“I have committed fraud. For this I feel constant and intense guilt. .. Through a scheme of using false bank statements I have been able to embezzle millions of dollars from customer accounts at Peregrine Financial Group, Inc. The forgeries started nearly twenty years ago and have gone undetected until now. I was able to conceal my crime of forgery by being the sole individual with access to the US Bank account held by PFG. No one else in the company ever saw an actual US Bank statement. … I had no access to additional capital and I was forced into a difficult decision: Should I go out of business or cheat? I guess my ego was too big to admit failure. So I cheated, I falsified the very core of the financial documents of PFG, the Bank Statements. .. I also made forgeries of official letters and correspondence from the bank, as well as transaction confirmation statements.”

“Using a combination of Photo Shop, Excel, scanners, and both laser and ink jet printers I was able to make very convincing forgeries of nearing every document that came from the Bank. I could create forgeries very quickly so no one suspected that my forgeries were not the real thing that had just arrived in the mail.”

“When it became a common practice for Certified Auditors and the Field Auditors of the Regulators to mail Balance Confirmation Forms to Banks and other entities holding customer funds I opened a post office box. The box was originally in the name of Firstar Bank but was eventually changed to US Bank. I put the address “PO Box 706, Cedar Falls, lA 50613-0030″ on the counterfeit Bank Statements. When the auditors mailed Confirmation Forms to the Bank’s false address, I would intercept the Form, type in the amount I needed to show, forge a Bank Officer’s signature and mail it back to the Regulator or Certified Auditor.

When online Banking became prevalent I learned how to falsify online Bank Statements and the Regulators accepted them without question.”

Full PFG Affidavit (including part of the suicide note): PFG Affidavit (Scribd)

——————–

PFG once again proves that not only is the Sanctity of Segregated Funds “guideline” all but dead, but that it was really just a myth all along. Far be it for regulators to pick up a phone just once over a 20 year period and speak with an actual representative of the bank to confirm the existence of hundreds of millions of dollars.

But perhaps the most frightening thing about all these blowups using client capital, is that by the time this is all over, with so many firms secretly reaching for yield any way they can since interest rates have been stuck at 0%, how many more funds, companies, clearing firms, and brokerage houses blow up before all is said and done. And even if they get away with it for a while, I can’t imagine what hell will break loose once interest rates start climbing again in the U.S. (as they have in Greece, Italy, Spain, etc). Unfortunately, there’s still no way for the average person to tell who’s gonna get caught with their pants down once the tides turn. And while I don’t very much trust the FDIC or SIPC either (especially if many institutions all collapse simultaneously), it’s still better than nothing if regulators want to hold to the claim of actually somewhat protecting innocent customers. Just ask some of Madoff’s ex-clients.

Often times such blowups start with the coverup of a smaller loss (or some kind of “reaching for yield” or “naked hedge” scenario that backfired). The CEO figures he’ll be able to “kick the can” down the road long enough to figure out how to dig out of the hole (hey, the government does it all the time, so why can’t we all)! Perhaps he can outgrow the “discrepancy” over time and glaze it over. Such wishful thinking inevitably leads to even bigger failures and blowups (just like repeatedly lending more money to defunct countries who have absolutely no way to pay it back or even print their way out of it).

But perhaps the government can pass some new laws, rules, and regulations, and create a few new oversight bureaus, to make sure the original oversight commissions enforce the laws, rules, and regulations already in place.

So far, clients of these firms would have likely faced less risk had the government simply told them “caveat emptor”: realize that any firm where you entrust your hard-earned money could disappear with it overnight, so diversify wisely… And if you do get caught up in one of these frauds, hopefully your money went to help some other “poor” politically-connected bankster stay afloat and save the economy while you go back to eating cake…

In late 2011, once the market bounced off its early October lows, there was increasing chatter over how it’s probably too early for a real full-blown European debt crisis at that point in time, and how the “powers that be” would likely run the market higher into the new year.  But, the real “tell” would be how the markets behaved come the new year, and that’s when all hell would likely break loose all over again.  I too began to think that while the rest of 2011 may lead to a good bounce in the markets, early 2012 could bring back some real turmoil.

Then a thought struck me.  Between all the blog posts, newspapers, and television media pundits calling for a “let’s see how January goes” moment – hey, even I myself was thinking the same thing…  What if, with all of us worrying over that same possibility, January turned out just fine – a perfect “non-event”?  And heck, even Ben Bernanke was probably worried about the new year, and we all know what that leads to: more cheap money and credit would likely be dumped right back into the markets at the first hint of trouble.

So as 2011 came to a close, while I did sell a few positions just in case, I decided to leave most of my longer-term positions as is.  And, while hindsight is always 20/20, that did turn out to be a great decision.  Of course, we never know for sure, and that’s why traders and investors must consistently practice sound risk management.  One must always protect against the times we miss.  And it not only serves to protect and preserve your bankroll, but it also helps provide the clarity and peace of mind necessary – an edge in itself – to properly consider and evaluate the information available to you. Worrying if your over-leveraged position might blow up in your face is not going to help you make a smart decision.

Traders and investors alike must always be open to taking every piece of relevant information into consideration, including our own preconceived notions and biases.  As Ray Dalio of Bridgewater Associates once said “I constantly want to know what I don’t know.  I want to know when I am wrong.  And it helps when someone points it out.”  While it certainly helps if someone else points it out, we can also objectively look at our own thought process, feelings, and emotions and consider how they too may be wrong or dangerously biased.  This in itself becomes part of a valid trading edge.  Everything counts, and we are often our own worst enemy in most endeavors we pursue.  As in playing chess or poker, those players who patiently take a step back in order to “see the bigger picture” and contemplate the best moves will, in the long-run, always triumph over those less savvy players just itching to make a move.

We should always ask ourselves what do other traders think they know.  What are they worried about or afraid of and to what extent?  Am I starting to feel worried or nervous myself, and are these thoughts rational and based on sound reasoning?  There was a great line in the movie Margin Call when CEO Tuld (played by Jeremy Irons) says “It’s not panicking if you’re the first one out the door.”  Granted, no one (and no firm) should ever be leveraged to that extent in the first place, but from his “clear” perspective the mortgage game was up.  And you certainly don’t want to be the one panicking out at the bottom of a move, with or without margin calls over your head.

Am I afraid that if don’t buy some stock tanking like a “falling knife” right now, I’ll miss the huge bounce coming right around the corner?  Is it possible many other traders are thinking the same way?  The reality is that it’s rarely “too late” to get a better price when buying into a crashing stock.  When the price action settles down, stabilizes, and starts to rebound, the stock will probably still be priced below your initial entry.  Sometimes our own feelings can give us strong clues as to what the “crowd” is thinking as well.  There was no need to predict ahead of time that October 4^th, 2011 would be the low of the last crisis and panic.  However, through awareness of our own feelings, astute observation into the collective thoughts of others, and by watching the price action in relation to the current headlines, we are continually provided with clues as to what is more likely to happen next.  For example, each time new headlines appeared about Greece and its debt problems, the chatter they generated seemed to lead to increasingly complacent market action and behavior.  There would be short-lived dips that would quickly recover, as if no one really cared any more.

And more recently, how has the market reacted as we’re hitting new multi-year highs?  Ironically, the VIX (fear) index (and even more so, the publicly traded VXX index based on the VIX futures) has been acting more fearful of a potential coming crash the higher the market goes.  Markets don’t generally crash right after making new highs, unless they’ve just gone through a high-volume blow-off top.  I recently read a study analyzing future market behavior when there are strong upward moves in both the VIX/VXX and the overall market in the same day.  The study showed that it has lead to even stronger upward price action in the near future.  And so far in 2012, that’s exactly how things have played out in the market.  But human behavior is not rational, and memory of the recent volatile past is still imprinted in traders’ minds.  So with each new high in the market, traders buy the VIX products expecting a crash that never materializes, and are then hit over the head with some of the highest levels of contango (the huge cost of rolling over current futures and options contracts to the next month) the VIX market has ever experienced.  And of course, traders are also greeted with another leg up in the market as well.  Never has it been easier for me to explain or visualize the term “climbing a wall of worry”.

In reality, it is the unexpected shocks that lead to the most “real” fear.  Especially where credit and leverage is concerned, it is these quick shocks that are most likely to catch firms (such as MF Global) unprepared and caught with their pants down.  But the more time that goes by with an event in the forefront, the longer the world has to deal with it, adjust by preparing for the worst, and “get used to” the new norm.  Just remember back to the Japanese nuclear crisis, the BP oil spill, or even more recently, the fears over a massively understated Greek CDS credit event once the ISDA declared the Greek bond “re-pricing” a credit event.  Banks, governments, and central banks have now had upwards of eight months to deal with the possibility of messy CDS defaults.  While there were some pundits calling for the possibility of three trillion dollars worth of losses versus the three or so billion claimed, it was likely that “the powers that be” had all the time they needed to deal with these issues.  And, believe it or not, the ISDA CDS auction also came to pass without incident.  That’s not to say there aren’t plenty of roaches crawling around everywhere.  But just as Countrywide Financial and Morgan Stanley were rolled into Bank of America to perhaps conceal a much worst debacle in the sub-prime mortgage market, the “powers that be” have likely had enough time to take similar measures to deal with any more potential blow-ups in the Greek bond market (well, at least for the time being).

In conclusion, always consider all the information available to you, be aware of what you don’t know, and consider where you might be flat-out wrong.  Seek to develop the focus and patience to position yourself in the best possible way, as opposed to merely trying to capture the next small wiggle.  Instead of missing out or being incorrectly positioned, you may provide yourself a much better chance to capture a nice chunk of the real move about to appear just around the bend.

(Josh Brown / RegisteredRep) “There are some stock market land mines that will invariably destroy anyone foolish enough to stand on them for an extended period of time. .. Until you’ve been blown up by a few of these murder holes yourself, it’s hard to recognize them. Below is a list of the dark alleys you never want to wander down for your own future financial well-being. .. These alleys are strewn with various land mines, any of which could become your very own murder hole at any time. You probably won’t listen anyway, but don’t say I didn’t warn you.”

SPACs – “According to Reuters, the last big wave of 57 SPACs that debuted at the height of the credit bubble in 2007 had raised a combined $11.3 billion. That’s a whole lot of “dumb money.” The best thing that could’ve transpired for those 57 companies would have been the return of cash that occurs when the clock runs out and a deal hasn’t been consummated. In fact, there were a few hedge funds involved with some of those SPACs that were forcing that dissolution to occur using the voting power of their stock positions. .. If it weren’t so true, it would almost be laughable how horribly and slowly these things die. And by the way, many of these SPACs have been China-related in recent years. For investors, the China-SPAC combination is like being beaten up after school and then coming home to find that your parents have moved away without telling you. .. And just so you know, the investment banks that make these stepchild IPOs are almost always connected to an aggressive brokerage sales force. How else could $100 million be raised for such a hare-brained scheme?”

Chinese Reverse Mergers – “The short sellers who have attacked and unmasked the Chinese RTO fraud machine have done investors a favor in the long run. I’ve advised people to avoid the entire China stock sector until the companies grow up a bit and start acting like professionals. After all, if the legendary John Paulson can be taken in by these charlatans, what chance do you have?”

One-Drug Biotechs – “The vast majority of drug trials fail to satisfy the FDA, and approvals are the exception, not the rule. .. If you must own biotechnology, try to go with a larger company that has several drugs on the market or in development. It may not produce a 10-fold return, but it also won’t vaporize your portfolio on an FDA setback.”

Private Placements – “So I’ll tell you what happens and what will always happen when retail brokers bring their clients private banking deals. By the time a company is desperate enough to go to broker/dealers for funds, it means that it is already at the end of its rope. The retail brokers are offered a 10 percent commission to show the deal to their clients. They are also promised warrants and stock options should the company end up going public. (It won’t.) This exorbitant compensation for the brokers is a huge red flag. .. The higher the commission or selling concession a broker is paid to sell a product, the worse that product will be for his or her clients. Brokers take note: selling a client a private placement that pays you a tenth of that money back is the same thing as telling your client to go f*%k himself. And by the way, the more interesting the company, the more dangerous the private placement offering.”

Other investor traps to watch out for:

• “Oil and gas limited partnerships. (If you’re being cut in on them, the wells are dry.)
• Principal protection funds. (They always come out after the market’s been killed and cap your upside on the recovery.)
• Insurance brokers selling asset management. (Does your hairdresser also repair the roof on your house?)
• Stockbrokers selling guaranteed-return equity-linked annuities. (Yeah, that’ll end well.)
• Reverse convertibles and other structured products. (They will pit you against both the market and the banker — good luck!)
• Brokers with one day left in their pay period. (They will call you with the news that “we need to rotate and move some things around.”)
• Brokers with thick New York accents and Boca Raton area codes.
• Anyone who claims to have a “system.” (Why? Because there is no such thing, and if there were, you would be the last person to hear of it.)
• Anyone who calls himself a “financier.” (He’s guaranteed to be full of sh*t and probably wears dress shoes with no socks.)
• Financial advisors who self-clear or self-custody client funds. (Always be sure there is another pair of eyes on your money, preferably a large corporation’s.)
• Currency brokers and forex sites. (Nobody knows anything; this is all highly leveraged speculation, and the brokers are actually trading against you when you take a position.)
• Managed futures funds. (The fees are so over the top that your actual return will look nothing like the advertised return.)
• Movie investments. (The latest telemarketing scam; no studio worth investing in is going to unleash an army of cold callers to raise funds.)
• Closed-end fund IPOs. (These funds should only be bought at a discount in the secondary market. Within 90 days of the IPO, the “penalty bid” phase ends and brokers can freely dump shares while keeping their commissions — you will be down 15 percent in a blink.)”

Full Story: Staying Out of the Murder Holes (Joshua Brown / RegisteredRep)

And let’s not forget to mention double and triple ETNs (Exchange-Traded-Notes) that will evaporate your portfolio faster than you can say “WTF“?!… 

Full Story: Collateral Damage: TVIX’s Fall Could Have Broader Implications (TVIX, VXX)

(TheReformedBroker) “When stalking a growth stock awaiting better entries or looking for new growth stock ideas, one of the best things you can do is get a hold of Wall Street’s Upgrades and Downgrades each morning.  .. Typically a fast-growing company will stumble on a specious analyst downgrade and then the accumulation will resume as the institutional fans of the story get over it and come back with buy orders.”

Examples of B.S. downgrades:

“Valuation - growth stocks don’t trade on ‘valuation’, they trade on sentiment and the expectation of future earnings, see the numerous valuation-based downgrades of lululemon and Whole Foods.

Dropping Coverage - believe it or not there are institutions who will actually sell on the news that a brokerage firm is dropping or suspending coverage in a name due to an analyst leaving or something.

Channel Checks - there is only one thing sell-side analysts suck more at than tackle football and that is ‘channel checking’ – they literally cannot do it in such a way that there are actionable insights to be gleaned from it.  Think about how many times you heard about strength in non-Apple tablets (there never really was any) or weakness in the iPhone 2 (also, never really happened).  Channel checks are a money-loser in most cases – wait for the actual hard data, forget what people say they’ll do or think they’ll do.

Short-Term Pressures - chances are if you are interested in a growth stock investment, what happens tomorrow or the next day has little to do with anything.  For example, I saw an analyst downgrade Buffalo Wild Wings, one of this moment’s greatest growth stories, because of a rise in chicken wing costs in early February.  And while the analyst was correct in terms of those costs rising, it’s really a trivial, short-term matter to anyone who intends to invest in the business.

Strategic Direction - some people are meant to run businesses and others are meant to analyze and critique them. When a company announces a new strategic direction or goal, the knee-jerk Wall Street response is to cut it to neutral due to ‘uncertainty’.  I have no interest in seeing sell-side analysts vote on the strategic decisions of a company – management often knows more about their market than the eggheads do.”

Full Story: Growth Stock Strategy: Buy Bullsh*t Downgrades (TheReformedBroker)

(DynamicDividend) “If the data I’ve collected over the last six months is any indication, a very strong case can be made for the initiation of a dividend as a signal that a stock is about to generate market-beating returns.”

“Of the 36 stocks listed, only three are currently trading lower than their final closing price prior to declaring their first payout, and only seven have been outperformed by the S&P 500 since the same announcement. The average gain by the new dividend stocks (22.75%) is an absurd 15.67% better than the average gain by the S&P 500 (7.09%) during comparable periods.”

“Some highlights include: SMF Energy gaining 182% (vs. 17% for the S&P 500), Ebix gaining 58% (vs. 12%), Intuit gaining 40% (vs. 14%), Xyratex gaining 68% (vs. 2%), and Emcor Group gaining 53% (vs. 16%). Solutia has popped 77%, thanks in large part to Eastman agreeing to pay a 42% premium for the company last week.”

Full Story: New Dividend Stocks Absolutely Crushing Broader Market (DynamicDividend)

DynamicDividend.com is a terrific source of all types of dividend-related news and information, including lists of “Dividend Dynamo” stocks that have had the longest run of annual consecutive dividend growth.

Stocks from List: NRGM, RRMS, ZMH, A, ESIO, CSPI, FMCN, GNE, KNSY, SOA, FBNK, GFF, IACI, NOR, LXK, PCTI, OILT, CORE, ACFN, HSNI, EME, HL, PRA, EBIX, WWAY, NICK, CECE, INTU, CGI, NMFC, KINS, DSW, FUEL, AMOT, JCOM, XRTX

(read more...)]]> http://www.vlogolution.com/hot/2012-02-01-stocks-declaring-first-time-dividends-strongly-outperform-market/feed/ 0 http://www.vlogolution.com/hot/2012-01-20-where-do-billionaires-park-their-cash-and-assets/ http://www.vlogolution.com/hot/2012-01-20-where-do-billionaires-park-their-cash-and-assets/#comments Sat, 21 Jan 2012 04:53:37 +0000 http://www.vlogolution.com/hot/?p=1825

(BloombergMarketsMagazine) “Cash generates minuscule returns. Commodities, especially gold, can soar or tumble in an instant. In these perplexing times, Bloomberg Markets magazine in its January issue asked 10 billionaires 14 questions covering their views on the global economy, where they see opportunities and who gave them the best advice.”

Some highlights:

John Paul DeJoria (Primary Assets: Stakes in John Paul Mitchell Systems and Patron Spirits Co. Residence: Los Angeles Industry: Retail):

“Influential indicators? Beauty salons. Typically, customers will visit every six weeks; in downturns, that drops to every eight weeks. When the frequency starts to go up again, it indicates the economy is improving.”

“Where to park $1 million in cash?  Twenty-five percent in gold, 25 percent in silver, 25 percent in NYSE blue-chip stocks that pay a dividend and 25 percent between Asian and European blue chips that pay a dividend.”

Eli Broad (Primary Assets: Investments, art Residence: Los Angeles Industries: Banking, real estate):

“Influential indicators? Consumer confidence, unemployment and political gridlock.”

“Best investing advice? Don’t bet the farm.”

“Margin in portfolio? Not in this uncertain world.”

“Where to park $1 million in cash? High-quality multinational consumer companies such as Procter & Gamble Co., Coca-Cola Co., Kraft Foods Inc. and Johnson & Johnson. (JNJ)”

Peter Hargreaves (Primary Asset: 32.2 percent of Hargreaves Lansdown Plc, the U.K.’s biggest retail broker Residence: Bristol, England Industry: Financial services):

“Fixed-income investments? German bonds for the currency play when the euro implodes”

Where to put $1 million in cash? $500,000 in Singapore dollars and $500,000 in Norwegian krone.”

“Is there a money manager you would trust with your entire portfolio? Me.”

Full Story: Billionaire Prokhorov Touts Gold as Trump Embraces Foreclosures (BloombergMarketsMagazine)

(TheReformedBroker) “Sometimes when stocks gap down on earnings they don’t bounce – they keep going and going lower, never to be heard from again. But I knew $LULU would at least bounce, even if it eventually retests the lows from this morning where I bought in (41.75 to 42.25). This is because LULU didn’t miss earnings or revenue or guide lower for the coming quarter – it simply didn’t blow The Street away by the same magnitude that it had in prior quarters. It still grew faster than most other public retailers and it still has more room to grow than any retailer I can think of.”

“Only an imbecile looks at +30% revenue growth as a ‘disappointment’ – especially amidst a market full of other stocks that couldn’t grow their top line revenues if their lives depended on it. And the fact that LULU may not have met sell-side analyst expectations means absolutely nothing to me. Because I’ve seen this short-term myopia before back when Coach ($COH) was a young, mid cap growth story during the last recession (2002 – 2003). It would blast the Street’s stupid expectations out to Jupiter three quarters in a row and then have a quarter that was just okay. People couldn’t wait to write it off and say it was “decelerating” or had peaked. And then it would smash the numbers for another three or four quarters in a row just to piss the naysayers off.”

“Short-termism is foolish when you’re talking hyper-growth potential and a young company with nothing but room to expand. I’m not telling you LULU is cheap or ‘deserves’ a 30 multiple or blah blah blah. I’m saying that stocks don’t get punished for growing revenues at a 30% clip for long. I knew they’d bring it back simply for the fact that, well, there just aren’t any other LULUs to buy, plain and simple.”

Full Story: lululesson (TheReformedBroker)

(Barnhardt.biz) “I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not. And this goes not just for my clients, but for every futures and options account in the United States. The entire system has been utterly destroyed by the MF Global collapse. Given this sad reality, I could not in good conscience take one more step as a commodity broker, soliciting trades that I knew were unsafe or holding funds that I knew to be in jeopardy.”

“I have learned over the last week that MF Global is almost certainly the mere tip of the iceberg. There is massive industry-wide exposure to European sovereign junk debt. ..  I now suspect that the reason the Chicago Mercantile Exchange did not immediately step in to backstop the MFG implosion was because they knew and know that if they backstopped MFG, they would then be expected to backstop all of the other firms in the system when the failures began to cascade – and there simply isn’t that much money in the entire system. In short, the problem is a SYSTEMIC problem, not merely isolated to one firm.” – from Ann Barnhardt’s Client Letter (BCM HAS CEASED OPERATIONS), complete letter follows below…

(TheMarketTicker) “The reason they got caught is the same reason I would have gotten caught if I had been clearing through MF Global: Despite being around the markets since well before the 2000 crash and having successfully negotiated that and the 2008 mess everyone has believed, right up until MF blew up, that customer funds were in fact segregated and thus this risk would never occur. Simply put everyone has now discovered that this assumption is wrong. .. Nothing that has come out of the CME, the SEC or Washington DC that has restored my confidence that MF Global is, in fact, a one-off situation.  In point of fact The Fed is now requiring margin on certain repo transactions where they never did before, implying that there may well be additional snakes in the grass and additional unrecognized and intentionally hidden risks of this sort.”

Full Story: Oh Oh. “Regulated” Derivative Markets About To Blow Up? (TheMarketTicker)

______________________________________________________________________

Entire Letter from Ann Barnhardt to her IBB / Commercial Hedging Clients  (source: http://barnhardt.biz):

BCM HAS CEASED OPERATIONS

Posted by Ann Barnhardt – November 17, AD 2011 10:27 AM MST

Dear Clients, Industry Colleagues and Friends of Barnhardt Capital Management,

It is with regret and unflinching moral certainty that I announce that Barnhardt Capital Management has ceased operations. After six years of operating as an independent introducing brokerage, and eight years of employment as a broker before that, I found myself, this morning, for the first time since I was 20 years old, watching the futures and options markets open not as a participant, but as a mere spectator.

The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not. And this goes not just for my clients, but for every futures and options account in the United States. The entire system has been utterly destroyed by the MF Global collapse. Given this sad reality, I could not in good conscience take one more step as a commodity broker, soliciting trades that I knew were unsafe or holding funds that I knew to be in jeopardy.

The futures markets are very highly-leveraged and thus require an exceptionally firm base upon which to function. That base was the sacrosanct segregation of customer funds from clearing firm capital, with additional emergency financial backing provided by the exchanges themselves. Up until a few weeks ago, that base existed, and had worked flawlessly. Firms came and went, with some imploding in spectacular fashion. Whenever a firm failure happened, the customer funds were intact and the exchanges would step in to backstop everything and keep customers 100% liquid – even as their clearing firm collapsed and was quickly replaced by another firm within the system.

Everything changed just a few short weeks ago. A firm, led by a crony of the Obama regime, stole all of the non-margined cash held by customers of his firm. Let’s not sugar-coat this or make this crime seem “complex” and “abstract” by drowning ourselves in six-dollar words and uber-technical jargon. Jon Corzine STOLE the customer cash at MF Global. Knowing Jon Corzine, and knowing the abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies, this is not really a surprise. What was a surprise was the reaction of the exchanges and regulators. Their reaction has been to take a bad situation and make it orders of magnitude worse. Specifically, they froze customers out of their accounts WHILE THE MARKETS CONTINUED TO TRADE, refusing to even allow them to liquidate. This is unfathomable. The risk exposure precedent that has been set is completely intolerable and has destroyed the entire industry paradigm. No informed person can continue to engage these markets, and no moral person can continue to broker or facilitate customer engagement in what is now a massive game of Russian Roulette.

I have learned over the last week that MF Global is almost certainly the mere tip of the iceberg. There is massive industry-wide exposure to European sovereign junk debt. While other firms may not be as heavily leveraged as Corzine had MFG leveraged, and it is now thought that MFG’s leverage may have been in excess of 100:1, they are still suicidally leveraged and will likely stand massive, unmeetable collateral calls in the coming days and weeks as Europe inevitably collapses. I now suspect that the reason the Chicago Mercantile Exchange did not immediately step in to backstop the MFG implosion was because they knew and know that if they backstopped MFG, they would then be expected to backstop all of the other firms in the system when the failures began to cascade – and there simply isn’t that much money in the entire system. In short, the problem is a SYSTEMIC problem, not merely isolated to one firm.

Perhaps the most ominous dynamic that I have yet heard of in regards to this mess is that of the risk of potential CLAWBACK actions. For those who do not know, “clawback” is the process by which a bankruptcy trustee is legally permitted to re-seize assets that left a bankrupt entity in the time period immediately preceding the entity’s collapse. So, using the MF Global customers as an example, any funds that were withdrawn from MFG accounts in the run-up to the collapse, either because of suspicions the customer may have had about MFG from, say, watching the company’s bond yields rise sharply, or from purely organic day-to-day withdrawls, the bankruptcy trustee COULD initiate action to “clawback” those funds. As a hedge broker, this makes my blood run cold. Generally, as the markets move in favor of a hedge position and equity builds in a client’s account, that excess equity is sent back to the customer who then uses that equity to offset cash market transactions OR to pay down a revolving line of credit. Even the possibility that a customer could be penalized and additionally raped AGAIN via a clawback action after already having their customer funds stolen is simply villainous. While there has been no open indication of clawback actions being initiated by the MF Global trustee, I have been told that it is a possibility.

And so, to the very unpleasant crux of the matter. The futures and options markets are no longer viable. It is my recommendation that ALL customers withdraw from all of the markets as soon as possible so that they have the best chance of protecting themselves and their equity. The system is no longer functioning with integrity and is suicidally risk-laden. The rule of law is non-existent, instead replaced with godless, criminal political cronyism.

Remember, derivatives contracts are NOT NECESSARY in the commodities markets. The cash commodity itself is the underlying reality and is not dependent on the futures or options markets. Many people seem to have gotten that backwards over the past decades. From Abel the animal husbandman up until the year 1964, there were no cattle futures contracts at all, and no options contracts until 1984, and yet the cash cattle markets got along just fine.

Finally, I will not, under any circumstance, consider reforming and re-opening Barnhardt Capital Management, or any other iteration of a brokerage business, until Barack Obama has been removed from office AND the government of the United States has been sufficiently reformed and repopulated so as to engender my total and complete confidence in the government, its adherence to and enforcement of the rule of law, and in its competent and just regulatory oversight of any commodities markets that may reform. So long as the government remains criminal, it would serve no purpose whatsoever to attempt to rebuild the futures industry or my firm, because in a lawless environment, the same thievery and fraud would simply happen again, and the criminals would go unpunished, sheltered by the criminal oligarchy.

To my clients, who literally TO THE MAN agreed with my assessment of the situation, and were relieved to be exiting the markets, and many whom I now suspect stayed in the markets as long as they did only out of personal loyalty to me, I can only say thank you for the honor and pleasure of serving you over these last years, with some of my clients having been with me for over twelve years. I will continue to blog at Barnhardt.biz, which will be subtly re-skinned soon, and will continue my cattle marketing consultation business. I will still be here in the office, answering my phones, with the same phone numbers. Alas, my retirement came a few years earlier than I had anticipated, but there was no possible way to continue given the inevitability of the collapse of the global financial markets, the overthrow of our government, and the resulting collapse in the rule of law.

As for me, I can only echo the words of David:

“This is the Lord’s doing; and it is wonderful in our eyes.”

With Best Regards-
Ann Barnhardt

Source: http://barnhardt.biz/

Ann Barnhardt addendum: “There is some confusion as to what I (formerly) did for a living via BCM. I am not a ‘hedge fund’ or a ‘money manager’. I am an old-school commercial hedge broker specializing in CATTLE and GRAIN. Farmers, ranchers, etc. Actual hedging of actual cattle and grain using futures and options. Very old-school original.”

(JonStewart) “Politician Jon Corzine saw Lehman Brothers as a cautionary tale; financial firm honcho Jon Corzine saw it as a dare.”

I don’t always agree with Jon Stewart, but he’s pretty much got it right on the money on this one…

(TheMarketTicker) “Let us remember that MF Global was just added to the primary dealer list in 2010! The bankruptcy does raise questions, however, about how the Fed picks the primary dealers — especially since MF Global was one of four firms added to the ranks after new, more stringent requirements were put in effect in 2010.”

Full Story: MF Global – Trillions in Bailouts, Loads of New Regulations, yet nothing has changed (vlogolution)

(PeterBrandt) “The media is missing the real story in the sad saga of MF Global. The story is not the big bet in Europe by MF Global that went south. The story is not the risk-taking ways of Jon Corzine.

The real story is the ineptness of federal regulators (so, what’s new). The real story is that speculators may end up holding an empty bag right under the noses of the U.S. government regulators responsible for their protection. The present administration appears unwilling to step up to the plate. The Obama administration bailed out AIG, Deutsche Bank, Fannie, Freddie and a whole bunch of other crooks along the way. But when it comes to protecting the integrity of futures markets, the powers that be (or should be) are MIA.

If segregated account holders of MF Global are stiffed it will be the end of market integrity as we know it. Free market lovers everywhere, do NOT under-emphasize the importance of this matter. The MF Global situation could be the leak in the dike that will flood the financial system as we know it. If segregated account holders in a federally regulated market are not protected, what is next?”

Full Story: Futures traders: Be concerned, be very concerned (PeterBrandt)

(PeterBrandt) “Futures markets and futures commission merchants (FCMs) are supposed to be highly regulated by the Commodity Futures Trading Commission (CFTC). If MF Global’s seg customers are not fully protected, it would be the equivalent of, let’s say, depositors of Chase bank or customers of Fidelity not being protected.

The failure of MF Global’s segregated account to be made whole would be the biggest financial disaster since 1929 and would spell the end of the futures industry as we know it. Folks in the financial industry should take this matter seriously — very seriously. Do not underestimate the importance of this matter.”

Full Story: MF Global — 2011′s version of 1929 (PeterBrandt)

(Interloper) “Mr. Achuthan has been arguably the most accurate economic forecaster over the past five years and perhaps more importantly, is apparently using new analytical techniques and indicators – his emphasis on short and long-leading economic indicators is an excellent example. As he noted this morning, he was virtually alone among prominent economists in predicting a slowdown for the latter half of 2011, even if his predicted official recession has yet to become evident.”

” .. Achuthan presented his view that despite recent stronger data a US recession was still on tap, followed by Steve Liesman (fairly) asking ‘What about recent stronger GDP and consumer spending data’, followed by Achuthan saying that it didn’t matter because there is contagion in the data whereby more indicators were turning negative, followed by Liesman asking (again fairly) ‘like what’, and Achuthan responding something like ‘it doesn’t matter what, it matters how many‘. .. Liesman continued to badger his guest with ‘what do investors do today?’ ”

“.. Achuthan, in other words, is telling investors you something you will not hear from any employee of a brokerage or investment bank (well, maybe SocGen): wait.”

“.. My real issue is with those who will complain, ‘Why would I listen to that guy? He can’t even tell me which indicator he’s basing his conclusion on’. These people want THE ANSWER, stated bluntly, with conviction. To these people I respond; there is nothing you should be more afraid of than a market pundit who is certain.”

“Certainty is a tremendous marketing tool but there is a reason that the ‘con‘ in con man is short for confidence. Remember that it would only take one highly-leveraged trade to make someone wealthy enough to never work again. This implies that if the ‘certain’ dude (and its 99% of the time a dude) was really 100% sure, they would be leveraged 200-1 on the trade and, if it were successful, you’d never see them again outside of Saint Tropez-situated photos in celebrity magazines. In truth they are not sure – it’s a marketing gimmick to attract your investment dollars.”

“We are naturally attracted to certainty and we want to believe that someone has the answer because psychologically the random nature of markets is repellent. But in the end it is most often a trap and all investors should remember what a portfolio manager once told me: ‘People don’t like to hear it but we are in the probability game, not the certainty game.’ ”

Full Story: Liesman vs Achuthan and why investors should be terrified of certainty (Interloper)

(GlobeInvestor) “ETNs expose investors to the risk of losing all or most of their principal. That’s because ETNs are set up as unsecured, long-term debt obligations of the issuer, Ms. Pelant explains. ETF investors don’t face the same default risk because ETFs own a pro rata stake in a basket of stocks, bonds, or derivatives held by a custodian in trust and legally separate from the issuer, she says.”

“When Morgan Stanley’s viability came under question in September , its family of Market Vectors ETNs sold off dramatically. ‘The Market Vectors Remnimbi/USD ETN (CNY) plunged more than 25 per cent versus a 1-per-cent drop in a comparable ETF,’ observes Greg Newton, a veteran financial journalist who writes the NakedShorts blog.”

However, if the ETFs don’t actually hold the securities that make up the fund, and instead use synthetics or swaps rather than physicals, investors may also be exposed to much more credit and counter-party risk than they realize. And as Jeffrey Gundlach discussed at the recent DoubleLine Luncheon at the New York Yacht Club, “Never, ever take counterparty risk. It is the one risk you are almost never rewarded for taking. Unless you are running $800 billion dollars, there is no need to use swaps, synthetics or baskets – trade cash markets and avoid any trades that require a counterparty.”

(HistorySquared) “In light of the counter party risks inherent in ETFs, especially those that use synthetic swaps rather than the physicals, there might be an inexpensive way to express a bearish view on some of the European banks.

For example, in 2008 Lehman Brothers had several failed ETNs. ‘The three ETNs were Opta Lehman Commodity, Agriculture and Private Equity. In September 2008, these ETNs halted trading when Lehman Brothers failed. Currently, the final results are being sorted out, but it appears that Lehman ETN holders will receive 2 cents on the dollar from their original investment.’ ”

These are some clever lower-risk trading ideas for expressing a bearish view on the future solvency of a particular counterparty:

“Perhaps there are some far OTM options on some of the Socgen ETFs that are worth a look . Or a less risky trade could be long an ETF with physicals underlying the ETF that is issued by a more secure bank, and short the highly correlated Socgen ETFs. A potentially catastrophic event could be triggered by Deutsche Banks popular x-trackers.”

Full Story: ETFs as Tail Risk Trades (HistorySquared)

(Bloomberg) “ETFs that use swaps to clone stock, bond or currency returns have been criticized by regulators and firms including Fidelity Investors, which say clients risk losing money should the banks writing the derivatives become insolvent. Outflows from Lyxor are another blow to Societe Generale, France’s second-largest bank, whose shares have tumbled this year as the escalating sovereign-debt crisis squeezes lenders’ funding.

‘It’s an issue of counterparty risk related to the financial health of the backing bank,’ said Jose Garcia Zarate, an ETF analyst at Morningstar Inc. in London. ‘Fears over synthetic replication have been building up, and at the same time, fears of banks’ peripheral-debt exposure have grown. Put those two together: bingo!’ ” — Swap ETFs, Lyxor Have Record Outflows (Bloomberg)

(StockChartist) “I often cringe when I see charts posted on other sites where the author inserts a sloping trendline and then jumps to the conclusion that the trendline will act as some sort of wall of support or resistance as the case may be. The first thing I do when I look at the same chart on my system is to look for and usually find what might be horizontal lines that project a dramatically different interpretation. The question is “Which trendline, sloping or horizontal, prevails and trumps the other?” In making a decision as to whether to buy (or sell) and two lines lead to different conclusions which should you pay more attention to?”

“.. if I have to choose between an ascending (or descending) trendline and a horizontal one to drive my decisions I would look to the horizontal one. I can’t easily calculate where the trendline will be a month or two out. But I can easily see whether there are any horizontal trendlines that mark where buyers and sellers have traded places for control of a stock’s trend. Those are the transfers of power that I rely on to help me anticipate what might be ahead for a stock (or Index).”

Full Story: Sloping or Horizontal Trendline: Which is More Trustworthy? (StockChartist)

(PeterBrandt) “How a chartist draws a line can make all the difference in the world between a good call or a bad call, a profit or a loss.”

“.. ‘Brandt, you are bearish one day, bullish the next and bearish the next. Can you make up your mind?’ The answer is a loud, ‘NO!’ I am a chartist. I believe that charts provide set ups with certain reward to risk parameters and trigger points. I do not believe that charts are useful for price forecasting. I am on record with this stance dating back 30 years. When I get a chart screaming a certain message I develop a strong opinion, weakly held. I will hold and state that opinion until the price action tells me something else. Then my scream will carry a different message.”

Full Story: The two faces of Silver (PeterBrandt)

(ContrarianEdge) “Investing is not an idea-­per-hour profession; it more likely results in a few ideas per year. A traditional, structured working environment creates pressure to produce an output — an idea, even a forced idea. Warren Buffett once said at a Berkshire Hathaway annual meeting: ‘We don’t get paid for activity; we get paid for being right. As to how long we’ll wait, we’ll wait indefinitely.’ ”

“I do my best thinking in the morning. At 3:00 in the afternoon, my brain shuts off; that is when I read my e-mails. We are all different. My best friend is a brunch person; he needs to consume six cups of coffee in the morning just to get his brain going. To be most productive, he shouldn’t go to work before 11:00 a.m.”

“And then there’s the business news. Serious business news that lacked sensationalism, and thus ratings, has been replaced by a new genre: business entertainment …” (WHY, you ask? cuz that’s what people want)

“You may think you’re able to filter the noise. You cannot; it overwhelms you. So don’t fight the noise — block it. Leave the television off while the markets are open, and at the end of the day, check the business channel websites to see if there were interviews or news events that are worth watching.”

“Numerous studies have found that humans are terrible at multitasking. We have a hard time ignoring irrelevant information and are too sensitive to new information. Focus is the antithesis of multitasking. I find that I’m most productive on an airplane. I put on my headphones and focus on reading or writing. There are no distractions — no e-mails, no Twitter, no Facebook, no instant messages, no phone calls. I get more done in the course of a four-hour flight than in two days at the office. But you don’t need to rack up frequent-flier miles to focus; just go into ‘off mode’ a few hours a day: Kill your Internet, turn off your phone, and do what you need to do.”

Full Story: A Few Simple Rules For Money Managers (ContrarianEdge)

(RobertSinn) Being a “contrarian” in the markets has become quite popular recently. Many market participants seem to think that they must be smarter than any group of other market participants who share the same view. The logic goes something like “if everyone agrees and thinks the same thing then they cannot possibly be correct”- I believe this notion of contrarianism is very dangerous.

Full Story: On Being Contrarian (RobertSinn)

“You are neither right nor wrong because the crowd disagrees with you.  You are right because your data and reasoning are right.” — Benjamin Graham

Was the May 6^th, 2010 intraday crash and recovery just another one of those once-in-a-lifetime rare anomalies -– a rare confluence of events coming together to form the “Perfect Storm”?  And if a “Perfect Storm” generally occurs so infrequently, why does it seem that we are presented with a newsworthy “Perfect Storm” in the markets on an almost regular basis?  With all the misinformation and outrageous reasons the media and its “pundits” offer, perhaps it’s time to revisit exactly how markets work, and what (or who) may be to blame.  It’s a lot easier to blame a “fat finger” or some naughty short-sellers for a huge market-selloff, than to accept that markets do not always have a buyer for every seller.  Very simply, when a large number of market participants decide they all must sell (or buy) at the exact same time, an “air pocket” of price action will form.  Anyone who has traded a market knows that this type of single-sided liquidity “crisis” occurs every day in the markets to various extents, especially after significant news events are released.  While these relatively smaller moves may not be nearly as significant as a 1000 point intraday drop and overall market selloff, the dynamics are more or less the same.  The setup develops with a large number of market participants all thinking the same way (ie. very strong bullish or bearish sentiment), generally due to a strong extended trend in a market.  When the market finally turns, the large group of participants on the wrong side of the trade all decide to reverse course at the same time, at similar stop levels, just to save their leveraged hides.  Does the trading term “slippage” ring a bell?

(read more...)]]> http://www.vlogolution.com/hot/2010-05-19-the-perfect-storm-lessons-learned-from-the-dow%e2%80%99s-1000-point-flash-crash/feed/ 1 http://www.vlogolution.com/hot/2009-11-11-martin-armstrong-on-market-predictions-and-objective-vs-subjective-analysis/ http://www.vlogolution.com/hot/2009-11-11-martin-armstrong-on-market-predictions-and-objective-vs-subjective-analysis/#comments Wed, 11 Nov 2009 08:01:52 +0000 http://www.vlogolution.com/hot/?p=567

Martin Armstrong is the author of the Economic Confidence Model based on an 8.6 year business cycle theory inspired by the work of Nikolai Kondratieff.  Two years ago, the cycle once again accurately predicted the peak of the last economic cycle years in advance.  February 26, 2007 yielded some of the tightest credit spreads ever (easy access to credit), and the housing market had already begun its sharp decline.

He is currently in prison, indicted in 1999 on charges of defrauding Japanese investors.  His trial would have made more sense had it taken place in “Alice in Wonderland”.  Without getting into all the details here, just the fact that he was in jail for seven years for contempt of court should be enough to make any American cringe and wonder how that’s possible in the great ‘ole USA.  He finally caved in and plead guilty in 2007 to the fraud charge.  In return, he was given an additional five year prison term in addition to the seven he had already served!  Now, if this were any ordinary American schmo, perhaps he could be written off for one reason or another as just another guy with a crazy “they’re out to get me” sob story.  However, when you look deeper into the facts, and then consider that Mr. Armstrong was also one of the most respected financial research advisers to scores of powerful figures from central bank executives to heads of multinational corporations to heads of state, it really makes you wonder what’s going on with the “Rule of Law” — the real glue that holds our country together.  Armstrong even authored the most insightful and thorough analysis of the 1929 crash ever assembled on behalf of the Reagan administration in the ’80s.

From his jail cell, Martin Armstrong continues to write some of the most insightful and interesting essays I’ve come across on a variety of topics from market cycles, to rule of law, to the history and cycles of politics and war.  Since he has access to little more than an old typewriter (and no whiteout), you must understandably have a bit of patience with his “what I’m thinking about now” writing style.  Would I be showing my age if I can still recall the nightmare of using a typewriter for school papers?  It’s horrible.

Regardless, I’ve learned more useful knowledge about world history (and our own history) from Armstrong’s essays than I ever learned in school.  And it’s more fascinating than you can even imagine.  Everything’s been done and tried before.  And here’s some food for thought…  in the six thousand or so years of civilized history, can anyone find one example where socialism actually succeeded with a happy ending?  But I guess that’s why most politicians don’t bother to learn any of history’s lessons.  It would just interfere with their agendas and other questionable motives.

The following text is an excerpt from Martin Armstrong’s latest essay entitled “Objective vs Subjective Analysis” (pages 10-12).  I’ve also taken the liberty of making some small corrections here and there to make the text more readable while still hopefully maintaining Mr. Armstrong’s full meaning and intent.

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It’s kind of ironic how Martha Stewart became the poster child for cracking down on insider trading activity, even though it was never even proven or substantiated.  For those of you that remember the movie Airplane with Leslie Nielsen, it reminds me of the scene where the police officers detain the little old lady while allowing a dozen terrorists to walk right through the security gate armed with bazookas.  Now with Goldman Sachs, we’re faced with likely the greatest inside information and market manipulation scheme of all time — way larger than the usual trading on inside information that seems to go on every day in the markets.  And once again, I doubt a single one of the people responsible will end up in jail over it (let alone receive anything much more than a slap on the wrist, if that).  More likely, it’ll be brushed under the rug with the rest of the manure and never heard of again.  But should we really expect anything different from our government, which at this point exists as little more than a taxpayer-subsidized wholly-owned subsidiary of Goldman Sachs?!  Shhhh, thou shalt not use the lordGoldman’s name in vain!

It was also quite telling that Goldman was able to have the FBI detain their programmer Sergey Aleynikov within a day’s notice on charges that the theft of their code was an issue of national security as it could enable others to manipulate the markets.  Of course, I’m sure that’s not what Goldman would be using it for (uh huh)…  But I suppose that the Plunge Protection Team a.k.a. Goldman Sachs does require “special access” to the markets to do its job and assure it stays in the black (and then sooooome).

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Most traders and investors at one time or another have fallen into the “confidence” trap. Sometimes it’s a result of believing in the infallibility of their research. Other times it’s due to having a presumed “hot” hand — they’ve finally got the game figured out and can do no wrong. Maybe they’ve gotten caught up with some hot new money-minting trading system with a great historical track record. Or perhaps they’ve been drawn in by someone else’s hot streak, in a chat room for instance (novice traders, trying to skip a few steps, are notorious for succumbing to this). All the calls turn out great, and even the fundamental and technical research that’s shared always seems right on the money. However, up to that point they’ve just watched –- and they’re kicking themselves for missing out on yet another huge gain. Let’s take our fictional trader and call him Bernie.

Bernie decides he’s not going to miss out on the next opportunity that comes up. When the next “hot stock” is revealed, it happens to be a stock that he himself already had on his radar. The additional research backs up his conviction. Everything seems right, and the stock appears perfectly poised for a huge move. Bernie’s confidence level for the trade is higher than ever. Forget about what he can afford to lose, this is the trade that’ll make his year!

Bernie decides to accumulate a position much larger than normal — 3 times as large in fact, equating to about a quarter of his total account size. At first, all seems to be working out great and the trade has even moved a nice 5% in his favor. Two days later however, he wakes up to find the stock down 25%, blowing right through any stop levels he may have considered. The company out of the blue announced a dilutive secondary offering to “better take advantage of opportunities that may become available” or some other similar mumbo-jumbo.

Bernie feels caught, but he figures the big picture still hasn’t really changed, and that prices should find support around the offering price. In fact, he decides to double his position around the offering price if he can. The company’s valuation seems cheaper than ever, and the company will now have even more cash to materialize its goals.

However, as the price continues to drop, Bernie starts to wonder… More investors, increasingly disgusted by the management’s apparent lack of regard for their investing well-being, decide to throw in the towel. By the end of the week, the stock is down another 38% just from the offering price! The same stock that traders and investors all loved at $9 just a few days earlier, they now hate at $5. Even those investors who bought into the secondary are feeling completely betrayed.

Ironically, if the research and valuations are accurate, the stock should be more attractive than ever at these levels. Of course, it doesn’t matter anymore, as most traders (including our newbie trader Bernie) decided to throw in the towel as the stock sells off in a panic around $4/share leaving Bernie with a whopping 44% account loss (requiring a 125% increase in account value just to reach breakeven). Several days later, the stock is trading back around its offering price. How’s that for the perfect reaming. Bernie feels crushed, blames the guy in the chat room for putting out such a horrible call, and calls him a fraud despite the fact that all his other picks turned out pretty well.

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Here’s to another great oversight job by the SEC and the NASD. For anyone who caught any of the trading in Dendreon today (NASD:DNDN), this is exactly the type of situation that can be the death of you as a trader. Once you see it unfolding, the best thing you can do is STAY THE HELL AWAY. For those of you who missed all the “fun”, basically DNDN tanked nearly 70% in a bit over two minutes from 1:25pm to 1:27pm down to around $7.75 and was halted a few minutes later. Trading did not resume until 6:15pm when the stock reopened at about $24 per share and traded as high as $27.65 within minutes before pulling back a bit.  You think maybe a few people got caught in the early fun and games that took place by some market-manipulating private trading elite?  I’d bet on it…

The Nasdaq Stock Market said it was investigating two minutes worth of transactions in Dendreon Corp because they may have resulted from a brokerage error.  Transactions executed between 1:25pm and 1:27pm were under review, the New York-based exchange said in an e-mailed statement.  Anyone who made any trades in DNDN during that time were now panicking due to the trading halt, since they have no clue what their position would be by the time it’s all over (as the stock may gap huge and/or the trades may be broken). In such a case, if it was really some massive broker error or some other strange sheistery, the proper way to handle it would have been to BREAK EVERY TRANSACTION right up to the time just before the debacle began.  But, that would of course mean that those politically-connected friends of the NASD who made a fortune from this mess (you know, like Bernie Madoff until he went just a wee bit too far) would have to give it all back, and that’s just NOT PLAYING FAIR!

So, the Nasdaq Stock Market announced that it would let stand those hairy two minutes worth of transactions in Dendreon that it initially suspected were the result of a brokerage error!  Nasdaq announced its decision in an e-mailed statement at 3:06pm.  The statement also asserted that the ruling “cannot be appealed”.  Of course not… then their pals couldn’t have booked their 100%+ of porkified profits once DNDN reopened for trading later in the day!

Getting caught in something like this is a trader’s worst nightmare, and my heart goes out to any trader who may have been sideswiped and reamed in the rear by the elite powers that be.

What can be learned from this? Trading is war, and you’re on your own. Your only protection is that you’re always in control of your position size. Remember the importance of discipline, and always consider worst-case scenarios when managing risk.  Speaking of which, anyone else notice some of the “Swine Flu” stocks may be attempting to build new higher bases today (ie. NVAX, BCRX)?

(read more...)]]> http://www.vlogolution.com/hot/2009-04-28-dendreons-70-pork-over-by-the-nasd/feed/ 2 http://www.vlogolution.com/hot/2009-04-26-make-some-pork-from-the-swine-flu-outbreak/ http://www.vlogolution.com/hot/2009-04-26-make-some-pork-from-the-swine-flu-outbreak/#comments Sun, 26 Apr 2009 23:52:21 +0000 http://www.vlogolution.com/hot/?p=433

Another year, and another pandemic-potential flu virus outbreak. This year’s hoopla is over the swine influenza (H1N1) virus (swine flu) outbreaks in pigs which has also traversed to humans. Granted, this is frightening stuff. Perhaps what’s more frightening about this outbreak than other recent avian flu outbreaks is that not only are these closer to home, but that there have already been confirmed cases in humans from California to New York City. The outbreak seems to have spread from Mexico outward, as eight students at a New York Catholic high school that contracted swine flu had been to Mexico over spring break just two weeks ago.

Grounding ourselves back to reality, with so many protective measures now being taken, it’s likely that this outbreak will eventually fizzle out like those in previous years. Already many of the students are recovering, and with the heightening level of awareness people will be extra cautious. For those who want extra protection, I’ve heard that Sambucol (black elderberry extract) may be helpful in warding off flu virus attacks.

In the meantime, with all the hype around this outbreak (#swineflu is the top tweeted phrase on Twitter today!) is there some way to Pass Me The Pork on this crazy PIG FLU?!

Already Friday, several of the top flu vaccine “penny stocks” began moving sharply higher, and there’s likely more potential opportunity for greater moves higher on Monday. The current leader is NASD:NVAX (Novavax, Inc.), already up 75% on Friday alone. Scientists at Novavax have successfully developed the first multi-strain flu vaccine, though it may not be FDA approved in time to help with the current flu outbreak. As these stocks will already likely gap even higher pre-market Monday morning, you better watch the price action closely, don’t chase, and consider scaling in as higher bases form. If it’s too wild, stay away and wait until they calm down.

Some of these stocks may also turn out to be great shorts later this week. For disclosure purposes, I already managed to pick up some shares in a few of these stocks on Friday so I already have a nice little cushion, and will watch closely Monday for the opportunity to add more (or begin unloading if one of these stocks just goes completely berserk).  But remember… Don’t stick around too long, hit and run baby! Well, enough rambling…

Here’s the list of stocks to consider (NVAX – Novavax, BCRX – Biocryst, GNBT – Generex, SVA – Sinovax, and MYL – Mylan/Roche/Tamiflu/oseltamivir). From the charts and data below, you’ll also notice a few of them have built up a significant short interest for some seriously whopping short-squeeze potential. Do your due diligence, don’t blink, and you just may be able to turn these pigs into some of your own PORK!

(read more...)]]> http://www.vlogolution.com/hot/2009-04-26-make-some-pork-from-the-swine-flu-outbreak/feed/ 3 http://www.vlogolution.com/hot/2009-04-22-any-pork-in-this-stock-market-for-me/ http://www.vlogolution.com/hot/2009-04-22-any-pork-in-this-stock-market-for-me/#comments Wed, 22 Apr 2009 21:53:54 +0000 http://www.vlogolution.com/hot/?p=425

Video interview and update on the current State of the Markets, as well as the overall State of the Economy with Daryl Montgomery of the NY Investing Meetup (interviewed by Alexander Morris of moMoneyTV and PassMeThePork.com).  Watch NOW to learn if there are any opportunities currently offered by the markets.  We have the answers for what’s on everyone’s mind, “Is there any room in the stock market for it to PASS ME THE PORK??!”]]> http://www.vlogolution.com/hot/2009-04-22-any-pork-in-this-stock-market-for-me/feed/ 43 http://www.vlogolution.com/hot/2007-11-19-wall-streets-bad-ass-timothy-sykes-momoney-interview-craziest-interview-ever/ http://www.vlogolution.com/hot/2007-11-19-wall-streets-bad-ass-timothy-sykes-momoney-interview-craziest-interview-ever/#comments Mon, 19 Nov 2007 12:00:07 +0000 http://www.vlogolution.com/hot/?page_id=147

SHARE/SUBSCRIBE/RATE/COMMENT/FAVE IT! Timothy Sykes: “Wall Street Warrior” or Wall Street’s Bad Ass? Tim Sykes, author of “An American Hedge Fund”, took 12 grand and turned it into $2 million by age 22 and then lost $700,000 in his hedge fund. Ouch! Despite the fall from grace Tim acts like he’s on top of the world in what just may be the nuttiest Wall Street interview you’ve ever watched! Timothy Sykes and Alexander Paul Morris, Music: “KYA” by Paulus

]]> http://www.vlogolution.com/hot/2007-11-19-wall-streets-bad-ass-timothy-sykes-momoney-interview-craziest-interview-ever/feed/ 48 http://www.vlogolution.com/hot/2007-05-31-following-the-smart-money-traders-with-the-deepest-pockets/ http://www.vlogolution.com/hot/2007-05-31-following-the-smart-money-traders-with-the-deepest-pockets/#comments Wed, 30 May 2007 22:00:00 +0000 http://www.vlogolution.com/hot/?page_id=106

As a trader, you’ll find that you’re usually your own worst enemy. It’s so easy to slip into bad habits that it’ll make your head spin. In this episode, we teach you what to watch out for, and how to focus in on finding the best low-risk high-reward trading opportunities. Stock mentions: NYSE:EFD
]]> http://www.vlogolution.com/hot/2007-05-31-following-the-smart-money-traders-with-the-deepest-pockets/feed/ 0 http://www.vlogolution.com/hot/2007-05-30-profiting-when-insiders-trade-at-extremes-in-stock-prices-part-2/ http://www.vlogolution.com/hot/2007-05-30-profiting-when-insiders-trade-at-extremes-in-stock-prices-part-2/#comments Tue, 29 May 2007 22:00:00 +0000 http://www.vlogolution.com/hot/?page_id=103