Cornering Tracks and Markets

A couple of weeks ago, a court in Stuttgart acquitted Porsche’s (Xetra:PSHG_p) former CEO Wendelin Wiedeking and ex-CFO Holger Härter on the charges of attempted market manipulation regarding the unsuccessful takeover of Volkswagn AG (Xetra:VOWG_p).

This story made me remember the remarkable short squeeze Porsche managed to pull, and what is even more amazing, is that nobody has decided to make a movie out of it.

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Let’s go back in time to relive one of the most amazing short squeezes ever.   Continue reading

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Happy Easter

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The Barker Report will be back next week.  Have a very happy Easter.

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Brexit, Schmexit! Part 2: The Banks

As June approaches, we should find Brexit’s air time on UK news increasing (if that is even possible).  As we stand today, there are two well defined camps: those for Brexit, and those against it.  Several political figures have joined the different camps, with Prime Minister David Cameron and London mayor Boris Johnson being the most senior representatives of each side.  I won’t dwell into the politics of this, but focus on the economics.  Today we will analyze the effects of Brexit on London’s stance as a major financial hub. Continue reading

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How Low Can You Go?

We’re not talking about the limbo dance here, but central bank rates around the world.  After (not-so-super) Mario Draghi’s bazooka last week, I decided to write a quick note about what’s going on with rates, and what are the potential pitfalls.

Why are rates important?

The interest rate is the main tool central banks have to influence the economy.  Rates are used along with banking reserves and open market operations to expand or contract the money supply.  If an economy is growing too fast central banks can increase the rate, making it more expensive to borrow and encouraging savings.   Continue reading

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Brexit, Schmexit! Part 1: The Pound

After recent negotiations between the UK Prime Minister and heads of EU states, the in-out referendum has been scheduled for June 23rd.  So far, Brexit has been hogging air time across news outlets all over the UK.

Brexit stands for British Exit of the European Union.  Over the next 3 months I will bring you a series of blog posts analyzing Brexit and its implications to the UK economy, starting with the pound. Continue reading

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Death Cross for Netflix

Netflix’s (NASDAQ: NFLX) 50 day simple moving average (SMA) has been slowly (even painfully some might say) creeping towards its 200 day SMA.  Last week, the 50 day SMA actually crossed the 200 day SMA downwards, this event is known by technical analysts as the “death cross”.  It denotes a long term reversal in the performance of a stock.

Last August, Apple (NASDAQ: AAPL) had its death cross moment and since then the stock has been down as much as 13%.  Apple’s stock death cross took place after coming down from its highs of nearly $135 per share.  The stock is now around 30% off  its highs.

Continue reading

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GoPro: Innovate or Die

The dismal Q4 report sent the already battered GoPro stock (NASDAQ: GPRO) to a new all time low.  Now down more than 90% since its 2014 highs, the personal camera maker will be forced to change their business model or perish.

It has been reported that the company might come up with software that will enable better/faster sharing of videos on their PC platform, as well as a new drone based camera; hey, there’s even a new CFO coming through the door.  But will this be enough to stir away this company from its path to doom? Yours truly seems to think otherwise: Continue reading

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The Crude Reality. Part 2

When the laws of supply and demand ceased to function
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Anyone who took economics 101 in college knows that at a lower price, consumer demand for a product increases, pushing the price up; and at a higher price, demand slows, therefore depressing the prices. On the producer side, higher prices incentivize producers to supply more products, while lower prices have the opposite effect. Continue reading

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The Crude Reality. Part 1

It’s not rosy for everybody

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Despite having bounced nearly 25% from its lows earlier last month, the WTI benchmark crude oil still remains a good 75% below its peak in 2008, and 60% below its 2014 high. January also saw crude close below its recession peak’s low of 30.28, and saw it test its 12 year technical support.  The recent rebound in oil prices was fueled primarily by rumors that Saudi Arabia might cut production by up to 500,000 barrels per day, the notion that Iran may not be ready to start pumping and selling oil as fast as the market had predicted, and most recently Venezuela’s oil talks with OPEC and Russia.  Regardless, oil inventories remain at historic highs. Continue reading

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Time to Short the Venezuelan Bolivar?

For longer than we care to remember the Venezuelan Bolivar has been pegged to the US Dollar.  The peg as we know is artificially sustained and reminiscent of South America in the eighties.  During the eighties, many countries in Latin America had two different currency markets: an official market where exporters were forced to sell their Dollars to the central bank, and where importers had to participate in Dollar auctions, in order to bid for the currency and be able to pay for their purchases abroad.  There was also a “black market” which ran parallel and quoted the North American currency at a much more realistic level.  This inevitably drove importers and exporters in general to do as much in their power as possible to bend, circumvent, or flatly break the law.  Neo-liberal governments in the early nineties reverted this by floating the currencies and liberalizing the markets.
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Of course Hugo Chavez and his successor, Nicolas Maduro seemed to be oblivious to this fact. After devaluating the VEB in favor of the new VEF or Bolivar Fuerte (strong Bolivar), the latter has been pegged to the US dollar for the last 10 years or so.  But all that might me coming to an end.  In recent elections the opposition gained control of the assembly which has diminished Maduro’s power, and could eventually see him out of office. The first job of any successor with half an ounce of common sense would be to float the currency, which would immediately drive it into a nose-bleeding dive. Not a bad time to be short the currency. Continue reading

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