Wednesday, June 19, 2013
6:59 AM John Ursus No comments
The Fed started their two day meeting yesterday and today at 1400 hours EST the FOMC will announce the results of their meeting which will be followed by a press conference at 1430 hours EST. Ben, the Septic Tank, Bernanke will have to face some tough questions as the socialist Dumbama who is currently on a little trip around Europe after attending the G-8 Summit in Belfast, North Ireland where he Russian President Putin played him like a well-trained puppy, basically stated that Bernanke is fired.
I am not even bothered to listen to his press conference as I expect equity markets as well as the USD to tank like usually. Every time the Septic Tank opens his mouth and attempts to communicate plenty of feces is spilled, dumb money is shocked and smart money collects. He has already rattled the bulls as he noted that the Fed may taper with QE which send the first shock waves across global equity markets. Dumb money was quick to adjust some of their bullish bets and the Nikkei 225 plunged into a bear market already.
While I do expect volatility to pick up right after the announcement and into the New York close, I position all our traders to take an early day today and simply enjoy the finer things Monte Carlo has to offer. All our funds and their trades are well positioned and the last thing I need is for someone to panic as Bernanke will initiate a sell-off in late afternoon trade.
Bernanke will most likely announce that the Fed will taper QE sooner rather than later as he clearly knows that he will no longer be allowed to abuse the Fed with his moronic approach and idiotic tactics which were designed to artificially prop up financial markets based on hope the rest of the economy would follow suit. It did not do so and the U.S. economy is a dead patient on life support. Bernanke will signal that the Fed is going to lower the medication until it pulls the plug completely.
Janet Yellen is rumored to become the first female Fed Chief and Bernanke may try to crush markets now to a certain degree until Yellen, should she indeed be hated enough on Capitol Hill to be offered the plague of exiting QE completely, takes over and batters financial markets into the ground. Most dumb money mismanagers believe that the Fed exit will signal economic strength which is the reason why dumb money always ends up holding the bag as smart money cashes out and eat their lunch.
Bernanke stressed the fact that the Fed will be data dependent and will not taper or reduce QE until the U.S. unemployment rate drops to 6.5%. Well, it is obvious that his plan was flushed down the toilet just as everything else the Septic Tank has attempted. The only thing he has accomplished is to kick the can down the road, display his idiocy and now he will be forced to pass the torch to another unqualified individual and see if that person will fumble the ball or can keep it kicking down the road until the next person will have to pick it up.
Prepare your portfolio for a rout on global equity markets. I am sure to enjoy this evening as I host a small private party down at the yacht club. Dumb money will get butchered during the last two hours of New York trading and as Dumbama is finishing his speech in Germany where moronic Germans approve more of him than the country he defrauded with his presidency I am applying the finishing touches to our trades and ensure we are not going to violate our risk management protocol as Bernanke will screw it up once again.
Monday, June 17, 2013
9:50 AM John Ursus No comments
They offer the popular MT4 platform with a minimum deposit of $1,000 and claims to offer NDD trading as well as STP and state on their website that they never trade against their clients. They are regulated in Australia and for the time being there is no reason for The Last Bear to think that this online broker has deceived potential clients. They seem quite open and honest which is the right approach for a broker.
It appears that forex trading is not their primary business unit, but that does not mean that traders should not take them into consideration. They offer maximum leverage of 1:500 and they offer what they call the Enfinium Trader Workstation without further information provided. They claim to work with 14 liquidity providers for best pricing and spreads appear to start above 2 pips on popular pairs.
We tried hard to find out more from what they present on their website, without success. This was rather unfortunate as we would have loved to bring you more about this online broker. Apparently tailored to retail forex traders without any tools to introduce new traders to forex which is slightly confusing as it appears they have not quite grown up and decided who to target.
We have nothing bad to report about them, but on the other hand aside from their claim to not trade against clients and being a NDD/STP broker we have nothing good to report either. In general there are brokers out there who present themselves better, and there are brokers out there who represent themselves worse. We are sitting on the fence with this forex broker and therefore have to give them two claws down.
The sole reason being we would have loved much more information without having to open an account or contacting them directly. Our gut feeling makes us believe that they are trying to sound bigger and better than they really are and just because they are regulated does not mean that there are no areas of concern, The Last Bear has roared!
Saturday, June 15, 2013
4:05 AM John Ursus No comments
They begged for help and knew that they would receive it as the late Colonel Gaddafi was not liked by the West as he did not dance to their music and decided to play his own tunes. He was open for business and every capitalist appreciates that. Plenty of people decided to point their fingers and accuse everyone who opposed intervention in Libya that we were driven by greed.
This just shows the lack of intelligence among the general public. For starters we oppose interventions in sovereign nations. What happens within the borders of a country is the business of the citizens as well as government of that country alone and no outside nations has the right to intervene simply because they are able to do so. Colonel Gaddafi stated multiple times that his country is under attack and he did so rightfully.
Now that his regime has been overthrown, chaos in Libya is the daily routine and nothing functions. I am not suggesting Libya was a fully functioning society or fully operational nation. Libya had plenty of problems on all fronts, but thanks to the invasion by NATO forces and their assistance of rebels Libya has deteriorated further and now we left them to deal with their problems again after causing much more hardship.
Our primary concern was that Colonel Gaddafi’s stockpiles of weapons would be raided by al-Qaeda fighters and other criminals. We were particularly concerned with his arsenal of SA-7’s. The SA-7 Grail as it is known in NATO circles started production in 1970 and is a former Soviet weapon. It is still in use today and was sued in every major regional conflict. The SA-7 is also known as 9K32 – Strela 2. It is a first-generation Soviet man portable and shoulder fired surface-to-air missile which operates in low altitude with an extremely high explosive warhead as well as a passive infrared homing device.
It can reach a maximum strike altitude of 2,300 meters and is operated by proportional navigation logic. Its maximum range is 4,300 meters and carries a 1.15 kilogram direct –energy blast fragmentation warhead with 370 grams of HE content. Its detonation mechanism is a non-delay impact mechanism with grazing fuses and a 14s – 17s self-destruct mode while it flies at a speed of 500 meters per second.
The fact that the SA-7 is still in use today as a much feared weapon speaks chapters about its operational use with deadly outcome. Colonel Gaddafi had a huge arsenal of SA-7s and now our fears have been confirmed that al-Qaeda in Mali has an unknown number of those deadly MANPADS. The U.S. hoped to be able to secure the stockpiles and flew in specialists who arrived too late as arms depots were raided and SA-7’s specifically sought.
Since 1975 at least 40 civilian aircraft have been hit which caused 28 crashes and 800 deaths. The biggest threat is to civilian aircraft as most modern military aircraft have counter-measures in place. It also forces attack helicopters to fly above the SA-7’s reach which makes it harder to engage militants.
This could de-stabilize the entire North-African airspace which is why we opposed intervention. Once again idiotic leaders made a decision and now the world is less safe than before. Each time they try to tackle one problem, they create two more. The confirmed reports that al-Qaeda in Mali has the SA-7’s worries us and our business interests in the region which need to be addressed and resolved.
Thursday, June 13, 2013
4:22 AM John Ursus No comments
After Japan closed for business we saw the Nikkei 225 in official bear market territory as dropped over 20% while the USDJPY corrected almost 1,000 pips. We took a huge short position in the Nikkei 225 at 15,750 back on May 23rd and before the close we set our SL at 12,750 which means we either get more downside tomorrow and increase our profits or book a guaranteed profit of 3,000 per contract. I can’t disclose how many contract we shorted, but the number is five digits. You do the math.
One day before we took our huge Nikkei 225 short position we did the same with the USDJPY at 103.50. Our TP is set at 93.50 with an SL at 95.00. At least 850 pips highly leveraged, yes we deserve to celebrate. We did similar maneuvers in the S&P 500, FTSE 100 and EURAUD. Three weeks have changed the entire outlook for the rest of the year.
Since the Septic Tank mentioned that his 12 Plumbers and he may taper with the QE program, global equity markets have shed roughly $2.4 Trillion. As plenty of dumb money managers scramble for the exits as they saw the 2013 profits melt away in less than 15 trading days, we are sitting in the heart of Monte Carlo enjoying the scenery and breathing a sigh of relieve. Dumb money once again saw their gain evaporate due to their idiotic approach to financial markets.
When Abe was re-elected Prime Minister of Japan he tried to talk the talk that this time would be different. He reintroduced Abenomics to Japan. He has not learned anything from his previous mistakes. There is a reason he lost the elections and the Japanese voters thought to now give him another chance to do more of the same and so he does.
At first dumb money had an orgasmic experience and bought into Abenomics. Just another example of how pathetic the majority really is. They make the same mistakes and expect a different outcome; insane. Now they get punished as they deserve. The planet displayed a sever vote of disapproval to Abenomics and the USDJPY is the best indicator of that. Nikkei 225 down, USDJPY down and the Japanese economy will soon follow suit.
The sell-off has not caught up with Europe as well as the U.S. yet, at least not in such a drastic manner. Give it some time and we may report a total of $5 Trillion in losses before the month is over. Our food arrives, so I am going to enjoy it as much as I have enjoyed the correction in the Nikkei 225 as well as the reversal trade in the USDJPY.
Wednesday, June 12, 2013
4:58 AM John Ursus No comments
Today we will examine a much talked about forex broker; HotForex. They have invested heavily in ad campaigns in order to get their name out and apparently they have had some success in doing so. It appears as they are closing the gap to InstaForex when it comes to top forex brokers in Asia who cater to retail clients as a market maker. InstaForex still enjoys the number one spot and is well established, but HotForex is worth to take a look at so here we go.
Their website offers a nice design and adds to a professional feel as you brows what they have to offer. They offer the standard MetaTrader 4 platform and have a Micro, Premium as well as VIP account. The Premium accounts are basically standard account with a few added features such as the MyFX plugin for deposits above $2,000 which is rather high as other brokerages offer them for half that. The annual subscription is $249.
Their VIP account carries a minimum deposit of $40,000 and charges a commission of $3 per $100,000 traded. They do not specify it as an ECN account and it makes no sense to deposit $40,000 into a market maker account. In addition they also offer the Currenex platform and advertise it to scalpers with a commission of $5 per $100,000 traded. The minimum deposit is $500.
Those who do not care about forex trading, but prefer to follow others will get access to Zulutrade through HotForex. The minimum deposit for a Zulutrader account is $50. Please never confuse forex trading with forex following as they are not the same. Professional traders do not social trade and you need to be aware that you follow someone else and depend on what they do which has nothing to do with trading. As long as you are happy with that keep forex following.
They offer leverage of 1:1000 on their micro account and 1:400 on their Premium account. The also offer two forex bonuses, a 100% credit bonus and a 15% rescue bonus. You can find the explanation as well as terms and conditions on their website. They offer PAMM accounts as well as Islamic accounts and have added a Fix account where spreads are fixed in order to complete their overall account offerings.
A few nice perks they offer are a debit card as well as various promotions plus what they claim is the best affiliate program in the forex industry which may just be the case with 60% revenue share, 25% refer-a-partner commission and up to $15 per lot. The Last Bear has not come across a better affiliate program to date.
HotForex is regulated by the FSC in Mauritius and does not accept U.S. clients. The do offer a VPS service and several educational tools and seem to have everything for the retail markets they need.
HotForex offers an affiliate program which may be unbeatable and earned its spot on our list as Best Affiliate Forex Broker. They are an overall great stop for retail traders and ranks second only to InstaForex when it comes to established forex brokers with PaxForex still holding the Top Spot Best New Forex Broker. The Last Bear gives HotForex two claws up!
Saturday, June 8, 2013
4:10 AM John Ursus No comments
As with every first Friday of the month, everyone is looking forward to the release of non-farm payrolls out of the U.S. as dumb money managers make trading adjustments based by this lagging indicator. Since 90% of financial markets are comprised of dumb money investors such as mutual funds this economic data point always moves financial markets.
I am sitting in my office monitoring our trades across all hedge funds as I wait for the release of the NFP. Japan spooked global markets as it collapsed two weeks ago and continued correct being down over 18% and coming close to official bear market territory according to dumb money standards. Smart money comprehends that the Nikkei 225 already collapsed into a bear market given the strength of the violent sell-off in the short period of time. Those who wanted to go long after a small correction were stopped hours or days after they tried to go long. Abe failed as expected, Nikkei 225 down, Japanese Yen up and Abe should be out.
The Fed picked up the torched scarring dumb money with their new bad word of choice, tapering. The only reason U.S. equity markets and to a smaller extend global equity markets managed to rally was due to the Fed’s stimulus. Currently the Fed decides to waste $85 Billion of taxpayer’s money per month for no good reason. Once the taper or even extend financial markets will come crashing down back to reality.
A healthy equity market wants strong employment figures; that is when you know that the rally is valid. The fear prior to the release was that NFP data would give the Fed a reason to taper stimulus and eventually exit it. Dumb money hoped for figures which were lukewarm and do not point to stable economic growth so that the Fed may continue to artificially pump up equity markets.
Flashback dumb money; the Fed should not even be in equity markets. All the gains dumb money witnessed in their portfolios will evaporate rather soon. This reverse and perverse approach is pathetic. NFP clocked in at 175,000, but negative revisions shaved off 12,000 jobs in March and April while the unemployment rate rose to 7.6%. Dumb money cheered and ignored the first crack in unemployment data which points to an even weaker economic picture than anticipated.
Most economic reports showed that the economy is in worse shape than dumb money hoped for and that there is an extreme disconnect between equity markets and the real economy. Such a drastic gap is not unheard of and the last major gap which formed was between 2007 and 2008. Eventually the gap will close and equity markets return closer to fair value which in the case of the 2008 meltdown saw equity markets shed roughly 50%.
The disconnect after that has been far greater and it should not come as a shock to see a correction of 75% or which will unfold during the rest of the decade. I am running some numbers and basically confirm our prediction of a major market crash. Next decade we may see the S&P 500 trade at actual fair value which is below 500. The only fair value is book value of companies and not expectations of what may happen. Next decade will see a complete shift in evaluations of companies and this decade long hyped up boom and bust will have a much need bust for good which will force market participants to rethink how to evaluate public traded companies and that it makes no sense to pay 20 times what a company is worth based on hope.
Thursday, June 6, 2013
11:54 AM John Ursus No comments
During the financial crisis Jamie Dimon, CEO and Chairman of JPM, made it through to be hailed as the top CEO in the financial world. The golden boy who did not disregard risk management and navigated his firm to record profits enjoyed a nice run until the London Whale disaster shook his magic cage. Almost $7 Billion were wiped off the books by a trading loss caused by the London Whale.
Jamie Dimon did survive a vote of confidence and was allowed to keep both titles as some shareholders wanted to separate the two roles which would have essential caused Dimon to resign. A resignation by Dimon may have caused the share price to collapse and that would cause bigger losses than to allow Dimon to be happy keeping both roles.
Just as the London Whale disaster is receding from the news and JPM tries to rebuild it name it is being hit with another $1.6 Billion loss, this time much closer to home. Jamie Dimon decided to flush $1.6 Billion down the toiled in Jefferson County, Alabama as the bank forgave $842 Million in debt owed by Jefferson County to JPM in 2011 as it took the lead to arrange some risky security deals which may have been designed to safe Jefferson County, but related into the U.S. biggest municipal bankruptcy filing in history.
In 2009 JPM settled an SEC investigation into financing for Jefferson County for $722 Million. In total the costs are close to $1.6 Billion, but at least they are only one-quarter of the losses caused by the London Whale. At least Dimon helps to write history and his name can appear in the books, some CEO’s think it is better to make negative history than no history at all.
Let’s be fair, Jamie Dimon did not run JPM at that time and was employed by One Corporation which was purchased by JPM. So, it is not Dimon’s fault here. The exotic financing deal resulted in a prison sentence for County Commission and Birmingham Mayor Larry Langford on bribery charges. The total debt tied to the sewer system is $3.1 Billion and Jefferson County announced that it made a deal with companies holding $2.4 Billion of the debt.
JPM will take a 70% while hedge funds will take roughly 20% of a hit. This shows that hedge funds came out on top, if that is what you would like to call it. Deals with municipalities under water are always popular as you are dealing with entities in distress and seeking to stay afloat by any means possible. Sure, the JPM case shows how it can backfire and it is nice for the media to gag over.
Trust me, for every one JPM like case there are a few dozen success stories nobody writes about as all parties involved try to keep it a secret and for good reasons.