gotten into this 'game.' At a time when the 1 year yield is basically ZERO, it makes a HUGE amount of sense for these types of firms to chase these "cash and carry" trades.
It can be lucrative as shit, especially with metals, because the actual carrying cost is infintessimally small relative to the value of the goods (UNLIKE crude oil or grains which will eventually spoil).
i.e. the LME metal warehouser can take delivery of spot zinc or aluminum and sell the 3 month out contract and earn 4-5% annualized return that is risk free.
Then, there is the 'optionality' imbedded in being long front and short back on metals. for instance, the market can flip into backwardation up a sudden physical tightness...and then blammo...people are paying YOU to roll inventory.
It's one of the reasons JAron (GS) is such a big player in all those oil hubs (Cushing, OK and NY Harbor). They ain't dummies....
There are pretty good rules on the book in regard to commodity manipulation as well. If anyone thinks they're being wronged by the operators and they have evidence, it's very easy to call the CFTC. I'm not kidding....
The CFTC would be happy to jam it to Glencore or Trafi for sure. If they were given good evidence, they'd stick it to a bank as well. But don't get me wrong, they'd much rather nail a Trafi than a JPM.
in re the SODA p/e you see on many of the public sites, they are giving earnings in euros so you have to do the conversion, it drops the forward p/e by about half
@wunsa (9:33)
To be clear... I never said "the Bernank" would ever... "policy wise"... be responsible for ANYTHING (no way he could EVER 'hope' to do so)... (not that he ever hoped or cared as to whether or not the joo buck 'entities' (sorry to offend all the delicate {as KOMOROSKY put it] sensibilities out there), who still swear by 'skittles & unicorns'... [& therefore get scuttled by the VIX at any given juncture whilst waiting for Neely's latest geometry])...
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All I simply stated was that Qe3- Qe18, would, in fact, happen...
As to what it's called & how it manifests... I dunno...
Bottom line is... NOTWITHSTANdING paper markets... One ought 2 own PHYSICAL (something) over paper prices of something...
How hard is that to understand? (not you u specifically - but ANYONE - paper 'day traders' to be specific)...
I'm just an ANNOYANCE tho... discredit me at will as we speak...
thanks for all that AT, of course its likely evident my choice is A
as for the new moneymaker.....it's business, I agree what they are doing makes perfect sense, great way for them to make profits, only natural to me they'd get in, especially given the catalyst of physical tightness you describe, which is more certain to happen from time to time in coming years.
@mcHappy:
"I read somewhere that in 2008 there were $198 TRILLION in derivatives and now there is $248 TRILLION 3 years later. Nobody has learned a g-dam f'ing thing because nobody making the decisions had any consequences for their actions."
It does sound like a big number, doesn't it?
I wouldn't suggest that it's NOT a big number, but it's definitely misleading.
For instance, I could open a 10 lot option contract of Dec WTI futures. The notional value of the 10 contracts would be ~ $1,000,000 (based on $100 crude and 1,000 bbls contract), but if it's a deep out of the money contract, it wouldn't cost me much to put that trade on. Maybe 10-30K depending on how deep out of the money they were. The derivatives police would call that $1,000,000 of derivs 'in play'...but the number, in reality, is much, much smaller.
Again, 200-300Trillion is a huge number...not trying to discount that at all....that's why when we get "events"...it triggers BIG, BIG moves in these indexes...bigger than some could imagine.
I'm just suggesting it's a little misleading.
I'm seeing more stories like this in re: that awesome tobacco settlement from years ago. dumb ol' "linear" thinking politicians/economists planned on huge tobaccy revenues as far as the eye could see.
wrong.
Smoking demand is fairly 'inelastic' at certain price points....
At the current tax/price point, people have curtailed usage.
But wait...health care costs keep going up...and people are smoking less....
Guess it's time to go after the Fast Food Chains...
Those 'evil doers'.....
Andy T
I always thought that was odd. Cities/states continue to raise taxes on smokes as the ads to not smoke increase. They have to keep raising taxes (just to keep the same level) because there are fewer people smoking.
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