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Bond-Buying Chaos Is Spinning Out of Control


A few weeks ago, the man formerly known as the Bond King, Bill Gross, tweeted that shorting German bunds would be the trade of the century.

I was gratified to see that he was reading my mind, as readers of my Credit Strategist newsletter already know.

As a result of a massive bond-buying program by the European Central Bank (ECB), the yields not only on German bunds but on all European debt had plunged to ridiculously low levels.

Here's what you need to know...

European Central Bank QE Is Masking Eurozone Struggles

European Central Bank QE

The European Central Bank quantitative easing regime is officially in full swing.

European Central Bank data released last Friday indicated as much. The sovereign bond-buying program began March 9. And in just two weeks, Eurozone central banks had already purchased 26.3 billion euros. This is all while economic indicators seem to point toward a recovery.

This market optimism is all unwarranted. Here's why the Eurozone is still in trouble, and why QE won't fix anything...

Earn 6% When Others Are Losing Money


We're living in crazy economic times.

The race to debase and stimulate has taken us into uncharted financial waters.

Zero interest rate policies (ZIRP) are being replaced with negative interest rate policies (NIRP).

It's an upside-down banking environment that presents some serious challenges.

But investors who are willing to get just a little creative can profit nicely, even as others lose money that just sits there.

And, even better, the shares are trading at an 8% discount now...

Google's New "Euro Plan" Could Boost Shares by 50%
(or More)

Puzzle 200px

Google Inc.'s (Nasdaq: GOOG) plan to merge its European operations might look like a defensive pullback, but it's really a potential buying opportunity. In fact, Money Morning's Defense and Tech Specialist Michael Robinson thinks the stock could soar 50% over the next three and a half years.

The search giant said on February 25 that it would merge its two European divisions.

It's Not Time to Sell Everything… Yet

The Fed One of my favorite lines is "I'm not the kind of guy to say I told you so – but if I was, I'd sure be saying it now." As far as saying "I told you so," back in the summer of 2008, in my "Friday Night Illumination" emails to my banker and trader friends, […]

Read More…

Why the European Central Bank's Massive Economic Experiment Will Fail

Eurozone conflict

Last week, the European Central Bank's turn finally came to announce large scale quantitative easing.

As the continent witnesses a battle between deflation and attempts at inflation, will it finally be enough?

Europe is following in the footsteps of the United States, hoping for similar "successful" results.

Instead, it's likely to fall somewhere between the U.S. and Japan.

From the Land of the Rising Sun there is precedent, but it's a forewarning.

Here's the story...

ECB QE Points to These Profit Plays


ECB QE and EU LTRO for Dummies: As soon as you read this explanation, comprehensible to even the dumbest of the dumb, you'll be set to trade initials.

We made 382% gains trading these initials. And there's more: Once we closed out, we re-entered.. and now we're up 180%.

Here's how to make real, easy money from the world's biggest economic experiment...

"Super Mario" Draghi's QE in One Photo


The European Central Bank (ECB) took a dramatic policy leap Thursday morning...
ECB President Mario Draghi launched a quantitative easing program (QE) that will pump hundreds of billions into Europe's economy.

Here's just what that means (and how it looks)...

Swiss National Bank vs. ECB: The Best and Worst of Central Banking

swiss national bank

The Swiss National Bank's three-year old franc-euro peg is no longer.

Yesterday (Thursday), the Swiss National Bank decoupled its fixed 1.2 CHF/€ exchange rate. This was on expectations that the European Central Bank will announce a quantitative easing policy in next week's meeting.

Here's why the Swiss abandoned the peg...

Desperation in the Eurozone Is a Profit Play for Us

Eurozone conflict

On September 4, the European Central Bank lowered the interest rate on its main refinancing operations by 10 basis points to 0.05%. In addition, the interest rate on its marginal lending facility was reduced by 10 basis points to 0.30% and the interest rate on its deposit facility was reduced by 10 basis points as well to -0.20%.

These rate cuts came as a bit of a surprise to the markets since only three months ago the central bank cut interest rates and was waiting for these cuts to stimulate economic growth.

Unfortunately, growth has slowed rather than jumped since then...

Read More…

TSLA, ECB Dominate Stock Market News Today

stock market new today

Stock market news today, September 4, 2014: U.S. stock futures were up this morning (Thursday) following a mixed trading session in the stock market Wednesday. Apple Inc. (Nasdaq: AAPL) - which accounts for nearly 9% of the Nasdaq - slumped 4.22% yesterday after a possible breach of its iCloud. As a result, the Nasdaq slipped 0.56% (25.62 points).

Here’s a list of the top stock market news for Thursday…

Stock Market Today Will Move on GDP Numbers and Eurozone QE Talk

Stock Market Today

Stock market today, August 28, 2014: This morning, the U.S. Commerce Department revised second-quarter GDP upward to 4.2% growth, while jobless claims slipped to 298,000 for last week.
Last week, European Central Bank President Mario Draghi affirmed his commitments to Eurozone QE. Despite the optimism, many analysts remain divided on whether the ECB will act as soon as next week or wait until some point in the fall.

Here’s what you should know to make your Wednesday profitable…

Silver Price Today Cushioned by Solid Demand

silver price today

The silver price today moved solidly higher in morning trading following some positive economic data out of China.

July Comex silver traded up $0.392, or 1.26%, at $19.73, after the preliminary HSBC China manufacturing purchasing managers index (PMI) for May came in at 49.7. That was up from 48.1 in April, and was the best reading in five months.

Here’s what’s next for the price of silver…

European Central Bank Does Nothing – But Markets React in Big Way

"Maybe next year..." was basically the message sent today (Thursday) from the European Central Bank (ECB).

The European Central Bank left interest rates unchanged despite slightly lowering its outlook for the ailing Eurozone economy for the remainder of 2013. But, it sees a gradual recovery in 2014.

The ECB forecasts Eurozone GDP will contract by 0.6% this year, down from its March projection of 0.5%. However, it modified its 2014 estimates, predicting a return to growth at a rate of 1.1%.

"Euro-area economic activity should stabilize and recover on the course of the year albeit at a subdued pace," ECB President Mario Draghi said at a news conference.

The region has been stuck in recessionary mode for six consecutive quarters. But Draghi cited improving economic data in May as reasons for not taking immediate action.

"But we stand ready to act, and we will continue to monitor closely all incoming data," Draghi said at a news conference. He added the ECB would remain "accommodative" for as long as necessary.

Draghi also staunchly defended the ECB's actions, saying the bank's outright monetary transactions launched last year were "probably the most successfully monetary policy measure undertaken in recent times."

Draghi said the policy had no negative affect on markets.

"The ECB hasn't done anything to increase volatility in the markets," Draghi said. "If you think the ECB has done anything comparable to other central banks, we wouldn't agree."

After today's ECB briefing, the Stoxx Europe 600 Index fell 0.4% to 294.04, setting it on pace to close at the lowest level since late April. Banks suffered some of the steepest losses.

European bond yields plunged the most in three months, with Portugal taking the worst hit.

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Why the ECB's Plan Can't Save Europe

So, Thursday was a big deal. Did you get that?

Markets rallied around the globe, especially European markets and U.S. markets.

But did you get what really happened?

I know you saw the rally, and I'm sure it lifted your spirits. It lifted mine for about a day - that is, until I lifted up the ECB's skirt to see if their provocative language would leave Europe's knickers in a twist or not.

If you're not the kind of person to look at such intimate things too closely, don't worry. I love all that stuff and am driven to know how all the bits and pieces come together or apart. So, I'll tell you what I saw up there.

Europe's knickers certainly are twisted. So much so that if an ill wind blows, everyone is going to see the naked truth.

Let me show you what I mean...

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