As far as the markets go, they’ve had an incredible run since 2009.
That’s because the Federal Reserve bought more than $4 trillion worth of bonds and securities in the open market to flatten interest rates and buoy said markets.
But going forward, starting in September, the Fed’s stopping its monthly purchases of billions of dollars’ worth of bonds… And that could send the markets into a tailspin.
Today, I’m covering what Fed Chair Janet Yellen said in her Humphrey-Hawkins testimony to Congress this week. More importantly, I’m covering what she didn’t say, and what could happen starting in September.
On June 7, I laid out the case for buying put options on Fossil Group.
I started the piece with, “According to Wikipedia, fossils (from Classical Latin fossilis; literally, “obtained by digging”) are the preserved remains or traces of animals, plants, and other organisms from the remote past. The totality of fossils, both discovered and undiscovered, and their placement in fossil-containing rock formations and sedimentary layers is known as the fossil record. That’s amazingly close to the definition I’d give the once-trendy watch and accessories purveyor turned dinosaur crap retailer, Fossil Group Inc. (NASDAQ:FOSL).
At least we can give them foresight credit for getting their name right.”
You can read, or re-read, the dirt on Fossil right here, and you should. We made a 100% gain on our FOSL puts position in my Zenith Trading Circle member newsletter service, and you should have made a bundle on the puts I recommended for you too.
I also asked my readers, as part of the jury in the court of public opinion, if they found Barclays guilty or innocent.
Your verdict was a resounding… guilty as charged.
There were five times as many cries of “Guilty!” than there were defenses of innocence in the comments thread of last week’s article. It seems as though the majority of my readers have little patience for fraudsters wielding power.
Some of your comments about Barclays stood out to me particularly, as well as a few comments from earlier, and I want to address them now.
There’s a type of trade I don’t think I’ve introduced to Insights & Indictments yet, but this is too perfect of an opportunity to pass up.
This company that I’m about to recommend you move in on is about to make a major move. The only problem is that it’s set up to swing either way.
That’s why we’re getting creative.
First, I’ll explain what I plan we do, and then I’ll lay down the dirty details on this company. It’s struggling with some major lawsuits over a recent acquisition, but the stock has been steadily rising over the past week. Position yourself right and you stand to make serious gains no matter what happens next.
In 2008, the biggest banks in the Western world were being bailed out by their governments. Barclays, however, raised billions of dollars on its own to fortify its balance sheet and sidestep the inconvenience of having its executives’ compensation and bankers’ bonus pools subject to regulatory dictates.
Now it turns out that not everything was what it seemed.
Barclays Plc. (NYSE:BCS), the holding company that controls Barclays Bank Plc. (NYSE:BCS-PD), and four former top Barclays executives have been charged with fraud relating to how they raised the money that saved the bank and their paychecks from government oversight.
Whether they were just trying to save taxpayers money or their compensation packages will now be determined in criminal court.
But in the court of public opinion, the verdict’s already being tallied.
Get caught up on what they did and how, and then cast your vote here…
For years now, I’ve been writing here in Insights & Indictments about America’s consumers, our consumer-driven economy, and the impact of the Internet on bricks-and-mortar stores and retail in general… And I’ve made a bunch of predictions.
Surprisingly or not, I’ve been right about almost every single one.
But being right is one thing, making money by looking into the future is something altogether different. If I dare say so myself, it’s much better.
That’s what I want to focus on today. Not about being right (well, maybe a little), but on how to make money on big trends.
If you’ve been following this column (or, even better, following my Zenith Trading Circle recommendations), you know exactly what I mean. Following my advice means you’ve cashed in on all those recommendations.
If you don’t know how Amazon really operates, I’ll bet you have no idea why it bought Whole Foods and what it really plans on doing with it.
Amazon.Com Inc. (NASDAQ:AMZN) is going to use Whole Foods the same way it used everything else. Just like it used its original bookselling fulfillment centers to sell everything to everyone, and how it used its Amazon Web Services platform to sell 40% of all cloud-based web services…
To take a piece of any and all economic activity… selling anything and everything.
Now, that includes food.
The Whole Foods acquisition fills in the missing link in Jeff Bezos’ grand plan to sell the world to the world, and profit from the sale of everything including books, clothes, food, and anything to do with data.
Consumer spending in the United States generates two-thirds of our gross domestic product, or GDP.
With GDP growth averaging only 1.3% over the past decade, compared to the 3.3% average annual growth rate from 1990-2000, it’s high time consumer spending had a thorough check-up.
On Wednesday, I wrote about consumers having less to spend because millions of jobs have been exported, about the stress they face with increasing levels of debt from rising healthcare and housing expenses, and the crushing weight of school loans squeezing discretionary spending.
But being stressed out isn’t the only thing shaping consumption patterns. A fundamental, structural shift in how and where consumers shop is taking an even bigger toll on consumer spending’s contribution to GDP.