What We're Reading

Just when the (last few remaining) bears were enjoying some market wide liquidation, China apparently launched some stealth QE of their own reversing AUD/JPY and sending markets plowing over weak bears.  From Bloomberg:

• CHINA’S PBOC STARTS 500B YUAN SLF TODAY, SINA.COM SAYS
• PBOC PROVIDES 500B YUAN LIQUIDITY TO CHINA’S TOP 5 BANKS: SINA
• PBOC PROVIDES 100B YUAN TO EACH BANK TODAY, TOMORROW WITH DURATION OF 3 MONTHS: SINA

According to Government Sachs

"This amount is roughly the same as a 50 bps cut to RRR for the whole banking system on a static basis.  Still, such an easing would be consistent with our expectation that (1) monetary policy will loosened amid the drastic slowdown in activity growth and falling inflation, and (2) full scale RRR and interest rate cuts are unlikely because they would be viewed as aggressive stimulus."

Toss in a little hint dropping from the Wall Street Journal's Fed-whisperer Jon Hilsenrath that that the "considerable period" language will

How mesmerizing is this?  Now that's what I call awesomeness.  Taken by my daughter last night.  Boy, do I love Texas!

Polls released this week showed for the first time that a majority – an extremely small majority, but a majority nonetheless – of Scots favor independence, although other polls suggest the no camp remains in the lead. A poll is not the election, which will be held Sept. 18, but it is still a warning that something extraordinary might happen very soon. The political union between Scotland and England might be abolished after 300 years. The implications of this are enormous and generally ignored.

Obviously, this raises a host of question about how such a divorce might take place, whether the expected time frame – divorce by 2016 – will be adhered to, and how state property might be divided. It also raises the question of Scottish foreign policy. Will Scotland remain in NATO? Will it have membership in the European Union? Will it continue to use the pound sterling, and if not, how will it roll out its own currency?

These are important questions, but far more important issues will follow

On down days such as this, one could easily assume some profits are being taken ahead of the Alibaba IPO the third week of September.  Some will look for signs of a market top (as they nervously do each day).  We could also sit and ponder if the dollar strength is weighing or over seas tensions are bothering the market but in truth, it doesn't matter.

Best thing to do is to check your stops, adjust as necessary and take note of just "who" is holding up amongst the selling.  I'm not referring sectors per se or to laggards or beaten up names, but what one could consider leaders with more "room to run" and not being sold first by finds. Funds, after all, know more than we do.

Better to explain it, those who may be seeing selling BUT are stil holding up (green) as eager buyers are there to scoop up what's being sold.  Today, such names to be kept on your radar are NFLX, TSLA, DECK, FB, JD, JKS, GOOG, MDVN, TWTR.

**If** we head higher, these names would be expected to lead.  Of course, i

And they get to write off over 1/2 of it too.

Companies would expect their investment firm, especially management and Senior members, to not only dissuade insider trading, but to lead by example.  Here's a complete failure.

Case in point Mr. Michael Anthony Dupre Lucarelli.  The Director of Market Intelligence at a Manhattan-based investor relations firm.  Market Intelligence?  Serious oxymoron going on there?  Maybe not an oxymoron such as "honest politician" or "almost pregnant" but snake in the grass, no doubt (allegedly).

Today the SEC charged the "Director" of insider trading by more than a dozen clients.  The charges were filed against Mr. Lucarelli alleging he garnered nearly $1 million in illicit profits.

An SEC investigation and ongoing forensic analysis of Lucarelli’s work computers uncovered that he repeatedly accessed clients’ draft press releases stored on his firm’s computer network prior to public announcements.  The SEC alleges that Lucarelli, who had no legitimate work-related reason to access the draft press r

Markets being forward looking, I believe we're seeing a snap back ahead of this weeks Jackson Hole meeting (Aug 21-23) where policymakers will discuss at length their thinking around the labor markets of major economies, perhaps dropping clues about the path for monetary policy in the months ahead.

The spotlight will be on Janet Yellen, who will speak on Friday in her first appearance at Jackson Hole as Fed chair.

Most will recall Ben Bernanke two years ago that paved the way for an unprecedented $85 billion per month stimulus plan.

While most don't expect anything spectacular out of the Fed Chairwoman given the improvement in the unemployment rate and overall economy, I have to wonder what will happen after the air is let out of the hopium balloon.  QE is still set to end in October.  Tensions between Russian and Ukraine have sent yields lower.  Whether there is further escalation or a resolution is yet to be seen.  The economy is recovering like a limp noodle, but it is improving.  S

Among other things, I’m known to be a “reductionist.”  In my line of work you must be good at pinpointing what to focus on – that is, the major underlying truths and problems in a situation. I then become obsessive about solving or fixing whatever they may be. This combination is what perhaps has lead to my success over the years and is why I’ve chosen to be so outspoken about shareholder activism, corporate governance issues, and the current economic state of America. Currently, I believe that the facts “reduce” to one indisputable truth which is that we must change our system of selecting CEOs in order to stay competitive and get us out of an extremely dangerous financial situation. With exceptions, I believe that too many companies in this country are terribly run and there’s no system in place to hold the CEOs and Boards of these inadequately managed companies accountable. There are numerous challenges we are facing today whether it be monetary policy, unemployment, income inequali

Everyone knows our beloved five year rally seems to be weakening of late.  The big question is just "how" weak will it become.  If anyone tells you they know that answer, stop reading that website.  Certainly more and more sectors are now exhibiting profit taking even as fund managers lounge sipping Mai Tai's from their catamarans off the coast.  Indeed selling can beget more selling, however that doesn't mean we may not see a few days of buying to test overhead resistance and see if it holds; if the "top" is truly in.

Now is not a time (imo) to add to a long position.

Now is a time to be hedged or flat in a long portfolio.

Now is the time for day trades or brief swing trades.

Now is a time to let the charts show you direction.

A second enormous week of earnings lies before us.  While thus far companies are largely beat (which should be the case if they're well run), forward guidance hasn't been all that impressive from a sales growth perspective.

Buybacks and dividend increases

In the business world, we're continually taught that high CEO pay is a necessary evil in order to attract top talent, and therefore, top returns.  Or "pay for performance" as they would have you believe. 

A recent analysis of CEO compensation data publicly released by Equilar oddly shows little correlation between the two.

This graph shows the pay of 200 CEOs and the stock returns of their companies: (click to enlarge)

The trend line—the average of how much a CEO’s ranking is affected by stock performance—shows that a CEO’s income ranking is only 1 percent based on the company’s stock return. That means that 99 percent of the ranking has nothing to do with performance at all. (The size and profitability of companies didn’t affect the random patterns.)

If “pay for performance” was really a factor in compensating this group of CEOs, we’d see compensation and stock performance moving in tandem. The points on the chart would be arranged in a straight, diagonal line.

In short, nope. Furth

Is Amazon's cloud play becoming gloomy?  Amazon, specifically Amazon Web Service (AWS) is in an out war with for the cloud with Google, Microsoft, and many, many others and it doesn't look as though these pressures are going to ease up any time soon.  Indeed everyone has or is (late bloomers) is getting into the cloud and of course, cost savings by having your own data servers is quite the enticement.

A quick look at the facts.

AWS sales dipped this quarter as Amazon announced Thursday that for its second quarter that the category that includes AWS saw a 3% sequential revenue slip. That “other” category — which also includes advertising services and co-branded credit card agreements — also logged 38% growth year over year which sounds fantastic until you realize year-over-year growth in the first quarter was 60%. There have been other slight quarterly dips in the category’s otherwise relentless rise over the past few years, but they’ve mostly happened between fourth and first quarters.

"If you hire people just because they can do a job, they’ll work for your money. But if you hire people who believe what you believe, they’ll work for you with blood and sweat and tears."  - Simon Sinek

When we, in the investment world, think of great innovators,it beckons thoughts of Alexander Graham Bell, the Wright brothers and modern day leaders such as Apple's Steve Jobs and possibly Amazon's Steve Bezos and Tesla's Elon Musk.

They've transformed or are currently transforming how we live each day.

Sadly Antonio Meucci doesn't come to mind, although the Italian inventor is best known for developing a voice-communication apparatus which several sources credit as the first telephone

Nor do they recall Smithsonian worker and inventor Samuel Pierpont Langley although he is considered a true pioneer of aviation.

The difference between them?  Why one is remembered throughout history (off the top of one's head) is possibly their ability to attract believers.  Coworkers who are passiona

A friend of mine had to rub this in my face.  Coolangatta on the Gold Coast QLD Australia where he is visiting friends.  I think Aruba is calling my name.......

It was a charting kind of weekend, or as Sadiq's girlfriend would say "drawing on the computer with markers".  *lol*  I have uploads in our chart section of seven (7)  different sectors for long ideas.  Merely look within those sectors, define your risk and go for it.   All I ask is that you "pay with a tweet" and mention Stockbuz.net any time you browse our charts.

Yes, we're still at all-time new highs however some sectors have not broken out to new highs (yet).  Yellen slightly tapered the taper and rates are still expected low.  Iraq and Putin tensions the only real headlines but they do not appear to be affecting risk appetite heavily.  Volume is light = no volume selling overall and you know the old saying; never short a dull market.  Personally I'm staying away from many areas of tech and retail with some offering weakened guidance of late.  It's a stock pickers market in that arena if you ask me.

And let's not forget the single Mothers out there.  Hats off to you as well!

What were they thinking?  I'm sorry, I'm just not diggin' the new design.  Next!

Each year a member scratches his/her head and wonders what's discussed behind the well-guarded, super-secret closed doors at the annual Bilderberg conference.  Conspiracy bloggers go insane pondering the possibilities.  "They must be plotting to take over the world!" they say.  "A world currency is coming!" they chant and yet each year (since 1954 mind you) we're still chugging along on the U.S Dollar.  Alarmists just each this shit up.  At least Zerohedge has obtained a list of 2014 attendees, so scratch and ponder away.  I have got my popcorn and Jujubees at my side, ready to watch the ridiculous posts flood the blogisphere.  No rubber rooms for this chick.  I wonder what massive conspiracy they'll make up predict this year.

Chairman

• FRA    Castries, Henri de    Chairman and CEO, AXA Group

Attendees

• DEU    Achleitner, Paul M.    Chairman of the Supervisory Board, Deutsche Bank AG
• DEU    Ackermann, Josef    Former CEO, Deutsche Bank AG
• GBR    Agius, Marcus    Non-Executive Chairman