Bernanke is hinting that the party won’t last forever and the stock market is the ultimate discounting machine… The recent centrally planned pump and dump is now heading toward the
The stock market rally has been long in the toothe since at least last September, but that doesn’t mean you should short and hold. I like being long stock against
So I’m at a Vegas grinder heavy cash game on a regular weekday afternoon. I first realize something is up when my pocket tens were bested by pocket jacks in
Wall Street Owns Washington? It Would Seem the Money Printing is Helping Bankers and Brokers and Not the Broke
Do government employees and politicians actually care about you, or do they care more about the price of Exxon Mobile (NYSE: XOM) common? With 93% of Americans losing 5% of
So, I’ve been rounding a bit here in Las Vegas. So much fun and so far its way more profitable than my last paying job. Yesterday, I bought into the
Bernanke is hinting that the party won’t last forever and the stock market is the ultimate discounting machine… The recent centrally planned pump and dump is now heading toward the dumping phase. It’s my personal belief that the banking and defense industries along with a bloated red tape covered Washington bureaucratic machine is about to eat through the pockets of us poor Americans again, but I digress. Wall Street doesn’t really care about the stock market so long as they are on the right side of the tape.
After today’s big red bar, the right side of the tape is likely the short side of the tape, and although I am long and hate being right about the wrong things, there just isn’t much I can do about it. I am short some CONN here and also own QQQ and IWM put options, but as I am getting older I generally keep my small portfolio in land, real estate, and cash. That way, if the stock market goes to zero I can still farm and I’ll never be homeless.
I know that’s not very exciting, but hey, exciting is not all that it’s cracked up to be — plenty of people get excited playing craps, but it still has the worst odds against the house of any casino table game… In other words, I think you will have as much luck at slots as you will from buying front load mutual funds, lol… but seriously.
The stock market rally has been long in the toothe since at least last September, but that doesn’t mean you should short and hold. I like being long stock against a “married put” here because it protects capital from a market crash. We may actually see a flash crash or 1987 type event here soon because of the high CAPE PE ratios and record profit margins. That said, in the short run anything can happen. One thing I feel confident in telling readers is that even though I am long, I don’t want to be long and would rather be tightly hedged or in cash.
Everyone I talk to feels slightly uncomfortable with the stock rally or way too confident. There is little room in the middle. In any event, I hope it goes up but wouldn’t be suprised to see a one day 15% dumping. Again, I am not hoping for it, I just think the odds of a crash are much higher than they were when the market was 20% lower than it is today.
Trees don’t grow to the sky and stocks don’t rise forever. There are, of course, bargains in the market to be found. Just be wary of agency conflicts and self centered management teams.
So I’m at a Vegas grinder heavy cash game on a regular weekday afternoon. I first realize something is up when my pocket tens were bested by pocket jacks in the $1000 buy in 2-5 game (felt a bit chilly, but nothing too crazy). That was just variance I thought and moved on as I saw most of my $500 paper profit disappear on that hand. Two hands later I’m staring down at two red Aces. I raise to $75 and some guy calls with Ace nine of hearts…. bizzare, right?
Well, because he is basically drawing dead to any ace, he only can hit trip eights or the flush. The odds of this “donkey” (more likely a con team member with the dealer) beating my Aces is something like 11% or lower. Pretty crazy when you lose a big pot to a guy who is an 89% underdog. Furthermore, whenever I win with aces in this room, I make like $25. When I lose, it’s always AT LEAST $250.
So, I huff and puff about this “cooler” and get up to grab a slice of pizza. When I get back to the table I am on the big blind. This time I look down at two black Kings. I think to myself, “not another cold deck, right?” but of course I should always listen to my gut instincts. I know these guys are casing me, because a few days ago somebody told me that “poker is a game of the inside, not the outside.” It was a warning to stop grinding these rooms and get a corporate job. Alas, you readers have nothing to worry about, I love being a semi-retired blogging logger with a penchant for un-rigged poker grinding.
In any event, the small blind raises to $25. I shove all in for $560 right after him. The long haired “fella” in the eight seat snap calls and shoves the rest of his stack in the middle, and he has me covered. Instantly, I know I am the victim of a scam. It sucks, but that’s modern era poker — a game of the inside, not the outside. The little blind guy tanks for what seems like and hour and finally flips a coin. Sure enough, heads came and he went all in as well.
So here I am with pocket kings playing as an outsider in an insider game with two other guys all in pre-flop. Seat eight flips over pocket aces and the little blind flips over pocket queens. A classic cooler — in fact, THE classic cooler.
Needless to say, no kings hit the board and I am felted for a cool $650 on the hand. I get up, ask seat eight (who screamed in happy excitement “YES!!!!” even though he knew the score before the set up hand was even dealt) what the dealer’s name was. He said, “bryan” and I said, good now I know to simply snap fold or get up and leave whenever Bryan is dealing to me. He laughed in a sort of confirming way as if to give me some respect for at least knowing I was the victim of a regular con job at one of the top three poker rooms on the strip.
I will keep you posted as to my play here, but it seems increasingly that bad beats and cold decks are just as prevalent in Nevada as they were in Florida and New Mexico. Hopefully, these “mechanics, card sharks, and inside men” will read this blog and stop rigging the cash games I play in but nevertheless I will likely be folding pocket aces and pocket kings preflop whenever I see them until I know I have a dealer in the game that I trust. By the way, there are many excellent non-con-job poker dealers at the Aria, which I think is the most legitimate room I have played in here in Vegas so far. The Golden Nugget also runs correctly, though the games are usually low stakes 1-2 no limit.
I don’t think the WPT or WSOPC tourneys are rigged, but all it takes is one shady dealer to turn the table in any game of cards. When money is involved, there is no such thing as a fair shake for the little guy.
I love poker and am interesting in starting a legal cash game which is gauranteed to be legitimate. If you want to donate to this cause or to Hedgephone, simply shoot an email to Nlevis@aol.com
All the best, and don’t worry, I haven’t forgotten you I’m just trying to make it as a grinder.
Wall Street Owns Washington? It Would Seem the Money Printing is Helping Bankers and Brokers and Not the Broke
Do government employees and politicians actually care about you, or do they care more about the price of Exxon Mobile (NYSE: XOM) common? With 93% of Americans losing 5% of their nest egg over the past three years, and with Exxon fetching just 9X last year’s earnings and under 11X forward earnings the answer is self-explanatory. But is Exxon’s gain really your loss?
Once upon a time a former master of the universe at Citigroup (NYSE: C) prior to the financial crisis was chosen to become Secretary of the U.S. Treasury. In fact this man was in charge of many of the departments where the really infamous “structured products” were sold to unsuspecting clients (and then shorted?). To me, it seems that many big guns in government come direct via the revolving door that is the District of Columbia, where a billion bucks is just a drop in the digital monetary bucket.
Last week, Congress decided to gut most of the newly passed Stock Act, which was supposed to prevent members of Congress from trading on inside information. Now, only Congressional staffers can actually place the trades thanks to this legislative re-do. Thank goodness. After all, if you want to be powerful, you better be able to rob your own clients or at least front-run U.S. taxpayers via the TD Ameritrade (NYSE: AMTD) app on your Congressional staffer’s smart phone. It is, after all, just good business. Now that Congress and the GAO are investigating the Department of Homeland (In) Security for buying $2 billion in hollow point bullets that explode on contact (for our safety, right?), it seems that we may finally see some type of accountability in D.C. for rule makers who find new and creative ways to break the rules they just made. Just look at this excerpt regarding Congressmen Max Baucus:
“While Congressman Bachus was publicly trying to keep the economy from cratering, he was privately betting that it would, buying option funds that would go up in value if the market went down. He would make a variety of trades and profited at a time when most Americans were losing their shirts,” 60 Minutes reported.
“What we know is that those meetings were held one day and literally the next day Congressman Bachus would engage in buying stock options based on apocalyptic briefings he had the day before from the Fed chairman and treasury secretary. I mean, talk about a stock tip,” said Peter Schweizer, a fellow at the Hoover Institution, a conservative think tank at Stanford University.”
Read more: In Gutting The STOCK Act, Congress Plays By Its Own Rules · NYU Local http://nyulocal.com/national/2013/04/26/in-gutting-the-stock-act-congress-plays-by-its-own-rules/#ixzz2Rz6jvEi9
By the way, Ameritrade is not a stock I would short sell after Congress decided to get back into the insider trading game – these guys are the masters of self-directed investing and low cost trading. At 16.7X forward earnings, Ameritrade is a hold in my view, even with non-robot trading volume making new lows as the stock market makes new highs. In that sense, a sell-off may actually help earnings in the short term as investors could hit the panic button once again. After all, TD Ameritrade is an easy platform for Congressional staffers to understand.
It turns out that when you are the one making the laws, it’s pretty hard to be brought to justice. Considering that one acronym agency investigating another like this, will Wall Street ever actually face the music for past crimes? I doubt it, and the “ye old” statute of limitations is only around 7-10 years in most states for securities fraud. Besides, when the SEC fines a mega bank like Citigroup, the money never actually goes to the victims of the fraudulent scheming but instead goes back to Washington (that other group of schemers). Kind of like one hand washing the other. When will the FBI investigate the CIA, the SEC, or the NSA? I rather enjoy seeing the dishonest bureaucrats squirm, so this latest inquisition will be quite exciting. Look, I am true blue Democrat American and it’s my duty to ask questions.
So, are the Jeff Skillings of the world really winning? Are they raising money and burning investors along their climb to the top, where government and Wall Street meet to trade on insider information? It sounds like a bad novel, but frankly it’s looking more and more like the game is rigged. Fraud is kind of a new social currency, but I digress. I’m just a long-term investor and must play the hole cards I’m dealt like everyone else. I hope the stock market rises forever, or at least 10% per year, because I’m long. It doesn’t mean I think the stock pumping central bank strategy is fair or equitable, on the other hand. The trouble is, that it will take more regulation and enforcement as well as executive pay caps (Personally, I favor max CEO pay at 2% of market capitalization – anything above that gets a little fishy) and a major restructuring of corporate incentives to get there. CEO pay is up an incredible 20% since 2009, and is now at 204 times that of the “rank and file” corporate employee. Those numbers mean that while Wall Street is booming, the underlying economic weakness persists. In the end, virtuous people must square the virtuous circle or the entire system falls apart. Ultimately, it is the values of corporate management, and the laws regarding their stewardship, that will decide the future direction of the economy and not some esoteric math calculation. On the morality front, Americans are being cut down like cannon fodder in the midst of an ever-consolidating stock market based society.
If stocks ever start falling again, there is no telling how far down the rabbit hole the corruption and dry-rot actually takes us. It’s a tough environment to be invested in, but wise stewards of capital likely need as much diversification, cash reserves, and patience as humanly possible. The short term trading game is better left to the HFT robots and the staffers who call upon them, though technical and fundamental analysis does work if you can find the time to do the research. Almost nobody beats the market over long periods of time, and the business of money management is now more than ever a rapidly consolidating industry in itself. Basically, the gains are going to an increasingly smaller group of people.
All in all, the stock market has recovered but it has recovered while leaving most Americans behind. Hopefully we get the trickle down monsoon which most economists have been selling us since the financial crisis began, and hopefully the middle class sees a pay raise sooner rather than later.
So, I’ve been rounding a bit here in Las Vegas. So much fun and so far its way more profitable than my last paying job.
Yesterday, I bought into the $1000 WPT event at Bellagio. We started with 10,000 chips and things were going quite well, as I tripled up to 30,000 chips when my pocket queens held up against an early position shove with pocket nines. I ended up moving over to another table after busting three or four players. One hand, the guy in seat five and I both flopped trip nines and I ended up filling up on the river.
When I moved to the next table I was put next to one of my Poker idols, Eric Lindgren. The first major hand was folded around to me on the small blind. I had King Queen Off and just flat called not wanting to show strength to Eric on the big blind, who’s hand I thought I had completely dominated. Of course, I hit the King on the flop and checked it to him, expecting the pro to lead out with a healthy bet. Lindgren checked the flop instead and the turn card was a club which put three clubs on the board. I checked as I didn’t like the club draw getting there and the famous gambler bet half the pot. I called. The river was a blank and I checked again. Eric bet half the pot again. I tanked, knowing the pro got there somehow, and said “I know you have clubs, but I have to call with this don’t I?” as I flipped over my pair of kings (top pair). Lindgren smiled and said, “how did you know?” and showed two small clubs for a flush…. Urghh…..
Things kept going like this for the next few hands. I picked up Ace King and Eric called with Ten Eight suited, which is a great drawing hand. I bluffed into him for a few streets and lost the hand to his pair of tens which came on the flop. Two hands later I busted when my pocket tens were bested by seat one who shoved with Ace King. I called him and said “all that I ask is that you invest my money wisely.” I’m sure, in retrospect, that he did.
After losing pretty big at Bellagio, I headed over to another room and made it all back plus a little profit. I got very lucky and actually hit quad aces. Pretty good times in Vegas. I will update soon!
Mayor Michael Bloomberg was denied a second slice of pizza today at an Italian eatery in Brooklyn.
The owners of Collegno’s Pizzeria say they refused to serve him more than one piece to protest Bloomberg’s proposed soda ban,which would limit the portions of soda sold in the city.
Bloomberg was having an informal working lunch with city comptroller John Liu at the time and was enraged by the embarrassing prohibition. The owners would not relent, however, and the pair were forced to decamp to another restaurant to finish their meal.
Witnesses say the situation unfolded when as the two were looking over budget documents, they realized they needed more food than originally ordered.
“Hey, could I get another pepperoni over here?” Bloomberg asked owner Antonio Benito.
“I’m sorry sir,” he replied, “we can’t do that. You’ve reached your personal slice limit.”
Stop and Tisk
Mayor Bloomberg, not accustomed to being challenged, assumed that the owner was joking.
“OK, that’s funny,” he remarked, “because of the soda thing … No come on. I’m not kidding. I haven’t eaten all morning, just send over another pepperoni.”
“I’m sorry sir. We’re serious,” Benito insisted. “We’ve decided that eating more than one piece isn’t healthy for you, and so we’re forbidding you from doing it.”
“Look jackass,” Bloomberg retorted, his anger boiling, “I fucking skipped breakfast this morning just so I could eat four slices of your pizza. Don’t be a schmuck, just get back to the kitchen and bring out some fucking pizza, okay.”
“I’m sorry sir, there’s nothing I can do,” the owner repeated. “Maybe you could go to several restaurants and get one slice at each. At least that way you’re walking. You know, burning calories.”
Witnesses say a fuming Bloomberg and a bemused Liu did indeed walk down the street to a rival pizzeria , ordered another slice and finished their meeting.
New York’s so-called “soda ban” would have limited the size of sweetened beverages served in restaurants to 16 oz (0.5 liters). The plan, backed by Mayor Bloomberg, is currently being held up by a U.S. district court.
Bloomberg has been the mayor of New York City since 2002. Theretofore he was the CEO of Bloomberg LP, the world’s leading financial data firm. His personal fortune is estimated at around $27 billion.
Methuen Police Chief Joe Solomon told the Valley Patriot this afternoon that D’Ambrosio a sent text message and posted terrorist threats on social media.
“We took this very seriously,” Chief Solomon said.
“He posted a threat in the form of rap where he mentioned the White House, the Boston Marathon bombing, and said ‘everybody you will see what I am going to do, kill people.”
Superintendent of Schools Judy Scannell said that the student was not in school today, but that a student at Methuen High School saw the posting on Facebook and notified the school administration who notified police.
“Once again we have to commend the Methuen High School Student who came forward, we always say, if you see something, say something, and that’s what this student did. We also want to commend the school safety officers and the administration for bringing this to our attention immediately. Threats of this kind of violence is unacceptable and will not be tolerated, not in Methuen they won’t.”
The police chief says that D’Ambrosio faces up to 20 years for felony charges of communicating terrorist threats under MGL. Ch. 269, Section 14. Bail has been set at $1MIL.
D’Ambrosio lives at 19 Glenn Avenue in Methuen and was arrested on Pleasant Street near Highland.
“We got the tip around 1pm and by 1:30 we had him in custody,” the chief said.
“I do want to make clear he did not make a specific threat against the school or any particular individuals but he did threaten to kill a bunch of people and specifically mentioned the Boston Marathon and the White House. The threat was disturbing enough for us to act and I think our officers did the right thing.”
D’Ambrosio will be arraigned Thursday morning in Lawrence District Court.
D’Ambrosio also had disturbing photos and posts on his Facebook page including “Fuck politics, Fuck Obama and Fuck the government!!”
He also had a “disturbing satanic photo posted as well as a photo of himself on a “Wanted Poster” that reads “Wanted Dead or Alive” a quick perusal of his Facebook page shows D’Ambrosio’s unusual interest in gangs, violence and a criminal lifestyle.
D’Ambrosio also has a Youtube page where he raps about “living in da hood” in Methuen.
The Valley Patriot will update this story as more information becomes available.
Eventually, governments that rack up too much debt run into a big problem. The question is when, not if — even the excel-gate debate going on can’t deny that the more indebted a nation (or company or person for that matter) becomes, the more risky the future is going to be for a nation determined on racking up unsurmountable debt. Just because the stock market is up doesn’t mean more debt “has worked.” Debt inherently allows the borrower to enjoy the present at the expense of future output.
Below is the following argument from Berkeley economist J. Bradford Delong… I completely disagree that high stock prices will somehow save the world. Call me crazy. But, he is right about debt.
From Project Syndicate:
BERKELEY – A government that does not tax sufficiently to cover its spending will eventually run into all manner of debt-generated trouble. Its nominal interest rates will rise as bondholders fear inflation. Its business leaders will hunker down and try to move their wealth out of the companies they run for fear of high future corporate taxes.
Moreover, real interest rates will rise, owing to policy uncertainty, rendering many investments that are truly socially productive unprofitable. And, when inflation takes hold, the division of labor will shrink. What once was a large web held together by thin monetary ties will fragment into very small networks solidified by thick bonds of personal trust and social obligation. And a small division of labor means low productivity.
All of this is bound to happen – eventually – if a government does not tax sufficiently to cover its spending. But can it happen as long as interest rates remain low, stock prices remain buoyant, and inflation remains subdued? I and other economists – including Larry Summers, Laura Tyson, Paul Krugman, and many more – believe that it cannot.
As long as stock prices are buoyant, business leaders are not scared of future taxes or of policy uncertainty. As long as interest rates remain low, there is no downward pressure on public investment. And as long as inflation remains low, the extra debt that a government issues is highly prized as a store of value, helps savers sleep more easily at night, and provides a boost to the economy, because it assists deleveraging and raises the velocity of spending.
In the Land of the Free recently, a California couple had their child kidnapped by the state. At gunpoint.
It all started in mid-April when Anna and Alex Nikolayev took their 5-month old son Sammy to the hospital in Sacramento to be treated for flu symptoms.
The parents didn’t particularly care for the treatment that their son was receiving. Doctors were pumping him full of antibiotics and soon began talking about performing surgery.
Anna and Alex argued with the doctors and said that they were going to get a second opinion; they took the baby and went to another hospital where another physician deemed it perfectly safe for the child to return home with his parents without the need for surgery.
The next day, with the family resting comfortably at home, the police showed up with Child Protective Services.
Alex, the father, went outside to talk to them where he was thrown to the ground by police. Officers then relieved him of his house keys and proceeded to let themselves into the house with hands on their pistols. Then, still with their hands on their pistols, they told the mother “I’m going to grab your baby, and don’t resist and don’t fight me…”
The child was then ripped from his mother’s arms and placed into state custody, where he remained for a week.
Yesterday, a Sacramento County judge ordered that Sammy be transferred to a hospital in Palo Alto (120 miles away), and that his parents finally be given unfettered access to their son… under the condition that the State of California’s Child Protective Services continue to monitor the ‘situation’
Guns. Cops. Government bureaucrats. Courts. Kidnapping. A dysfunctional medical care system.
This is what it means to be in the Land of the Free… where collecting rainwater, consuming raw milk, or seeking a second opinion on your child’s medical care is now criminalized.
When you don’t even have the basic right to make decisions about your own child… and when your own child can be forced from you at gunpoint in your own home that was entered illegally… you know that freedom has officially hit the waste bin of history. Perhaps the greatest irony is that the parents are originally from Russia… but they had to come to the United States to find the Soviet Union. Have you hit your breaking point yet? If not now, when?
Read more: www.zerohedge.com
Former fashion jewelry saleswoman Rebecca Gonzales and former Chief Executive Officer Ron Johnson have one thing in common: J.C. Penney Co. (JCP) no longer employs either.
The similarity ends there. Johnson, 54, got a compensation package worth 1,795 times the average wage and benefits of a U.S. department store worker when he was hired in November 2011, according to data compiled by Bloomberg. Gonzales’s hourly wage was $8.30 that year.
Across the Standard & Poor’s 500 Index of companies, the average multiple of CEO compensation to that of rank-and-file workers is 204, up 20 percent since 2009, the data show. The numbers are based on industry-specific estimates for worker compensation.
Almost three years after Congress ordered public companies to reveal actual CEO-to-worker pay ratios under the Dodd-Frank law, the numbers remain unknown. As the Occupy Wall Street movement and 2012 election made income inequality a social flashpoint, mandatory disclosure of the ratios remained bottled up at the Securities and Exchange Commission, which hasn’t yet drawn up the rules to implement it. Some of America’s biggest companies are lobbying against the requirement.
“It’s a simple piece of information shareholders ought to have,” said Phil Angelides, who led the Financial Crisis Inquiry Commission, which investigated the economic collapse of 2008. “The fact that corporate executives wouldn’t want to display the number speaks volumes.” The lobbying is part of “a street-by-street, block-by-block fight waged by large corporations and their Wall Street colleagues” to obstruct the Dodd-Frank law, he said.
The leading opponent of mandatory pay-ratio disclosure is a Washington-based non-profit called the HR Policy Association, which represents top human resources executives at about 335 large corporations.
“We don’t believe the information would be material to investors,” said Tim Bartl, president of the group’s advocacy arm, the Center on Executive Compensation. Accounting for country-to-country differences in wages and benefits at global companies would be costly, time-consuming and all but impossible, he said in an interview.