FocalPoint Analytics

Value, long/short equity
FocalPoint Analytics
Value, long/short equity
Contributor since: 2011
Company: FocalPoint Analytics
NVAX might move into my trading range today. I placed a limit order for 1,075 shares at 9.3. My sell target on this trading block is 14.
That was just my guess as to the cause for the explosions Mark. It goes against probability that all of a sudden we get three big events in the same month, a month where a lot of loans are probably being called. I just connected some of the dots.
If correct, it could be huge as many Chinese high officials may be implicated. Even if there is no fraud you are absolutely correct that the banks are going to get nail gunned here and that means available liquidity is going to drop.
I don't think their economy can handle any more constraints on liquidity. Their economy appears to be in transition. They are already selling large amounts of US treasuries and German bonds to cover.
What are the ramifications of this to investors? I would think the spigot on speculations is will be tightened. So their markets should drop. That has already started, so nothing new… Is there a way for us to make money on something like this?
Another big warehouse explosion in China
All of a sudden three different warehouses just blowup? My guess is the explosions are a scam. Those warehouses were supposed to contain large quantities of raw materials such as cooper. The scoundrels then took out multiple loans using the stored materials as collateral and then sold the collateral as prices plunged. The loans were called, and Boom - the warehouses blow-up. I suppose the scoundrels will now take the insurance payoff and get out of town.
I hope LT is doing ok.
O-Man… it's a blood bath in Asia and Futures. I am going to fasten my seat belt, sit on my hands and enjoy the ride.
Here it is….
Reuters, Aug 20th.
Greek Prime Minister Alexis Tsipras will submit his resignation to the country's president later today to clear the way for early elections on Sept. 20.
The Greek government has been fatally destabilized. As a result, new elections will be coming. When? According to the Greek Reporter, Tsipras will decide the time of snap elections after a meeting with key advisers today (Aug 20th).
What's Wrong?
Greece is in recession. The agreement calls for huge increases in taxes, pension reductions, modification of retirement dates, reductions in public employment, massive sells offs of public properties, and so on. Many people have stated that the new economic goals and time tables are unrealistic. The Greek banking system is not sustainable and is going to need more and more help to keep it going. Meanwhile, the current government is finding it more and more difficult to get enabling legislation through the parliament.
What's going to happen?
New elections are a certainty and that means the loan agreement and its terms will be up in the air yet again.
The Greek government [Syriza] is likely to call a confidence vote, following a rebellion within the ruling Syriza party over the new bailout deal, senior ministers said on Monday.
and the beat goes on….
Words fail me. God Bless!
Oh! Sorry LT. On mac voce to text, if you have OSX Mountain Lion or better, the OSXs have voice to text called "Dictation" built in.
A better bit of software is "Dragon Dictate 4.0". I think its on sale for 149.99. It also wants OSX Mountain Lion or better.
Here is a liink [] to a page that lists free Mac voice to text software that lets you filter by OSX versions. This should help for older versions of OSX.
I would have thought someone would have an internet site that performs speech to text functionality, but I could not find one.
I hope this helps LT. Best, Bob
That's great news D. Your symptoms were suggestive.
Friday Aug 14, 2015
Omnibus Bill Passes:
The Greek Parliament approved the omnibus bill that clears the way for a new three-year bailout program worth 85 billion euros. The parliamentary session was stormy with government and opposition supporters throwing accusations at one another.
Rebellion Within Syriza Party and New Election:
Tsipras faced rebellion with 42 Syriza MPs NOT supporting the bill. Forty-three is the threshold beyond which Tsipras has no choice but to call elections. [So Tsipras's government is hanging by a thread.]
Opposition Among Eurozone Finance Ministers:
The draft bailout must now be approved by other Eurozone member states at a meeting of finance ministers in Brussels today [Friday]. Than it needs to be ratified by national parliaments in a number of countries, including Germany, which remains skeptical. All this needs to happen before a first tranche can be disbursed allowing Greece to make a crucial €3.2bn payment to the ECB due 20 August.
Germany, the biggest single contributor to Greece’s two previous bailouts, cautioned that Eurozone support for the loan package is not guaranteed. The loan agreement includes significant spending cuts in health, welfare, and pensions combined with significant tax increases in conjunction with ambitious privatisation schemes. Tsipras has also agreed to reverse some of the policy decisions enacted since elected in January.
The 29 pages of conditions concede ultimate authority over much of Greek policymaking to the Eurozone and establishes a system of quarterly reviews of the reforms by the Troika of institutions.
Meeting the new bailout terms will require more austerity for Greece. The three-year programme entails a “fiscal adjustment” of up to 5% of Greek GDP, while the economy is expected to slump by 2.3% this year and 1.3% next year, according to senior sources.
[No way the Greek economy will rebound by 1% in the next year under the terms of the new loan.]
Bridging Loan Option:
The German parliament might vote not to approve the bailout but instead sanction a bridging loan that would allow Athens to make its August 20th ECB payment.
IMF Support?
On August 6th, Thomas Ostros, who is an alternate director on the IMFs board, said the decision to participate in the new loan package will not be decided until sometime in Autumn [Sept-Nov].
However, the Greeks need to make a €3.2bn payment to the ECB on 20 August. Will the IMF change its mind on timing, or will its stance pull the balance over to the bridging loan approach?
It appears one major objection of the IMF concerns the failure of the new rescue plan to address Greece’s debt sustainability. A second concerns the timing on the setup of a privatisation trust fund that is supposed to hold Greek assets worth €50bn.
Under the Boot of the Troika:
The bailout agreement says: “The conditionality will be updated on a quarterly basis, taking into account the progress in reforms achieved over the previous quarter. In each review, the specific policy measures and other instruments to achieve these broad objectives outlined here will be fully specified in detail and timeline.”
Clearly, this is a mess. I don't see how the current government can remain in power under the terms of the loan. I have seen some of the tax increases. They are huge and will likely kill the economy and drive even more of it into a black market. I don't see how any popular voted government could get elected under the proposed conditions. Is there a Technocrat leader of the Greek state in their future?
D, you might want to go in and have your prostate checked out…
Very good Maya! That is really very good.
China devaluation?
Right… now add to the seasonal flu market the 5B RSV market :)
That's what I thought about the trading situation Maya… Hold. And that is also what I think about the offerings Guns buy on the offerings particularly if success follows on success.
I hope the Doc was holding NVAX :)
Ack! Dow death cross.
Does this help Maya?
Here is a link to a presentation that provides an estimate for the world and US market size of an RSV vaccine. See slide six.
Remember RSV is not the same as seasonal flu. RSV causes far more hospitalizations than seasonal flu.
NVAX elected to go it alone on their development of an RSV vaccine. As a result, they don't have to share. There are also no competitors for this vaccine.
From the projected market size slide:
The prospective addressable market for an RSV vaccine is over $5B annual worldwide sales.
Worldwide: RSV affects 64M people and 160k Deaths per year.
USA: RSV affects around 100K infants and 1.75k elderly hospitalizations with 14 k elderly death’s per year.
NVAXs current market cap is something like $3.7B. Put that up against $5B in potential revenues from just the RSV vaccine, a vaccine that seems to be likely to be fast tracked.
In addition, NVAX has many more products in their pipeline so they are not a one trick pony. I expect more positive news in this quarter. For example, we just had positive news on an NVAX quad seasonal flu vaccine.
They have over 300M in cash, but this is an expensive business. They will do more offerings. So do you play the old game of sell on a pop and wait for the offering to buy back in? Or do we just hold and add to the core on dips? Why add to the core, because with each positive result risk decreases and profit potential increases.
At least that is the way I see it. I am reluctant to try to time the offerings. If it gets acquired, it should get acquired at a substantial premium.
We might see a short squeeze today :)
WOW… ANR is going Bk. That's metallurgical coal…
Things are looking really bad in Greece as their PMI dropped to 30.2, and new orders to …. drum roll …. 17.9 in July. Anyone ever seen a lower new orders number?
August 3, 2015
The Greek monthly PMI data from Markit confirms that the Greek economy collapsed in July. Last month marked the 11th consecutive month of contraction, but it was the depth of the downturn that was truly shocking.
The index plummeted to 30.2 from 46.9 in June, the lowest print on record, but it was new orders that shocked plunging to 17.9 from 43.2. Anything below 50 signals contraction.
It should rebound to some degree, but these are really terrible numbers that signal the path taken is NOT going to work. Raising taxes in these conditions is crazy.
PMI leads GDP. These numbers suggest that the Greek GDP is going into strong negative numbers. So there will be NO primary surplus.
The Greek market opened today and crashed… banks are limit down (-30%). Horrible …
I remember a Disney show when I was a kid. I loved the guy that sang blue bird on shoulder and thought how neat it was to integrate animation with the real people.
LOL… have not heard that one since I read the book as a kid.
Thank you very much Trip. I hope you and your family are doing ok. Best.
Me Too…. thanks Maya.
I saw that… its dangerous because if anyone of them takes a torpedo the whole ship starts listing.
Did we bounce off the S&P 200 day moving average today?
This looks like a decent article on the coming El Nino.
Thanks WT, but I think the credit is mostly due to the great work of Silicon and Mark.
Me too Silcon… I found a source after Mark identified the name of the mechanism (Target2) you described.
The Greek CB is apparently behind by about 8 months on its pay outs… I had no idea about that…
Thanks to both you and Mark for pointing that out.
That sounds reasonable to me Mark. Thank you.