What We're Reading

One in 14 Americans may have just lost tons of their personal information — everything from their Social Security Number and birthdates to notes on their finances, relationships and even sexual proclivities — to hackers in a massive cyber breach, a federal agency said Thursday.

Hackers have made off with confidential data belonging to 22 million people who work, formerly worked or have applied to work for the federal government, costing a top agency official her job and exposing troves of sensitive data stored by the Office of Personnel Management (OPM), which serves as a sort of human resources for federal workers.

Here's a breakdown of the biggest questions — including what you should know about the attack, who is affected and what it means for you.

Which databases were hit?

While OPM has declined to say exactly which systems were affected, an agency filing in the Federal Register reveals two likely targets: the Enterprise Human Resources Integration (EHRI) system, which contains per

If you ignore the ongoing Greek sideshow, rarely has European money growth been as accommodative as it is today. Europe has enormous structural problems of too much debt, an inflexible currency and an ageing population, but cyclical factors are very positive. Leading indicators are also positive, and the problems in Greece practically guarantee that the ECB will remain extremely accommodative even though Germany will require some tapering of QE.  Barring major contagion from Greece, any equity weakness in Europe will represent a buying opportunity.  Real M1 in Europe is growing at 11%, and the collapse in the price of oil means that excess liquidity is surging now and is as high as it was in 2009 and higher than it was in 2004-05.

While investors are worried about the fallout from Greece on the European banking system, we offer the next chart to show that excess liquidity is still extremely positive for European banking stocks.

- See more at: Variant

Different perspectives can be so interesting.

The European financial crisis is not just a Greek problem.  It involves Spain, Italy, Germany, France, Greece and even America and China.

China’s market downfall has been dramatic and painful for the investors involved. But so far there has been little immediate impact on the rest of the world, because China tightly limits foreign investment in mainland stocks.

China’s stock markets are, for the most part, a mom and pop affair—about 80% of the trading that happens in Shanghai and Shenzhen is done by Chinese individuals. They represent at most 14% of the total Chinese population.

But there’s little doubt the effects of this downturn will be felt globally—it just may take some time. After all, Chinese investors have lost more about $3.4 trillion in equity value from the markets mid-June peak until the July 7 close:

And although the government is supporting state-owned companies in the markets, other companies have seen their market value plummet.

As of July 8, about half of the stocks that traded in Shanghai and Shenzhen have voluntarily halted trading indefinitely—which potentially puts the brakes on everything from co

This was the week Greece inched closest to chaos, as a bank holiday and a technical default caused markets around the world to erupt in turmoil. They recovered somewhat Tuesday, and futures looked stronger Wednesday morning, but on Monday, the NASDAQ Composite Index lost 2.4 percent, the Standard & Poor's 500 Index lost 2.09 percent and the Dow Jones Industrial Average fell 1.95 percent. Volatility exploded, as the Chicago Board Options Exchange Volatility Index surged 35 percent, its biggest increase in two years, to 18.85. 

One would imagine that such a scenario might be constructive for gold. It has been called the best measure of fear, the only real currency, a refuge for those who plan for panic. So how is it doing these days? Spot prices were soft on Monday, despite the wild volatility in equities, drifting down a few bucks from about $1,180 an ounce to about $1,176. They fell a few dollars more yesterday, and are soft Wednesday.

I thought gold was an investor’s best friend dur

This article came to me from member Drew and I think it's a name you need on your watch list.  Volume is great and who doesn't love 4x the SPX.   Read on........

A recent article asked the following questions,

1. If you could only own one company in your portfolio, which would it be? Why?

2. If you had $25,000 to invest today on one company and you planned to hold it for 10 years or more, which company would you buy? Why?

For years, my #1 favorite stock in the world has been the Credit Suisse AG - VelocityShares Daily Inverse VIX Short-Term ETN (NASDAQ:XIV). It has returned almost four times the S&P 500 (NYSEARCA:SPY) total returns.

It is my favorite stock in the world... or my favorite security trading on a stock exchange (since it is not, as many will be quick to point out, a stock. It is an exchange traded note).

Other than expected value, what factors impact your investing decisions?

I always ask that question in search of non-economic counterparties. In late 2012, I found that,

Received this SoberLook email from member Ryan and had to chuckle.  Did oil bulls (who are always drooling at the mouth) truly feel OPEC would cut production at some point to satisfy their desire for higher pricing?  Come on.  How much can the U.S.consumer handle with new jobs created at the low end of the scale?  What would happen with $5 gas gasoline?  Carpools would become all the rage here in my locale. At a time when the U.S. consumer needs money to spend, the impact of higher oil would be the last thing we need.

With low oil, the weak will fail and M&A will continue in the crowded space.  Let new technology force cost savings (as we're seeing it every where else) and bring O&G production up to 21st century standards.  I've written about it several times and I think the Saudis knew it was time.

In 2014 the Saudis could no longer accept the loss of crude oil market share as the North American production levels shot up sharply over a three-year period.

Source: Yardeni Researc

In my typical day I read 20+ articles pertaining to the the stock market and investing.  Only occasionally posting one here which stands out in my mind but one yesterday at Sober Look caught my eye.  It's author begins right off the bat with "The United States is not building enough homes to meet the nation's housing demand." and I almost spit out my tea.  Not building enough homes when you compare the aging ones being thrown out versus the new ones being constructed or are we looking at what a consumer can afford to buy?  He is clearly in the camp that we should crank out more housing which would cause prices to drop at some point and suddenly "Joe the Plumber" will move out of his apartment an into a new home.  I simply don't buy that scenario.

Anyone with even a little information on the market knows that the middle class has been hallowed out (and may continue) and guess what?  Those lost jobs, whether lost to technological advances or shipped overseas, are NOT coming back.  Perio

When it comes to where younger Americans get news about politics and government, social media look to be the local TV of the Millennial generation. About six-in-ten online Millennials (61%) report getting political news on Facebook in a given week, a much larger percentage than turn to any other news source, according to a new Pew Research Center analysis. This stands in stark contrast to internet-using Baby Boomers, for whom local TV tops the list of sources for political news at nearly the same reach (60%).

At the same time, Millennials’ relatively low reliance on local TV for political news (37% see news there in a given week) almost mirrors Baby Boomers’ comparatively low reliance on Facebook (39%).

Gen Xers, who bridge the age gap between Millennials (ages 18-33 at the time of the 2014 survey) and Baby Boomers (ages 50-68), also bridge the gap between these news sources. Roughly half (51%) of online Gen Xers get political and government news on Facebook in a given week and about h

When I came across this list of the top 10 Federal contractors, not only were they all defense contractors, it also gave a eyes-glance breakdown of what the U.S. purchases from each.  Nice if you're an investor.  I find it interesting that the F35 has been in production for 14+ years.  Seriously?  By the time we get one that works, it'll be time to fund development of a new one.  From Nationalpriorities:

10. Huntington Ingalls Industries, $4.7 billion.

Huntington Ingalls describes itself as “America’s largest military shipbuilding company.”

9. BAE Systems, $5.0 billion.

BAE Systems traffics in “defence, aerospace and security solutions” (and yes, they are a British company with significant operations in the U.S.), with products ranging from amphibious combat vehicles to “hyper velocity projectiles.”

8.  L-3 Communications Holdings, $5.8 billion.

L-3 bills itself as a “prime contractor in aerospace and national security solutions.”  Its products include explosive detection systems and h

Had to share this monthly chart of crude oil because I am one that has viewed it bearishly since it broke it's 200 month sma; prior support during the financial crisis. (click chart to enlarge)

Blame it on fracking.  Blame it on OPEC.  Blame it in fuel efficient cars.  Blame it on whatever you wish but just because it was bullish for years, does not mean it will always be the same.

Natural gas has been embraced by the U.S. and continues to grow.  Coal is all but dead; being dropped by one country after the next.  There obviously is no U.S. oil shortage (thank you Bakkens) and our dependency on overseas oil becomes less with each passing day.

Yes they have shut down rigs to cut back on the oversupply but (imo) barring any disruption in production, I see this years move in crude oil as nothing more than back-n-fill.  The 200 month is an interesting overhead obstacle.  And that strong U.S. Dollar?  No, that not going to help it either (again barring a disruption).

It's not a bear mark

With all of America's 401k's flowing into equities and with CNBC continually saying bonds are the worst trade around, one has to determine if continuing to buy here is the smartest way to go or take partials, roll up your stops and raise cash rather than buying this top.

Technically the monthly chart shows MACD posed to bear cross although the month is far from over.  The bollinger band is flattening out which does not say to "buy" here but remain cautious and sit on hands.

Here TLT for a quick glance at the monthly and yeah, it's still selling.  Could see a temporary bounce (here or there) but overall, the trend is still down so equities (or cash) it is.

I believe traders are taking profits at this fibonacci extension ahead of the June FOMC meeting and why not.  The 10 year Treasury has been on a move and if the Fed doesn't raise (which most don't think it will) it can return to oversold and ramp up again before September.

QE is over.  I repeat; QE is over.  The market must

It’s time for what is arguably the world’s most influential monthly economic update.  The US economy generated 280,000 new jobs in May, as the world’s largest economy continues to shake off a sluggish first quarter.

The unemployment rate rose slightly to 5.5%. We’ll be rounding up our best charts, as well as the best ones we see from around the web in the lead-up and aftermath of the 8:30 a.m. data release.

Now let's take a look at the winners and losers.  Notice the 253,000 people who previously had no job and were not looking.........that's a big shift if you ask me.  One to the bullish side.  They're up off of Mommy's couch (finally).

A look by sector breaks it down.

A big gainer? Healthcare no doubt.  One has to wonder how many in Congress, attempting to repeal Obamacare, have "this" in the back of their minds.....or "should".

The new loser making a new low.........manufacturing.

Now for some historical perspective.  We're still getting there..........

And again we

According to The Economist, in May 19th official statisticians announced that Britain entered deflation in April, with consumer prices standing 0.1% lower than a year earlier. It is first time since 1960 that annual inflation has been negative. Back then, prices pepped up again quickly. The Bank of England expects a similar rebound this time, on the basis that the recent fall in the price of food and fuel will be a one-off. But for inflation to return to the bank’s 2% target, sustained growth in wages is necessary. That means the bank is keeping a close eye on inflation expectations; if Britons start accepting lower pay rises on account of stagnant prices, deflation could persist.

Here in the U.S. fears of deflation still linger with strength in the U.S. Dollar continuing to quash any strong moves in commodities.  We've discussed it a few times before here and here. Tomorrow's GDP and PMI will be watched closely.  At least it won't be a boring Friday morning.

For the week ending May 24, 23% of Americans said the economy is excellent or good while 29% said it is poor, resulting in a current conditions score of -6. The economic outlook score of -11 is the result of 42% of Americans saying the economy is getting better and 53% saying it is getting worse.

Well this chart from Gallup certainly makes one wonder. Where will the U.S. see growth?  We need a catlyst......

Saw this and had to share it because clearly, there are enormous masses out there that just are not feeling giddy over the economic "recovery".  Trickle down effect?  Yeah, o.k.   Sure, the stock market is enjoying all time new highs but is the economy truly humming along?  The numbers show obviously not for the majority.  Bribe your kids.  Do whatever it takes.  They'll need it later, even more than they need it today.

From Ritholtz:

The economy is, in a word, “lumpy.” It is strong in some regions, anemic in others. Strength by economic sector varies widely. There are myriad reasons for this: Some parts of the country were much harder hit by the real estate collapse; some sectors naturally rebound more quickly; some innovations lend themselves to more rapid growth.

The kind of recovery that you personally are experiencing is highly dependent upon many factors, but today I want to focus on three: education, market sector and geography. The data suggest these elements matter a great dea

From BofAML's latest Global Fund Manager Survey: more than 50% of investors now expect Fed to lift off in Q3 or later.  Courtesy of MatthewB

Obviously June seems off the table.  Markets however, tend to bake in any moves long beforehand therefore remain long and accumulate banks and if you haven't already, lighten up on the utilities.  There's still money to be had; just in the right areas.

The numbers are in on 2014 CEO compensation, and as the old Seinfeld joke goes, they are real and they are spectacular. CEO pay is also controversial as the income gap widens in America.

The average S&P 500 company CEO made 373 times the salary of the average production and non-supervisory worker in 2014, up from 331 times in 2013, according to the AFL-CIO.

Why is CEO pay rising sharply, and how are CEO pay packages structured to maximize executive compensation? Here are the basics you need to know to understand the big numbers behind the CEO headlines.

1. How much do CEOs get paid?

The average pay package last year was $22.6 million, up from $20.7 million in 2013, according to an analysis of companies' proxy disclosures by executive-compensation data firm Equilar.

The average gain in total compensation for the 200 highest-paid U.S. CEOs worked out to 9.1 percent last year. That handily thrashed the 2.4 percent economic growth and meager increase in personal income that other American