• For most of us, Tuesday will simply mark the first day of October or perhaps the start of the fourth quarter. But in Washington, October 1st is New Year's Day, as in fiscal new year, and once again, the federal government looks like it's going to be late to the party. This as lawmakers haggle and horse-trade down to the final minute, risking the closure of non-essential government offices, in hopes of securing the best possible political outcome for themselves.

    While the President, the chairman of the Federal Reserve and many others are warning that such a closure would hurt an already fledgling economic recovery, not everyone agrees.

    "I don't think shutting down the government can do any more destruction than a lot of what government actually does right now," says Jonathan Hoenig of CapitalistPig.com, in the attached video. "Anything that can be done to slow the size and scope of government is ultimately a beneficial thing for the bottom line."

    Related: 12 Ways A Government Shut-down Would Effect You

    For the record, Hoenig says he doesn't want the government to "grind to a halt" but if it does, it'll be fine with him presuming we get something beneficial out of it.

    "I am from the school that says if it wins us a longer term victory in terms of keeping this country more free, more capitalist, that's a beneficial result," he says.

    Read More »from The Upside to a Closed Government
  • Having just issued three press releases in two day, the media relations department at J.C. Penney (JCP) is arguably the ailing department store's most functional division. The latest announcement from Plano, Texas shows that an unexpected secondary offering of 84-million shares was priced at $9.65 per share, which was also below the market price at the time it was announced.

    While the stock sale will net the company close to a billion dollars that it can use for general corporate purposes, it also dilutes the stock by at least one-third, and sent it plunging to levels last seen since the '80s.

    Related: J.C. Penney Shares Whipsaw as Debt Concerns Grow

    "It's exactly why you never want to catch these falling knives," says Jonathan Hoenig of CapitalistPig.com in the attached video. "Just when you think a weak stock can't go any lower, it does, time and time again."

    The point is, if you're thinking about getting in early on the comeback story of the year, Hoenig says don't do it and points to all the bottom fishers over the last five years who have lost money doing exactly the same thing.

    Read More »from J.C. Penney’s Biggest Sale Ever Must Be Avoided at All Costs! Warns Hoenig
  • Obama administration officials are expected to propose roughly $300 million in aid to Detroit later today. It’s a paltry amount for largest U.S. city to ever declare bankruptcy and comes nowhere near the $18.5 billion of debt obligations Detroit has on its books.

    This latest cash infusion is being made by a motley assortment of federal, state and private foundations and is ear-marked for improvements to the transit system and “blight improvements.”

    Investing in transit while demolishing vacant buildings nicely encapsulates the process of “creative destruction” at work in Motown. At 138,000 square miles Detroit is a massive, increasingly desolate place. Over the last 60 years the population has dropped more than 60% from 1.85 million in 1950 to 700,000 today. It’s the kind of city where gorgeous buildings are stuck in desolate, dangerous locations.

    One of the people in charge of saving Detroit is Michigan Governor Rick Snyder. A Michigan native who built a net worth in the vicinity of $200 million as a Gateway executive and venture capitalist, Snyder is a self-described “nerd” with a pragmatic, tech-friendly approaching to remaking the city.

    Speaking to Breakout from a packed tech conference last week, Snyder insists Detroit is already on the mend. “This isn’t about starting from scratch,” Snyder insists, “It’s already been going for several years.”

    Read More »from How Gov. Rick Snyder Plans to Save Detroit
  • If you're going to dance among the hedge fund elephants you better be nimble. That's the basic thinking of Allstartcharts.com and founder of Eagle Bay Capital J.C. Parets as he tries to make money for his clients by trading shares of Herbalife (HLF).

    A quick refresher course on Herbalife might be in order. Last December billionaire investor Bill Ackman announced he was shorting the shares of nutritional supplement (?) company Herbalife. Ackman maintains the company is a pyramid scheme and believes the stock will go to zero. Putting his money where his mouth is, Ackman announced that he was short 20% of HLF's float and wouldn't cover a single share.

    Ackman has plenty of enemies on Wall Street and they were quick to pounce. Among those enemies is billionaire Carl Ichan who famously went on CNBC and suggested Ackman was exposing himself to "the mother of all short squeezes." With Ackman sitting on so many shares on the short side, Icahn and other Wall Street "whales" pounced, buying up Herbalife shares and "squeezing" Herbalife higher while Ackman squirmed.

    Whether or not Herbalife is corrupt is debatable. For Parets what matters is that all those buyers create an upward pressure on the shares. As a technical trader Parets is indifferent to the fundamentals. "They sell vitamins?" he scoffs in the attached video. "Who cares what it is. It's a stock."

    Read More »from Herbalife: Monster Short Squeeze Coming Soon, Says Chartist

Pagination

(2,719 Stories)

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