Friday, May 28, 2010

IMF: next year gross debt to GDP at 97%, 110% by 2015

Unsustainable, to say the least.

US money supply plunges at 1930s pace as Obama eyes fresh stimulus


The US authorities have an entirely different explanation for the failure of stimulus measures to gain full traction. They are opting instead for yet further doses of Keynesian spending, despite warnings from the IMF that the gross public debt of the US will reach 97pc of GDP next year and 110pc by 2015.



Which of the following is worse:
A. Second dip recession (great depression)
B. Freeze and collapse of credit markets
C. US treasury default
D. Deflation
E. Hyper inflation
F. Stagflation

... all of the above at varying times over the next couple of years, guaranteeing there's no where to hide your retirement funds.

Optimists say: Keynesian economical approach 'could work' (for the first time in history), and growth combined with deliberate moderate inflation could erase or subdue all current worries.

Did I say spooky already?


Thursday, May 27, 2010

WPF TextBlock TextWrapping hell: a solution

In a project I was working on I encountered a situation where I wanted a WPF text-block to wrap, a naive person would think that simply stating TextWrapping="Wrap" would do the trick, Microsoft would tell you - that would make too much sense.

Hence - the problem, how would you cause your textblock to not greedily increase in width and destroy your layout?

Problem better described here, here and here.

A solution for you, assuming this would be the troubled textblock XAML:
<TextBlock TextWrapping="Wrap" Text="bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla "/>

Wrap in a canvas and binding to its actual width/height should do the trick. Just make sure the canvas plays nice with its parent alignment scheme. Why a canvas? Because a canvas does not query its children to determine its size. It allows an inverse layout planning as shown below:

<Canvas VerticalAlignment="Stretch" HorizontAlalignment="Stretch" x:Name="canvasHelper" Margin="30, 30, 30, 30" MinWidth="30">
<TextBlock TextWrapping="Wrap" MaxWidth="{Binding ActualWidth, ElementName=canvasHelper}" MaxHeight="{Binding ActualHeight, ElementName=canvasHelper}" Text="bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla "></Canvas>


Friday, May 21, 2010

Where were you two weeks ago: Robini says extra 20% tumble in stocks a-comin'

Well - he was saying that half a year ago - I think. At every point in time you can find both bulls and bears in the commentary arena. The thing is - bears are shy or less vocal on bull runs, and bulls are in hiding during bear raids.

It is the news outlets that promote to headlines what deems relevant to yesterday's theme. So here we go:
Stocks to Tumble Another 20%, Cash the Safest Place: Roubini
Stocks are likely to continue their aggressive decline and shed another 20 percent in value as the world economy weakens, noted economist Nouriel Roubini told CNBC.

As the market slides into correction territory, Roubini said weakness in euro zone countries and a slowdown in the US and other developed countries will make things even more difficult for investors in the months ahead.

"There are some parts of the global economy that are now at the risk of a double-dip recession," said Roubini, head of Roubini Global Economics. "From here on I see things getting worse."

Prices in both stocks and commodities are likely to take a hit, and investors may only be safe in cash and other safe havens. Roubini said investors also can use options to hedge against future market risk that he said is sure to come as conditions weaken in the US, Japan, China and through much of Europe.


Let's recount why we are in a downtrend:
1. Greece in huge debt, riots, bailouts.
2. Germans unhappy with bailout of Greece.
3. Euro-zone financial system in credit crunch (under reported)
4. P.I.G.S - riots in the streets, not in news in America
5. Financial reform in the US brings uncertainty
6. Unemployment in the US not easing
7. The tail wags the dog - stock market rises, followed by slight economic improvement, stock market tumbles - you know what's coming next

Time to invest SH?


Thursday, May 20, 2010

Is it just me or was it one of the sickest day of the market ever?

Does this picture seem right to you?

Immediate interpretation: 80%+ of ALL stocks today lost unusual portion of value.

Twilight zone market. Spooky days upon us.

Tuesday, May 18, 2010

Depressing of the day: Investing guru newsletter says it's all about to crash

Will Richard Russell's subscribers follow up on his warning?

'Major Crash' Likely If Stocks Break May 7 Lows, Russell Says

Investors should sell U.S. stocks because the market is at risk of a "major crash," Richard Russell, editor of the Dow Theory Letters newsletter, said in a note to subscribers today.

The decline would follow should the Dow Jones Industrial Average and Dow Jones Industrial Average fall below their May 7 levels, he said. They have risen 1.3 percent and 2.8 percent versus their closing levels that day.

"If I read the stock market correctly, it's telling me that there is a surprise ahead," Russell wrote. "And that surprise will be a reversal to the downside for the economy, plus a collection of other troubles ahead."

The market started showing signs of deterioration in early April, including a shrinking number of stocks reaching 52-week highs and falling stocks outnumbering rising ones, he said. Russell, 85, has published Dow Theory Letters every three weeks since 1958 and posts daily market commentaries on his website.

Scary - scare-mongering.

All the best with your savings, Cheers!

Before buying anything from a website advertising on radio...

There are several types of radio advertisers, or cheap midnight advertisers. I don't intend to defame any. I would mention two scamer-types, and one example of easy avoidance.

Type A: Free report! You'll get rich! Look at this cool car, you can get that too!

Usually on TV, you'd see an ad for some 'blog', which is actually a sales pitch for some 'free book'. You pay for shipment, but then realize they have your credit card number and have sent you a box full of crap you don't need. The 'free book', is pretty much crap for dummies too.

I did this once, just to see what's on the other side. I called to ask not to be charged for all the crap I didn't order. When reaching a point where they tried to negotiate a price for the box of crap - and I declined - it came down to shipping the box to them on my expense or agreeing to get them off my back for about 3$ (they initially wanted 100$).

Lessons learned: 1. Don't buy anything advertised for dummies. It's obviously directed at low brain power deadbeats hoping to make billions. Assume you are not one of them and don't even try their website. 2. Don't agree to pay anything, call them as soon as you can and refuse to pay - see where that leads you.

Type B: Website full of propositions claiming to ship you something for free after you sign about 5 deals

I've heard several people who tried this and did get a product at some point. I heard some ad on the radio and logged in, didn't sign a single deal - didn't want the crap - but I did expose myself by just logging in and giving them a phone number.

The sites steal your identity. They bombard you with spam. They sell every bit of info you give them to electronic hackers who will try to exploit any possibility to steal from you. Including charging your cell phone for services you didn't ask.

Lesson learned: Don't beg for anything free off the web. Make sure your kids don't do this either. Make sure your wife doesn't do this. Let your friends know what happens. And inject yourself into conversations where some would claim to have successfully got a free iPod or something similar.

The solutions: 1. dump the email used, it will forever be held captive by spammers. 2. Make sure the email isn't attached to ebay/paypal and disconnect it if it does. 3. Call your cellphone carrier and request blocks on any services you haven't ordered, in particular SMS services. That's where the thieves are.

Above all, remember - if you pay online with credit card - use your card company's services to acquire alternative numbers. Once any shady entity gets hold of your real one - they will find a way to steal.

Avoid buying a book by 'free pamphlet' radio ad
It's very simple, if the radio ad directs to a site for free stuff - yet it's evident they are trying to sell you a book - search for the book on Amazon and read all the 'one star' reviews. You'll save yourself time and money.

In particular, here's an example: the one star reviews...


Friday, May 7, 2010

Really scary: No one really knows why the market crashed and bounced yesterday

Excuses were made, rumors flew, stories were told, but the truth is no one really knows.

Some speculated it was a directed crash - and the options actions preceding the 5 minutes 700 points drop shows someone was building this. (so I've read, I don't know this to be fact at all)

The news correspondents told a weird story that a Proctor and Gamble trader mistakenly sold 15 Billion stocks instead of Million. Perhaps, I just didn't know a pharmaceuticals company has their own traders (or was it just bad linguistic - it was a person who traded the stock, not an employee of PG trading the market). Still, if it were only PG crashing... It definitely wasn't. Was it quants and robots? Hacked brokers computers?

The following story reaffirms that no one knows yet:
What the Heck Happened to the Stock Market Yesterday?
After yesterday's historic market plunge, everyone is groping for explanations. What caused the market to drop 999 points, mostly in the space of a half-hour, and then recover 700 points by the end of the day?

Was it the chaos in Europe, stock values that have overshot underlying economics, and other fundamentals? Or was it a "fat finger" trading error--the typing of "billion" instead of "million" in a sell order--and other glitches? Or was it the rise of computerized "high-frequency trading," which has taken humans out of the equation?

The answer right now is that no one knows for sure. The SEC has already launched an investigation, the NYSE and the NASDAQ are pointing fingers at one another, and firms are still digging through trading records.

But here's what we do know, says Mark Williams, finance professor at Boston University and the author of Uncontrolled Risk: Lessons of Lehman Brothers And How Systemic Risk Can Still Bring Down The World Financial System.

We know that there were some trading glitches, as evidenced by the NASDAQ cancelling trades in some stocks that had huge temporary moves. And we know that there is a very troubling economic backdrop to what happened, starting with the chaos in Europe.

Greece may be only the beginning of the European problems, Williams says. The issues there have yet to be solved, and they may soon spread to far larger countries like Spain. The market is absolutely right to be worried about this development, so a pullback in stocks is hardly surprising.

As for the role of "glitches" and electronics, we'll know more after the the investigations are concluded. But market crashes have happened throughout history, long before high-frequency trading and computerized execution came into being. They're rare, but they're also normal market behavior. So it's highly unlikely that the "cause" of yesterday's crash was some sort of electronic malfunction.

Madness to continue or end soon?

Thursday, May 6, 2010

New EzBacktest version 1.0.3

Simple updated feature: Option dialog to edit values of rule 9 - X down to cash, Y up to invest.

Download here.


WTF part 2: Dow plunged more than 900 pts - WHAT AREN'T WE TOLD?

Something is happening and the snap sound is very loud.

Dow Falls in High-Speed Drop
Stocks plummeted in a flashback to the panicked trading of 2008. Investors fled everything from stocks and risky bonds and poured money into safe assets such as U.S. Treasurys.

Stocks began the day in negative territory but took a sharp dive south in the afternoon as selling built up and some indexes fell through key technical levels, sparking new waves of selling, investors said.

As losses piled up, the Dow Jones Industrial Average plunged more than 900 points. Key short-term credit markets—such as the rate for three-month Libor—began to show signs of stress and corporate bonds tumbled. The Dow was recently down about 460 points to 10400.

The S&P 500 and the Nasdaq Composite, which also saw steep intraday drops, were down more than 4% each in recent activity.

Credit markets, too, are beginning to show signs of stress. Three-month Libor, the benchmark rate for billions of dollars in debt, shot to 0.42 percentage point from 0.37 percentage point, traders said. Corporate bond indexes also tumbled.

"It's getting pretty ugly out there very fast," Guy Lebas, chief fixed income strategist at Janney Montgomery Scott. "There are definitely some major concerns that are escalating this afternoon."

Investors remained deeply worried Thursday about the unfolding drama of Europe's efforts to prop up Greece's finances. Despite boisterous street protests, Greece's parliament passed a bill with austerity measures that will give the country access to an assistance package jointly offered by the European Union and International Monetary Fund. Other EU members will take votes in their respective parliaments soon to approve spending on the package, with a first test expected in Germany on Friday.

"A lot of traders are getting carried out of there seats. There are lots of liquidations including hedge funds out of riskier assets," Michael Franzese, head of Treasury trading at Wunderlich Securities in New York. "No one was expecting this sell off in stocks and the euro and a flight to quality trade is in full effect and it not yields levels it just capital preservation."

While the bailout is expected to pass in Germany and elsewhere, it remains unpopular among voters who don't want to see their respective countries' resources used to solve Greece's problems. Traders said that any hints of populist backlash could slow the package's implementation or lead to omission of elements needed to prevent global economic contagion.

"Some of the panic-mode has come in now," said Jay Suskind, senior vice president at Duncan-Williams. "What you're seeing in Greece—even the pictures on the television with the protests starts to spark some real fear."

Rumor mill tells it all, of course CNBC are there to report the rumor:
The Dow plunged Thursday amid buzz in the market that European banks have halted lending.

One trader, on the condition of anonymity, said he heard fixed income desks in Europe shut down early because there was no liquidity — basically European banks are halting lending right now.

"This is similar to what took place pre-Lehman Brothers," the trader said.

So - is it a European Lehman type collapse?

Yikes! 500 DOWN ON THE DOW, NASDAQ -5.34%


European Debt Woes Could Hurt US, Fed Says
The Federal Reserve is closely monitoring financial turbulence in Europe as it could have repercussions for the United States and its markets, policymakers at the central bank said on Thursday.

James Bullard, president of the St. Louis Fed, argued the European crisis, which centers on worries about the high debt level of Greece and other member states, poses a threat to an otherwise improving U.S. economic outlook.

"One risk to the outlook ... is the fallout from potential sovereign debt default as conditions continue to deteriorate in Greece and other countries," Bullard told an audience at Washington University's Olin Business School.

His counterpart at the Richmond Fed, President Jeffrey Lacker, said the ongoing turmoil, which has led to deadly protests in Greece, was not affecting his outlook for the U.S. economy thus far, though it bears watching.

"They are something we're paying close attention to. It has the potential to develop into something that has noticeable effects.

But I don't see that so far," he told reporters after a speech in Richmond.

The euro and world stocks have fallen over the last three days over worries Greece's debt crisis was spreading to other weak euro zone economies. Greece is preparing to adopt harsh austerity measures as part of a European rescue package aimed at staving off a sovereign debt default.

Bullard raised the possibility of a debt restructuring, saying other countries have been through such restructurings before. "Restructuring debt, if it does come to that, you can live through it ... it's not pleasant," he said. "It does create a lot of volatility."

Strain in money markets reminiscent of those seen in the early stages of the global financial crisis, back in mid-2007, resurfaced this week on fears the euro zone crisis could choke interbank lending.

What aren't we told here?

Tuesday, May 4, 2010

Interesting excuses for market crashes

I don't pretend to be a market expert. Seriously, I'm just a regular person - observing his savings and following the news.

The headlines today say: "Dow Falls Over 200 Amid Euro Worries" and "Stocks Slammed on Greece Debt Concerns; Dow Sinks 200 Points"

Now hold on one second, didn't Greece get rescued? Isn't that old news? I mean - really - did investor just now become aware of Euro-Zone issues? It seems to me that the crash today is unrelated. It's a sell off. Pure and simple. Panic. Everyone sells - so should you. (not an advise - I'm expressing the psychology of what is happening)

On the whole, there are actually reasons to be optimistic in the near and close future. The economy is improving and earnings in this quarter seem to be showing a brighter picture. Or at least those are the stories I read over the last few days.

Regardless, one cannot ignore 200+ down days on the Dow Jones. Should this volatility continue, investors need to identify its true cause, and completely ignore the manure pushed as knee jerk analysis to daily price moves.

UPDATE: Professional activists bears have set their sites and are committing an attack whilst the New York Times facilitates the ammunition; Is Spain the Next EU Country To Tumble Into a Debt Crisis?

I'm speaking without actual knowledge here, but I don't think the US-mortgage-crisis/Lehman crash and the Euro-Zone issues are on the same scale. How reliant is the rest of the world on Greece and Spain's economies?

UPDATE II: Herd psychology in action, source found. On fast money yesterday, traders were told to short EEM. So there - CNBC triggers sell off. Good luck.

Monday, May 3, 2010

Believe it or not, economy begins to smell like roses

Watch out for the thorns.

Recovery Strengthens as ISM, Construction Spending Gain
The U.S. manufacturing sector grew in April at its fastest pace in almost six years and at a rate that was above expectations, according to an industry report released Monday.

The Institute for Supply Management said its index of national factory activity rose to 60.4 in April from 59.6 in March, The median forecast of 77 economists surveyed by Reuters was for a reading of 60.

The data represents a ninth straight month of gains, with the headline index at its highest since June 2004.

A reading above 50 indicates expansion in the sector.

A separate government report showed that U.S. construction spending unexpectedly rose in March to post the first advance since October, lifted by a rebound in public construction investment.

The Commerce Department said construction spending increased 0.2 percent, the largest gain since October, to an annual rate of $847.3 billion. That followed February's revised 2.1 percent drop that was previously reported as a 1.3 percent fall.

Economists surveyed by Reuters had forecast construction spending falling 0.3 percent in March.

All that's missing from the economy smells like roses equation: Jobs, Deficits, Defaults. Still, positive signs cyclically sprout.


Saturday, May 1, 2010

EzBacktest 1.0.2 release, minor bug fixes and new strategy for back testing

Per email request I added the following 'strategy':

'5% down to cash, 5% up invest' - this strategy sells all holdings when portfolio loses 5%, then it keeps track of how would those holdings do - and when rise by 5% from any minimum since 'sell out date' - will reinvest with the desired allocation.

Download here

The latest addition proves very simply - that this strategy pretty much sucks. Don't do it, but you're free to experiment from the safety of this research tool.