Month: April 2012

Questrade orders not going to market

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Well, this helps me make a decision about what broker to use:  anybody but Questrade.  I’m on hold with trade desk now 34 minutes.

NOTE to self:  Now that you have the CLN, take all your accounts back to Waterhouse.

The following explanation is from Questrade:

Please be aware due to a technical issue, accounts that traded, deposited, or withdrew funds on Monday may now display incorrect positions and balances. Accounts affected by this issue will have any new or replacement orders reviewed by Questrade’s trade desk; this process will delay the orders from being sent to the market. This issue is expected to be fully corrected by Wednesday morning. If you have any questions please contact Questrade at 1.888.783.7866.

Call the number and be prepared to be on hold.  The orders were not “delayed”; they were not going to market at all.  This is absolutely unacceptable.  I can’t afford to stay at Questrade.  I’ve decided to leave Questrade over the recent breakdown of their web trader platform.  I waited patiently for weeks as the market has plummeted, and today I finally go to market to make a trade and the dumbass platform won’t even take my orders to market.

I read the following at a forum:

 

Jaanu Teene wrote:

Hi sparxtrading,

I’d like to clarify – this issue has not suspended our clients’ ability to close or open positions.

Here’s the full details: due to a technical issue, accounts that traded, deposited, or withdrew funds on Monday may now display incorrect positions and balances. Accounts affected by this issue will have any new or replacement orders reviewed by Questrade’s trade desk. This will not impact your ability to trade. In some cases, it may delay an order being sent to market. This issue is expected to be fully corrected by Wednesday morning.

I’d like to add a few more details:
• If you can see the position, you can place the trade yourself and it will go to broker review
• If you cannot see the position and you want to close it, contact our trade desk.

Our client services are at 1.888.783.7866. The trade desk is at 1.866.980.9590

Regards
Jaanu Teene
Questrade Inc.

Clearly this Jaanu Teene has no idea what she is talking about.  I placed orders that didn’t go to market for over a 45 minutes.  Jaanu Teene:  it’s your job to troll the internet to see what bad things people are saying about Questrade.  Here I am.  Come do damage control here.

Tony Robbins video on USA Federal Solvency

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Tony Robbins has made a video on the United States budget.  The video serves to show how far out of whack the federal budget is, and more especially, how the plan of taxing the rich so that they pay their fair share, which is the rhetoric coming out of the Obama campaign, will not solve the problem.  Taxing expats, US citizens living abroad, won’t solve the budget problems either.  Basically, Robbins shows, using Iowahawk’s numbers, that confiscating all the profits and all the wealth of the rich and corporations would not balance the budget, unless the US were also to stop (1) foreign aid; (2) pull out of Afghanistan and Iraq, (3) etc., etc.

Meanwhile, Cullin Roche, the Pragmatic Capitalist, calls Tony Robbins’ video stupid;  he claims to understand monetary policy and says that it is impossible for a money currency issuer to go insolvent (e.g., Zimbabwe, Weimar Germany, Argentina, Chile???); rather, he says that such an entity can cause inflation.  He says that this is not merely a semantic distinction.  Are you buying that?  I have argued that the United States government is already insolvent, but that its money creation ability makes it able to extend and pretend, to kick the can down the road, until the dollar itself becomes a meaningless symbol of value, since measuring other assets in dollars is reification.  The United States has already defaulted.   So have many currency issuers in history.  Monty Pelerin agrees.  Here is Roche’s video:

But the United States government is much worse off so far this year than what Robbins projects; it is not borrowing 40 cents on every dollar it spends but 53 cents.  The debt death spiral is at work.  Expect a government that is so desperate to continue to put in place desperate measures.  It becomes a predator, seeking food high and low, including expat food.  It is currently cannibalizing its own expats, rather than facing the fact that it must both (1) cut its budget and (2) raise taxes on all Americans living in the United States.  Raising taxes on the rich and those living on foreign countries will not solve the insolvency.

Hat tip:  Business Insider.

October to March: US government borrows 53 cents on every dollar in “budget”

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From Zerohedge, US Posts Biggest March Budget Deficit In History:

Following the all time record high February budget deficit of $232 billion, the US March budget deficit number is in, and in addition to being bigger than expected, coming at $198.2 billion on expectations of “only” $196 billion, the government outlay in the past month also is the largest March deficit on record. This brings the total deficit in fiscal 2012 to $779 billion, which is to be expected for a country gripped in total political chaos and which is unable to either raise revenues or lower spending. What is more disturbing is that over the same period (Oct 1 2011 – March 31, 2012), the US government issued $792 billion in debt, a trend that will continue. What is most disturbing is that the comparable tax revenues net of refunds, “matching” this increase in deficit and spending, are only $693 billion, in other words the US government is funding well more than half of its cash needs with debt rather than with tax revenue.

My math tells me that the US is borrowing 53.3 cents on every dollar in expenditures over the last six months.  No government or any other entity (unless you can change water into wine) can continue to do this, not even the mighty United States, without eventually facing a day of reckoning.

 

“Price is a function of liquidity”: Charles Biderman speaks with Chris Martenson

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“Price is a function of liquidity, having nothing to do with value.”

Charles Biderman recounts how he went bankrupt in 1987 even though he had a positive net value in his real estate investments.  Why, because his banks went bankrupt and his loans were called.  If he had had time to sell his properties, he says, he wouldn’t have had to declare bankruptcy.  This taught him the following:

Price is a function of liquidity, having nothing to do with value.

What does this mean for the investor?  Ultimately, in the real world, fundamentals should eventually win, but the market depends not on that value but on the ability of investors to maintain their liquidity.  Thus, the most liquid players during severe downturns will be able to add value to their portfolios.  The real trick of investing is twofold:  (1) Determining what stocks have a real value; (2) being liquid when the vast majority of other market participants are illiquid–only then can the investor be assured of getting the bargain basement price for an asset.  This means keeping a tight lid on one’s use of leverage.  My policy is to keep leverage below 1:1 debt to equity; and to use only a fraction of the bank loan permitted to me.

Another lesson is perhaps less obvious:  Never invest in the company in which you carry your loans.  If that financial institution goes bankrupt, so will your investment.  So you will be hit with a double whammy.  Say you invest in ABC bank where you have your line of credit which is your funding of last resort for your margin account.  When ABC bank goes bankrupt, then your loan gets called.  At the same time, your portfolio takes a hit because your ABC bank investment has also gone down to zero.  This could result in the margin call to which one is unable to respond, except by liquidating the remaining portfolio at severe losses.

Stuart Varney on why food prices have skyrocketed in past year

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Monty Pelerin has a great post on how government statistics are lying to people about inflation.  He makes an appeal to the real inflation in food prices.  While the excessive creation (electronically not via printing) of fiat money results in high food prices, the EPA has just decided to increase the ethanol content of gasoline to 15% from 10%.  This will not help food prices either, since it is more lucrative for farmers to receive a government subsidy to grow corn for ethanol than for food or for livestock feed.

The Bible treats agricultural growth as a direct gift from God himself.  For us to take our grains a piss them into cars because of worry that God can’t keep the planet from turning into a ball of fire is something that will ultimately lead to His judgment of our society.  It is immoral to burn food in cars.  We have abundant petroleum products are for that purpose.  Meanwhile, Americans (and yes, we in Canada) are feeling the pinch of inflation.  This is just going to get worse, much worse, as central banks around the world solve their sovereign debt and other insolvency issues through the creation of more fiat money.   Monty Pelerin has another excellent post (Why High Inflation Is Inevitable) explaining why the Bernanke must continue to ease–the US government is insolvent.  If the Bernanke doesn’t ease, the politicians will fire him and replace him with someone who will.  Food, energy and other costs of the real things people need will continue to pinch people’s budgets until it will cost one’s entire wages just to survive.  That what happened in Weimar.

Hat tip: Monty Pelerin