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Monthly Archives: April 2012

Speculators Begin to Trim Bets in Commodities as China Slows and Goldman Issues Neutral Ratings

“Investors pared bullish commodity bets on signs of slowing growth in China and as Goldman Sachs Group Inc. cut its recommendation on raw materials.

Hedge funds and other money managers reduced combined net- long positions across 18 U.S. futures and options by 1.8 percent to 1.14 million contracts in the week ended March 27, Commodity Futures Trading Commission data show. Bullish wagers on hogs fell the most, dropping 31 percent to the lowest since June, while those on gold had the biggest gain, rising 15 percent, the largest increase since the end of January.

The Standard & Poor’s GSCI Spot Index of 24 raw materials tumbled 2.1 percent last week, paring this year’s advance to 6.8 percent. Goldman cut its three-month recommendation on March 28, warning that the economy will “soften” this quarter. Societe Generale SA said March 27 that Chinese corporate profits won’t grow at all this year, and Federal Reserve Chairman Ben S. Bernanke said two days later that the pace of the U.S recovery has been “extremely sluggish.”

“The story over the near term is probably one of weakness,” said Anthony Valeri, a market strategist at LPL Financial in San Diego, which oversees $330 billion of assets. “There are some renewed concerns over China’s economic growth. That’s been the negative for commodities.”

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European Banks Lead to the Downside as Investors Remain Concerned Over Debt Crisis

European stocks fluctuated between gains and losses as continued concern about the euro area’s debt crisis offset an expansion in Chinese manufacturing. U.S. index futures and Asian shares were little changed.

Credit Agricole SA (ACA) and Societe Generale (GLE) SA led a selloff in banks, falling more than 2 percent. ING Groep NV (INGA) paced insurers lower, retreating 2.1 percent. Cookson Group Plc (CKSN) rallied 4.5 percent after the Sunday Times reported the world’s biggest maker of ceramic linings for metal smelters may spin off its electronics unit….”

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A Little Less Than Half of Greek Bondholders Still Have Not Agreed Upon Restructuring

“Investors in Greek bonds issued under foreign law rejected the nation’s attempts to restructure the debt at talks last week.

In 20 out of 36 meetings, bondholders either turned down the government’s proposal, adjourned the talks or failed to achieve a quorum, according to a press release today from the Greek Public Debt Management Office.

The meetings involved holders of about $26.8 billion of foreign-law notes denominated in dollars, euros, Swiss francs and yen. Investors owning $15.3 billion of securities agreed to a restructuring, leaving $11.5 billion still to be dealt with.

“The key thing with the international bonds is that holders have to vote bond-by-bond rather than in aggregate,” said Thomas Costerg, European economist at Standard Chartered Bank. “That makes it easier for investors to block the restructuring and raises the question of what Greece can do now.”

Greece is trying to re-organize the rest of its debt after carrying out the biggest sovereign restructuring in history last month. The government is insisting there’s no money to fully pay holders of bonds issued under international law, after it forced investors in 197 billion euros ($263 billion) of domestic-law securities to accept losses of about 70 percent….”

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STAND YOUR GROUND: No Democrat Florida Senators Voted Against the Law

David Martosko

Despite liberal protesters’ claims that Florida’s so-called “stand your ground” gun law demonstrates that Republican policymakers are responsible for the February death of 17-year-old Trayvon Martin, an analysis of its legislative history shows that it was a bipartisan effort — and that no Florida Democratic state senator voted against it.

One Democrat, Fort Lauderdale state Sen. Mandy Dawson, missed the vote. But the rest of the Senate chamber supported it, 39-0.

The Florida House vote was 92-20. Twelve Democrats voted in favor.

And of the 15 states that have passed variations of the law since 2005, the year Florida’s model legislation became law, eight — a majority — had Democratic governors when the laws were enacted. None issued a veto.

Democratic governors who signed “stand your ground” bills, or otherwise permitted them to become law, include Kathleen Blanco of Louisiana, Jennifer Granholm of Michigan, Brian Schweitzer of  Montana, John Lynch of New Hampshire, Brad Henry of Oklahoma, Phil Bredesen of Tennessee, Joe Manchin of West Virginia and Janet Napolitano of Arizona – now the U.S. Secretary of Homeland Security.

The bills in Louisiana and West Virginia passed with Democratic control of both houses in the states’ legislatures, in 2006 and 2008, respectively.

Read the rest here.

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Obama’s Alinsky Strategy: Who’s Next?

“If I had a son, he’d look like Trayvon.” The death of Trayvon Martin is a tragedy–as was the death of a 6-year-old girl named Aliyah Shell (photo above), caught in the crossfire of gang violence over St. Patrick’s Day weekend in Chicago.

But Aliyah’s story received very little coverage, despite the event being more recent than the Martin tragedy, and despite the fact that it happened in President Barack Obama’s very own Chicago on a weekend when 49 people were shot and 10 others were killed.

No mention of Aliyah from the president. No public outpouring for a young mother who sat untangling her daughter’s hair as shots rang out. Nothing. And yet…

“If I had a son, he’d look like Trayvon.”

Why? Why would the president weigh in on this specific case at this specific time?

It’s not about wrong or right. It’s not about justice. It’s not about Trayvon Martin.

“The despair is there; now it’s up to us to go in and rub raw the sores of discontent, galvanize them for radical social change.”- Saul Alinsky

An interesting quote to consider, from the man who shaped the minds of those who shaped President Obama.

Now consider Obama’s former chief of staff Rahm Emanuel’s notorious statement: “You never want a serious crisis to go to waste.”

The meaning is the same. It is calculating and it is dangerous, part of a bigger picture–a multi-faceted war to divide America for the sole purpose of securing Obama’s re-election and subsequent radical social change.

Look at the contrived conflicts on the left wing’s political chessboard:

Move 1   Occupy Wall Street: the (self-appointed) 99% versus the 1%

Move 2   Contraceptive/abortifacient mandates: government versus religion

Move 3   Sandra Fluke: women versus conservatives (supposedly)

And now…

Move 4   Trayvon Martin: black versus “white” (so-called)

This is not complicated. President Obama is organizing. It’s that simple, and it’s straight out of the radical playbook:

“Once you organize people, they’ll keep advancing from issue to issue toward the ultimate objective: people power. We’ll not only give them a cause, we’ll make life goddamn exciting for them again — life instead of existence. We’ll turn them on…” – Saul Alinsky

This is not about Trayvon Martin. This is about divide and conquer. Hope and Change has been replaced with Us vs. Them. This about pitting Americans against Americans.

The despair is there… so, what’s Move 5?


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The Greatest Myth About Trading


Risk is something that most people associate with trading.  In fact, to the public at large, you are often likely to get the response, “isn’t that risky,” when you tell them that you trade for a living.  However, I think that is one of the biggest myths about trading, and I assert that trading is no more risky than most other jobs.

Read the rest here.

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Why Are the Fed and SEC Keeping Wall Street’s Secrets?

William D. Cohan

Getting what should be public information about major Wall Street firms can be maddeningly difficult.

Bloomberg News discovered this in its ultimately successful effort to get information on the $1.2 trillion in “secret loans” the Fed doled out during the financial crisis. And I’ve had no small experience of it myself.

As I started each of my three books — about Lazard Freres, Bear Stearns and Goldman Sachs Group Inc. (GS) — I submitted Freedom of Information Act requests to the appropriate government agencies (the Securities Exchange Commission, the State Department and the Federal Reserve) to obtain whatever documents, memos and e-mails they had about these companies and their senior executives.

I was hoping to find, among other nuggets, details of enforcement actions, or settlements that were reached where the firms “neither admitted nor denied” guilt, or other documentary evidence of the coziness that has for too long existed between Wall Street and Washington.

Sadly, getting this information in anything like a timely basis — say, before my books were finished and published — has been nearly impossible. At first, when I asked the SEC about documents related to Lazard’s role in the Hartford-Mediobanca scandal starting in 1968 and ending in 1981, the agency told me it could not release the information. When I reminded the FOIA administrator that the SEC had already released the information, years before, to another journalist, the agency dug up the 40 boxes of unindexed, unorganized documents and invited me to a warehouse in Pennsylvania to take a look. After an hour or so, the clerk asked me if I was done with my review. (Eventually, I persuaded the SEC to ship the boxes — at my expense — to its office in Manhattan, where I spent months poring over them.)

Read the rest here.

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GOLDMAN: The Next 24 Hours Will Be Critical For The Global Economy

Joe Weisenthal

Goldman’s Dominic Wilson is out with a new note offering guidance to investors on whether to finally jump off the stockmarket, and get more bearish.

Here’s the key threshold:

We think that risk assets are likely to move higher as long as US data remain consistent with GDP growth of somewhat more than 2%.

The next several hours may be decisive…

Given more mixed news in March, and the likelihood that weather-related boosts will fade in the month or two ahead, the stakes have been raised for the releases over the next 24 hours. At the risk of oversimplification, if the ISM and global PMIs bounce convincingly, we think the market is likely to be able to make fresh highs. If instead we see a second month of declines, we are likely to turn more cautious.

So basically, huge hours ahead, starting with the Chinese PMI today, and ending with US ISM numbers tomorrow morning.

UPDATE: The official Chinese PMI reading has bounced back nicely.

European PMI data will come out super-early on Monday.

Read the rest here.

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10 Most Foolish Things a Trader Can Do

Joshua M Brown, The Reformed Broker
April 1st, 2012

Happy April Fools Day. Hopefully you got through it without being pranked.

I have my own version of this “10 Foolish Things” concept in my head but I’m not quite ready to flesh it out yet. But here’s a great iteration from a site called New Trader U…

I came across this post by Stephen Burns and he’s allowed me to repost it here, check it out!

Read the rest here.

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Bees Harmed by Low Levels of Common Pesticides


“Even low doses of popular pesticides can reduce bees’ survival and reproduction, two new studies show.

The findings bolster evidence that such chemicals may be partly responsible for recent declines in populations of honeybees andbumblebees around the world, which have caused alarm due to the insects’ importance as crop pollinators.

The researchers suggest the widespread use of the pesticides needs to be re-evaluated in light of the findings.

The two studies, published Wednesday in the journal Science, looked at the effects of pesticides called neonicotinoids on bumblebees and honeybees, respectively. The chemicals were fed to the bees in doses similar to those that they would be exposed to in the wild when foraging among crops sprayed with the pesticides.

Neonicotinoids, first introduced in the 1990s, are used to kill aphids and other sap-sucking insects. According to a news release from Science, they are now some of the most widely used crop pesticides in the world.

In the first study, led by Penelope Whitehorn at the University of Stirling in Britain, colonies of buff-tailed bumblebees were fed doses of a neonicotinoid pesticide called imidacloprid and then allowed to forage for six weeks. The researchers found that bumblebees exposed to the pesticide had nests that were an average of eight to 12 per cent smaller than colonies that weren’t exposed. They also produced 85 per cent fewer queen bees.

That could have a huge effect on bumblebee populations, because all bumblebees except the queens die when winter sets in. Bumblebee populations rely on the queens to survive the winter and found new colonies in the spring.

In the second study, led by Mickaël Henry of the French National Institute for Agricultural Researchin Avignon, France, honeybees were fed small doses of a different neonicotinoid pesticide called thiamethoxam. They were then tracked with small microchips called RFID tags.

The researchers found that 10 to 31 per cent of bees exposed to the pesticide did not return to their colony after being released to forage for the day. That was up to double the estimated normal mortality rate for a honeybee on a given day, about 15 per cent.

The pesticide appears to interfere with the bees’ ability to navigate and find their way back to the colony, an effect that has been shown in previous studies.

Henry noted that currently, in order to get a pesticide approved, the manufacturer must show that the product does not directly kill bees when applied to a field.

“But they basically ignore the consequences of doses that do not kill them but may cause behavioral difficulties,” he said in a statement.

David Goulson, who co-authored the British study with Whitehorn, said the use of neonicotinoid pesticides “clearly poses a threat” to the health of bees and “urgently needs to be re-evaluated.”

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