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Posts by Wyatt's Torch

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  • Investment & Finance Thread (Apr. 13 edition)

    04/17/2014 10:41:16 AM PDT · 64 of 65
    Wyatt's Torch to expat_panama
  • Investment & Finance Thread (Apr. 13 edition)

    04/17/2014 10:17:50 AM PDT · 62 of 65
    Wyatt's Torch to expat_panama

    Another bullish sign:

    http://goo.gl/fb/h5Syd

  • Investment & Finance Thread (Apr. 13 edition)

    04/17/2014 9:38:38 AM PDT · 61 of 65
    Wyatt's Torch to expat_panama

    This is a pretty important story on the monetary front. You’ve seen me mention velocity a number of times. Now lending and business spending is picking up. Velocity should start to pick up. That’s an inflationary signal:

    Everyone’s Talking About This Bullish Trend, But Art Cashin Warns It’s Hyperinflationary

    AP Images
    Art Cashin
    We’re seeing increasing amounts of evidence to suggest that business spending activity is picking up.
    The most compelling evidence that many analysts are pointing to is the recent acceleration of commercial and industrial loans (C&I) as reported by the Federal Reserve.

    “Why is lending increasing so fast in the US?” asked The Financialist’s Jens Erik Gould. “There are two primary factors: a recovering economy and loose monetary policy meant to entice businesses to take on more debt.”

    That first point is good news, but that second point raises a red flag for some.

    Since the financial crisis, the Federal Reserve has kept monetary policy very loose. Indeed, the Fed’s balance sheet has ballooned from $1 trillion in 2007 to more than $4 trillion today as it bought up financial assets and flooded the economy with cash.

    However, much of that cash hasn’t moved much. Specifically, borrowing and spending in the business world has been very low. And as a result, inflation has remained very low.

    Now, the anecdotes are pouring in to confirm the Fed’s lending data. UBS’s Art Cashin wrote about it this morning citing one bank’s anecdote. He also issued a somewhat ominous warning (emphasis added):

    ...In a front page article this morning, the WSJ says that all may be changing. They say banks are beginning to lend and business are beginning to borrow. Here’s a bit:

    The increase in commercial lending is helping big banks offset slack demand for mortgages and other types of consumer loans, which has weighed on overall lending numbers. The six banks posted 2.9% growth in overall lending in the first quarter.

    Andrew Cecere, chief financial officer of U.S. Bancorp, the fifth-largest U.S. lender by assets, said in an interview Wednesday the bank has seen increased demand for commercial loans from small businesses to midsize companies and large corporations. The Minneapolis bank posted a 9.7% increase in commercial loans outstanding in the quarter, to $113.8 billion, helping to drive a rise in first-quarter net income.

    “There’s just a general higher level of interest in loan activity and lines of credit,” he said.

    The implications of this are potentially huge – to the economy; to the stock market; to Fed policy; and perhaps, most importantly, to inflation. In a fractional banking system, money gets velocity when it’s lent. High velocity risks hyperinflation. We’ll discuss more fully next week.

    Cashin has long warned that an increase in the velocity of money could quickly turn hyperinflationary.

    While he may sound extreme, he’s not the only person warning about the perils of increased lending activity on the back of a mountain of loose money.

    “Over the past 15 weeks there has been a sharp acceleration in bank lending, which is now growing at an 8.6% annual rate, and could suggest animal spirits are reviving,” noted Charles Schwab’s Liz Ann Sonders. “But it does mean we need to keep an eye on the velocity of money to gauge the risk of an inflation scare.”

    We’ll surely hear more about this.

  • Marissa Mayer's second-in-command gets a $58million severance package after working..15 months

    04/17/2014 9:32:06 AM PDT · 10 of 28
    Wyatt's Torch to C19fan

    I could have failed for 1/3 of that cost...

  • Jobless claims inch up, but remain near 7-year low

    04/17/2014 8:07:23 AM PDT · 23 of 26
    Wyatt's Torch to IC Ken

    No that is continuing claims. This is initial claims.

  • Investment & Finance Thread (Apr. 13 edition)

  • The ‘Foreclosure Crisis’ Has Ended: But government and media don't want you to know that.

    04/17/2014 7:39:40 AM PDT · 18 of 23
    Wyatt's Torch to SeekAndFind

    Still high but the “crisis” is over. The rate has been trending down for the last 4 years. The pig has moved through the python ($1 to Ivy Zelman).

  • Jobless claims inch up, but remain near 7-year low

    04/17/2014 7:36:46 AM PDT · 21 of 26
    Wyatt's Torch to Cringing Negativism Network

    From ISI this morning:

    Claims Make Slight Downside Breakout

    History suggests that when unemployment claims make a downside breakout, the perception of the economy and Fed policy shifts. They made a slight downside breakout this week. And this is the week of the April employment survey.

  • The ‘Foreclosure Crisis’ Has Ended: But government and media don't want you to know that.

    04/17/2014 7:32:24 AM PDT · 15 of 23
    Wyatt's Torch to SeekAndFind
  • Fed Can Print Money, But It Can't Print Jobs

    04/17/2014 7:16:07 AM PDT · 8 of 14
    Wyatt's Torch to expat_panama

    “I don’t want to ruin your evening after such a pleasant dinner. But if you wish to know who is at fault for hollowing out the welfare of middle-income workers and the American economy, kindly do not look at me or my colleagues at the Fed. When you go home tonight look at yourself in the mirror. We at the Fed are providing more than enough monetary accommodation. You elect our fiscal and regulatory policymakers. It is time for them to do their job, to ally themselves with us to achieve a fully employed, prosperous America. Only you, as voters, have the power to insist that they craft policies that are needed to restore American prosperity. Please do so.

    Have a most pleasant evening! “

    ~ Richard Fisher, Dallas Fed Chairman, February 11, 2014

  • Jobless claims inch up, but remain near 7-year low

    04/17/2014 7:09:30 AM PDT · 18 of 26
    Wyatt's Torch to IC Ken

    No that’s incorrect. This chart if for initial (first time) claims.

  • Jobless claims inch up, but remain near 7-year low

    04/17/2014 6:51:02 AM PDT · 16 of 26
    Wyatt's Torch to ThunderSleeps

    No we aren’t losing jobs (except in the government sector). Private sector employment is at an all time high

    http://www.businessinsider.com/private-payrolls-peak-2014-4

  • Jobless claims inch up, but remain near 7-year low

    04/17/2014 6:43:18 AM PDT · 11 of 26
    Wyatt's Torch to irish guard

    Been trending downward for 15+ years driven by women. Participation rate for men has been trending downward for 50 years. Demographics is a piece of the equation.

  • Jobless claims inch up, but remain near 7-year low

    04/17/2014 6:36:18 AM PDT · 5 of 26
    Wyatt's Torch to SeekAndFind
  • Casualty of Coal: One of Two Major Coal-Fired Electric Plants to Close

    04/17/2014 6:24:25 AM PDT · 11 of 24
    Wyatt's Torch to Phillyred

    Almost all of the new plants are gas fired due to nat gas being ~$4.50/mmbtu. Unless that doubles there won’t be anything but gas fired.

  • The Recovery is Dead

    04/17/2014 6:12:44 AM PDT · 20 of 46
    Wyatt's Torch to Opinionated Blowhard

    “I don’t want to ruin your evening after such a pleasant dinner. But if you wish to know who is at fault for hollowing out the welfare of middle-income workers and the American economy, kindly do not look at me or my colleagues at the Fed. When you go home tonight look at yourself in the mirror. We at the Fed are providing more than enough monetary accommodation. You elect our fiscal and regulatory policymakers. It is time for them to do their job, to ally themselves with us to achieve a fully employed, prosperous America. Only you, as voters, have the power to insist that they craft policies that are needed to restore American prosperity. Please do so.

    Have a most pleasant evening!”

    ~ Dallas Fed Chairman Richard Fisher, February 11, 2014

  • Investment & Finance Thread (Apr. 13 edition)

    04/17/2014 5:46:07 AM PDT · 54 of 65
    Wyatt's Torch to expat_panama

    THE LOOK…April 17th, 2014

    U.S. stock-index futures fell, after the biggest three-day rally in two months for equities, as Google Inc. posted worse-than-estimated sales and investors awaited data that may show jobless claims rose.

    Google slid 3.2 percent in early New York trading as increasing costs and a shift of advertising to mobile phones curbed first-quarter results. Facebook Inc., which also derives most of its revenue from advertising, lost 2.5 percent. International Business Machines Corp. dropped 3.7 percent after
    reporting quarterly sales that trailed projections. General Electric, on the other hand, is currently trading up 2 percent after releasing earnings this morning.

    Futures on the S&P 500 expiring in June declined 0.2percent to 1,848.4 at 11:28 a.m. in London. The equity gaugeadvanced yesterday, capping a three-day gain of 2.6 percent, asYahoo! Inc. earnings topped estimates and industrial productionclimbed more than forecast. Dow Jones Industrial Average
    contracts retreated 46 points, or 0.3 percent, to 16,285 today.

    “It has been a bit direction-less in the markets,” OttoWaser, chief investment officer at R&A Research & AssetManagement AG in Zurich, said by telephone. “There’s been a bit of a rotation out of technology — these sectors that had gotten a bit stretched in their valuations — but there hasn’t been any
    major correction in the U.S.”

    Twenty-five companies in the S&P 500 report earnings today. Profit per share for the index’s constituents probably dropped 0.9 percent in the first quarter, according to analyst estimates compiled by Bloomberg. Revenue climbed 2.6 percent from a year earlier, the projections show.

    A report at 8:30 a.m. in Washington may show 315,000 people filed first-time applications for unemployment benefits in the week ended April 12, up from the previous week’s reading of 300,000 that was the lowest since May 2007, according to the median economist projection compiled by Bloomberg.

    European stocks declined, paring their advance this week, as SAP AG slid after posting worse-
    than-forecast earnings and sales, outweighing gains by carmakers. U.S. index futures slipped, while Asian shares rose.

    SAP lost 3.3 percent as Germany’s biggest technology company also said that revenue from new software licenses dropped in the quarter. Akzo Nobel NV slid the most in nine months as its sales missed projections. Remy Cointreau SA and Diageo Plc led beverage stocks lower after reporting lower
    sales. Renault SA and PSA Peugeot Citroen each gained more than 1 percent as a report showed European car sales rose in March.

    The Stoxx Europe 600 Index retreated 0.3 percent to 329.86 at 10:53 a.m. in London as diplomats from Ukraine, Russia, the U.S. and the European Union meet for talks in Geneva today. The benchmark has still added 0.3 percent this week. It has fallen 2.8 percent from this year’s high on April 4 amid a confrontation between Ukraine’s government and pro-Russian separatists in the country’s eastern region.
    “Investors are very cautious because of Ukraine and

    · Support:1851, 1840, 1824
    · Resistance:1867, 1873, 1889

    The Federal Reserve is increasing its dominance in the daily market for the borrowing and lending of Treasuries while putting a floor under money-market rates.
    The top panel of the CHART OF THE DAY shows the allotment at the central bank’s daily fixed-rate reverse repurchase agreements, which are tri-party transactions conducted daily by the Federal Reserve Bank of New York. The daily use levels, which appear as a negative on the chart as they represent a temporary drain of reserve from the banking system, have risen as increases in allowable per counterparty bids have been matched with demand. The bottom panel shows the activity has helped Treasury repo rates move up from almost zero.
    “The Fed with its reverse-repo program is playing a greater role in Treasury repo, accounting for 17 percent of the tri-party market,” said Joe Abate, a money-market strategist in New York at primary dealer Barclays Plc. “In addition to establishing a harder floor under short-term interest rates by increasing allotment sizes, the program seems to be changing the behavior of money market investors, who have been increasing their holdings of Treasury repo.”
    Money market mutual funds’ holdings of Treasury repo averaged $220 billion from September 2013 to March 2014, which compares to an average of $180 billion between January 2013 and the start of the Fed’s program in September of that year, according to Abate.
    The Fed is using the fixed-rate reverse repo facility to improve control of short-term borrowing costs and help facilitate the eventual unwinding of monetary policy. The facility will eventually allow the Fed’s ligible tri-party reverse repo counterparties, which range from banks to broker-dealer to money market funds, to lend the Fed unlimited amounts of cash overnight in exchange for Treasuries. The per-counterparty daily allotment cap is $10 billion at a fixed rate of 0.05 percent.
    The counterparty limit was $500 million when the program began. Under the Fed’s current guides for the operations, the fixed rate can range from 0.01 to 0.05 percent.

    Disclaimer:
    The information contained in this communication is not intended as an offer or solicitation for the purchase or sale of any securities, futures, options, or any other investment product. This communication is not research, and does not contain enough information on which to make an investment decision. The information herein has been obtained from various sources including Bloomberg, Wall St. Journal, Briefing.com, Dow Jones, Reuters

    Sources: Commentary adapted from Bloomberg, Wall St. Journal, Briefing.com, Streetaccount, theflyonthewall, FT.com, Reuters, and/or Dow Jones NewsPlus.

    This e-mail and its attachments are intended only for the individual or entity to whom it is addressed and may contain information that is confidential, privileged, inside information, or subject to other restrictions on use or disclosure. Any unauthorized use, dissemination or copying of this transmission or the information in it is prohibited and may be unlawful. If you have received this transmission in error, please notify the sender immediately by return e-mail, and permanently delete or destroy this e-mail, any attachments, and all copies (digital or paper). Unless expressly stated in this e-mail, nothing in this message should be construed as a digital or electronic signature. For additional important disclaimers and disclosures regarding KCG’s products and services, please click on the following link:

    http://www.kcg.com/legal/global-disclosures

  • Investment & Finance Thread (Apr. 13 edition)

    04/17/2014 5:43:23 AM PDT · 53 of 65
    Wyatt's Torch to expat_panama
  • Investment & Finance Thread (Apr. 13 edition)

    04/17/2014 5:34:05 AM PDT · 51 of 65
    Wyatt's Torch to expat_panama

    Initial Claims = 304,000 beating estimates

  • Investment & Finance Thread (Apr. 13 edition)

    04/17/2014 5:32:07 AM PDT · 50 of 65
    Wyatt's Torch to expat_panama; bert

    I go back to Dallas Fed Chairman Fisher’s comment on the destructive impact of fiscal policy. As bert mentioned Obamacare, minimum wage, EPA, and all the other choking regulation is what is killing growth. Business Insider had an article yesterday that this is the worst earnings growth performance in 50+ years. The politicians, ALL OF THEM, are killing the economy.

  • Investment & Finance Thread (Apr. 13 edition)

    04/17/2014 4:47:45 AM PDT · 46 of 65
    Wyatt's Torch to Wyatt's Torch
  • Investment & Finance Thread (Apr. 13 edition)

    04/17/2014 4:42:46 AM PDT · 45 of 65
    Wyatt's Torch to bert
    That not inflation...

    Inflation is "always and everywhere a monetary event" ~ Milton Friedman

    Here is wage growth YOY over the past few years:

    http://research.stlouisfed.org/fred2/graph/?g=xBA

  • Donald Rumsfeld writes the IRS: I have no idea if my tax returns are accurate

    04/16/2014 6:46:34 PM PDT · 19 of 19
    Wyatt's Torch to TangoLimaSierra

    I, for one, cannot wait to read his book.

  • Donald Rumsfeld writes the IRS: I have no idea if my tax returns are accurate

    04/16/2014 2:06:13 PM PDT · 5 of 19
    Wyatt's Torch to GrandJediMasterYoda

    That’s fantastic! I have a BS in Finance. An MBA. I work in corporate finance and deal with numbers all day. I have no clue if mine are right. I trust Turbo Tax becaus there is no way I could do it all on my own. Utterly ridiculous.

  • Investment & Finance Thread (Apr. 13 edition)

    04/16/2014 1:54:58 PM PDT · 42 of 65
    Wyatt's Torch to expat_panama
  • Investment & Finance Thread (Apr. 13 edition)

    04/16/2014 1:53:12 PM PDT · 41 of 65
    Wyatt's Torch to expat_panama

    KCG Closing Summary:

    Today’s S&P 500 Intra-day Chart:

    NYSE Volume: 675 million

    Sector Performance:

    End of Day Summary:

    Closing Market Summary: Stocks Post Third Day of Consecutive Gains
    The stock market finished the Wednesday session on an upbeat note with the Nasdaq (+1.3%) ending in the lead. The S&P 500 settled higher by 1.1% with all ten sectors posting gains.

    The benchmark index spent the entire trading day in the green, rallying to new highs during the last hour of action. The tech-heavy Nasdaq, meanwhile, briefly dipped into the red during morning action, but was able to recover swiftly.

    Stocks began the trading day with modest gains after the overnight session featured the release of China’s Q1 GDP. Although the report could be classified as better-than-feared, it did not necessarily produce a clear-cut signal as the year-over-year reading of 7.4% beat estimates (7.3%), while the quarter-over-quarter growth of 1.4% was just below expectations (1.5%).

    When the opening bell rang at the New York Stock Exchange, the Dow and S&P 500 maintained relatively narrow ranges through the first two hours of action, while the Nasdaq slipped below its flat line due to weakness among chipmakers. The largest industry player, Intel (INTC 26.93, +0.16), reported a slim earnings beat, but other semiconductor names struggled. The broader PHLX Semiconductor Index shed 0.2%.

    Even though chipmakers knocked the Nasdaq into the red, the index was able to overcome that weakness due to the relative strength of biotechnology and recently-battered momentum names. The iShares Nasdaq Biotechnology ETF (IBB 222.79, +5.18) jumped 2.4%, ending just above its 200-day moving average (219.97) after struggling with that level for the past week.

    Interestingly, the broader health care (+0.6%) sector did not follow biotech’s lead as several large components weighed. UnitedHealth (UNH 78.19, -1.32) contributed to the underperformance, falling 1.7% after receiving a downgrade from Citigroup ahead of its earnings report, which will be released ahead of tomorrow’s opening bell.

    Elsewhere among influential sectors, consumer discretionary (+1.4%), energy (+1.2%), and industrials (+1.5%) provided support to the broader market, while financials (+0.9%) lagged. The economically-sensitive sector was pressured by Bank of America (BAC 16.13, -0.26), which lost 1.6% after missing bottom-line estimates. The financial sector will be in focus once again tomorrow with the market digesting quarterly results from American Express (AXP 87.40, +1.36), Goldman Sachs (GS 157.22, +2.30), and Morgan Stanley (MS 29.89, +0.34).

    On the countercyclical side, health care (+0.6%) ended at the bottom of the leaderboard, while consumer staples (+0.9%), telecom services (+0.9%), and utilities (+0.8%) had some difficulty keeping up with the broader market.

    Treasuries settled modestly lower following a range bound session. The benchmark 10-yr yield ticked up one basis point to 2.64%.

    Participation was below average as 661 million shares changed hands at the NYSE.

    Reviewing today’s data:
    Housing starts increased 2.4% in March to 946,000 from an upwardly revised 920,000 in February. The Briefing.com consensus expected 955,000 new starts. Overall, the residential construction report was encouraging, but did not provide any evidence that the weakness in January and February was weather related. Starts remained well below 1.00 million, which was the average in the fourth quarter. Had weather factored into the weakness, then there should have been a much stronger bounce from delayed starts. Single-family construction, which languished below 600,000 in January and February, rebounded 6.0% to 635,000. That was more in-line with the trends over the last 12 months. Multifamily starts fell 3.1% to 311,000 in March from 321,000 in February. That was a typical decline from a normally volatile sector.
    Industrial production increased 0.7% in March after increasing an upwardly revised 1.2% (from 0.6%) in February. The Briefing.com consensus expected industrial production to increase 0.5%. Manufacturing production increased 0.5% in March, down from an upwardly revised 1.4% (from 0.9%) in February. The March gain was in-line with the ISM production index. Despite a 0.8% decline in motor vehicles and parts production, durable goods manufacturing production increased 0.5%. Nondurable goods manufacturing production increased 0.7%, which was mostly the result of a 3.3% increase in petroleum and coal products production.
    Tomorrow, weekly initial claims (Briefing.com consensus 312K) will be reported at 8:30 ET and the Philadelphia Fed Survey for April (consensus 8.6) will be released at 10:00 ET.
    S&P 500 +0.8% YTD
    Dow Jones Industrial Average -0.9% YTD
    Nasdaq Composite -2.2% YTD
    Russell 2000 -2.6% YTD
    Bond Summary:

    Curve Flattest Since October 2009: 10-yr: -03/32..2.637%..USD/JPY: 102.24..EUR/USD: 1.3815
    Treasuries finished mixed amid a choppy trade.
    The complex held small losses into the U.S. cash open before some light buying emerged in response to the disappointing housing starts (946K actual v. 955K expected) and building permits (990K actual v. 1003K expected) data.
    Maturities would slip onto their worst levels of the session following the strong industrial production (0.7% actual v. 0.5% expected) and capacity utilization (79.2% actual v. 78.8% expected) numbers, but failed to see follow through selling.
    A choppy trade persisted before Fed Chair Janet Yellen suggested the central bank remains committed to an accommodative policy and that there is greater chance inflation runs below the Fed’s target.
    The latest Fed Beige Book indicated “economic activity increased in most regions of the country since the previous report.”
    Outperformance at the long end saw the 30y shed -0.6bps to 3.454%. The yield on the long bond closed on session lows, and at a level last seen in June.
    The 10y edged up +0.9bps to 2.637%. Traders will continue to monitor the 2.600% level over the coming sessions as that level has held up since early February.
    The 5y lagged, finishing +3.7bps @ 1.655%. Selling produced a fourth straight rise in yield, and has action moving towards a test of resistance in the 1.660%/1.700% area.
    Today’s mixed trade flattened the yield curve with 5-30-yr spread tightening to 180bps, which was last seen in October 2009.
    Precious metals were firm with gold +$2 @ $1302 and silver +0.13 @ $19.62.
    Data: Initial and continuing claims (8:30), and Philly Fed (10).

    Commodities Summary:

    Closing Commodities: Gold Rise 0.3%, Closes Above $1300/Oz, Crude Gains 5 Cents
    June gold traded in positive territory for most of today’s pit session. Prices advanced as high as $1307.10 per ounce and dipped to a session low of $1297.90 per ounce in mid-morning action. The yellow metal eventually settled with a 0.3% gain at $1303.40 per ounce.
    May silver rose to a session high of $19.81 per ounce shortly after floor trade opened. It then chopped around near the $19.60 per ounce level and settled with a 0.8% gain at $19.64 per ounce.
    May crude oil rose to a session high of $104.82 per barrel in early morning floor trade but slipped into negative territory following inventory data that showed a build of 10.0 mln barrels when a smaller build of 1.8-2.3 mln barrels was anticipated.
    The energy component managed to inch higher in afternoon action and settled at $103.73 per barrel, or 5 cents above the unchanged line.
    May natural gas chopped around in the red today. It touched a session high of $4.57 per MMBtu in early morning action and settled with a 0.9% loss at $4.53 per MMBtu, just above its session low of $4.52 per MMBtu.
    NYMEX Energy Closing Prices
    May crude oil rose $0.05 to $103.73/barrel
    Crude oil rose to a session high of $104.82 in early morning floor trade but slipped into negative territory following inventory data that showed a build of 10.0 mln barrels when a smaller build of 1.8-2.3 mln barrels was anticipated. The energy component managed to inch higher in afternoon action and settled 5 cents above the unchanged line.
    May natural gas fell 4 cents to $4.53/MMBtu
    Natural gas chopped around in the red today. It touched a session high of $4.57 in early morning action and settled just above its session low of $4.52, booking a loss of 0.9%.
    May heating oil rose 2 cents to $3.01/gallon
    May RBOB settled unchanged at $3.04/gallon
    CBOT Agriculture and Ethanol/ICE Sugar Closing Prices
    May corn fell 6 cents to $4.98/bushel
    May wheat fell 13 cents to $6.88/bushel
    May soybeans rose 17 cents to $15.19/bushel
    May ethanol fell 9 cents to $2.17/gallon
    July sugar (#16 (U.S.)) rose 0.06 of a penny to 24.40 cents/lbs

    The information contained in this communication is not intended as an offer or solicitation for the purchase or sale of any securities, futures, options, or any other investment product. This communication is not research, and does not contain enough information on which to make an investment decision. The information herein has been obtained from various sources including Bloomberg, Wall St. Journal, Briefing.com, Dow Jones, Reuters

    Sources: Commentary adapted from Bloomberg, Wall St. Journal, Briefing.com, FT.com, Reuters, and/or Dow Jones NewsPlus.

    John Longobardi
    Corporate Relations Director

    One Liberty Plaza
    165 Broadway
    New York, NY 10006
    +1 646 428 1704 tel
    +1 203 887 2202 mobile
    jlongobardi@kcg.com
    www.kcg.com

    This e-mail and its attachments are intended only for the individual or entity to whom it is addressed and may contain information that is confidential, privileged, inside information, or subject to other restrictions on use or disclosure. Any unauthorized use, dissemination or copying of this transmission or the information in it is prohibited and may be unlawful. If you have received this transmission in error, please notify the sender immediately by return e-mail, and permanently delete or destroy this e-mail, any attachments, and all copies (digital or paper). Unless expressly stated in this e-mail, nothing in this message should be construed as a digital or electronic signature. For additional important disclaimers and disclosures regarding KCG’s products and services, please click on the following link:

    http://www.kcg.com/legal/global-disclosures

  • Investment & Finance Thread (Apr. 13 edition)

    04/16/2014 1:11:59 PM PDT · 39 of 65
    Wyatt's Torch to expat_panama

    GOOG, IBM and AMX all miss top line. GOOG on earnings as well.

  • The Winners and Losers in Detroit Bankruptcy

    04/16/2014 12:55:02 PM PDT · 2 of 6
    Wyatt's Torch to MichCapCon

    Protecting unsecured pensioners at the expense of secured creditors is unconscionable and basically destroys financial law.

  • Major Study Finds The US Is An Oligarchy

    04/16/2014 12:35:55 PM PDT · 16 of 31
    Wyatt's Torch to tcrlaf

    It’s not just Deocrats. The Pubbies are equally complicit. Rush’s “ruling class” commentary from a few years ago was spot on.

  • Investment & Finance Thread (Apr. 13 edition)

  • 86M Full-Time Private-Sector Workers Sustain 148M Benefit Takers

    04/16/2014 10:58:05 AM PDT · 31 of 43
    Wyatt's Torch to AmusedBystander

    1/3 of this reported number is Social Security. Another 1/3 is Medicare. While “technically” they are “takers” they also have paid into and continue to pay a boat load of taxes currently as you mention. As I mentioned in another post, the problem of a massive government and a massive entitlement society is vey bad. But this sort of “analysis” does more damage because it is very poorly thought through and easily discredited.

  • 86M Full-Time Private-Sector Workers Sustain 148M Benefit Takers

    04/16/2014 10:51:59 AM PDT · 29 of 43
    Wyatt's Torch to grobdriver

    It’s a lot misleading... The problem is bad. They don’t need to use bad math to prove the point.

  • Game of Thrones, United States Edition - A Smallfolk's Guide, First Edition

    04/16/2014 10:09:56 AM PDT · 13 of 19
    Wyatt's Torch to miliantnutcase

    Paul Ryan = Littlefinger

    Sigil: An Excel chart on a field of PowerPoint backgrounds

  • Investment & Finance Thread (Apr. 13 edition)

    04/16/2014 9:33:46 AM PDT · 37 of 65
    Wyatt's Torch to expat_panama

    Yellen ON:

    JANET YELLEN GIVES FIRST SPEECH ON MONETARY POLICY AS FED CHAIR

    REUTERS/John Gress
    United States Federal Reserve Chair Janet Yellen.
    Janet Yellen is giving her first speech on monetary policy today since assuming office as chairwoman of the Federal Reserve in an event at the Economic Club of New York.
    Markets are not moving much on her comments.

    Below is the full text of her speech:

    Chair Janet L. Yellen

    At the Economic Club of New York, New York, New York

    April 16, 2014

    Monetary Policy and the Economic Recovery

    Nearly five years into the expansion that began after the financial crisis and the Great Recession, the recovery has come a long way. More than 8 million jobs have been added to nonfarm payrolls since 2009, almost the same number lost as a result of the recession. Led by a resurgent auto industry, manufacturing output has also nearly returned to its pre-recession peak. While the housing market still has far to go, it seems to have turned a corner.

    It is a sign of how far the economy has come that a return to full employment is, for the first time since the crisis, in the medium-term outlooks of many forecasters. It is a reminder of how far we have to go, however, that this long-awaited outcome is projected to be more than two years away.

    Today I will discuss how my colleagues on the Federal Open Market Committee (FOMC) and I view the state of the economy and how this view is likely to shape our efforts to promote a return to maximum employment in a context of price stability. I will start with the FOMC’s outlook, which foresees a gradual return over the next two to three years of economic conditions consistent with its mandate.

    While monetary policy discussions naturally begin with a baseline outlook, the path of the economy is uncertain, and effective policy must respond to significant unexpected twists and turns the economy may take. My primary focus today will be on how the FOMC’s monetary policy framework has evolved to best support the recovery through those twists and turns, and what this framework is likely to imply as the recovery progresses.

    The Current Economic Outlook

    The FOMC’s current outlook for continued, moderate growth is little changed from last fall. In recent months, some indicators have been notably weak, requiring us to judge whether the data are signaling a material change in the outlook. The unusually harsh winter weather in much of the nation has complicated this judgment, but my FOMC colleagues and I generally believe that a significant part of the recent softness was weather related.

    The continued improvement in labor market conditions has been important in this judgment. The unemployment rate, at 6.7 percent, has fallen three-tenths of 1 percentage point since late last year. Broader measures of unemployment that include workers marginally attached to the labor force and those working part time for economic reasons have fallen a bit more than the headline unemployment rate, and labor force participation, which had been falling, has ticked up this year.

    Inflation, as measured by the price index for personal consumption expenditures, has slowed from an annual rate of about 2-1/2 percent in early 2012 to less than 1 percent in February of this year.1 This rate is well below the Committee’s 2 percent longer-run objective. Many advanced economies are observing a similar softness in inflation.

    To some extent, the low rate of inflation seems due to influences that are likely to be temporary, including a deceleration in consumer energy prices and outright declines in core import prices in recent quarters. Longer-run inflation expectations have remained remarkably steady, however. We anticipate that, as the effects of transitory factors subside and as labor market gains continue, inflation will gradually move back toward 2 percent.

    In sum, the central tendency of FOMC participant projections for the unemployment rate at the end of 2016 is 5.2 to 5.6 percent, and for inflation the central tendency is 1.7 to 2 percent.2 If this forecast was to become reality, the economy would be approaching what my colleagues and I view as maximum employment and price stability for the first time in nearly a decade. I find this baseline outlook quite plausible.

    Of course, if the economy obediently followed our forecasts, the job of central bankers would be a lot easier and their speeches would be a lot shorter. Alas, the economy is often not so compliant, so I will ask your indulgence for a few more minutes.

    Three Big Questions for the FOMC

    Because the course of the economy is uncertain, monetary policymakers need to carefully watch for signs that it is diverging from the baseline outlook and then respond in a systematic way. Let me turn first to monitoring and discuss three questions I believe are likely to loom large in the FOMC’s ongoing assessment of where we are on the path back to maximum employment and price stability.

    Is there still significant slack in the labor market?

    The first question concerns the extent of slack in the labor market. One of the FOMC’s objectives is to promote a return to maximum employment, but exactly what conditions are consistent with maximum employment can be difficult to assess. Thus far in the recovery and to this day, there is little question that the economy has remained far from maximum employment, so measurement difficulties were not our focus. But as the attainment of our maximum employment goal draws nearer, it will be necessary for the FOMC to form a more nuanced judgment about when the recovery of the labor market will be materially complete. As the FOMC’s statement on longer-term goals and policy strategy emphasizes, these judgments are inherently uncertain and must be based on a wide range of indicators.3

    I will refer to the shortfall in employment relative to its mandate-consistent level as labor market slack, and there are a number of different indicators of this slack. Probably the best single indicator is the unemployment rate. At 6.7 percent, it is now slightly more than 1 percentage point above the 5.2 to 5.6 percent central tendency of the Committee’s projections for the longer-run normal unemployment rate. This shortfall remains significant, and in our baseline outlook, it will take more than two years to close.4

    Other data suggest that there may be more slack in labor markets than indicated by the unemployment rate. For example, the share of the workforce that is working part time but would prefer to work full time remains quite high by historical standards. Similarly, while the share of workers in the labor force who are unemployed and have been looking for work for more than six months has fallen from its peak in 2010, it remains as high as any time prior to the Great Recession.5 There is ongoing debate about why long-term unemployment remains so high and the degree to which it might decline in a more robust economy. As I argued more fully in a recent speech, I believe that long-term unemployment might fall appreciably if economic conditions were stronger.6

    The low level of labor force participation may also signal additional slack that is not reflected in the headline unemployment rate. Participation would be expected to fall because of the aging of the population, but the decline steepened in the recovery. Although economists differ over what share of those currently outside the labor market might join or rejoin the labor force in a stronger economy, my own view is that some portion of the decline in participation likely represents labor market slack.7

    Lastly, economists also look to wage pressures to signal a tightening labor market. At present, wage gains continue to proceed at a historically slow pace in this recovery, with few signs of a broad-based acceleration. As the extent of slack we see today diminishes, however, the FOMC will need to monitor these and other labor market indicators closely to judge how much slack remains and, therefore, how accommodative monetary policy should be.

    Is inflation moving back toward 2 percent?
    A second question that is likely to figure heavily in our assessment of the recovery is whether inflation is moving back toward the FOMC’s 2 percent longer-run objective, as envisioned in our baseline outlook. As the most recent FOMC statement emphasizes, inflation persistently below 2 percent could pose risks to economic performance.

    The FOMC strives to avoid inflation slipping too far below its 2 percent objective because, at very low inflation rates, adverse economic developments could more easily push the economy into deflation. The limited historical experience with deflation shows that, once it starts, deflation can become entrenched and associated with prolonged periods of very weak economic performance.8

    A persistent bout of very low inflation carries other risks as well. With the federal funds rate currently near its lower limit, lower inflation translates into a higher real value for the federal funds rate, limiting the capacity of monetary policy to support the economy.9 Further, with longer-term inflation expectations anchored near 2 percent in recent years, persistent inflation well below this expected value increases the real burden of debt for households and firms, which may put a drag on economic activity.

    I will mention two considerations that will be important in assessing whether inflation is likely to move back to 2 percent as the economy recovers. First, we anticipate that, as labor market slack diminishes, it will exert less of a drag on inflation. However, during the recovery, very high levels of slack have seemingly not generated strong downward pressure on inflation. We must therefore watch carefully to see whether diminishing slack is helping return inflation to our objective.10 Second, our baseline projection rests on the view that inflation expectations will remain well anchored near 2 percent and provide a natural pull back to that level. But the strength of that pull in the unprecedented conditions we continue to face is something we must continue to assess.

    Finally, the FOMC is well aware that inflation could also threaten to rise substantiallyabove 2 percent. At present, I rate the chances of this happening as significantly below the chances of inflation persisting below 2 percent, but we must always be prepared to respond to such unexpected outcomes, which leads us to my third question.

    What factors may push the recovery off track?
    Myriad factors continuously buffet the economy, so the Committee must always be asking, “What factors may be pushing the recovery off track?” For example, over the nearly 5 years of the recovery, the economy has been affected by greater-than-expected fiscal drag in the United States and by spillovers from the sovereign debt and banking problems of some euro-area countries. Further, our baseline outlook has changed as we have learned about the degree of structural damage to the economy wrought by the crisis and the subsequent pace of healing.

    Let me offer an example of how these issues shape policy. Four years ago, in April 2010, the outlook appeared fairly bright. The emergency lending programs that the Federal Reserve implemented at the height of the crisis had been largely wound down, and the Fed was soon to complete its first large-scale asset purchase program. Private-sector forecasters polled in the April 2010 Blue Chip survey were predicting that the unemployment rate would fall steadily to 8.6 percent in the final quarter of 2011.11

    This forecast proved quite accurate—the unemployment rate averaged 8.6 percent in the fourth quarter of 2011. But this was not the whole story. In April 2010, Blue Chip forecasters not only expected falling unemployment, they also expected the FOMC to soon begin raising the federal funds rate. Indeed, they expected the federal funds rate to reach 1.3 percent by the second quarter of 2011.12 By July 2010, however, with growth disappointing and the FOMC expressing concerns about softening in both growth and inflation, the Blue Chip forecast of the federal funds rate in mid-2011 had fallen to 0.8 percent, and by October the forecasters expected that the rate would remain in the range of 0 to 25 basis points throughout 2011, as turned out to be the case.13 Not only did expectations of policy tightening recede, the FOMC also initiated a new $600 billion asset purchase program in November 2010.

    Thus, while the reductions in the unemployment rate through 2011 were roughly as forecast in early 2010, this improvement only came about with the FOMC providing a considerably higher level of accommodation than originally anticipated.

    This experience was essentially repeated the following year. In April 2011, Blue Chip forecasters expected the unemployment rate to fall to 7.9 percent by the fourth quarter of 2012, with the FOMC expected to have already raised the federal funds rate to near 1 percent by mid-2012.14

    As it turned out, the unemployment rate forecast was once more remarkably accurate, but again this was associated with considerably more accommodation than anticipated. In response to signs of slowing economic activity, in August 2011 the FOMC for the first time expressed its forward guidance in terms of the calendar, stating that conditions would likely warrant exceptionally low levels for the federal funds rate at least through mid-2013. The following month, the Committee added to accommodation by adopting a new balance sheet policy known as the maturity extension program. 15

    Thus, in both 2011 and 2012, the unemployment rate actually declined by about as much as had been forecast the previous year, but only after unexpected weakness prompted additional accommodative steps by the Federal Reserve. In both cases, I believe that the FOMC’s decision to respond to signs of weakness with significant additional accommodation played an important role in helping to keep the projected labor market recovery on track.16 These episodes illustrate what I described earlier as a vital aspect of effective monetary policymaking: monitor the economy for signs that events are unfolding in a materially different manner than expected and adjust policy in response in a systematic manner. Now I will turn from the task of monitoring to the policy response.

    Policy Challenges in an Unprecedented Recovery
    Fundamental to modern thinking on central banking is the idea that monetary policy is more effective when the public better understands and anticipates how the central bank will respond to evolving economic conditions. Specifically, it is important for the central bank to make clear how it will adjust its policy stance in response to unforeseen economic developments in a manner that reduces or blunts potentially harmful consequences. If the public understands and expects policymakers to behave in this systematically stabilizing manner, it will tend to respond less to such developments. Monetary policy will thus have an “automatic stabilizer” effect that operates through private-sector expectations. It is important to note that tying the response of policy to the economy necessarily makes the future course of the federal funds rate uncertain. But by responding to changing circumstances, policy can be most effective at reducing uncertainty about the course of inflation and employment.

    Recall how this worked during the couple of decades before the crisis—a period sometimes known as the Great Moderation. The FOMC’s main policy tool, the federal funds rate, was well above zero, leaving ample scope to respond to the modest shocks that buffeted the economy during that period. Many studies confirmed that the appropriate response of policy to those shocks could be described with a fair degree of accuracy by a simple rule linking the federal funds rate to the shortfall or excess of employment and inflation relative to their desired values.17 The famous Taylor rule provides one such formula.18

    The idea that monetary policy should react in a systematic manner in order to blunt the effects of shocks has remained central in the FOMC’s policymaking during this recovery. However, the application of this idea has been more challenging. With the federal funds rate pinned near zero, the FOMC has been forced to rely on two less familiar policy tools—the first one being forward guidance regarding the future setting of the federal funds rate and the second being large-scale asset purchases. There are no time-tested guidelines for how these tools should be adjusted in response to changes in the outlook. As the episodes recounted earlier illustrate, the FOMC has continued to try to adjust its policy tools in a systematic manner in response to new information about the economy. But because both the tools and the economic conditions have been unfamiliar, it has also been critical that the FOMC communicate how it expects to deploy its tools in response to material changes in the outlook.

    Let me review some important elements in the evolution of the FOMC’s communication framework. When the FOMC initially began using its unconventional tools, policy communication was relatively simple. In December 2008, for example, the FOMC said it expected that conditions would warrant keeping the federal funds rate near zero for “some time.” This period before the “liftoff” in the federal funds rate was described in increasingly specific, and (as it turned out) longer, periods over time—”some time” became “an extended period,” which was later changed to “mid-2013,” then “late 2014,” then “mid-2015.”19 This fixed, calendar-based guidance had the virtue of simplicity, but it lacked the automatic stabilizer property of communication that would signal how and why the stance of policy and forward guidance might change as developments unfolded, and as we learned about the extent of the need for accommodation.

    More recently, the Federal Reserve, and I might add, other central banks around the world, have sought to incorporate this automatic stabilizer feature in their communications.20 In December 2012, the Committee reformulated its forward guidance, stating that it anticipated that the federal funds rate would remain near zero at least as long as the unemployment rate remained above 6-1/2 percent, inflation over the period between one and two years ahead was projected to be no more than half a percentage point above the Committee’s objective, and longer-term inflation expectations continued to be well anchored. This guidance emphasized to the public that it could count on a near-zero federal funds rate at least until substantial progress in the recovery had been achieved, however long that might take. When these thresholds were announced, the unemployment rate was reported to be 7.7 percent, and the Committee projected that the 6-1/2 percent threshold would not be reached for another 2-1/2 years—in mid-2015. The Committee emphasized that these numerical criteria were not triggers for raising the federal funds rate, and Chairman Bernanke stated that, ultimately, any decision to begin removing accommodation would be based on a wide range of indicators.21

    Our communications about asset purchases have undergone a similar transformation. The initial asset purchase programs had fixed time and quantity limits, although those limits came with a proviso that they might be adjusted. In the fall of 2012, the FOMC launched its current purchase program, this time explicitly tying the course of the program to evolving economic conditions. When the program began, the rate of purchases was $85 billion per month, and the Committee indicated that purchases would continue, providing that inflation remained well behaved, until there was a substantial improvement in the outlook for the labor market.22

    Based on the cumulative progress toward maximum employment since the initiation of the program and the improvement in the outlook for the labor market, the FOMC began reducing the pace of asset purchases last December, stating that “[i]f incoming information broadly supports the Committee’s expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-term objective, the Committee will likely reduce the pace of asset purchases in further measured steps at future meetings.”23Purchases are currently proceeding at a pace of $55 billion per month. Consistent with my theme today, however, the FOMC statement underscores that purchases are not on a preset course—the FOMC stands ready to adjust the pace of purchases as warranted should the outlook change materially.

    Recent Changes to the Forward Guidance
    At our most recent meeting in March, the FOMC reformulated its forward guidance for the federal funds rate. While one of the main motivations for this change was that the unemployment rate might soon cross the 6-1/2 percent threshold, the new formulation is also well suited to help the FOMC explain policy adjustments that may arise in response to changes in the outlook. I should note that the change in the forward guidance did not indicate a change in the Committee’s policy intentions, but instead was made to clarify the Committee’s thinking about policy as the economy continues to recover. The new guidance provides a general description of the framework that the FOMC will apply in making decisions about the timing of liftoff. Specifically, in determining how long to maintain the current target range of 0 to 25 basis points for the federal funds rate, “the Committee will assess progress, both realized and expected, toward its objectives of maximum employment and 2 percent inflation.”24 In other words, the larger the shortfall of employment or inflation from their respective objectives, and the slower the projected progress toward those objectives, the longer the current target range for the federal funds rate is likely to be maintained. This approach underscores the continuing commitment of the FOMC to maintain the appropriate degree of accommodation to support the recovery. The new guidance also reaffirms the FOMC’s view that decisions about liftoff should not be based on any one indicator, but that it will take into account a wide range of information on the labor market, inflation, and financial developments.

    Along with this general framework, the FOMC provided an assessment of what that framework implies for the likely path of policy under the baseline outlook. At present, the Committee anticipates that economic and financial conditions will likely warrant maintaining the current range “for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee’s 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored.”25

    Finally, the Committee began explaining more fully how policy may operate in the period after liftoff, indicating its expectation that economic conditions may, for some time, warrant keeping short-term interest rates below levels the Committee views as likely to prove normal in the longer run. FOMC participants have cited different reasons for this view, but many of the reasons involve persistent effects of the financial crisis and the possibility that the productive capacity of the economy will grow more slowly, at least for a time, than it did, on average, before the crisis. The expectation that the achievement of our economic objectives will likely require low real interest rates for some time is again not confined to the United States but is shared broadly across many advanced economies.26 Of course, this guidance is a forecast and will evolve as we gain further evidence about how the economy is operating in the wake of the crisis and ensuing recession.

    Conclusion
    In summary, the policy framework I have described reflects the FOMC’s commitment to systematically respond to unforeseen economic developments in order to promote a return to maximum employment in a context of price stability.

    It is very welcome news that a return to these conditions has finally appeared in the medium-term outlook of many forecasters. But it will be much better news when this objective is reached. My colleagues on the FOMC and I will stay focused on doing the Federal Reserve’s part to promote this goal.

  • Investment & Finance Thread (Apr. 13 edition)

    04/16/2014 8:21:01 AM PDT · 35 of 65
    Wyatt's Torch to expat_panama

    I’m traveling and don’t have my FactSet screen. I can look at some technical charts when I get back in the office

  • Investment & Finance Thread (Apr. 13 edition)

    04/16/2014 8:19:33 AM PDT · 34 of 65
    Wyatt's Torch to expat_panama

    Did you intend the Star Wars refernce? Well done.

  • Why ‘Game Of Thrones’ Is The Most Frustrating Show On TV

    04/16/2014 7:55:32 AM PDT · 71 of 78
    Wyatt's Torch to Mamzelle

    Based on your description I’m fairly certain you have never read them.

  • Why ‘Game Of Thrones’ Is The Most Frustrating Show On TV

    04/16/2014 7:54:01 AM PDT · 70 of 78
    Wyatt's Torch to RayChuang88

    Agree. Really great books and damn near impossible to turn into a series. I think it’s really well done (gratuitous and superfluous sex scenes aside).

  • Why ‘Game Of Thrones’ Is The Most Frustrating Show On TV

    04/16/2014 7:52:39 AM PDT · 69 of 78
    Wyatt's Torch to vladimir998

    As soon as I read “it won’t stop killing the most interesting characters” i stopped as that’s just straight out of the books. I’m assuming he hasn’t read them.

  • Investment & Finance Thread (Apr. 13 edition)

    04/16/2014 6:25:35 AM PDT · 29 of 65
    Wyatt's Torch to expat_panama

    IP and Capacity Utilization beat

    Housing Starts/Permits miss

  • African-American Pastor Horrified at How Many Black Babies Abortion Kills

    04/14/2014 6:19:15 PM PDT · 16 of 28
    Wyatt's Torch to Morgana

    He should also be horrified at the 80% illegitimacy rate. That stat is destroying that culture.

  • 2014 Pulitzer Prize Winners

    04/14/2014 5:26:14 PM PDT · 10 of 11
    Wyatt's Torch to Zionist Conspirator

    The prize for fiction has been spotty the last few years. The last great winner was Cormack McCarthy’s The Road. I have not read Goldfinch this years winner. They didn’t give one in 2012.

  • Girl sends terroristic tweet to AA, gets unwanted response

    04/14/2014 11:49:03 AM PDT · 46 of 67
    Wyatt's Torch to Mears
    14 year old girls have never been known for their good common sense.

    As the father of one I can vouch for this :-)

  • Investment & Finance Thread (Apr. 13 edition)

    04/14/2014 5:27:43 AM PDT · 13 of 65
    Wyatt's Torch to expat_panama

    KCG Morning Update:

    U.S. stock-index futures fell, following the Standard & Poor’s 500 Index’s worst week since 2012, as investors awaited earnings and retail-sales data, while violence escalated in Ukraine.

    Citigroup Inc. lost 1.9 percent in Germany before it reports first-quarter earnings. Johnson & Johnson retreated 1 percent after Jefferies Group LLC cut its rating on the drugmaker’s shares.

    S&P 500 futures expiring in June declined 0.1 percent to 1,809.5 at 6:10 a.m. in New York. The S&P slid 1 percent on April 11, completing its worst week since 2012, as technology shares dropped on valuation concerns and JPMorgan Chase & Co. tumbled after reporting first-quarter profit that missed
    analysts’ estimates. Dow Jones Industrial Average contracts lost 21 points, or 0.1 percent, to 15,960 today.

    “There’s some nervousness around the U.S. earnings season and obviously with the added geopolitical worries, that’s enough to unsettle some investors,” said Henk Potts, who helps oversee about $310 billion as a strategist at Barclays Wealth & Investment Management in London. “We had JPMorgan come in below expectations so it’s clear it’s been a pretty tough quarter for U.S. financial services. We’ll get a much better picture of corporate America come this week with some more earnings coming
    through.”

    M&T Bank Corp. also posts earnings today, while Coca-Cola Co., Goldman Sachs Group Inc., Yahoo! Inc., Google Inc. and General Electric Co. are among companies scheduled to report later this week.

    A Commerce Department report at 8:30 a.m. in Washington may show that retail sales rose 0.9 percent in March, according to the median forecast of analysts surveyed by Bloomberg. Sales increased 0.3 percent in February.

    European stocks fell for a third day, after completing their worst week in a month, as investors
    weighed increasing violence in Ukraine. U.S. stock-index futures were little changed, while Asian shares dropped.

    PSA Peugeot Citroen slid 4.4 percent after saying it will cut its model lineup by almost half. Kuehne & Nagel International AG lost 3.4 percent after the world’s biggest sea-freight forwarder reported first-quarter sales that missed estimates. Symrise AG dropped 2 percent after offering to buy Diana Group. Glencore Xstrata Plc rose after selling its stake in the Las Bambas copper mine in Peru.

    The Stoxx Europe 600 Index fell 0.5 percent to 327.07 at 12:12 p.m. in London, posting its fifth decline in six days. Standard & Poor’s 500 Index futures gained less than 0.1 percent, while the MSCI Asia Pacific Index lost 0.3 percent.

    • Support:1808, 1801, 1780
    • Resistance:1829, 1842, 1863

    Projections that earnings will rise much faster than sales at U.S. companies may be too optimistic, according to Andrew Burkly, an Oppenheimer & Co. strategist.
    The CHART OF THE DAY displays the projected percentage gaps between profit and revenue growth for companies in the Standard & Poor’s 500 Index through 2016, according to data compiled by Bloomberg from analysts’ estimates. Quarterly figures for last year are included for comparison.
    Analysts are looking for the S&P 500’s first-quarter earnings to increase 1 percent, or 1.9 percentage points less than sales. They see profit leading by 3.6 points in the second quarter, 5.2 points in the third and 6.2 points in the fourth.
    Companies will have to increase profit margins to records to meet estimates, Burkly wrote two days ago in a report. The result is “a scenario we view with ongoing skepticism,” the New York-based portfolio strategist wrote.
    The margin for U.S. companies during last year’s fourth quarter was the highest since 1950, according to data compiled by the Commerce Department. Earnings for the period amounted to 12.7 percent of revenue.
    Finding ways to reduce costs and make workers more productive will be “an increasing challenge,” Burkly wrote, adding that many companies lack the pricing power to bolster revenue. “Forecasts for earnings growth will have to be pared to allow companies to satisfy investor expectations,” he wrote.

  • Nirvana Steals the Show at Rock and Roll Hall of Fame Celebration [President Reagan mocked]

    04/13/2014 10:48:53 AM PDT · 48 of 123
    Wyatt's Torch to ConservativeStatement

    Stipe is and always has been a radical leftie. Never showers. Stinks like crazy. But early R.E.M. (Green and before) was just outstanding music. So radically different from everything out at that time in the early-mid 80’s.

  • Giant Tesla battery factory producing 'affordable' electric cars at $35,000? [Nevada solar?]

    04/12/2014 6:48:27 AM PDT · 31 of 51
    Wyatt's Torch to bigbob

    Exactly. It’s fascinating to me that FReepers routinely excoriate a guy who is revolutionizing the automobile and the space industry.

  • Investment & Finance Thread (Apr. 6 edition)

    04/11/2014 1:01:13 PM PDT · 84 of 85
    Wyatt's Torch to expat_panama

    People selling stock to cover taxes? Everyone I’ve talked to has just gotten slammed with tax payments...

  • Woman run down by freight train while running on the tracks with headphones on

    04/11/2014 11:45:28 AM PDT · 56 of 73
    Wyatt's Torch to Tolerance Sucks Rocks

    Best. Noise. Cancelling. Headphones. EVER.

  • Investment & Finance Thread (Apr. 6 edition)

    04/11/2014 11:39:06 AM PDT · 83 of 85
    Wyatt's Torch to expat_panama

    NYSE MAC DESK MID-DAY MARKET UPDATE:

    DOW 16,065 (-104 points), S&P500 1822 (-10 handles), Brent Crude $107.70/barrel (+$0.24), Gold $1,318.60/oz. (-$1.50)

    MARKET DRIVERS: (Stocks are continuing their slide amid some mixed bank earnings and despite a much better-than-expected consumer sentiment reading.)

    • The University of Michigan consumer sentiment index rose in April to 82.6 – the highest level since July – topping Street economists’ consensus which called for a lower reading of 81.
    • According to the Labor Department, U.S. PPI (producer price index) rose by a seasonally adjusted 0.5% in March, from -0.1% in the preceding month. Analysts had expected U.S. PPI to rise 0.1% last month. (It marked the largest monthly increase since last June.)
    • China’s consumer price index rose 2.4% from a year earlier in March, up from 2.0% in February and right in line with consensus expectations.
    • Germany’s consumer price index rose 1.0% from a year earlier in March, unchanged from February’s pace and in line with consensus estimates.
    • In the IPO-space, we had three more come to the NYSE this morning: 1) Fast-casual Mediterranean restaurant Zoe’s Kitchen (ZOES) priced 5.8 million shares at $15, high end of the upwardly revised $13 to $15 range. Shares are currently trading at $25.80! Also: 2) Farmland property REIT Farmland Partners (FPI) priced 3.8 million shares at $14. 3) Nat gas and crude oil LP Enable Midstream Partners (ENBL) priced 25 million shares at $20.

    At its last minus-tick, the S&P 500 index is now down 1.18% year-to-date. That’s it! Minus 1.18%, y-t-d!! Listening to some of the talking heads on the financial networks, you’d think that Armageddon was imminent!!(?) Here are a few thoughts we’d like to share with those panic-stricken talking-heads in the hope that we might be able to coax a couple of them off of the ledge… 1- Market players have been obsessed with a modest number of high-beta biotech and internet names which enjoyed explosive upside moves throughout this most recent bull-run. 2- What we are seeing is a rotation out of these 3 or 4 dozen ‘high beta/big momentum’ names and INTO dividend paying names, (like utilities and REITs), energy stocks, telecom and ‘old school’ tech stocks. Case in point, while some high beta names are down as much as 20%+ over the past 30 days, utilities are up 5.8% and telecoms are up 5.6% as money is “rotating” into these sectors. 3- Finally, for those of you who are wondering when the market is going to turn around and go higher again; we’d like to direct you to the splendid chart of the S&P 500 that I have cut-and-pasted below. Specifically, please direct your eyes to the green wavy line which represents the 100-day moving average for the index… You will notice that, over the past year, the Index has briefly fallen through the average five times, (June, August, October, early February and TODAY). Now, please look at the “Relative Strength Index – RSI” chart located at the bottom of the illustration. Each of the other four times that the S&P broke below its 100-DMA, the RSI dipped below 40, (to as low as 31.5 in February), before a rally ensued. With the RSI currently at 40.8158, I say we give it another few days before we can expect to see the “Rally Boys” come to the rescue… Again – not to belabor the point – the S&P 500 is only down 1.18% on the year, so relax, take a deep breath, pour yourself a cocktail after work and enjoy the weekend… Moving on, the Dow has settled into a narrow trading-range near session-lows, and volume remains heavier than normal, with ~285M shares on the tape at this time… Internally, breadth is mixed with issues and volume bearish while new highs to new lows are bullish (positive divergence). Advancing Issues: 1481 / Declining Issues: 2746 — for a ratio of 0.5 to 1. New 52-Week Highs: 67/ New 52-Week Lows: 63… Technically, 1819 represents critical support in the S&P. Thankfully, we bounced off that level this morning… Meanwhile, in the trading pits the 10-year US Treasury is trading flat following yesterday’s jaw dropping scramble/flight to safety trade that pushed the yield down to the 2.63% level… It is amazing to me how much money is piling into the 10-year at such a low yield. Might be telling us that US economic growth won’t be all it’s cracked-up to be this year… Stay tuned… Baseball trivia follows... Have a tremendous weekend!

    Sector Highlights brought to you by http://www.streetaccount.com/
    • Consumer discretionary underperforming with the S&P Consumer Discretionary Index (0.5%)
    o Retail underperforming with the S&P Retail Index (0.7%), extending yesterday’s ~3% sell-off. JCP (8.6%) and SHLD (3.8%) leading the department stores lower. Not seeing any specific catalyst behind the JCP move. Stock now down >12% on the week. ARO (4.3%), LB (2.4%), EXPR (2%) and GPS (1.5%) the notable underperformers among the apparel names. GPS missed March comps expectations and said it expects Q1 gross margins to decelerate further from last quarter. The stock was downgraded at Janney Capital, which notes margin pressure as well as increasing promotions. CE space underperforming with HGG (3%), RSH (2.7%) and BBY (2%). FDO (1.9%) continuing its post-earnings move lower.
    o Footwear and sporting goods underperforming. CROX (2.5%), DECK (2.5%) and DSW (1.7%) the laggards. DSW now down >6% on the week. SKX (1.1%) continuing its move lower from yesterday, when it fell 5.2% after Buckingham initiated the stock underperform. UA +1.2% the notable gainer in the space, recovering some of yesterday’s 5.9% losses.
    o Autos mixed. GPI (1.8%) and GM (1.7%) the notable decliners. The latter confirmed a $1.3B charge in Q1 due to recall-related repairs. Note reports that the company may look at all senior level executives, including CEO Mary Barra, in relation to the ignition-switch issues. TM +2.2%, HMC +1.9% and F +1.6% the notable outperformers. TM was upgraded at both Jefferies and Mizuho Securities. F was upgraded at Deutsche Bank.
    o Restaurants relatively outperforming after yesterday’s underperformance. CBRL +1.1%, RT +1%, JACK +0.9% and DNKN +0.6% leading the way higher. Recall RT rallied ~12% yesterday on an earnings beat. Stock now up >20% on the week. WEN (0.9%) and TXRH (0.8%) the notable underperformers.
    o Other notable performers: CVC (2.1%), KORS (1.7%), MGM +1.5%

    • Financials underperforming with the S&P Financials Index (0.5%)
    o Banking group lagging with BKX (0.2%). Q1 earnings season began today with JPM (2.5%) and WFC +1.8% showing mixed results, although both banks showed weakness in mortgage banking. JPM the laggard after top and bottom line miss, with analyst commentary highlighting broad-based weakness. WFC outperforming as earnings and revenue beat, with slowing mortgage business offset by better expense controls and stronger credit quality. BAC (0.2%) also lower, while regionals performing better with KRX +0.4%.
    o Insurers mostly lower. GNW (1.5%), HIG (0.7%) and LNC (0.5%) lagging, while AFL +0.8%, ACE +0.6% and TRV +0.4% outperform.
    o Online brokers outperforming. Recovering some of the week’s losses with AMTD +1.1%, ETFC +0.8% and SCHW +0.4%.

    • Materials underperforming with the S&P Materials Index (0.5%)
    o Industrial metals underperforming. Worries about slowing growth out of China cited as a headwind. Steel space led lower by AKS (3%) and X (2.3%). Note the steel equities have had a nice run up over the past few weeks, amid a flurry of positive catalysts including price hikes, positive sell-side commentary and Chinese stimulus measures. AA (1.7%) and KALU (1.2%) the notable decliners among the aluminum names, while CENX +1.1% outperforms. ACH (0.6%) stable after its ~9.5% rally yesterday. CLF (2.2%) the other notable performer among the industrial metals.
    o Precious metals equities mostly lower. Underlying assets slightly lower today, with SLV (0.1%) and GLD (0.1%). NEM (1.4%) and GG (1%) the notable decliners. Upside limited, with ABX +0.7% the notable outperformer.
    o Other notable performers: CF (1.8%)

    • Utilities outperforming with the S&P Utilities Index (0.1%)
    o Sector remains the big beneficiary of the heightened risk aversion and defensive rotation in equities that has also driven the rally in Treasuries. In addition, it has been the best performing sector in 2014. According to Bespoke, since the start of WWII, sector is having its sixth best year vs broader market. Also note that while Q1 earnings sentiment has been negative, utilities has been the only sector to actually see an upward revision to growth expectations since the start of the quarter. At the same time however, there has been some focus on technically overbought conditions.

    • Energy outperforming with the S&P Energy Index +0.2%
    o Continuing on from yesterday’s outperformance, aided by recent rise in crude oil prices. WTI +0.7% to $104.08 today. Natural gas (0.8%) lower on the day after this week’s strong rally.
    o Majors outperforming. COP +2.3% the leader, rebounding from yesterday’s decline. Yesterday’s analyst day was generally met with positive reaction, however modest downward revision to 2014 volume guidance seemed to be focus of yesterday’s price decline. COP upgraded at Morgan Stanley. CVX +0.7% also outperforming, while BP (1.1%) lags.
    o Refiners underperforming. WNR (2.1%) lagging, with HFC (1.9%), TSO (1.7%) and VLO (1.3%) also underperforming.
    o Coal broadly lower. WLT (4.4%), ANR (3.4%) and BTU (2.4%) the laggards.
    o E&Ps outperforming with the EPX +0.4%. KWK +2.3%, WTI +2.1% and SWN +1.5% among the best performers.

    • Healthcare outperforming with the S&P Healthcare Index +0.2%
    o Biotechs outperforming and rebounding from yesterday’s sharp sell-off, when the NBI and IBB both fell more than 5%. NBI +1.4% and IBB +1.4% today. GILD +4.7% and INCY +4% leading the way higher. The former announced results the phase 2 studied of GS-US-334-0125 and GS-US-334-0126. RGDO (15.9%) the notable laggard after a secondary share offering.
    o Pharma mostly lower with the DRG (0.2%). Downside rather limited, however, with PRGO (1.1%) and MYL (1%) the notable underperformers. ACT +1.3% and MRK +1.2% the notable gainers.
    o Other notable performers: SPNC +3.4%, WCG (4.3%). The former received FDA clearance for two medical lead extraction devices. Recall WCG shares rallied in the afternoon yesterday on takeover speculation.

  • U.S. storm team predicts below-average Atlantic hurricane season

    04/11/2014 10:20:46 AM PDT · 29 of 32
    Wyatt's Torch to kingattax

    We are screwed. These clowns haven’t been right since 2005...