EU Wed

  • Posted: 29 October 2011 07:12 PM #16

    Alan

    As you know, what was primarily in the Thursday agreement concerning Italy, was a warning rapidly to get its acts together and agree on the economic reforms they had been discussing for weeks. You don’t have to be a great bond specialist to react the day after as they did. Of course you have commentators, like for example Lian Halligan in todays Daily Telegraph, that immediately jump on the occasion and declare the “Global bond markets, by character more sober and smarter than the excitable equity guys”. That’s for the “market”. You can pick and choose the wise guys according to your pre-justices of the moment.

    I’m not at all convinced that we live in a world where anything is, as you write: “predominantly a matter of finance and economics”. We can play the game that the world is like that, as most economists have the habit of doing (that’s why that so often are wrong), but it is somewhat distant from reality.

    One of the most important dimensions of any understanding of what takes place in Europe is to be aware of ,and understand, to which degree politics (European integration and national policies and decision making) are determining not only the problems that Europe clearly is confronted to, as well as the flaws of the Euro, but also the solutions. European integration and the Euro cannot be address solely as a matter of economy and finance. It is a political choice. They would call it a political and historical project for peace and democracy in Europe.

    When I mentioned a certain bias among Anglo Saxon commentators concerning European integration in general and the Euro in particular, it was a simple reference to their apparent dislike for both.

         
  • Posted: 31 October 2011 09:10 AM #17

    hlas,
    I have enjoyed our Euro discussion of the past week.  It will be interesting to watch developments over the next few months. Fingers crossed that things get better for Europe and that there isn’t any negative effect on AAPL.

    Alan

         
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    Posted: 31 October 2011 11:07 AM #18

    Hannibal - 26 October 2011 01:48 PM

    Paul Krugman wrote an op-ed on Monday that is as clear-eyed a view on the economic problems facing the Euro and Europe as anything I have read in the last 6 months. I recommend it highly.

    http://www.nytimes.com/2011/10/24/opinion/the-hole-in-europes-bucket.html?_r=1&ref=paulkrugman

    Alan

    As usual, Krugman is clueless (yes, I know left wing Swedes awarded him the Nobel for Phrenology). He managed an entire column about the Greek crisis without mentioning their profligate ways, their laziness, enormous welfare state, and public-sector-heavy economy. An utterly unsustainable system.

    Probably not: whatever the likes of Ron Paul may believe, money creation isn?t inflationary in a depressed economy.

    Nonsense, utter nonsense. Inflation doesn’t go up if you cook the books, like the US core inflation index does (include housing, a popped bubble, and leave out energy and food).

    Want to really know what’s happening?

    Why the latest eurozone bail-out is destined to fail within weeks

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  • Posted: 01 November 2011 08:02 AM #19

    Well the bailout for Greece is effectively on hold.  The Government is putting the austerity measures to e referendum so if the public turn it down they will face a hard default.  Interestingly according to pols Greeks don’t want the austerity measures but want to stay in the Euro.  It’s either denial or wanting the cake and eat it too.  In addition the Greek PM has initiated a confidence vote on his own leadership (this should be over by 4 Nov).

    Anyway if you have some cash this is going to be one of the few times (maybe the only time) to pick up some more AAPL at a discount (I call a discount anything at 399 or lower) prior to the predicted year end rally.  If you can’t pick some up not to worry, it’s going to be a great end of year IMHO.
    Frank

         
  • Posted: 01 November 2011 09:15 AM #20

    fas550 - 01 November 2011 11:02 AM

    Well the bailout for Greece is effectively on hold.  The Government is putting the austerity measures to e referendum so if the public turn it down they will face a hard default.  Interestingly according to pols Greeks don’t want the austerity measures but want to stay in the Euro.  It’s either denial or wanting the cake and eat it too.  In addition the Greek PM has initiated a confidence vote on his own leadership (this should be over by 4 Nov).

    Anyway if you have some cash this is going to be one of the few times (maybe the only time) to pick up some more AAPL at a discount (I call a discount anything at 399 or lower) prior to the predicted year end rally.  If you can’t pick some up not to worry, it’s going to be a great end of year IMHO.
    Frank

    Frank,
    I’m seeing some nice under-$400 AAPL prices this morning in the pre-market.  You are right on target: This may be the last under-$400 sale before the holidays—and maybe forever!  I didn’t buy enough of those juicy (2x)  JULY 385/410 bull spreads last week, so kismet may give me another chance this week.

    Alan

         
  • Posted: 01 November 2011 10:07 AM #21

    Hannibal - 01 November 2011 12:15 PM
    fas550 - 01 November 2011 11:02 AM

    Well the bailout for Greece is effectively on hold.  The Government is putting the austerity measures to e referendum so if the public turn it down they will face a hard default.  Interestingly according to pols Greeks don’t want the austerity measures but want to stay in the Euro.  It’s either denial or wanting the cake and eat it too.  In addition the Greek PM has initiated a confidence vote on his own leadership (this should be over by 4 Nov).

    Anyway if you have some cash this is going to be one of the few times (maybe the only time) to pick up some more AAPL at a discount (I call a discount anything at 399 or lower) prior to the predicted year end rally.  If you can’t pick some up not to worry, it’s going to be a great end of year IMHO.
    Frank

    Frank,
    I’m seeing some nice under-$400 AAPL prices this morning in the pre-market.  You are right on target: This may be the last under-$400 sale before the holidays—and maybe forever!  I didn’t buy enough of those juicy (2x)  JULY 385/410 bull spreads last week, so kismet may give me another chance this week.

    Alan

    Yes Im am looking at Jan 2013 $400 calls.  I have a number of them with an average price of $52.  I am hoping to get some at 61 or 60.5 anything below that I’m all in.  (Price hit 81 a few weeks ago.)  My plan is to hold these till post Xmas earnings (sell at $100+) then gradually rotate in to the 2014 calls but still analyzing the strike I want to buy.  I have been waiting for a day like today for a couple of weeks now. 
    BTW I also buy Jan 2012 calls on QID (Ultra Short QQQ) for when the market corrects as a broad based buffer for heavy down days.  I buy and sell them based on S&P P/E, VIXN etc…  I stated buying them when the market hit 11,800 and will probably dump the lot today if the VXN spikes early then fades towards the end of the day.

         
  • Posted: 01 November 2011 11:01 AM #22

    JDSoCal - 31 October 2011 02:07 PM
    Hannibal - 26 October 2011 01:48 PM

    Paul Krugman wrote an op-ed on Monday that is as clear-eyed a view on the economic problems facing the Euro and Europe as anything I have read in the last 6 months. I recommend it highly.

    http://www.nytimes.com/2011/10/24/opinion/the-hole-in-europes-bucket.html?_r=1&ref=paulkrugman

    Alan

    As usual, Krugman is clueless (yes, I know left wing Swedes awarded him the Nobel for Phrenology). He managed an entire column about the Greek crisis without mentioning their profligate ways, their laziness, enormous welfare state, and public-sector-heavy economy. An utterly unsustainable system.

    Probably not: whatever the likes of Ron Paul may believe, money creation isn?t inflationary in a depressed economy.

    Nonsense, utter nonsense. Inflation doesn’t go up if you cook the books, like the US core inflation index does (include housing, a popped bubble, and leave out energy and food).

    Want to really know what’s happening?

    Why the latest eurozone bail-out is destined to fail within weeks

    Jeez, JD, you are really wired: Too much coffee yesterday—or every day?  “Krugman awarded the Nobel for Phrenology”?  Man, what anger you have boiling over!

    Frank, hlas and I and others were having a very civil and informative conversation regarding the impact of the Euro crisis on our markets and AAPL. And then you jumped in with your vitriol. At least save it for the politics thread.

    All the other contributors to this thread were respectful of the various opinions put forward. Even though hlas and I disagreed about the Krugman post I cited, his strongest comment was that perhaps Krugman was showing some Anglo-Saxon bias. Reasonable point and his comment got me to thinking a bit about that angle.

    At your suggestion, I did read Liam Halligan’s post and found it a useful perspective. But your complaint about Krugman not pointing out the laziness of the Greeks and their profligate ways also holds for your Halligan article. Halligan was very measured in his tone and some of his points were very similar to what Krugman was saying in his post.

    So calm down man!—if you want your opinions to be respected. Vitriol such as what you contributed above only registers as a very poor substitute for intelligence and shows a lack of willingness to learn from others on this discussion board.

         
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    Posted: 01 November 2011 11:04 AM #23

    By Brett Arends, MarketWatch

    BOSTON (MarketWatch) ? Here?s a brain-teaser for you.

    Which corporate honcho recently bragged recently about his company?s strong resources, positive outlook and outstanding ?execution? skills? Who said he was ?particularly pleased? at recent developments, and predicted ?competitive returns to shareholders in the quarters ahead??

    Tim Cook at Apple? Alan Mulally at Ford? Mike Duke at Wal-Mart?

    None of the above. The answer is Jon Corzine, who runs MF Global Holdings Ltd. MF -16.08%  He made those remarks a week ago. Yesterday the company filed for bankruptcy.

    One week. No kidding.

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  • Posted: 01 November 2011 11:13 AM #24

    Hannibal - 01 November 2011 12:15 PM
    fas550 - 01 November 2011 11:02 AM

    Well the bailout for Greece is effectively on hold.  The Government is putting the austerity measures to e referendum so if the public turn it down they will face a hard default.  Interestingly according to pols Greeks don’t want the austerity measures but want to stay in the Euro.  It’s either denial or wanting the cake and eat it too.  In addition the Greek PM has initiated a confidence vote on his own leadership (this should be over by 4 Nov).

    Anyway if you have some cash this is going to be one of the few times (maybe the only time) to pick up some more AAPL at a discount (I call a discount anything at 399 or lower) prior to the predicted year end rally.  If you can’t pick some up not to worry, it’s going to be a great end of year IMHO.
    Frank

    Frank,
    I’m seeing some nice under-$400 AAPL prices this morning in the pre-market.  You are right on target: This may be the last under-$400 sale before the holidays—and maybe forever!  I didn’t buy enough of those juicy (2x)  JULY 385/410 bull spreads last week, so kismet may give me another chance this week.

    Alan

    I’m sort of hoping for a more substantial dip for a buying opportunity.  Last quarter I watched aapl fall from over $400 to $391 which I thought was a great opportunity (in the end it was) only to watch it fall all the way to $356.  I have cash I want in for the year-end rally but I’m still waiting.

    I feel like Billy Ray Valentine in the limo with the Dukes watching the prices of pork bellies.

         
  • Posted: 01 November 2011 02:02 PM #25

    The more I learn about the Euro zone debt crisis, the more I am believing that we’re headed to a gigantic meltdown of the World’s economy.

    The problem begins with decades of sovereign fiscal irresponsibility. Example: Greek sovereign debt is equal to 168% of Greek GDP, Italian debt is equal to 120% of GDP.  How in the hell did they find lenders willing to give so much?

    Keynesian economic theory = governments can stimulate economies with increased spending. The problem with that theory is that there is no theoretical cap included in the theory (at least none that I’m aware of), so governments just kept on artificially stimulating economies through deficit spending, instead of allowing the market to balance itself. This caused an ever increasing money supply that, because it always does, gravitates to the more astute. THEY invest their surplus funds with banks that make loans. The larger the amount invested, the larger the borrower had to be.

    Here’s where the rub begins, as money supply increases beyond normal economic need, it takes ever increasing amounts to stimulate an economy (think Weimar Republic during the 1920’s), much like a heroin addict needs ever larger, more frequent dosages to get the same high.

    As bank funds continued to increase they had to start lending to less credit worthy borrowers.  After all, there is a finite supply of the credit worthy.  That happened all around the world, with a few, rare exceptions.  So now we are demanding the abusers of easy credit policies (created by an over abundance of capital) to clean up their financial health, and do it in a way that doesn’t hurt the lenders.  That’s nuts, the lenders made the debt crisis possible, with funds derived by worldwide sovereign fiscal irresponsibility.

    Our worldwide debt crisis is a creation of too much liquidity, necessarily being given to those without the ability to repay it.  In other words, a house of cards built on worldwide deficit spending.

    I’m afraid we have reached the point where the dominoes are all lined up (ex: Greek/Italian/Portugese/Spanish//Irish AND Mexican, US, Canadian, British, French, Brazillian, Japanese and a hundred other country’s sovereign debt is held by banks and Countries, all around the world. (The situation reminds me of the interlocking mutual support/aid treaties prior to WWI.  What should have been a small localized dispute quickly spread throughout Europe as one country came to the defense of another, and so on.)

    The fear today is that, with or without, a Greek defaul, French banks will be downgraded because of the scope of their toxic holdings. Those banks go down, causing other banks, sovereign debt holdings, etc.,  to go down, and so on.

    There is only one cure, and we have an excellent example of it in Chile. Chile has been on a 20+ year austerity program. Not only has the Chilian government retired all of its sovereign debt, it has an annual budget surplus AND a very, very stable economy.

    The world’s governments, without exception, should take note, and stop trying to make life easier with false economies.  it’s time to end the deficit spending charade.

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    Posted: 01 November 2011 04:27 PM #26

    StillLong - 01 November 2011 02:13 PM

    ... I’m sort of hoping for a more substantial dip for a buying opportunity.  Last quarter I watched aapl fall from over $400 to $391 which I thought was a great opportunity (in the end it was) only to watch it fall all the way to $356.  I have cash I want in for the year-end rally but I’m still waiting.

    If you’re into swing trading, from a TA perspective, better to wait for a. AAPL above $409, go long b.  AAPL below $389, go short.  Btw, this is not a trading advice.  Just thinking aloud.

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  • Posted: 01 November 2011 04:31 PM #27

    StillLong - 01 November 2011 02:13 PM
    Hannibal - 01 November 2011 12:15 PM
    fas550 - 01 November 2011 11:02 AM

    Well the bailout for Greece is effectively on hold.  The Government is putting the austerity measures to e referendum so if the public turn it down they will face a hard default.  Interestingly according to pols Greeks don’t want the austerity measures but want to stay in the Euro.  It’s either denial or wanting the cake and eat it too.  In addition the Greek PM has initiated a confidence vote on his own leadership (this should be over by 4 Nov).

    Anyway if you have some cash this is going to be one of the few times (maybe the only time) to pick up some more AAPL at a discount (I call a discount anything at 399 or lower) prior to the predicted year end rally.  If you can’t pick some up not to worry, it’s going to be a great end of year IMHO.
    Frank

    Frank,
    I’m seeing some nice under-$400 AAPL prices this morning in the pre-market.  You are right on target: This may be the last under-$400 sale before the holidays—and maybe forever!  I didn’t buy enough of those juicy (2x)  JULY 385/410 bull spreads last week, so kismet may give me another chance this week.

    Alan

    I’m sort of hoping for a more substantial dip for a buying opportunity.  Last quarter I watched aapl fall from over $400 to $391 which I thought was a great opportunity (in the end it was) only to watch it fall all the way to $356.  I have cash I want in for the year-end rally but I’m still waiting.

    I feel like Billy Ray Valentine in the limo with the Dukes watching the prices of pork bellies.

    Maybe wishful thinking but given the debacle this earnings season at NFLX and AMZN with their miss on margins, if I were a money manager the sure place I could make money in the next qtr is AAPL.  Unless their research person is just a inept idiot and didn;t listen to AAPL Conf call (not out of the realm of possibility I guess), the AAPL earnings controversy is simply because the revenue has moved to this Qtr. 
    For this reason I really wanted to hold off and buy below 390 lets say, but even at 390 there will be a large run up before the Jan earnings release and I just didn’t want to miss it.  While I don’t like to see my investment go down, nothing gets me more anxious and infuriated than to pass on an opportunity and watch it go up, and up, and up… Get the picture.  Fund managers start dumping their dogs and cleaning up the window dressing so to speak starting today and IMHO they will spend cash earlier this qtr than later so they don’t miss the season leap as is traditional with this qtr.  Lot of speculation there but it makes sense to me grin
    Frank

         
  • Posted: 01 November 2011 04:39 PM #28

    Gregg Thurman - 01 November 2011 05:02 PM

    The more I learn about the Euro zone debt crisis, the more I am believing that we’re headed to a gigantic meltdown of the World’s economy.

    The problem begins with decades of sovereign fiscal irresponsibility. Example: Greek sovereign debt is equal to 168% of Greek GDP, Italian debt is equal to 120% of GDP.  How in the hell did they find lenders willing to give so much?

    Keynesian economic theory = governments can stimulate economies with increased spending. The problem with that theory is that there is no theoretical cap included in the theory (at least none that I’m aware of), so governments just kept on artificially stimulating economies through deficit spending, instead of allowing the market to balance itself. This caused an ever increasing money supply that, because it always does, gravitates to the more astute. THEY invest their surplus funds with banks that make loans. The larger the amount invested, the larger the borrower had to be.

    Here’s where the rub begins, as money supply increases beyond normal economic need, it takes ever increasing amounts to stimulate an economy (think Weimar Republic during the 1920’s), much like a heroin addict needs ever larger, more frequent dosages to get the same high.

    As bank funds continued to increase they had to start lending to less credit worthy borrowers.  After all, there is a finite supply of the credit worthy.  That happened all around the world, with a few, rare exceptions.  So now we are demanding the abusers of easy credit policies (created by an over abundance of capital) to clean up their financial health, and do it in a way that doesn’t hurt the lenders.  That’s nuts, the lenders made the debt crisis possible, with funds derived by worldwide sovereign fiscal irresponsibility.

    Our worldwide debt crisis is a creation of too much liquidity, necessarily being given to those without the ability to repay it.  In other words, a house of cards built on worldwide deficit spending.

    I’m afraid we have reached the point where the dominoes are all lined up (ex: Greek/Italian/Portugese/Spanish//Irish AND Mexican, US, Canadian, British, French, Brazillian, Japanese and a hundred other country’s sovereign debt is held by banks and Countries, all around the world. (The situation reminds me of the interlocking mutual support/aid treaties prior to WWI.  What should have been a small localized dispute quickly spread throughout Europe as one country came to the defense of another, and so on.)

    The fear today is that, with or without, a Greek defaul, French banks will be downgraded because of the scope of their toxic holdings. Those banks go down, causing other banks, sovereign debt holdings, etc.,  to go down, and so on.

    There is only one cure, and we have an excellent example of it in Chile. Chile has been on a 20+ year austerity program. Not only has the Chilian government retired all of its sovereign debt, it has an annual budget surplus AND a very, very stable economy.

    The world’s governments, without exception, should take note, and stop trying to make life easier with false economies.  it’s time to end the deficit spending charade.

    Nice post:  There are some short term crisis that are going to happen (e.g. Greek default) and long term (hold on, yes the U.S. no longer being the reserve currency).  The Greek issue could just be a sudden short lived drop or something like what happened earlier in the year with the debt limit.  The second item I have thought about but don’t want to think about it anymore.  Anyway it is a ways off but I am 100% convinced it will happen in my lifetime (I’m 47).  Unless a new breed of politician takes the stage that can actually make decisions instead of kicking the can down the road on the hard ones. 
    Frank

         
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    Posted: 01 November 2011 04:46 PM #29

    fas550 - 01 November 2011 07:39 PM

    ... long term (hold on, yes the U.S. no longer being the reserve currency) ...

    If not Greenback, then which one?

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    Posted: 01 November 2011 05:06 PM #30

    Gregg Thurman - 01 November 2011 05:02 PM

    ... Our worldwide debt crisis is a creation of too much liquidity, necessarily being given to those without the ability to repay it.  In other words, a house of cards built on worldwide deficit spending.

    I’m afraid we have reached the point where the dominoes are all lined up (ex: Greek/Italian/Portugese/Spanish//Irish AND Mexican, US, Canadian, British, French, Brazillian, Japanese and a hundred other country’s sovereign debt is held by banks and Countries, all around the world.

    Of similar view.  Thot is a consequence of fiat currency.  Yes, the only cure is austerity.  Are Americans ready?

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