The Stock Room page 12

(Continued from page 11)

                I guess you’ve been watching the recent batch of earnings reports. Really everyone, it hasn’t been all that bad. While not so far the best earnings’ season, many companies have beat on their earnings. However, some of them did have lower revenues as estimated by anal_ysts, even though their earnings increased. Not a great thing, but still no reason to dig shelters and wait for the end to come. Unfortunately, the CNBC crazies got the short hedgies adrenalin up and the 200 point drop on Friday was the result. Insanity!

                What was the rationalization this time? No profits? Increased costs? The overwhelming reasoning that the world is ending this time is that: No matter how good the earnings are, if the company even slightly missed the revenue estimates by anal_ysts… well, then everything sucks and we all must await the 2nd coming. But what was the reasoning for these minor revenue shortfalls, even when profits increased?

                Revenues are basically sales, and the more you sell the more revenue you make. Well duh! However, most larger multi-national companies do their sales overseas and are paid in whatever that country’s corresponding currency is. Having a long detailed conversation on currency conversions and valuations is not that important right now. Just understand in very simplistic terms… that as the difference in values between countries currencies fluctuate, so will the revenues received even if the SAME amount of items are sold valued in U.S. currency. Why these currency valuations fluctuate is just a total speculated, manipulated, political, contrived event. I couldn’t even begin to explain it, even if I understood it myself. Currency traders do the voodoo that they do and bam >>> we get fluctuations on a weekly – daily – hourly – and now with SkyNet nano-second basis.

                Nothing new here. The legitimate and sane people in the currency arena have called, no begged to get it to stop. Forex brokers back HFT clampdown - FT But like in all other arenas, the regulators are doing squat! So what happens and how the heck does this affect earnings reports – revenues – and cause a 200 point 1-day drop in the Dow? Simple really:

As currencies are manipulated the corresponding amounts of revenues fluctuates.

                Starting in the spring, #HFT currency traders have been driving the value of the U.S. dollar way up and this caused foreign currencies to drop like a rock. As the foreign values dropped… so does the value of the sales and revenues of U.S. companies. SHORT-term greed by #HFT traders/traitors are screwing us all again. How can any company focus on what is their true business when they have to spend so much time and resources keeping track of SkyNet’s antics. Even when U.S. companies sell what they say they will sell and in $U.S. dollars they can cost in, #HFT’s are nano-trading currencies and destroying any sense of reason.

                Finally some in the media are realizing this, but I pray it’s not too late to save this earnings season. “I hope it’s not too late. Turn… turn… turn!”

Stocks That Could Feel Currency Whiplash 19 Oct 2012

                What companies seem to be forced into is  wasting time and resources on controlling something that even the Forex experts can’t do! What a waste!

                So, as we digest this current quarter’s results, please try not to panic when a company misses ever so slightly in their revenues. Sure if something misses and they warn of pending doom… then sell the crap. Otherwise, let’s all try not to undermine what little confidence and enthusiasm that exists.

                “It’s The Mentality Stupid!” and please let’s not let SHORT-term thinking and trading destroy it all.

                I’m not sure how to do it, but a better way to report earnings & revenues without all these fluctuations is needed. Right now the system is prone to disaster.

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apppro’s take for 10/13/2012 10:00 am EST

#HFT is just a Symptom – NOT the disease!

Question: There has been a lot of HFT talk lately both in the media and even in Washington. Basically both useless, but we’re not going there right now. What we ALL need to ask is WHY? Why hasn’t any of the talking and pontificating and bullshitting done anything to stop it or to rein it in or to even understand it?

Answer: The answer is more direct and easier to grasp then most want to acknowledge. High frequency trading is not the problem; it is just an outshoot of the real issue – SHORT-TERM THINKING and thusly SHORT-term trading. “It’s The Mentality Stupid!”

                This SHORT-term thinking has caused us MUCH PAIN over the past several years. Instead of looking towards growth and planning for our future, all we seem to do is trade away our prosperity and look to extort penance from easy targets. We really cannot justify this any longer. All the rationalizations and would be justifications SHOULD NO LONGER BE ALLOWED to enter into our conversations.

                Here’s just another example of this: The infamous London whale trade of JPM. Please, everyone go back and review my articles on this. Say what you must, BUT it all comes back to the SHORT-term thinking of Mark-To-Market M2M that started our mess back in October 2007.

apppro’s take for 05/13/2012 07:30 am EST

“Whiter Shade of Pale” The story of JPM and the Lehman’s Principle

apppro’s take for 07/14/2012 11:30 am EST

The Whale’s Ahab: Mark-to-Market Strikes Again!

                Yesterday, JPM released earnings. During the conference call it became clear that what was left of the Whale trade may NOW EVEN SHOW A PROFIT! Yes, it may lose more, BUT it also may not! Hence the issue with M2M and the original Lehman’s Principle. This is the disease – the SHORT-term thinking that creates the issues and does NOT address the underlying symptoms.

JPMorgan Chase's CEO Discusses Q3 2012 Results - Earnings Call Transcript - Seeking Alpha

 

Jim Mitchell - Buckingham Research

Good morning. Two questions, one on what’s left of what you’d transferred. You closed out positions in CIO and transferred the rest to the Investment Bank. Can you give us any update on your thoughts on when that could be completely exited? And any other indications of size or impact in the quarter would be great.

Doug Braunstein

Last time we gave you some measures of CS01, VaR, RWA and a couple of stress tests. We said extreme stress 800 to 1.6 billion. That was July 13. Almost any measure you look at of risk would be down 20%, 30% or 40%. Certain risks are down 40%. Certain risks are down 30%, certain 20%. And the stress risk in addition is down by that amount. The folks are doing a great job managing it. It had a modest loss this quarter. We feel completely comfortable with it. It obviously can lose money. It can also make money. And we always said we hope at the end of the year it’s a non-issue we don’t have to talk about anymore. We’re still on track for that.

 

                What to do? Easy as I’ve always said >> “Get them where it hurts – their wallets!”

STOP the INSANITY NOW!

The 5 Golden Rules

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apppro’s take for 10/08/2012 05:00 pm EST

#HFT Mysterious “Vacuuming” Algorithms

                Great Article about an issue I’ve been screaming about.

Mysterious Algorithm Was 4% of Trading Activity Last Week

Published: Monday, 8 Oct 2012 | 4:27 PM ET

By: John Melloy

                The PROOF that some were looking for on my “Vacuuming” of bids thesis (see apppro’s take for 08/21/2012 06:00 pm EST) seems to be in this article. READ IT! With this election and all the tax BS let me scream out “It’s The Mentality Stupid!” and all this SHORT-term trading & thinking (Of which #HFT is King.) is killing us all.

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apppro’s take for 09/30/2012 09:00 am EST

“The Defiant Ones” vs. “The Entitled Ones”

The Defiant Ones (1958) http://www.imdb.com/title/tt0051525/

The Entitled Ones (2012) http://www.youtube.com/watch?v=tpAOwJvTOio                        

The Sane Ones (2012) http://www.youtube.com/watch?v=-fLOEiiBTss

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apppro’s take for 09/23/2012 09:00 am EST

The HFT Royal Flush

                Exactly which flush are we talking about here? Probably a combination of both, because the SHORT-term gambling away of our Nation’s resources & prosperity sure is the same as just flushing it down the toilet!

                Over the past week your beloved idiots in D.C. decided to have another farcical Senate hearing on HFT traitors. HFT in the Hot Seat If you watched any of it I’m sure it reminded you of the same Senate Committee’s hearing with the ‘Gang of Five’ right after the collapse of our entire financial system in 2008. A joke then and a joke now, too! EXCEPT IT’S NOT FUNNY! Let’s sing the Gang of 5’s theme song: No… no… no… it ain’t me babe! It ain’t me you’re looking for … babe!”

                Over the past few weeks, I too have had inspirational musings on several Mini-Flashes, especially in the commodity and VIX markets. “Volatility is not an asset. Soup is not a meal.”  But since you never listen to me, maybe you will listen to Bart Chilton the head of the CFTC.

 Bart on HFT in oil markets.

                OK people, you just don’t listen. Every time I ask the question, “What have we learned?” I just keep coming up with the same damn answer. You would think after 4 years of the worst recovery ever we would have understood what is truly going on here! But alas… NO! Again, if you want to stop this crap implement my 5 Golden Rules & STOP the INSANITY NOW! GET THEM WHERE IT HURTS – THEIR WALLETS!

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apppro’s take for 09/17/2012 03:00 pm EST

Monday, Monday

“Monday, Monday can’t trust that day.

Monday, Monday it just turns out that way!”

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apppro’s take for 09/12/2012 08:00 am EST

Coincidence or Karma?

Tehran or Cairo?
Iran or Egypt?

(Continued on page 13)

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