Wednesday, February 20, 2013

European Bank CEO Admits: "The Whole Thing Is Doomed"

As the European parliament attempts to create a budget and Draghi repeats how the temporary lull in European growth is merely a prelude to a growth renaissance in the second half of the year (not to be confused with the verbatim lie rehashed by European dignitaries in 2012, 2011, 2010 and 2009), it appears a few leaks of truthiness are seeing daylight in the disunion. In a shockingly frank interview, the CEO of Saxo Bank describes the Euro's recent rally as illusory and that "the whole thing is doomed," as the continent is not supported by a fiscal union. As Bloomberg reports, Lars Seier Christensen says he would be a "seller of the EUR at anything near 1.40," noting that "right now we’re in one of those fake solutions where people think that the problem is contained or being addressed, which it isn’t at all." Confirming that the only thing holding the farce together is political not economic efforts, he sums the situation up perfectly: "people have been dramatically underestimating the problems."

Via Bloomberg,
Lars Seier Christensen, co-chief executive officer of Danish bank Saxo Bank A/S, said the euro’s recent rally is illusory and the shared currency is set to fail because the continent hasn’t supported it with a fiscal union.

“The whole thing is doomed,” Christensen said yesterday in an interview at the bank’s Dubai office. “Right now we’re in one of those fake solutions where people think that the problem is contained or being addressed, which it isn’t at all.”


I’d be a bigger seller of the euro at anything near 1.4,” according to Christensen, who said he isn’t making any speculative bets against the currency.


“Another possible fallout is getting rid of some of the countries that are being ruined by being in the euro, notably the southern European economies,” Christensen said. “People have been dramatically underestimating the problems the French are going to get from this. Once the French get into a full- scale crisis, it’s over. Even the Germans cannot pay for that one and probably will not.”


Record Debt

Public-sector debt is at record levels, having more than doubled from 40 percent of gross domestic product in 2008. The European Commission, which is due to update its forecasts this week, sees it rising to 97.1 percent of GDP next year.

“It’s the political world that has been extremely supportive of the euro, not for economic reasons but for political reasons,” said Christensen, a long-time critic of the single currency who now lives in Switzerland.
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Bernard Baruch’s Ten Investing Rules

You want someone to emulate?
Bernard Baruch (August 19, 1870 – June 20, 1965) was the son of a South Carolina physician whose family moved to New York City when he was eleven year old. By his mid-twenties, he is able to buy an $18,000 seat on the exchange with his winnings and commissions from being a broker. By age 30, he is a millionaire and is known all over The Street as “The Lone Wolf”.
In his two-volume 1957 memoirs, My Own Story, Baruch left us with the following timeless rules for playing the game:
“Being so skeptical about the usefulness of advice, I have been reluctant to lay down any ‘rules’ or guidelines on how to invest or speculate wisely. Still, there are a number of things I have learned from my own experience which might be worth listing for those who are able to muster the necessary self-discipline:”
1. Don’t speculate unless you can make it a full-time job.
2. Beware of barbers, beauticians, waiters — of anyone — bringing gifts of “inside” information or “tips.”
3. Before you buy a security, find out everything you can about the company, its management and competitors, its earnings and possibilities for growth.
4. Don’t try to buy at the bottom and sell at the top. This can’t be done — except by liars.
5. Learn how to take your losses quickly and cleanly. Don’t expect to be right all the time. If you have made a mistake, cut your losses as quickly as possible.
6. Don’t buy too many different securities. Better have only a few investments which can be watched.
7. Make a periodic reappraisal of all your investments to see whether changing developments have altered their prospects.
8. Study your tax position to know when you can sell to greatest advantage.
9. Always keep a good part of your capital in a cash reserve. Never invest all your funds.
10. Don’t try to be a jack of all investments. Stick to the field you know best.
Baruch would later go on from Wall Street to Washington DC as an advisor to both Woodrow Wilson and to FDR during World War II.
Later, he became known as the Park Bench Statesman, owing to his fondness for discussing policy and politics with his acquaintances outdoors.
He lived til a few days shy of his 95th birthday in 1965. You could do worse than to invest and live based on these simple truths.

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Barnes & Noble, Inc. (NYSE: BKS)

Barnes & Noble, Inc. operates as a content, commerce, and technology company in the United States. It provides access to books, magazines, newspapers, and other content through its multi-channel distribution platform. It sells trade books, including hardcover and paperback consumer titles; mass market paperbacks, such as mystery, romance, science fiction, and other fiction; children's books; eBooks and other digital content; NOOK products comprising NOOK 1st Edition, NOOK Wi-Fi 1st Edition, NOOK Color, NOOK Simple Touch, NOOK Tablet, and NOOK Simple Touch with GlowLight eBook reader devices and related accessories; bargain books; magazines; gifts; cafe products and services; educational toys and games; music; and movies. The company sells its products directly to customers through its bookstores and on It also sells textbooks and course-related materials, emblematic apparel and gifts, trade books, school and dorm supplies, and convenience and cafe items in college and university campuses.
To analyze Barnes's stock for potential trading opportunities, please take a look at the 1-year chart of BKS (Barnes & Noble, Inc.) below with my added notations:
1-year chart of BKS (Barnes & Noble, Inc.) BKS has a key price level at $14. Not only can you see the $14 resistance (red) from back in April, but $14 has also acted as support (green) on multiple occasions. So, the $14 level is key to this stock. If you are bullish, you would want to buy the stock on a pullback to $14. However, if you are bearish, you might short BKS on a break of the $14 support.
The Tale of the Tape: BKS presents a couple of simple trading opportunities based on its key level of $14. A long position could be entered at the $14 support with a stop placed below that level, or a short play could be made on a break below $14 if that should happen.
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SAC Capital Partners Bets A Quarter Billion On Gold, Silver, & Mining Shares

While the mainstream media continues to spew out bearish news and headlines on precious metals and (especially) mining shares, SAC Capital Partners LP, a $20 billion dollar group of hedge funds founded by Stephen A. Cohen, quietly positioned itself in over $240 million dollars worth of gold, silver, and mining share investments during Q4 2012.
Of great interest is the structure of those positions. They are indicating, that the firm is expecting a massive spike in both gold and silver, as well as a staggering move higher in the mining shares.
Starting out, the firm increased it’s holdings in gold and silver mining shares from roughly $54.9 million to $122.2 million, a total increase of over $65 million. Companies included many of the major producers such as AngloGold, Barrick, Goldcorp, and surprisingly, included junior producers, such as Fortuna Silver Mines Inc.  (more)

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Euro’s Close To Short Term Top

The Euro is 56% of the Dollar Index and therefore its movements will directly impact the above Dollar index chart.  The Euro is in the timing band for a top and could be ready to begin moving lower towards an eventual ICL.  The $1.36 top set two weeks ago is potentially the IC top and if so, we should see a breakdown of the 13 week up trend line occur within the next few weeks.  But that might be a little premature, the Euro is well correlated with risk markets and therefore I doubt the move has ended.  The Euro Daily Cycle is showing that it’s ready to form a DCL and move higher over at least 3-7 sessions.  That bounce should be good for a move back to at least $1.35 which would set the scene for a potential double top near $1.36.

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Chart Pattern Predicts This Stock Could Rise 49% by Year-End: SWY

From a technical analysis standpoint, the chart of Safeway (NYSE: SWY) excites me. First, shares of the second-largest U.S. grocery-store chain have just broken a major downtrend line that dates back almost two years. Second, they have completed a rounding bottom base formed over roughly the past nine months and appear to be headed higher. With an upbeat revenue and earnings outlook, plus a healthy dividend, the stock looks attractive.
The California-based grocery store -- which operates approximately 1,700 locations across the United States and western Canada, and also holds a 49% interest in food and general merchandise retailer Casa Ley, which has 185 outlets in northwestern Mexico -- seems to be on the rise for three reasons:
1. Increased focus on customer loyalty programs;
2. Divesting of key assets; and
3. A shift in upper management.

Loyalty Programs
The company's "just for U" loyalty program helps shoppers save money with digital coupons and personalized specials. In fact, members can save up to 20% on groceries just by being part of the program. Members receive deals specifically tailored to them, based on products they frequently purchase. (more)

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Why the Rich Keep Getting Richer

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Chinese Stock Market is Sending Foreign Investors a Huge 'Buy' Signal

When the Chinese government wants its stock market to go up, it goes up... a lot.

It's happened several times in history...

It happened from 1996 to 1997... and again in 2005. (Heck, Chinese stocks soared fivefold in just two years starting in 2005, the last time the Chinese government wanted the stock market to go up.)

Today, the Chinese government wants the stock market to go up again.

Even better, Chinese stocks are incredibly cheap, and the uptrend has begun. In short, we have the perfect conditions for a triple-digit profit, courtesy of the Chinese government. Let me explain...

I first visited China in 1996. When I realized what was happening with the Chinese government, I recommended the largest blue-chip Chinese stock I could find to my readers...

You see, to push stocks higher, the government tried floating a variety of rumors. The government rumor that sparked the biggest rise was that China was going to allow local Chinese investors to buy shares of foreigner-only stocks.

Chinese stocks soared. My readers pocketed close to a triple-digit gain in a very short period of time.

But eventually, China's government worried that its rumors pushed stocks up too much. So it floated the opposite rumor... The company we'd pocketed nearly a double on eventually lost over 80% of its value.

This has happened multiple times. The most recent time was in 2005, just before Chinese stocks soared fivefold. And it's happening again, today...

Last month, China's top securities regulator announced it would increase by 10-fold the amount of money qualified foreign institutional investors are allowed to invest in Chinese stocks.

We have seen this play out before... China gets behind its stock market, and the market soars. It's already happening, as I write. And because Chinese stocks are so cheap, I believe we have an easy shot at triple-digit gains...

The Shanghai Composite Index now trades for the cheapest price-to-earnings (P/E) and price-to-book (P/B) ratios we've ever seen. In fact, Chinese stocks are even cheaper today than they were in 2005, right before the market soared fivefold in two years. Take a look...

This index of blue-chip Chinese companies traded for over 40 times earnings in 2007. And over the last 15 years, its average P/E ratio has been over 30. Today, this index trades for less than 10 times earnings...

Our starting point is basically the cheapest point in the history of the Shanghai Composite Index (based on the P/E and P/B ratios).

Chinese stocks have bottomed, and we now have our uptrend in place. Even better, the Chinese government is doing everything it can to push the stock market higher.

If the 2005-2007 bull market is any indication, our upside potential is hundreds of percent.

You can consider the Market Vectors China Fund (NYSE: PEK). It's a one-click way to trade the Shanghai Composite Index. Check it out...
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