The Sax Angle

Obama OK on Marijuana | Live Trading News

Posted on 15. Dec, 2012 by Live Trading News.

Recently, a friend and advisor to me who is a medical professional asked me if I had looked into any of the publicly traded marijuana opportunities.  I hadn’t but am starting to do that now.

US President Obama says federal authorities should not target recreational marijuana use in 2 Western states that voted to make it legal, given limited government resources and growing public acceptance of the controlled substance.

Mr. Obama’s first comments on the issue come weeks after Washington State and Colorado voters supported legalizing cannabis last month in ballot measures that stand in direct opposition of federal law.

via Obama OK on Marijuana | Live Trading News.

Shayne Heffernan Says It’s Time to Sell | Live Trading News

Posted on 19. Aug, 2012 by Live Trading News.

Economist Shayne Heffernan has identified the state of the European Economy, rising debt in the USA and a Global rise in unemployment as a reason to re-evaluate portfolio holdings and in many cases, it is time to sell. While many are trying to talk the market up, the reality is the economy has not seen improvement significant enough to reflect the growth seen on the US markets.

As Warren Buffett has said, “be fearful when others are greedy and to be greedy only when others are fearful.”

via Shayne Heffernan Says It’s Time to Sell | Live Trading News.

Apple Inc. (NASDAQ:AAPL) Dominates Mobile Ad Space | Live Trading News: Economic and Investment Research

Posted on 13. Mar, 2012 by Live Trading News.

Apple was up a thumping 15 points today.  The market is increasingly look like the stock chart of Apple.  It’s not surprising that Apple is winning the mobile advertising game, the fastest growing online ad market.

Apple Inc. (NASDAQ:AAPL) Dominates Mobile Ad Space

InMobi, the largest independent mobile ad network, released its Mobile Insights Report: North American Edition, February 2012. This comprehensive report is based on data from InMobi’s global network.

via Apple Inc. (NASDAQ:AAPL) Dominates Mobile Ad Space | Live Trading News: Economic and Investment Research.

Coal Miners a Must Own HKG:1088, NYSE:YZC, ASX:GCL | Live Stock Trading News | Equities, Forex, Gold, Silver and Oil Trading

Posted on 25. Oct, 2011 by Live Trading News.

Coal Miners a Must Own HKG:1088, NYSE:YZC, ASX:GCL

Banpu, China Shenhua Energy Company Limited, HKG:1088, Yanzhou Coal Mining Co. (ADR), NYSE:YZC, Gloucester Coal Limited , ASX:GCL

Utility companies in Indonesia, China and India are building more power plants that use thermal coal to satisfy the increasing demand for power in the region, which will in turn help keep coal prices high.

President Susilo Bambang Yudhoyono announced in March that unrefined coal exports would be banned from 2014, leading to what some observers have described as the “Indonesian coal rush.”

via Coal Miners a Must Own HKG:1088, NYSE:YZC, ASX:GCL | Live Stock Trading News | Equities, Forex, Gold, Silver and Oil Trading.

How well are you Hedged?

Posted on 07. Oct, 2011 by Live Trading News.

Why should you hedge?. The answer is simple, you can secure profits long term if you limit your risk.

To understand hedging you must first understand a basic but ignored concept that all investors and traders should know. Equity Beta, which is a calculation of how volatile a stock is when the market itself is moving. Beta shows the sensitivity to overall market movements of an individual equity in your portfolio.

Hedging can protect you from Black Swan Events and other sudden market shifts, it can also allow you to manage your currency exposure.

The best way to understand hedging is to think of it as insurance. When people decide to hedge, they are insuring themselves against a negative event. This doesn’t prevent a negative event from happening, but if it does happen and you’re properly hedged, the impact of the event is reduced. So, hedging occurs almost everywhere, and we see it everyday. For example, if you buy house insurance, you are hedging yourself against fires, break-ins or other unforeseen disasters.

Portfolio managers, individual investors and corporations use hedging techniques to reduce their exposure to various risks. In financial markets, however, hedging becomes more complicated than simply paying an insurance company a fee every year. Hedging against investment risk means strategically using instruments in the market to offset the risk of any adverse price movements. In other words, investors hedge one investment by making another.

Technically, to hedge you would invest in two securities with negative correlations. Of course, nothing in this world is free, so you still have to pay for this type of insurance in one form or another.

Hedging techniques generally involve the use of complicated financial instruments known as derivatives, the two most common of which are options and futures. We’re not going to get into the nitty-gritty of describing how these instruments work, but for now just keep in mind that with these instruments you can develop trading strategies where a loss in one investment is offset by a gain in a derivative.

Let’s imagine that we own 100 shares of ABCD at $35 and want to hedge this position should the stock decline further. Recent events may have us feeling the stock is vulnerable to the $23 level, which has been a level in past trading where the stock has rebounded. Let’s imagine that shares of ABCD finished trading at $30. In essence, the stock has declined $5 per share since purchase, and, now, we want to hedge that position.

When shares of ABCD open for trading, we may not want to sell the stock and REALIZE a loss. Instead of selling ABCD for a loss, we may want to hedge this position for a period of time using a put option. A hedge like this gives the investor the opportunity to “buy some insurance” on the stock held in his / her account for a period of time.

Let’s assume that we want to hedge into January. Because our example is that a trader owns 100 shares of stock, a hedge would be to buy 1 put contract (1 contract equals 100 shares).

Let’s now assume that the ABCD January $30 put (ABCMF) was offered at $2.30. Let’s assume that the stock opens for trading at $30.

If a trader buys 1 contract, his / her outlay of cash would be $230 plus commission paid. Once the option is bought, our hedge would be as described in the following paragraphs.
We would still hold long 100 shares of ABCD with a cost basis of $35 ($3,500). Once the put option is bought, the trader has established the RIGHT, but not the OBLIGATION to sell his / her stock at $30 between now and the January option expiration (Friday before the 3rd Saturday of January). This transaction costs the trader $230. (Note: A hedge position is considered a “neutral” position.)

Should the stock eventually fall to the $23 level (before option expiration), our 100 shares would be worth $23 ($2,300), but our January $30 put would be worth approximately $7 ($30 strike of option — $23 market price). As you can see, the put option has increased in value; thus, we’ve hedged against the downward move.

If shares of ABCD do fall to $23, and we do not hedge our position, our original investment of $3,500 will be worth $2,300 (paper loss of $1,200).

The hedged position under outlined assumptions would have required a total cash outlay of $3,500 (underlying stock), plus the $230 (cost of option excluding commissions), for a total cash exposure of $3,730. At a market price of $23, the HEDGED POSITION would be worth $3,000 ($2,300 in stock + the now $700 value of put option).

The previous example demonstrated a hedge position on a stock where we were already at a loss. Many institutions and investors will hedge positions that are currently in the position of profit. I would argue that the options market was originally created to allow investors the opportunity to hedge and help mitigate risk, not speculate on stock price direction.

If you are still not convinced hedging is important, take a look at what the OECD see as Future Shocks to world markets.

The Paris-based international economic organisation of 34 advanced nations OECD warns that disruptive shocks are likely to occur with increasing frequency and cause greater “economic and societal hardship” to the international community.

These types of reports serve as a reminder that investors must be vigilant as to their exposure, diversity and hedge positions, for those who need help contact www.heffcap.com

Pandemics, cyber attacks, financial crises, civil unrest and geomagnetic storms are the top 5 in what the OECD paint as a reason for government and people to be prepared.

The new OECD report, entitled “Future Global Shocks”, says the potential for wide-ranging and destructive consequences transcend national boundaries, given the increased inter-connectivity and the speed with which people, goods and data travel between various countries.

In addition to macroeconomic shocks that traverse globally integrated markets, sudden food shortages, natural disasters and outbreaks of infectious disease may occur in faraway places disrupting various industrial and social systems around the world, it says.

This global community has seen the manifestations of destabilizing elements emerging over the past two years, threatening to jeopardize the political, economic and social stability in several countries.

Recent examples include the ongoing political uprising in the Middle Eastern and North African (Mena) region, and the Euro zone debt crisis, as well as the devastating earthquake and tsunami that destroyed part of Japan in March. There was also the outbreak of H1N1 influenza A virus two years ago that spread to more than 210 countries, with reported deaths exceeding 18,000, before the pandemic receded in the latter part of 2010.

The OECD’s predictions serve as crucial reminders to governments and policymakers of the potential risks and vulnerabilities surrounding the global economy. Governments and policymakers should explore new approaches to international cooperation and greater information sharing to better assess potential shocks and establish prevention frameworks to minimize the negative effects of future storms. it says.

According to the OECD, there’s also a pressing need for policymakers to increase resources allocated to develop effective surveillance and monitoring systems to better manage the oncoming risks.

Director of the OECD International Futures Programme Michael Oborne says in his foreword to the organisation’s report:“There is a palpable sense of urgency to identify and assess risks arising from vulnerabilities in crucial systems, and to develop policies that will bolster efforts for prevention, early warning and response to ensure sustained economic prosperity.

“Visible indicators of vulnerability persist in the forms of economic imbalances, volatile commodity prices and currencies, colossal public debts and severe budget deficits, while the less visible ones are the drivers of vulnerability that tightly weave interconnections between commercial supply chains, technological systems and investment vehicles underlying the global economy.”

Natural disasters, failures in key technical systems or malicious attacks are factors that could disrupt those complex systems and produce shocks that could spread across the world, he adds.

Much of the world’s concern is still focused on the potential risks arising from the social unrest in Mena that could affect oil prices and exacerbate global inflation; the debt dilemma in Greece, whereby the attempted remedial measures have sparked public riots in the country, but non-action otherwise would likely lead to a debt default that could potentially cause a contagious financial crisis in the Euro region; rising inflation, especially in food prices that have increased incidences of poverty and seen as the root cause of social unrest in several countries; and the deceleration of US economic growth that would have implications for global growth and exports-driven economies in Asia.

Economists acknowledge there is still no light at the end of the tunnel yet despite the intense coordinated efforts by governments to deal with the problems.

In Malaysia, moderating growth in the near term and rising inflation have become inevitable facts. Being a highly open economy, Malaysia could still be affected by the spillover effects of global developments. And that should be reason enough for the Government to put its focus right, especially in terms of economic and risk management to ensure that the country’s economy and the welfare of its people are protected.

While most economists are optimistic that the Government’s Economic Transformation Programme (ETP) could continue providing momentum to the country’s economy and its subsidy programmes to minimise the effects of rising inflation, some are still concerned that the persistent political infighting could distract the Government from what’s more important and undermine its efforts to improve the country’s economy.

One economist says: “Global risks are rising, the country cannot afford to be apathetic and remain inward-looking. It’s high time that politicians from both divide come to their senses and work together to help the country remain on a sustainable path.”

Shayne Heffernan

Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.

Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services. www.livetradingnews.com

Promising USA Employment Data

Posted on 07. Oct, 2011 by Live Trading News.

US employers added 103,000 jobs in September, a modest burst of hiring after a sluggish summer. Still, job growth remains too weak to lower the unemployment rate, which stayed at 9.1 percent for the third straight month.

The US Labor Department also said Friday that it has revised the previous two months to show that companies hired at a stronger pace than first estimated.

Employers have added an average of only 72,000 jobs in the past five months. The economy must create about twice as many consistently just to keep up with population growth.

Nearly half of the gains last month were due to the rehiring of 45,000 striking Verizon employees.

The private sector added 137,000 jobs in September, up sharply from August but below July’s revised total. Government shed 34,000 jobs. Local governments cut teachers and other school employees.

Job gains occurred in construction, retail, temporary help services and health care. Manufacturing cut jobs for the second straight month.

The department revised August’s figures to show a gain of 57,000 jobs, up from a previous estimate of zero. July was revised up to 127,000 jobs, from 85,000.

Paul A. Ebeling, Jnr.

Goldman Sachs Group, Inc., NYSE:GS Still a Strong Buy | Live Stock Trading News | Equities, Forex, Gold, Silver and Oil Trading

Posted on 06. Oct, 2011 by Live Trading News.

Goldman Sachs Group, Inc., NYSE:GS Still a Strong BuyGoldman Sachs Group, Inc., NYSE:GS Still a Strong Buy according to Shayne Heffernan.U.S. banks have reason to think that regulators will put out a moderate proposal restricting proprietary trading, analysts said after a draft of the Volcker rule was leaked.The ridiculous Volcker Rule as it stands has been the reason for billions being wiped of the market cap of Goldman Sachs Group, Inc., NYSE:GS. As it appears more likely the communistic overtones of the rule will be rejected, Goldman Sachs may see a strong rally.

via Goldman Sachs Group, Inc., NYSE:GS Still a Strong Buy | Live Stock Trading News | Equities, Forex, Gold, Silver and Oil Trading.

China Will Back the EU

Posted on 20. Sep, 2011 by Live Trading News.

China Will Back the EU

China pledges unconditional support to EU in debt crisis

China’s support for the European Union in coping with its debt crisis is unconditional, Shen Danyang, spokesperson for the Ministry of Commerce (MOC), said Tuesday.

“China has set no preconditions for offering help to others. We only hope that we can gain respect when treating others sincerely,” Shen said at a regular news briefing.

Shen said that the EU not recognizing China’s status as a Market Economy and China providing support to the debt-hit EU are inherently different issues.

via China Will Back the EU | Live Stock Trading News | Equities, Forex, Gold, Silver and Oil Trading.

How Dodd-Frank Fuels Economic Fear

Posted on 12. Sep, 2011 by Live Trading News.

Since Barack Obama took office, $38 billion in new major regulations have been introduced, imposing an unprecedented burden on businesses, according to last month’s report by the Heritage Foundation.

An overly regulated environment is creating uncertainty — and uncertainty is perhaps the greatest obstacle for investing and hiring. The administration hastily introduced the 2,300 page Dodd Frank Wall Street Reform and Consumer Protection Act in the depths of the recession without fully understanding and studying the potential consequences of such unprecedented legislation.

To put the Dodd Frank bill in perspective, it is ten times the length of the Sarbanes-Oxley Act (66 pages) and the Gramm-Leach-Bliley Act (145 pages) combined. While a moderate level of regulation is necessary in large and vital sectors of the economy such as finance, housing, and healthcare, regulation is not the solution to the current economic problems that face the United States.

The administration must stop demonizing banks — as if they are not vital to the growth of credit and new business formation — and consider a moratorium on new regulations, an idea made popular by Presidential candidate Texas Governor Rick Perry.

Frank Keating in the Wall St Journal said “imagine a manufacturing company that deployed more than half of its work force as Occupational Health and Safety Administration (OSHA) compliance officers. Such a company would be unable to grow, let alone contribute to broader economic growth.

Yet banks across the country are feeling a similar pull on resources as the Dodd-Frank Act is implemented. Already federal regulators have issued 4,870 Federal Register pages of proposed or final rules affecting banks. Many more are still to come—for a grand total of more than 240 rules. And that’s on top of about 50 new or expanded regulations unrelated to Dodd-Frank that banks have had to absorb over the past two years.

Managing this mountainous regulatory burden is a significant challenge for a bank of any size. but for the median-sized bank—with 37 employees—it’s overwhelming. The cost of regulatory compliance as a share of operating expenses is two and a half times greater for small banks than for large banks.”

Mr Keating is not alone, Jamie Dimon has argued along the same line, “We’ve been through two stress tests, one at the Treasury, one at the Fed. I believe most of the banks passed the recent ones with flying colors,” Jamie Dimon, JP Morgan Chase & Co.’s chief executive officer, told Fed Chairman Ben S. Bernanke June 7. “Now we’re told there are going to be even higher capital requirements,” and “we know there are 300 rules coming. Has anyone bothered to study the cumulative effect of all these things?”

One month later, Dimon’s boldness has proven to be less an emblem of power than a cry of frustration. Global banking supervisors are poised to impose higher capital requirements that Wall Street complains will crimp profits, hamstring its fight against foreign rivals and damage the U.S. economy. And Dimon, 55, who kept JPMorgan largely clear of the subprime mortgage fiasco and helped stabilize the financial system in 2008 by acquiring Bear Stearns Cos. and Washington Mutual Inc., will face the same new strictures as the industry’s rogues.

Another indication of the changing regulatory environment took place almost a month earlier and an ocean away. During a May 17 confirmation hearing on his appointment to a new British financial watchdog, Donald Kohn, a former Fed vice chairman, told British lawmakers he had abandoned his belief that bankers’ self-interest would keep markets safe.

“I placed too much confidence in the ability of the private market participants to police themselves,” he testified.

Today Financial Services Companies are under attack on Wall St

Banks

The Federal Housing Finance Agency, which oversees mortgage giants Fannie Mae and Freddie Mac, is expected to file suit against Bank of America, JPMorgan Chase, Goldman Sachs and Deutsche Bank, among other banks, the Times reported, citing three unidentified individuals briefed on the matter.

The suits stem from subpoenas the finance agency issued to banks last year. They could be filed as early as Friday, the Times said, but if not filed Friday it said the suits would come on Tuesday.

The government will argue the banks, which pooled the mortgages and sold them as securities to investors, failed to perform due diligence required under securities law and missed evidence that borrowers’ incomes were falsified or inflated, the Times reported.

Fannie Mae and Freddie Mac lost more than $30 billion, due partly to their purchases of mortgage-backed securities, when the housing bubble burst in late 2008. Those losses were covered mostly with taxpayers’ money.

The agency filed suit against UBS in July, seeking to recover at least $900 million for taxpayers, and the individuals told the Times the new suits would be similar in scope.

A spokesman for the Federal Housing Finance Agency was not immediately available for comment.

Brokerage Firms

U.S. securities regulators have taken the unprecedented step of asking high-frequency trading firms to hand over the details of their trading strategies, and in some cases, their secret computer codes.

The requests for proprietary code and algorithm parameters by the Financial Industry Regulatory Authority (FINRA), a Wall Street brokerage regulator, are part of investigations into suspicious market activity, said Tom Gira, executive vice president of FINRA’s market regulation unit.

“It’s not a fishing expedition or educational exercise. It’s because there’s something that’s troubling us in the marketplace,” he said in an interview.

The Securities and Exchange Commission, meanwhile, has also begun making requests for proprietary algorithmic trading data as part of its authority to examine financial firms for compliance with U.S. regulations, according to agency officials and outside lawyers.

Shayne Heffernan

Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.

Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services. www.livetradingnews.com

Geithner on Global Growth

Posted on 08. Sep, 2011 by Live Trading News.

Tim Geithner says Global action needed boost growth

US Treasury Secretary Timothy Geithner Thursday called on the Global finance chiefs to boost growth but said a repeat of the massive co-ordinated fiscal stimulus efforts of Y 2009 is no longer possible.

In an opinion piece written for the a UK news paper, Mr. Geithner said the United States must strengthen employment, Europe must act more forcefully to contain its debt crisis, and China and other emerging markets should strengthen domestic demand and allow their currencies to rise more rapidly.

“The imperative remains to strengthen economic growth. Fiscal policy everywhere has to be guided by the imperatives of growth,” Mr. Geithner wrote a day before finance ministers from the Group of Seven (G-7) wealthy economies are due to meet in Marseilles, France.

Mr. Geithner acknowledged that some governments with high deficits and high borrowing costs have no choice but to consolidate their fiscal positions, while others have room to take more action to support growth or at least slow their fiscal consolidation.

Mr. Geithner said President Barack Obama Thursday evening will push for a “very substantial package” of public investments, tax incentives and targeted jobs measures, which will be combined with reforms to restore medium-term fiscal responsibility. He did not provide any specifics.

The US Treasury Secretary will depart for the Marseilles meeting after President Obama’s speech to the US Congress Thursday evening.

Mr. Geithner said governments in Europe must take more forceful action to “generate confidence that it can and will resolve its crisis.”

“This requires governments working together and alongside the European Central Bank in an unequivocal commitment to support Europe’s financial system and ensure governments can borrow at sustainable interest rates as they reform.” he said.

Mr. Geithner added in the op-ed piece that he believes none of the major Global central banks are “out of ammunition” and some will continue to ease monetary policy. Countries also should force more capital into their banking systems.

He cited some signs of optimism, such as easing oil prices, but said that the risks of a “longer period of relatively weak growth are significant, and it makes sense for policy makers to reduce the risk of that outcome.”

Paul A. Ebeling, Jnr.

US exports rise signalling firmer growth

Posted on 08. Sep, 2011 by Live Trading News.

US exports rise signalling firmer growth

The US economy is sluggish, but it is still moving along.

That was the message from 2 economic reports that pointed to a weak labor market, but also a better performance on trade that should boost Q-3 GDP.

The number of Americans filing new claims for jobless benefits rose unexpectedly last week, further evidence of an anemic employment picture just hours before President Barack Obama unveils a plan on job creation in a major address to Congress.

Still, a considerably narrower trade deficit for July offers hope for economic growth in Q-3 following a sluggish 1-H of this year.

Applications for unemployment benefits rose to 414,000 in the week ending September 3 from an upwardly revised 412,000 the prior week, the Labor Department said on Thursday. Wall Street analysts had been looking for a dip to 405,000.

“Jobless claims numbers have been stabilizing in recent weeks. We’re probably seeing an economy that’s just growing slowly,” said Gary Thayer, chief macro strategist at Wells Fargo Advisors in St. Louis.

US stocks were little changed as investors looked ahead to Obama’s address while Treasury debt was slightly higher and the USD was up.

Paul A. Ebeling, Jnr.

US Banks to Rally on Deal

Posted on 06. Sep, 2011 by Live Trading News.

US Banks offered deal on faulty mortgage foreclosure practices

BAC, JPM, C, WFC

US banks that allegedly engaged in improper mortgage foreclosure practices have been offered a deal by State prosecutors that limits their legal liability in exchange for a multibillion-dollar payment, it was reported Monday citing several people with direct knowledge of the discussions.

The proposed deal effectively releases the companies; Bank of America Corp. (NYSE:BAC), J.P. Morgan Chase & Co. (NYSE:JPM), Wells Fargo & Co. (NYSE:WFC), Citigroup Inc. (NYSE:C) and Ally Financial from legal liability for allegedly wrongful securitization practices, the newspaper cited the people as saying.

The proposal would have to be expanded before it will be agreed on as participants on both sides stressed the talks remain fluid, according to the newspaper. Payment could range from US$10 to 25 billion, the people said.

Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.

Funds Bet Big on Agriculture

Posted on 06. Sep, 2011 by Live Trading News.

Funds add Bullish agriculture bets on shortages

Funds increased Bullish bets on agricultural commodities by the most in more than a year on signs of tightening supplies amid adverse weather conditions.

In the week ended August 30, speculators raised their net-Long positions in 11 commodities by 18% to 915,341 futures and options contracts, government data show, the biggest gain since August 3, 2010.

Holdings in Wheat more than tripled, Bullish Corn bets reached an 11-week high, and Coybean positions rose to the highest since November 2010.

Corn prices have risen 70% in the past year and Soybean has gained 43%. The hottest July since Y 1955 means that U.S. production of both crops may miss government estimates, according to researcher and broker INTL FCStone Inc.

The costliest drought in Texas history has hampered US supplies of Cotton, while dry weather in the US Great Plains may curb planting of winter Wheat.

Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Level