Hedge Fund LIVE - An Interactive Trading Community
New to Hedge Fund LIVE?

Category Archives: Economy

Middle Class: The Shattering of “The American Dream”?

HedgeFundLive.com -

Inequality comes in many fashions. Currently there is a growing disparity between the rich and the middle class. As we hear the statistics that, about 20% of Americans make up about 85% of the wealth. Do we consider what is going on with the other 80% of Americans? They earn less than $100,000 annually. According to data used from Census Bureau, as of 2009 45.3% of them earn between $35,000 and $99,999 annually.

They are the true workhorses of the American economy. Compromised of laborers, teachers, firemen, and retail managers to name a few.

American Dream fades away

These are the people who help keep our country running. Without them we would not be able to maintain our title of “Super Power.” Unfortunately, there is a tight grip being placed on the middle class. Shattering hopes of living the “American Dream” by inflation.

Too many numbers , not enough jobs

Using data compiled from the Census Bureau. I found that from 2000 to 2009 the average median income grew 18.7%. In that time, gasoline prices rose by 35% and new home values by 23%. If the “American Dream” consists of owning a home and a car, average median salary does not keep up the pace.

With the “American Dream” growing further from the grasp of the middle class. I pose this question. Is this a case of economic inequality or an inflation war against the middle class?

Tune into my live broadcast on hedgefundlive.com , pick the Day Trade Well channel and get connected

6 Reactions to Qaddaffi and Current Libyan events


As our office sat and listened to Gadaffi’s live speech on the CNN LIVE channel today, it was pointed out that stations such as Bloomberg and CNBC (who are usually very current with Breaking News) were not reporting on it. Why?

Muammar Gaddafi

It seems as if technology, entertainment and pop-culture take some precedence over non-US events relating directly or indirectly to the stock market, nowadays. And with no help from media and news stations, which are responsible for driving a lot of American thoughts, people - especially young adults- may not realize the importance of World Events such as this until it is too late.

Below are my 6 interpretations of the average American’s reaction to the recent Quadaffi/Libyan events:

  1. Uhhh…Ka-Daf-fi?…Didn’t he shut down access to Facebook and Twitter in Egypt? I thought he’s already agreed to step down from office in September?
  2. I want to follow the news, but wish I knew the proper spelling of Gaddaffi’s name to type into Goggle search on my iPad. Is it Khaddafy, Qadaffi, or Gadhafi….?? How important can he really be if reporters don’t spell his name right? By the way, do you think he knows when the iPad 2 is coming out?
  3. My favorite basketball player, Carmelo Anthony, just got signed by the Knicks, for God’s sake! Why should I care about some damn foreign Tyrant!
  4. Justin Beiber’s new haircut and pop-culture is far more important than world events. Did you hear about how he surprised his girlfriend by filling her entire apartment with fresh flowers? It wasn’t even done as an apology for something he’d done wrong or a gift for Valentine’s day! Isn’t he sweet! Where’s my remote? I think I DVR’ed the Grammy’s.
  5. You want MY thoughts on the Italian Stock Exchange closing today and Rising Oil Prices?!?!..Who cares?..I’m NOT Italian! I’m not going to Italy any time soon! AND I drive a HYBRID…that’ll show all you suckers!

    Justin Bieber and Marc Schwartz have recently cut their hair, not together but similar Cuts

  6. As though we don’t have enough going on in this country, now we have to focus on more negative news in outside countries?!?!…Where’s Justin Beiber when you need him?

Tune in for my live broadcast at HedgeFundLive.com , just pick a channel and get connected

10 Craziest Kim Jong Il Moments (part 2) - Brought to you by Hedge Fund LIVE’s Lester Green, the same author of 10 Craziest Gaddafi Moments/Eccentricities

HedgeFundLIVE.com -

Hedge Fund Live - Kim Jong Il doesn't shit or piss. He transcends it.

1)  The Messiah - Every textbook in North Korea is Kim-centric and  few notes stand out the most.

One, children are taught that, when Kim was born spring suddenly broke out and a shower of rainbows instantly appeared in the sky.

And two, children are taught that Kim does not produce urine or feces like a regular human. He transcends that.

2) Brilliant Ideas  - In 2006, Kim finds out that there’s a guy in Germany who breeds giant rabbits. Seriously huge rabbits. Like, rabbits the size of dogs.  Kim soon becomes obsessed  with the rabbits and figures they are the answer to his country’s hunger problems.

Hedge Fund Live - Kim Jong Il's answer to North Korea's Hunger Problems.

Kim reaches out to Karl Szmolinsky of Berlin, the world’s foremost breeder of giant rabbits, and says he wants Szmolinsky to come to Pyongyang and set up a farm to breed these rabbits. For Kim believes that the meat yielded by these rabbits will end his people’s starvation.

Szmolinsky tells Kim this is, quite frankly, the dumbest idea possible. These rabbits only yield about 15 pounds of meat and they have huge appetites so they eat way more than that in carrots, potatoes and other vegetables. If anything, breeding giant rabbits would make the North Korea hunger situation even worse.

Kim, of course pays for 12 rabbits, at a cost of about $115 each. He tells Szmolinsky that the rabbits will be kept at a petting zoo in Pyongyang and, in a few months, Szmolinsky will be flown in to help really set up a farm for breeding.

In February of 2007, about five or six months later, Szmolinsky gets a call from a North Korean official canceling that trip. Why? Because, Szmolinsky believes, Kim couldn’t resist… and ate the giant rabbits to celebrate his birthday.

Hedge Fund Live - Tiger Who?!

3)  Tiger who? - In 1994, North Korea opened their  first golf course was opened and Kim decided to play. He’d never golfed before, but he found it pretty easy.

In his first-ever round of golf, he shot a world-record 38 under par… including another world record 11 holes-in-one! And even though all 17 of his bodyguards were eyewitnesses and swear they saw that go down, for some reason, the people at “Guinness” fail to recognize either record.

According to North Korea’s media Kim decided to retire from golf forever, lest he ruin it for us mortals.

4)  Hennessy - Kim becomes the world’s largest buyer of Hennessy. Much like LL Cool J, The Luniz and Oscar Schindler, Kim Jong-Il loves tippin’ some Hennessy. So he imports approximately $750,000 worth of it every year.  *The average member of the North Korean proletariat makes about $900 a year, by the way.

Hedge Fund Live - Kim Jong Il's $750,000 per year habit.

5)  Sorry Mr. President but their is no smoking in North Korea.

This is fantastic.  Kim makes sure he never gets addicted, or quits alone.  On doctor’s orders, Kim was told to give up smoking. So he did. And, at the same time, he decided to make every single other North Korean quit.

*  By the way, if you’re looking to quit smoking, move to North Korea, there penalty for smoking is death for you and your family.

6)  Losers - The Dear Leader bans the World Cup from being shown in North Korea unless of course North Korea wins.

Hedge Fund Live - Obama smokes to relieve stress.

7) Cars, Beers, and Hookers - Kim imports German cars, Czech beer, Uzbekistani caviar and Swedish prostitutes. Millions of North Koreans have died from starvation under Kim’s rule.

But he’s not really concerned with that. He’s using the country’s money wisely. Like importing $20 million worth of Mercedes, sending his personal chef to the Czech Republic to buy beer, sending his staff to Uzbekistan and Iran to get caviar, and importing a non-stop stream of white, blond Swedish prostitutes to have sex with him and his friends.

8) The Fear of Old Age - Kim injects himslef with the blood of virgins to stay young.

9)  A Prefectionist - Kim hires a staff to inspect his rice, to make sure each piece is the same size. In possibly the biggest example of his OCD, Kim apparently hates eating rice if every grain isn’t uniform in length, plumpness and color. So he hires a staff of women to go through each and every grain of rice before it enters his palace’s kitchen, making sure each piece meets Kim’s standard.

Hedge Fund Live - North Korea Soccer Team enjoying a Victory.

10)  George Costanza - Kim loathes his height so much that he attempts to rid the capital of short people. Kim Jong-Il is only 5-foot-3. He hates this fact. He wears elevator shoes to hide it. He reveres people who are taller Apparently, when Secretary of State Madeline Albright visited North Korea, she brought him a Michael Jordan autographed basketball, which instantly became his prized possession.

Hedge Fund Live - Kim Jong Il sports the lifts.

In fact, Kim hates his height so much that he decided to fix the problem of North Korean shortness back in 1989.   Kim was still seething over the success of Seoul, South Korea, hosting the Olympics the year before. So he created the World Festival of Youth and Students, an event and spectacle intended to outdo and embarrass the Olympics.

In advance of the Festival, Kim had pamphlets distributed in Pyongyang, describing a wonder drug that would make short people grow taller.

When people responded to the pamphlet, though, they quickly learned there was no wonder drug… it was Kim’s way of flushing out the shortest members of society (besides him, of course), so he could round them up and have them sent away to different uninhabited islands in an attempt to end their substandard genes from repeating in a new generation.

Check Out our live broadcast , Monday Through Friday at HedgeFundLive.com, just pick a channel.


Morning Recap: Unrest in Libya Continues, Just A Question of When

Morning Notes

- Not much has changed on the Libya front overnight and global markets are net down small
- Libya’s Interior Minister quit to join protestors; reports that Libyan Justice Minister + one of Gaddafi’s sons’ senior aide resigned as a result of objection over violence
- Now a question of when the Libyan state will collapse
- Biggest concern/risk appears to be whether the turmoil will spread into Saudi Arabia and other major oil producing nations in the Middle East
- Oil is up again today, though it has not made a higher high from yday
- China’s Shanghai Comp was actually up in the overnight
- Nikkei closed down 80bps- Japanese yen advanced
- Hong Kong GDP came in better than expected (+6.2% y/y), but Hang Seng closed down 40bps
- European bourses down this morning
- HPQ’s weak earnings last night has added negative tone in the pre
- BOE minutes were out- some notes include a 6-3 vote to keep rates unch’d, which marks another vote in favor of a rate hike from BOE’s last meeting
- BOE minutes helped boost the pound
- On economic calendar for today: Existing Home Sales at 10a; 5 yr note auction results at 1p
- Despite the ugly sell off yesterday, Spooz are currently up 3 handles from FV ahead of the open

What do Chinese migrant workers do after they “retire” young

Here’s something we all know: China has a large population of migrant workers, who left their villages and traditional ways of life, adventured into eastern provinces, and became factory workers or waitresses. As a whole they are pretty young, as their jobs require. When they get a little older, like 32,   a lot of them are forced to “retire” from those jobs because even younger workers pour in.

So the question is: what do those former migrant workers do after they lose their jobs? They are actually still very young, in their early 30s. Their families have been depending on their city wages. It’s hard for them to settle in the city because they don’t have city “hukou” and they can’t find stable physical jobs anymore. If they go back to villages, there are no enough agriculture work for them. Plus they don’t want to go back.

I did some research and here’s what I found:  A lot of them became Taobao Sellers. Taobao(淘宝), meaning “Searching for treasure” in Chinese, is the dominant C2C site in China, with millions of virtual shops, owned by Alibaba. It seems that a lot of these retired workers did well on Taobao too. They don’t need to speak perfect mandarin or have good local connections(which are city folks’ competitive advantage in city jobs).  Taobao provided them a great way to keep what they have today and keep progressing. The benefit is they don’t need to stay in cities to do this. They can go back to a small town and be as good a seller as someone in a big city. And that’s the right direction of urbanization.

Thoughts on an overbought market

I think the fact that equities slid today on all the major indices is an indication that the market is vastly overbought.  I don’t think the fundamental can back up the quick rebound from the lows of the financial crisis.  The mortgage and home market is still very weak and this goes hand-in-hand with the weakness in the job market.

It is clear that QE2 and vast government intervention is creating a mirage that equity holders are happy about because it creates the illusion that the worst of the crisis is behind us.  Yet, I personally believe that these actions of trying to stimulate the economy has only delayed the recovery period and tried to speed up the business cycle so that the American public and the world economy think we are home free and in the growth stage of the business cycle.

This is not to say that we are all doomed and we are definitely headed towards a major double dip (going as low as March 2009), but I do think that there will be a major reversal in confidence, and it all comes down to government spending.  When QE2 stops and equity holders realize that the fun can’t go on any longer, there will be a sell off.  When the government stops spending like crazy and actually reforms the budget via tax increases and/or spending cuts to major program, there will be a sell off.  When rates increase in the U.S. as they are certain to (because they are at their lower limit), there will be a sell off.

Going back to my original point…the fact that a shake up in the Middle East can send equities down is just one sign that the market is extremely vulnerable and prone to quick reversals.  I don’t think the joy ride in US equity is going to last forever.

Gaddafi speaks live on libyan TV

Just in case you missed it, here is a video from Qadaffi’s speech on Libyan TV today spoken from behind a podium in the entrance of his bombed-out Tripoli residence hit by U.S. airstrikes in the 1980s.

I’ve included a link to the video, as the embed code was disabled for unknown reasons.

Take note of as the camera occasionally pans back to show a towering monument of a gold-colored fist crushing an American fighter jet, outside of the un-repaired building.

Here are some other relating videos:

Saif al-Islam Gaddafi Addresses the Nation 1 of 3, 20/02/2011

ANN NEWS :: Libya 1/17/2011 Riots and Protests - iReport

Here’s Interesting Music Video

[LIBYA] Libyan Protests (February 17 2011)

Oil Supply Threatened- Finally Middle East Protests Pull Down Markets

Morning Notes

- Unrest in Middle East has been enough to push down markets
- Libya threatens to cut off oil supply in its entirety should protests continue; hence, oil and oil stocks are up notably
- Several major oil producers have suspended ops in Libya due to the turmoil there
- Inflation concerns in China as a result of potential oil restriction
- Shanghai Comp down 2.6% while Hang Seng closed down 2.1%
- Japan’s outlook cut to negative from stable at Moody’s
- Yen has weakened, yet Nikkei closed down 1.8%
- There was an earthquake in New Zealand (6.3 magnitude)
- Dollar, gold, bonds are seeing a lift- flight to safety plays
- On economic calendar for today: Case Shiller out at 9a; CB Consumer Confidence at 10a
- S&P futures are down 16 handles from FV ahead of the open

The Villains: Investment Bankers

Interesting blog I came across today about “The US Today: What Happens When You Let Investment Bankers Run a Country.”  The issue?  At most major U.S. companies, the risk of capitalism that is failure has been removed at the expense of increasing our country’s debt load.

And who have been a driving force behind it all?  Investment bankers.  Investment banking boils down to signing deals.  It doesn’t matter what the actual consequences of the deal will be or what, if any, benefit it will be to the parties involved.  Just get the damn deal done so the bankers can get their commission and free stock.  To quote the actual blog, “Investment banking as an industry runs almost completely contrary to wealth creation since it thrives on fees rather than capital appreciation. …Indeed, investment banking is one of the few industries on the planet in which you can get rich by creating debt for other to pay off.”

I need to stop giving them the benefit of the doubt.  Who has actually thoroughly analyzed some of these deals that were supposed to “save the system”: Bear Stearns/JPM, US taxpayer/Fannie and Freddie, US taxpayer/AIG, Merrill/BAC?  In the words of Senator Levin, “It was a shitty deal.”  I need to stop using the excuse, “But they had to do something.”

I’m not sure if I’m ready to say that investment bankers are at the bottom of the financial crisis.  Do they continue to improperly value junk assets?  Maybe.  Do they hide the true value of balance sheets?  Probably.  Do they create impossibly leveraged deals?  Most def.  (Take a look at the Fed’s balance sheet as a prime example- leveraged at 47 to 1, terrific.)  Fortunately for them, and unfortunately for the rest of the country, investment bankers can mask their activities behind their Ivy League degrees and fancy jargon.  Throw in bribe-like behavior in a cult of bankers and corporate executives who would never dream of stepping outside their elite circle, and I don’t think the nature of the game of investment banking will change anytime soon.

Socratic Trade Review: MOS (Mosaic)


According to an article on Investors Business Daily, MOS was named another big winner in their study of market leaders. Mosaic (NYSE:MOS) climbed 620% in 70 weeks as fertilizer firms have returned to the spotlight on rocketing grain prices.

Check out this Socratic Trade review by Hedge Fund Live Trader, Jeffrey Tynik, as he recorded a trade placed in MOS almost 13 months ago.