Bank of America, BAC's Kiss of Death

BAC has announced it will impose a $5 monthly fee on debit cards. We cannot envision this fee lasting for very long as the backlash will be horrendous for the bank, a la Netflix.

It is truly a sign of desperation and that the bank must be severely cash-strapped. If my bank did that, I'd switch banks right away.

It's not like people have much love for banks these days anyway. What were they thinking?

There is nothing to like on BAC's chart:

Below are straddles for BAC and XLF, computed with the wonderful StraddlesCalc.

Not advice! Options are dangerous and may cause 100% loss. Please do your own due diligence.

Nat Gas and UNG Falls off a cliff, attacked by all sides: Huge contango, hurricanes, storage

UNG is falling off a cliff today, as pretty much expected here. It is suffering from an attack from all sides.

Meanwhile, there are no expected hurricanes in the near future:

Storage numbers were released today, showing a large injection of 11Bcf.

Contango today is nasty, at a whopping 7% for the two front months (December and November)

Bad news all around for UNG.

Total breakdown in Germany: Parliament passes bailout that majority oppose

In a sign of complete disconnect and breakdown between politicians and the people they are supposed to represent, the German parliament has just backed the expansion of the European bail-out fund.


523 politicians voted in favor of it, 85 opposed, three abstained.That is 85.6% in favor.

However, a poll released yesterday showed that 75% of Germans opposed any new bailout measures. The WSJ reports: "A poll for national German broadcaster ZDF earlier this month shows three-quarters of Germans are against the expanded European rescue fund that's subject to Thursday's vote."

EWG is the ETF for Germany, FXE the most popular for the Euro.

We also track global countries ETF live and global currency ETFs live:

More Leveraged ETF Torture: 2X ETFs Become 3X ETFs

As if we needed more leverage!

Direxxion is changing its 2X ETFs into... 3X.

"Currently, the investment objective of each of the funds with “Bull” in its name is to seek daily investment results, before fees and expenses, of 200% of the fund’s target index. The investment objective of each of the funds with “Bear” in its name is to seek daily investment results, before fees and expenses, of -200% of the fund’s target index.
Effective December 1, 2011, each fund’s investment objective will be changed to seek daily investment results, before fees and expenses, of 300% or -300% of the performance of its specific target index".

The fact that 300% actually means 4X is too complicated math of course.

The higher the X, the faster the ETF's value goes to zero.

At least it's tough to do 4X though, as the fund risks having to drop it's value to zero in a single day if the market moves 25%.

Bad for UNG: huge natural gas contango to december

This is the current situation with natural gas contango:

It is currently 0.65% for November and October, and a whopping 7.2% from December to October. This implies prospects of prices rising, however, the contango is very bad (high) for UNG for December. Not good.

Gold ETFs Jump as Buying of Physical Gold is Intense

A report by Reuters today confirms that physical gold buying has been "exceptional", taking today's prices much higher. With it, gold ETFs are soaring, as expected.

We track all gold ETFs live here.


"... Meanwhile, heavy buying of physical gold stocks -- often a price-sensitive area of demand -- suggested that Monday's price fall had whetted investors' appetite for the metal.

Swiss bank UBS said it had seen very strong physical buying in Asia, particularly number one bullion consumer India, on Monday. "To be clear, physical demand right now is not just decent, it is exceptionally strong," the bank said.

Other precious metals also bounced back after Monday's hefty losses. Silver, which slid as much as 16 percent to a 10-month low of $26.04 an ounce on Monday, rose more than 9 percent to a high of $33.48 an ounce.

Spot platinum was up 1.3 percent at $1,575.50 an ounce, while spot palladium was up 3.7 percent at $650.22 an ounce.

Gold's premium over platinum stood at around $90 on Wednesday, with a ratio of 1.06, its highest in 20 years".

FXY and the next Bank of Japan intervention; a la Swiss? Yes, says Nissan.

The question is not If but When will the bank of Japan intervene to lower the yen.

Today, a Nissan Motor Co. senior executive urged Japan to take "decisive" action to prevent the strong yen from hollowing out the country's industrial base. He also mentioned that they should learn from Switzerland's intervention in the foreign-exchange markets to weaken its currency.

Can you imagine if all central banks had the funds to intervene to lower their currencies? "I have more money to weaken my own currency than you!".

Here are current FXY straddles, from the wonderful StraddlesCalc tool.

Options are very dangerous and may cause 100% loss. Please do your own due diligence.

Surviving - And Profitting - From Meltdown or Wild Monday, With ETFs

Gold and silver were severely beaten up in these last two days, and there are even more renewed talks of a Greek default. The possibilities were even mentioned by the Greek finance minister himself. Some say this could be prelude to major weekend action.

A meltdown Monday, or a massive injection of money and stimulus will cause the market to move wildly.

Below are straddles computed with StraddlesCalc tool.

As always, options are very dangerous and may cause 100% loss. Please do your own due diligence.