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Fuggedaboutit Friday – Dip? I Didn’t See No Dip?

Dip Buyers of the World unite!  You have nothing to lose but your 401Ks…  

Ah, could there be a more thorough perversion of Marxist ideals than not only confiscating a portion of the workers’ wages but using that money to actually pay for the means of production in exchange for infinitesimal, powerless shares of ownership?  It’s BRILLIANT but that’s the stock market, we had that back in 1848 when Marx penned his little Manifesto but what we didn’t have – what should really have old Karl rolling over in his grave today – is union busting.  And it’s Union Busting by the Government no less!

While the hunt continues for runaway Democrats, state Senator, Robert Jauch, a longtime Wisconsin lawmaker, said Thursday that – despite rumors that some of his colleagues had returned to the state, "everybody is outside of Wisconsin . . . all of us."  Jauch criticized what he called the "police state mentality" of Republicans in the Capitol and took issue with Walker’s assertions that Democrats who had fled the state were abandoning their duties.  "I’m doing more from the Land of Lincoln to communicate with citizens in my district than he is," Jauch said, adding that the Senate Democrats talk regularly and are "trying to reach out through back channels to see what the solution could be. This governor has dug himself in – that’s very clear."

While the Capitalist tools at Forbes are already cracking the Cristal and celebrating the demise of unions, it is more likely that (like many hair-brained Republican schemes) – defeat will be snatched from the jaws of victory because, even if Walker’s Republicans don’t back down (and they will), they have already reignited the National Labor Movement in much the same way that 8 years of George Bush polarized the usually disorganized Democratic opposition and led to a rout in 2008.  This is not about politics though, this is about investing and who will control the country in 2012 is indeed something to consider.  

Another thing to consider is, if they do take away collective bargaining rights in Wisconsin – the next Global city you see erupting into riots may be the one by your house.  That’s how pissed off the Democrats are now and you’d know this if you ever spoke to one or read one of their "liberal" publications, like the NY Times, instead of listening to Fox, whose new chief, Roger Ailes is currently involved in a controversy in which it is alleged (falsely, I am so sure) that he conspired to lie to Federal Investigators in order to push Bernie Kerik through the vetting process so he could become Director of Homeland Security.  I am sure this is all a total misunderstanding and will be cleared up immediately and I applaud Fox News for ignoring these ridiculous allegations as well as the rest of the MSM for burying this scandalous and certainly untrue story.  Now, can I have my mommy back?   

So fuggedaboutit!  That was the very good advice I gave back on April 23rd of last year when I said: "Goldman who.. Greece what?  Oh we fixed that thing last week! Yeah, the Germans (who are $4.5Tn in debt), the French (who are $4.4Tn in debt), the English ($9.2Tn) and, of course, the Italians ($4Tn in debt) are gonna give the Greeks a little something to keep the lights on until Christmas. Hey the world’s supposed to end in 2012 anyway so it’s not like we gotta keep worrying about this stuff, capiche?"  We coasted along that bottom from April ’till QE2 but it was indeed a good time to buy as we found a nice bottom as the S&P corrected from 1,219 back to 1,050 (13.8%) and bottomed out at 1,010 in June.  

Lesson number one then is:  You don’t have to feel like it’s a rush to buy.  When this train leaves the station – we WILL know it.  ALL the levels will fall – not MOST of them, which was what kept us from BUYBUYBUYing too much at the "top" as we kept ourselves flexible and cashy.  Having cash on the side allows us to do fun things like yesterday’s trade idea from the Morning Alert to Members, where I said:  

I’m going to cut commentary short to say PCLN March $445 puts are $8.50 and were $40 yesterday. Figure 1/2 of that was earnings premium and they are still down a ton so not at all unreasonable to play them expecting to get back to $12. You can actually hedge it by selling the NEXT WEEKLY $450 puts at $4.50 in whole or in part but I’d go for the naked puts at the moment.

As you can see from the chart, that was a very popular trade for us and we had ample time to buy as the puts slipped all the way down to $7.25 before hitting our goal at $12 (up 41%) at about 11:15.  These are the kind of fun "hit and run plays" we can make with out sidelined cash while we wait for the market to get realistic:  

  

Option contracts generally come in lots 100, so it is $850 at risk but, with PCLN, that’s like shorting 2 shares of the stock at $470, which is the price we thought was too toppy in the morning.  PCLN only fell to $455, which would have made 2x $15 on the stock ($30) but the option paid $350 per contract – that’s what we mean by leverage!  Keep in mind that leverage goes against you too as that dip to $725 was a $125 loss (14%) so the idea is not to lever your risk and to scale into positions and set sensible stops.  Of course it is unlikely you were going to short 2 shares of PCLN and that’s where options are really your friend.  

Let’s say you wanted to use $2,350 shorting 10 shares of PCLN (50% margin) and you hoped to make 2.5% ($11.75) times 10 for a $117.50 gain.  The short play never would have gone negative on you.  Premium buying is tricky – which is why, as I said yesterday, we prefer to sell it.  What you can do is allocate $800 (1/3 of max) to an initial position of 1 short contract and plan to double down at, say a 40% loss, assuming you still believe in the position at that point.  40% of $8.50 is $3.40 and the delta on the contract (change in price per $1 move in the underlying security) is .30 so PCLN would have to rise more than $10, through $380 for you to lose $3.50.  

So your risk is $350 in stage one – assuming you choose to abandon the short if they break $480.  $350 is 15% of your full allocation and, of course, you can set your risk tolerance lower than that if you wish.  We never went low enough to trigger a second round entry but, assuming PCLN $445 puts did fall to $5 and we decided to stick with them, then $500 would have bought us one more put and we would then have two puts at an average of $6.75 with only $1,350 of our $2,350 deployed.  Another 40% down would bring the contracts to $3 and we would be about 50% down on our position but doubling down again (assuming we still believed) would cost $600 for 2 more contracts and we would find ourselves with 4 PCLN $445 puts at an average of $4.875 ($1,950) with the current value at $3 ($1,200).  That’s a $750 loss AFTER the stock has moved $20 against us.  What would the loss be on 10 shares of PCLN that went $20 the wrong way?  $200. 

We risk losing $300 more but we MAKE $200 more on that $15 move in our direction (10 shorts would have made $150) in just 90 minutes – AND – we only tied up $850 to do it.  That’s what options are about – not taking crazy leveraged bets but taking STRATEGIC, HEDGED positions that allow you to diversify your risk and take advantage of opportunities quickly, without making big up-front commitments.  

Despite our faith in the stick we only found 3 new bullish trades as we had picked up bunch of well-hedged plays already on the way down, taking advantage of the boost in the VIX to enter the kinds of positions we do like (where we sell premium to suckers, rather than being the suckers buying the premium).  By the way, that XLE trade (shorting at $78), also from yesterday’s morning post, also worked like a charm and they fell to $76.50 (2%) in the afternoon which is very nice, even if you are just playing the stock.  Oil had a really spectacular fall, from $103.65 at the open all the way down to $95.50 at 3:30 and you do not want to even think about how much money that makes in the futures if you didn’t play it!  We actually flipped long on oil at the end of the day but stopped out already as they ran up last night and pulled back off the $98 line.  That oil trading is CRAZY!  

Crazy is also the continuing Global situation with Gaddafi losing more and more territory in Libya as violence there escalates. Iraqi citizens are rising up now, protesting the rampant corruption in the Government we set up over there as well as the poor government services.  I would suggest we give them all a tour of Detroit so the protesters will understand it’s not like we’re playing favorites – THIS is actually how we run our own country too!  

Ireland will be overthrowing their Government later today (and maybe their creditors right after that) but they are doing so at the ballot box and Russia is attempting to avoid unrest by raising interest rates, which will make the buying power of the money their people have rise and hold the line on inflation – those Commie Bastards!  How dare they worry about the purchasing power of their people?!?  Over in the UK, in a speech subtly titled, "Ten Good Reasons to Tighten,"  the BoE’s Andrew Sentance argues for gradual hikes now to lessen the need for aggressive moves down the road. "We cannot be confident that the current drivers of global inflation will quickly fall back."  Oh no – the dominoes are falling!

Of course, what sucks for the American worker is great for our Multi-National Corporate Masters and we all love a good puppet show, so they bought out the President to say "U.S. companies shouldn’t worry about inflation if they’re planning on expanding their business." Obama says at the first meeting of his Council on Jobs and Competitiveness. "We’re not seeing a broad-based inflation trend."  Yeah, I wish I was kidding, but he actually says this stuff….

Meanwhile, in California (which would be the world’s 9th biggest economy if separate), Governor Jerry Brown pledged to cut $25 billion from an $85 billion spending plan to close the state’s budget gap if lawmakers block a special election to allow voters to extend temporary tax increases.  If lawmakers don’t approve the special election, Brown said he’d hold up the budget for as long as it takes to eliminate the $25 billion deficit through spending cuts. “It’s very fundamental, whether you vote the taxes or you vote the cuts,” said Brown.

Isn’t that funny?  In California, the Republicans are blocking a VOTE BY THE PEOPLE to decide how they want to deal with the deficit and they are being touted as HEROES by the Conservative pundits but, in Wisconsin, the Democrats are blocking a vote by their legislature and they are being vilified by the same pundits, right after the commercial break.  It’s a wonder they don’t get confused sometimes and spit hateful epithets in the wrong direction…

Asia managed to close green this morning and our pre-markets are flying but we’re going to stay well-hedged into the weekend, thank you – just in case.  Russian terrorists have already served notice that they intend to bomb Olympic sites while Libya is in danger of becoming a terrorist-controlled state that is already allied with Italy (from a 2008 treaty).  

Speaking of Asia, our friend Hugh Hendry has 20 charts laying out his short on China, through Japan CDS swaps, generally postulating that everyone is over-invested in China and that a massive correction is coming and I’ll leave you with this food for thought from Hugh: 

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Note the quotes on that last page.  We are truly partying like it’s 1999 and, soon, the music WILL stop.  Perhaps Hugh is grabbing his chair a little early but at least he still has somewhere to sit – Chuck Prince does not! 

Have a great weekend, 

- Phil

 


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  1. rainman

    Well, looking at the futures this morning, I’d say that the fed pomo is directly related to the market’s momo. Wed night, I said that we’d probably  head down thursday at open then turn around as retail investers were allowed to flee the corral while mm took their cheap shares and then used pomo to turn those shares into more expensive shares. I have no idea how the fed determines which days are only 1-2B but it would be interesting to see if we can find a correlation with expirations.
    The next ones are Tues 3/1, Fri 3/4 (weeklies). Then we have to wait for a new schedule.
     
    Cap yesterdays fancy candle pattern could probably be considered a hammer (in hind sight 8).
     
    Nice video’s Phil. They sure took me back to the excessive ’80′s. Ahhh, if I didn’t know now, what I didn’t know then…

  2. Savi

    Phil--with re to the DECK trade, other than buying the stock  (as I do not think it will keep going up) would you add more calls and roll the 90 callers? or just wait and see
    Tx

  3. nicha

     Another way the rich take from the poor.

  4. exec

    Futures up…….everything is once again fixed.

  5. lflantheman

    Holdings:
    Longs: AAPL. PFE. USO. STP
    Shorts: IWM.
    Long Strangle: FDX

  6. flipspiceland

    @Phil
    Fact # 1:  Unions cast their fight for collective bargaining for the ‘little man’,  when in FACT they are doing nothing of the sort. They are in FACT extorting their higher wage and benefit demands, with no corresponding increase in their productivity, thereby adding to price inflation from every other  ‘little man’. 
    Every cent that a public service union ‘negotiates’ in, say, the teachers’ union comes from the taxpaying members of the community in which the ‘serve’.  New school built by union workers? Paid for by the taxpayers. Those taxpayers—- as you have been saying for a year—-- have not in the aggregate seen any INCREASES in their own pay and benefits, many of them losing ground for over decade, and/or in precarious employment situations, or out and out fired, or laid off, their unemployment compenation still subject to taxes, their real estate and school taxes still rising and owed and liened on them if not paid.
    It’s apparent by now that most union members work for a government or other publice ‘service’ entity, the manufacturing unions having sunk themselves in an ocean of overreach, gluttony, and avarice. They  ’produce’ a service that is nearly impossible to measure with any kind of metric. The last time I had to deal with DOT  employee, county records clerk, or state tax authority I had to shake my head at the incompetence, attitude, and arrogance. (After 10 years of winding up one business, I still get dunned for Sales Taxes every quarter which business was not subject to sales taxes in the first place). 
    Here are the facts: AFSCME and any other public ‘service’ (LOL) Unions are little different than Wall Street bankers, central autocratic authority, and other POWERs. It’s only a matter of degree.  Hank Paulson extorts a trillion from taxpayers to give to his former  and future employer, while public service unions extort billions from their children, grandchildren, friends, neighbors, enemies, and any other member of the taxpaying community.
    Save your breath Jrohema, and 1020 we already beat it to death on another page.

  7. samz3700

    I will second Phil on Dems being pissed – hope pre-market rants are ok.

    I am ready to go back to political / union organizing. If I could get my wife to leave the country, I would focus on that.

    I follow the news actively but have not been politically active for over a decade, having essentially given up under Bush, but I am so angry right now at Republicans, the DNC, the Bernank (although our crazy congress left him with few choices) that I am ready to go organize for sane tax policies and other policies to address income inequality in the US. The chart on where the US ranks that Phil posted a few days ago says it all.

  8. exec

    Flip

    You keep talking like that around here and you’re going to get marched out to the woodshed.

  9. flipspiceland

    @Exec
    Truth and fact are always more painful than the lies that placate and soothe, under false pretenses from the socialists (and capitalists, and fascists) and liberals who don’t know a thing about economics.
    Here, above, you have samz3700 talking about income equality and totally oblivious to the FACT that PUBLIC SERVICE unions have been exacerbaing income inequality for decades taking their pound of flesh from their own middle class members.

  10. rainman

    flip / truth — you lost me when you mentioned that pseudo science "economics".

  11. samz3700

    flip
    I don’t like a lot of unions but trying to take away collective bargaining is a different story. unions one many of the workers rights that we now tame for granted.

  12. samz3700

    flip –

    you are missing the point. my comment was about people being motivated to take action.

    FYI – I have multiple advanced degrees focusing on social movements and income inequality so you can disagree with me but no need to make personal attacks about being “oblivious”

    time to trade until eod.

  13. shadowfax

    IWM levels 79.22, 79.64, 80.08, 80.28, 80.57, 80.72, 81.98

  14. jabobeast

    it looks like all the MOMOs popped up after earnings.

  15. flipspiceland

    @rainman
    OK. How about common sense, accounting, How  about: Where does the money come from to pay a public service union employee’s $20,000 annual health care insurance premium?  It comes from the guy or gal who is working in the private sector whose salary hasn’t gone anywhere for ten years. His health insurance premium has risen 1,000 per cent during that time. Her ‘economic’ situation has deteriorated dramatically (or Phil is lying, which we know he isn’t) during that that time.  How is unfair to ask that public service employee to pay at least a fraction of that premium? 
    Collective bargaining is nothing more than POWER inflicted on the middle class members that mus pay for it. And I have no problem with CB for non-public service employees. But once you agree to serve the public, then do so. Don’t make the public’s burden (in a contracting ‘economy’) even more onerous.

  16. flipspiceland

    @samz
    Nothing here is personal, only ideas. Sorry if you took offense. 

  17. jakester

    Flip- Anyway there are a few of us on this board that support your opinions. I believe Phil is a typical misguided liberal. Understanding this, I keep my political opinions to myself most of the time as I do enjoy the site (minus the political propoganda coming from the founder). Wish we could keep this to a trading site and leave the political opinions at the door but this is not likely to happen anytime soon as most of them are coming from Phil….

  18. shadowfax

    more IWM 80.96, 81.13, 81.75

  19. jromeha

    Flip- my momma always said if you can’t say something nice… I would like to let you know I feel you articulate your stupid and WRONG points fairly well. Your unwavering, in spite if of FACTS the other side present is worthy of Glenn Beck or Limbaugh. You Sir, are a true conservative :) .

  20. gucci

    Iflan — do you roll 1/2 of your APPL 340 short  call weekly to next weekly 345 short call or higher strike. thx I have similar position

  21. mampcsA

     Phil, can you recommend a bearish hedge for today to hold over the weekend?

  22. lflantheman

    gucci;    No, I’m just holding these steady for now.   I expect market to draw back later today and these will protect losses for 1/2 of the long calls.   Even if the market doesn’t pull back, you’ve only covered 1/2, so you will still be fine.  The only reason we moved down to the 340s yesterday was to pick up that time value of 2 dollars.  We’ve already gotten 1.65 of that.  Now they act merely as protection on a pullback.  We will close them out at EOD. 

  23. Pharmboy

    Here we go back up…….

  24. Phil

    Good morning!  

    I think our DECK trade from yesterday is fine as is.  If you are worried, you can add an April $100 call to balance the delta but I don’t see $100 from those numbers. 

    Congrats to all our BA players!  One of our favorite long-term holds finally won that $35Bn contract (3rd time’s a charm!) from EADS.  I never had any doubt – but that was 18 months ago!  

    I forgot to mention how crappy our GDP number was (2.8% from 3.4% expected and revised down from 3.2%) but, of course, IT JUST DOESN’T MATTER – does it?  Bad economy = MORE FREE MONEY and that is all that matters to the companies we invest in.  

    Let’s watch our lines at  Dow 12,938, S&P 1,332, Nasdaq 2,530, NYSE 8,362 and Russell 800 (100% was 685) -  even if we go green on the S&P and NYSE though – I still want to ride neutral into the weekend.  

    In the $25KP – those VIX $17 calls dropped $1 overnight.  That’s kind of ridiculous so we’ll ride those out and the same with EDZ, which has a better chance of paying us anyway.  We’ll see how the rest goes but we are generally downward biased so we only get worried if we pop the NYSE and S&P lines to the upside.  

    It’s very tempting to go short here for a day trade but too risky as the morning selling may wash out quickly (volume looks low) and it’s a big POMO day.  Europe is green so let’s just enjoy the ride for now but, if I were going to short, it would be:  

    QQQQ NEXT WEEK (March 4th) $58 puts at .97, stopping out on the 2,250 line on the Nas, probably at $57.50.  That line would be the on/off switch for that cover probably at about .80 on those puts and they should make a nice cover into the weekend but only if you NEED a cover as it’s very risky and will probably lose.  

    How’s that for a pick? 

  25. Pharmboy

    Well, PLX had a CRL…..wonderful.  How did CLDA get their drug approved with all the side effects, but PLX has the same thing as Shire and GENZ….and are rejected.  Hummmm….again, I say, things make no sense. NIce.  They will get it, just a matter of time.  They even wiped out the 5 puts…..nice.

  26. mampcsA

     Phil, nice call on DECK. Waiting game now.

  27. 1020

    Flip, There you go Again….http://www.youtube.com/watch?v=rRnRX85tQu4
     
    :)

  28. bobhu

    Good Morning Pharmboy, is PLX a BUY at this price($6.68)?   Thanks.

  29. tchayipov

     Pharmboy / DCTH
    do you recommend DD here now?

  30. drumkeerin

    whoops, QID does a 5 to 1 split-those old options are now in the twilight zone

  31. flipspiceland

    Jrohomo  & 1020 Trading time. Have to desist. For now.
    The best you can do is ad hominem (look it up cuz) insults.
    Never deal with the facts, a true liberal.

  32. tuscadog

    Phil / Cash    Are you still advising about 65% cash position going into the weekend?

  33. tuscadog

    Pharm / PLX   Would you buy this morning on this big dip?

  34. Pharmboy

    All, DCTH and PLX….I am a buyer, next week.  Dust really needs to settle, and I would start by selling Ps.

  35. rainman

    tusca / cash — phil’s recommendation was "flexible and cashy" 8)

  36. dclark41

    Phil:
    "Sealed pallets wrapped in "Apple Confidential" tape are arriving at resellers early this week, suggesting another revamp of the company’s MacBook Pro (AAPL) is due to be announced, along with an expected new high-speed connection type based on Intel’s (INTC) Light Peak project, but using copper wire instead of fiber-optic. "

    http://moneymorning.com/2011/02/23/apple-inc.s-nasdaq-aapl-thunderbolt-could-ignite-intel-corp.-nasdaq-intc/
    Has this been announced yet? Can’t find anything. Is this what we are waiting for on the 25k INTC 22 calls? Now at .33. Thanks.

  37. Pharmboy

    25Kp – should be up to date.  I am out in a few hours for the rest of the day/weekend.  Have a nice one all!

     

    We’re even in INTC in the 25K.  Time to sell 1/2……???

  38. jromeha

    Flip- you just called me homo, no doubt on purpose. I’m not offended by the insinuation, I have plenty of gay friends. However, the fact that you choose to use that as an ‘insult’, is what’s both humerous(in a sad way) and offensive. You’re a small-minded idiot.

  39. 1020

    Flip – http://www.youtube.com/watch?v=K8E_zMLCRNg….
     
    Now where is that ignore button…..

  40. 1020

    jromeha/homo    Not that there is anything wrong with that…. ;)

  41. Pharmboy

    This comes out late yesterday on PLX. The FDA does not appear to want a clinical trial, just more background info, so looks like 6 mo to 1 yr delay.  LT, they will be fine.  I still say wait and sell Ps when things settle.

  42. flipspiceland

    @jromeha
    I’ve long been a practitioner of taking a gun to a knife fight.  You began the insults. can’t take ‘em, eh?
    Now b4 Phil yells at both of us, or me, let’s take this outside.
    Do what the Jakester says.

  43. jromeha

    1020 – exactly!  Well, I’m AD mil so actually there. lol

  44. Phil

    POMO = MoMo/Rainman – BILLIANT!  

    DECK/Savi – OK, where are we then?  The trade was selling 5 March $90 calls for $5 and buying 4 Apr $95s for $4.40 for a net $740 credit.  The March $90s are now $4.70 ($2,350) and the Apr $95s are $4.30 ($1,720), which is a $630 credit so it’s actually up $110 already (you only have to give $630 of $740 collected back to close it out).  So if you don’t like the trade – SHUT IT DOWN.  A bearish March/April spread will only give you a big payoff the next day if they really crash hard – that didn’t happen so this is now a grind out and you need to decide if you want to stick with it.  If yesterday freaked you out – then you probably don’t.  

    Great article Nicha – I wish I had time to get into that this morning but I got caught up trying to explain the benefits of options.

    Fixed/Exec – You said it

    Oops – I meant 2,750 on the Nas of course – already over the $57.50 mark on the Qs so now it’s just a hedge we can take on the way down.   

    LOL Flips!  Still not fixed?  More shock therapy for you!  So what happens when productivity increases without corresponding increases in wages – are you outraged or does your delusional outlook somehow permit you to cast that as some evil liberal plot as well? 

    It’s not one chart that shows the middle class getting screwed, Flips – it’s EVERY SINGLE PIECE OF DATA over the last 40 years.  I agree with you, people should save their breath trying to discuss this with you – it’s obviously your fervent religious belief that unions are bad while, if it wasn’t for unions, we’d already be getting 3rd-World wages for American workers.  Also, you are completely clueless as to the real issue here which is that Unions, as a group, fund Democrats who, as a group, are supposedly looking out for the workers on the policy level.  This isn’t about wages but about destroying the path through which the average American worker gets a voice in government.  

    And what Samz said!  

    Opinions/Jake – I try to keep them out of chat but when something as outrageous as what’s going on in Wisconsin happens in my own country, don’t you think it would be hypocritical of me to say nothing?  People saying nothing in order not to rock the boat is how this country got sold out in the first place.

    Beaish/Mampcs – I think Libya will turn ugly and I think that can spread and, as we know, a flight to dollar safety can wreck this market faster than anything.  They tried to ditch the dollar below 77 again last night but it didn’t stick, now 77.39.  That means this move up in the markets is very strong but it’s also dangerous as the dollar could pop and force the bears to capitulate and tank commodities, which could drag down key sectors on top of the relative devaluation that would be caused by a strong dollar.  So, short story is, I would keep well-hedged into the weekend but the trend is still up if nothing catastrophic actually happens so not too bearish at all!

    As a hedge, I think we can take advantage of the new FAZ contracts with the April $36/40 bull call spread at $2, selling T Jan $25 puts (or any favorite you have) for $1.50 for net .50 on the $4 spread that’s $3.50 (up 700% on cash) in the money. 

  45. 1020

    Sorry Phil, one cricket too many….

  46. yshenhar

     Phil – 1/2 out on INTC calls in the 25KP?

  47. jromeha

    Flip – that’s what’s sad about you Flip, you consider calling me a homo an insult! I consider it more evidence that you are a small-minded prick. It’s all good though, in another generation there will be few people who think like you. You will have no refuge…. Well, there might be some people in rural idaho who will still share your beliefs! lol.

  48. matt1966

    Article on CNBC alleging what I alleged on Monday.  Bernanke is a patriot.  In a way-
     
    http://www.cnbc.com/id/41778317

  49. 1020

    DAM I LOVE FRIDAYS!!!

  50. jromeha

    BTW, Im done, no more trading jabs with you Flip (today). Sorry for the disruption Phil, but I feel the undertone of Flip’s comments were borderline hate speech and felt compelled to respond. What can I say, his comments are even more irritating to me than Yipcarl’s daily, gushing mancrush on JRW last year!

  51. stjeanluc

    Just what Greece, Ireland and the PIGS needed:
    http://ftalphaville.ft.com/blog/2011/02/25/498686/the-eurozone-crisis-oil-shock-nexus/ 

  52. matt1966

    Phil, since the blowup in Libya began there really hasn’t been a flight to the $.  It’s pretty amazing really.  Usually the thing shoots up.  Instead, it was oil that shot up.  I think that’s very telling.  Lately, the correlation between equities and the $ hasn’t been as strong.  Also telling?

  53. Pharmboy

    Hello?????

  54. Pharmboy

    Matt – T’will happen to some extent, but liquid gold and gold are gonna be the way to go, for now.

  55. JohnC1

    Phil,  What are your thoughts on WMT, which has dropped substantially over the past few weeks?  Time to sell 47.5 puts?

  56. Phil

    LOL 1020!

    65% cash/Tusca – Oh yes!  We need to get over ALL 5 of our 100% lines before getting gung-ho bullish so short-term trades with cash until then.  Your short-term trades can lean bullish of course but you really don’t want to tie up too much cash when we could wake up Monday to $120 oil or riots in London or Paris or maybe even Detroit (sounds French!) or Chicago.  New Jersey teachers sound ready to riots – I met with some yesterday and Christie is looking to cut another $1Bn off the school budgets (he cut $1Bn last year) WHILE OFFERING NEW VOUCHERS so poor people can pay for rich kids to go to private schools – BRILLIANT!  It’s not just Wisconsin – there’s a nationwide, coordinated effort to shred the traditional Democratic support bases. 

    AAPL/DC:

     

    Apple MacBook Pro
    Apple has upgraded the MacBook Pro line, betting that Intel’s new high-speed technology for connecting a PC with other devices will help make the high-end laptops a winner among creative professionals.
    Apple released its latest MacBooks Thursday, the same day that Intel launchedThunderbolt. Formerly codenamed Light Peak, the interface is said to allow files to be transferred between compatible devices far faster than existing consumer connection protocols, like USB 2.0 or emerging standards like USB 3.0.

    Apple has made the quad-core Core i7 processor standard within the 15- and 17-inch MacBook Pros. The larger system comes with Advanced Micro Devices’ Radeon HD 6750M graphics card with 1GB of GDDR5 memory, while smaller model comes standard with the Radeon HD 6490M with 256 MB of memory. Prices start at $1,799 and $2,499, respectively.

    Apple is selling the 13-inch MacBook Pro with a dual-core processor. The starting configuration comes with a Core i5 processor and Intel’s HD Graphics 3000 integrated graphics. Prices start at $1,199.

     

     

    Not a huge deal but not negative either so AAPL creeps back up.  

    Have a nice weekend Pharm!  No on selling INTC, I’m happy with that position re. the above article.  

    Of course not 1020!  

    Check this commercial out:  

  57. Highlander

    Iflan,
    I warned about that AAPL down gap retrace possibility today. It is knocking on the door to break out even against heavy pressure of the fixers to keep it down. I have open order to sell feb 25 $350 callers @ $0.94 just to fgish!

  58. morxlntway

    being one of the few average people on PSW, i had to look up ad hominem and i didn’t see that it had anything to do with one’s sexual preference. I could be wrong of course, not knowing what’s going on in y’all’s heads.
    en.wikipedia.org/wiki/Ad_hominem

  59. nicha

     ad hominem – from wiki "is an attempt to link the validity of a premise to a characteristic or belief of the person advocating the premise."

  60. matt1966

    Is this one of those days where we creep along forever, finally pop above the morning high only to selloff pretty strong after that?  I hope so!

  61. Highlander

    Phil,
    Why do they ignore (economists) the high price of oil on the thousands of marginal oil companies in Texas ,NM, CO, PN & OH. It is dumping enormous amounts of cask instantly back into our own economy.Thats the way it works here in Texas and it is bailing our the State’s ass out just in time.

  62. twofaces

    Phil,
    I like PWER. They are producing power conversions for the communication infrastructure and solar equipment sector. They have a flexible manufacturing platform and positions itself for strong growth in 2011 despite a red flag on channel inventory build. P/E around 8!
    What about selling Put Jan2012, Strike7.50 for $1.05 and establishing a bull call spread Jan2012, Strike 10 and 12.5 for $0.75.
    Any modifications?

  63. JohnC1

    Phil:  Any adjustments to the FAS March 34 calls in the 25K portfolio?  Thanks.

  64. dmci

     Income trader,
    Close out the Mar 720/710P for $.05?

  65. jromeha

    Matt – I hear you, I am hoping oil pops to 98+. I dont see how, going into the weekend there isnt some fear buying going on… Of course, I guess we could get some fear selling spurred by the belief the Ghadaffi situation will be resolved this weekend. I could see that crazy fool blowing up some of his oil during his downfall though. I believe we will get one more spike to over 100$ before it crashes back down.

  66. twofaces

    regarding PWER:
    my target is 15 …

  67. jomama

    Pharm – PLX – no winners except those that were outright short which is a very brave trade.

    Phil – thoughts on Nutrisystems here? Getting hammered with a FAT uglystick.

  68. pstas

     HERO- up and away again.

  69. Highlander

    Nicha,
    Sorry to disagree with wiki, but you are speaking of ad authoritam , ad hominem is a logic error which means to attack the man instead of debating his ideas as opposed to the logic error of assuming his being an authority in one area somehow makes him an authority in another.

  70. jromeha

    Let’s go oil!

  71. 1020

    Morx/homo  The comment was in reference to how flip spelled jromeha’s name with his 10:09 comment….

  72. Pharmboy

    PLX/Jo – yesterday I was trying to study the options movement as well as the stock, and to me, they were fighting back and forth.  Things were not as clear cut, and the bias was on the long side of the trade from what I could tell. 

     

    Being a plant cell, vs mammalian, the FDA wants more info.  My whole premise was that the GENZ debacle and the shortage of TAlfa, the FDA allowed compassionate use of PLX’s enzyme.  The switch was fine with no AEs.  The FDA has some stick up its arse, and it is getting worry some that they are all over the map.  PLX is also cheaper to manufacture than GENZ (right in line with the Healthcare bill), so I think the company will get approval.  In the coming week or so, I will be selling Ps all over the place on them, as their technology is transferable to many different applications.  They took a haircut, but there is $$ there in what they do.

  73. Phil

    PLX/Pharm – Good deal long-term then.  Just the impatient people bailed.  I think the Aug $5/7.50 bull call spread at $1.30 is a good deal and you can sell the $5 puts for .60 to offset to .70 on a $2.50 spread but maybe wait on the put sale because, at $6.90, either the puts will pay better or your spread will go fully in the money and you don’t need them.  

    Have I mentioned how much I love a good VIX?  You don’t appreciate it until it’s gone…

    Way too many 1020…..

    INTC/$25KP, Yshen – Not when things are looking up.  As I noted in the $25KP review last night, we’re pretty bearish and those INTC calls are in pretty good shape with a month to go.  

    Bernanke/Matt – Yes, I hear they are working on a golden statue to honor him..

    Oil spreads/StJ – Interesting way to look at it. 

    Flight to dollar/Matt – I think we’re reaching that super-saturation point at which there are so many dollars floating around (ample supply) that it’s not possible to move it up.  That’s what causes hyper-inflation, when a currency crosses the threshold and becomes actually UNdesirable and people begin to go out of their way to get rid of them.  We’re getting close – one more tag-team policy speech by Bernanke and Geithner aught to do it.

    WMT/John – They have some real problems and will probably drop prices to try to boost sales.  I’d steer clear for now. 

    Creep/Matt – Not looking creepy except the way the indexes are flying.  Dollar being stomped back down to 77.30 is helping.  Fed dumped money and look what they did to poor TBT in a matter of minutes…

    Oil money/High – Because it’s a localized phenomena and, even in those states, it’s just money the consumer would have spent elsewhere going to oil companies instead.  Good for local oil company, bad for the Gap…

    PWER/Twofaces – First of all, if you accept the $1.05 bid and not the $1.20 ask (or at least $1.10 or $1.15) then you are screwing yourself by 5-10% on the entry.  2nd of all, the $10 puts pay $2.50, which is net $1.10 more than the net of the $7.50 puts but you can sell 1/2 as many to get more money and then you can do a 2x roll to a lower strike if you have to.  On the long side, if you are collecting $2.50, you can buy the Jan $5/10 bull call spread for $3 and that puts you in the $5 spread that’s $4 in the money (800%) for net .50 and your break-even is $7.75 which is just a hair over where you would be if the stock finished under $7.50 anyway.  

    FAS/25KP, John – Doesn’t anyone read my updates?  No, we’re good with them because they save us if we blow our EDZ and VIX money.  We’re pretty much balanced and, going into the weekend, no sense in getting unbalanced without a really good reason. 

    OPEN back to $90 – very tempting short.  

    Looking very topping now.  

    LOL – Peltz bid for FDO looking like BS.  Another great market scam….  

  74. flipspiceland

    @#hil

    You guys will not address the points I raise. Unions have been a partner in causing a rise in inflation. You will not look at wha has happened to employment in this country while unions have proclaimed that they have saved american jobs. What the hell ha happened to the tens of millions of jobs, then that have left this country or moved to right to work states?  You can’t beny it so you ignore it. Brilliant rhetorical subterfuge, but I ain’t buying it.  Nor is anyone else who possesses a scintilla of honesty running thru their veins.
    You liberals deny, deny, dey, obfuscate and lie, about the fact that the middle class is paying for the all the increases they extract from the taxpayer.  And you insist on characterizing my beef with Public Service unions as being anti-union painting me as against the workers.  That’s total b.s. and you all know it. 
    Go long WOR at 18.00.

  75. rehat

    dmci/RUT,
    I put my order to close the PUT side of the condor at .05 – let’s see if I get a fill.. good to take the leg out when you get a quick opportunity.

  76. Highlander

    Phil,
    BTW Texas produces 1.07 M bbls per day vs Libya’s 1.60 per day. But Texas production is disteibuted at around 9 bbls per day per well. Just think of the marginal pressures to spend.

  77. yshenhar

     Pharm
    What do you think about a starting a position in PLX?

  78. Highlander

    Phil,
    Look at that phony spike in AAPL volume, trying disperatly to keep away from the retrace today!

  79. morxlntway

    tnks 1020; i didnt notice that.

  80. flipspiceland

    @morxintay
    The reference calls out jrohema’s insults about stupid, (which may or may not be true, but ad hominem nevertheless) while she will not even once address my argument about the middle class being burdened with the demands of unions, while the middle class is being decimated. Nor does Phil.  While they bemoan the plight of the middle class every day, they do not or will not admit tha Public Service unions are part of the burden on the middle class.
    The hypocrisy of lefties knows no bouinds.
    Short WOR @ 19.25

  81. Phil

    NTRI/Jo –  Their outlook went very negative, not a knife I’d try to catch.  Notice the lack of upbeat words in the CC:

    Speaking of CC’s – still no transcript for DECK.  

    HERO/Pstas – That’s a good one! 

    All right kids – I’m not officially sick of it.  Please play nice or we’ll start moderating you....  

    Those QQQQ 3/4 Weekly $58 puts are right on target at .89 for a good entry here or the $57 puts at .44 are now a nice entry too.  

  82. 1020

    My new Flip alert…. :)

  83. 1020

    Sorry phil….I’ll be good… ;)

  84. flipspiceland

    @jromeha
     
    That’s all you got is name calling. Not one single refutation to my premise that the middle class is being assaulted by public service  unions, not helped.
    Not once in 10 replies.
    Ad HOMINEM,  that’s Ad HOMINEM. 

  85. flipspiceland

    @1020
    Ad HOMINEM, ma’am, AD HOMINEM.
    Meh.

  86. jromeha

    Like I said, I’m done. Although Flip still wants to play. Now he is referring to me as a female!lol

  87. daveo

    Enough. Go somewhere else.

  88. 1020

    ….not that there is anything wrong with that…. ;)

  89. dflam

    Phil/Yodi:
    thanks for the ROI calculation on HRB. When  cash margin is required against Puts,it’s such a pain to calculate ROI 

  90. flipspiceland

    @jrohema
    Got something against women?  Misogynistic?
    Are you EVER going to respond to the facts about the middle class being preyed upon by their own members, in Public Service employees unions?
    Or just quit?

  91. kimisk

    Phil — any thoughts on AXP? Seems to be underperforming. I recall you’ve mentioned it before. Also, what would be your preferred play now on our friend HCBK? Thanks --

  92. Phil

    Points/Flips – I addressed your first point with a chart that proved the exact opposite of what you said.  Do I have to write a term paper to address every one of your rants?  I’ll be happy to discuss this further with you on the weekend if I have time but today I certainly do not.  

    9 barrels a day/High – Yeah, it’s a crazy business down there.  If $100 oil were sustainable, there’d be another 1Mbd coming on line from all the wells that aren’t feasible at under $70 but no one is going to spend the money to restart wells on prices that are not likely to last long enough to pay for the start-up costs. 

    OK, Flips is now held for moderation – who wants to be next?  When I say save it for the weekend, I mean it! 

    AXP/Kimi – We just picked them yesterday.

  93. Savi

    I think we should stop this now--this is a trading site from 9.30   to 4 pm  is it not? quite uncouth I must say

  94. dmci

     rehat,
    I’ve had a $.05 close in for a few days now. I thought had a chance when TOS showed the spread of  -$.05 but no luck. It’s now back to $17.5

  95. nicha

     rehat, dmci – i tried closing the whole trade for $.20 this morning when it was trading at $.23. Now its jumped back to $.48.

  96. dmci

     Wrong decimal $.175

  97. Fabregas

    YOKU – I think it’s one of the most overvalued stocks out there

  98. amatta

    Phil on your comment about the Dollar… 
    I have the UUP March 22 Calls and 1/2 short the 23 Puts (net .90)… anything to do with it?

  99. rehat

    nicha, dcmi, The RUT is moving a bit so the premiums went up and the trade ran away.. I am sure we will get another chance as the RUT moves up in the next few hours… days….

  100. Highlander

    Flip,
    You sadly make the liberals point, the public unions are an unfair burden on the middle class. But and a big but, it is only because the general tax burden is also unfairly borne by the middle class due to the absurdly light burden borne by the rich!

  101. redlog

     Phil: INTC
    I didn’t have the same basis on the 25kp 22calls as you all, added some yesterday at .17 so @ $0.41 I sold and took 50% gain.  Now I see you still like them do you suggest re-entry?  TIA

  102. rainman

    Anyone know a good site that tracks average cost to produce an ounce of gold and/or an ounce of copper?

  103. 1020

    All in the Family – A classic comedy that made you think.  Where has all the great television programming gone?……

  104. gucci

    hi Phil — into the weekend what do you think for porfolio, bias to downside or tay neutral — thx

  105. stjeanluc

    Ominous statistics (obviously validated by Phil a long time ago) – we can’t afford $100 oil
    http://ftalphaville.ft.com/blog/2011/02/25/498751/oily-shadows-of-2008/ 

  106. Highlander

    Rainman,
    you want the incremental/marginal cost to produce an ounce of Gold, not the average cost!!

  107. a6474510

    I agree with highlander but also think everyone should have to pay for some of there benefits except for the folks in the military

  108. Highlander

    1020,
    Check out today’s self destruct of 2 and a half men by Sheen today!

  109. Phil

    At the open: Dow +0.22% to 12095. S&P +0.32% to 1310. Nasdaq +0.53% to 2752.
    Treasurys: 30-year -0.05%. 10-yr -0.07%. 5-yr -0.07%.
    Commodities: Crude +0.01% to $97.29. Gold -0.71% to $1405.80.
    Currencies: Euro -0.36% vs. dollar. Yen +0.01%. Pound -0.34%.

    10:00 AM On the hour: Dow +0.48%. 10-yr -0.03%. Euro -0.48% vs. dollar. Crude -0.44% to $96.85. Gold -0.88% to $1403.40.

    11:00 AM On the hour: Dow +0.52%. 10-yr +0.11%. Euro -0.39% vs. dollar. Crude -0.15% to $97.13. Gold -0.54% to $1408.10.  

    11:10 AM The Fed buys $7.24B in Treasurys maturing 2018-2021, of $23.97B submitted by dealers, in today’s open market operation. Bonds are clinging to small gains: the 30-year Tsy yield -0.01 to 4.53%; 10-year -0.015 to 3.43%; 5-year -0.01 to 2.185%.

    12:00 PM On the hour: Dow +0.39%. 10-yr +0.13%. Euro -0.3% vs. dollar. Crude +0.27% to $97.54. Gold -0.55% to $1408.00. 

    Q4 GDP (2nd estimate): +2.8% vs. +3.3% expected, +3.2% preliminary. Q4 GDP Deflator +0.4% vs. +0.3% expected, +0.3% preliminary. 

    Feb. Reuters/UofM Consumer Sentiment: 77.5 vs. 75.1 expected, 75.1 preliminary, 74.2 in January. Current conditions 86.9 vs. 86.8 preliminary, 81.8 in January. Expectations 71.6 vs. 67.6 preliminary, 69.3 in January. 

    The ECRI’s Weekly Leading Index climbs again, to 130.5 from 129.5, and annualized growth jumps to 6.1% from 4.9%. It’s a steady set of moves in the future-growth gauge from last summer.

    Richmond Fed’s Jeffrey Lacker says the Fed needs to start winding down its monetary easing programs before inflation becomes a serious problem. "Recovery has been well established," he tells CNBC. "We need to withdraw monetary policy stimulus at some point in order to prevent inflation from rising, and it’s often at this stage that inflation picks up." 

    Leading with a picture of a crumbling building labeled "U.S. economy" being held up by a Chinese symbol, China’s advertising supplement in the WaPo takes its yuan policy to the people. "Excessive spending … and low interest rates should be blamed for the trade imbalance." Who’s to argue? 

    Interior Secretary Ken Salazar plans to meet with oil industry execs today amid growing pressure to allow a resumption of deepwater drilling in the Gulf of Mexico. More offshore drilling would do little in the short run to boost domestic supplies, but it could help insulate Obama from charges that he is failing to act in the wake of surging oil and gasoline prices. 

    Oil price spikes couldn’t be coming at a worse time, says HSBC chief economist Stephen King – noting the pattern’s lining up for those who think oil and gas, not excessive credit, ultimately fuel the world economy. It might take $150/barrel to hit the breaking point, though. 

    Bank economists take issue with the absurd assertion that higher oil prices, by pushing inflation onto Japan, will be a boon to its economy. Macquarie remembers the last oil surge tipping Japan into recession long before Lehman blew.  As Cullen Roche notes, the recent surge in crude is profoundly deflationary.

    YouTube (GOOG) is reportedly eager to launch a streaming movie service that would compete with Netflix (NFLX) and Amazon (AMZN), and is considering debuting the service in Europe, and particularly the U.K., to cut down on competition. 

    What budget cuts are really all about:  The CFTC suspends development of a technology program meant to flag suspicious trading because of an $11M budget cut. The shortfall is causing a partisan rift in the agency, as Democrats and Republicans put forth competing visions of what the CFTC should do with its limited funding. 

    The Wisconsin Assembly passes a bill that would strip most public workers of their collective bargaining rights, setting up a showdown in the state’s Senate. The Republican agenda is now apparent to all, Paul Krugman says: "Union-busting and privatization remain GOP priorities, and the party will continue its efforts to smuggle those priorities through in the name of balanced budgets." 

    The greenback’s fall puts a strain on familes in emerging economies, many of whom rely on expatriate members sending home dollars. In the Philippines, Lorena Baquillos exchanges her seaman husband’s pay for just PHP 33K vs. PHP 43K not long ago.

    Inflation continues to accelerate in Deutschland, where individual states report monthly jumps of 0.5-0.6%. One economist sees German inflation pushing 3% by autumn. The euro falls sharply from a multi-month high hit earlier this morning, buying $1.3754.

    Revised figures show the U.K. economy shrank slightly more than previously reported in the Q4 2010. The ONS blames horrid December weather for the vast majority of the 0.6% shrinkage. Cable is off marginally at $1.6099. London shares?

    FT’s Gillian Tett wonders if recent unseemly losses at the uber-conservative Swiss National Bank are the canary in the coal mine for thus-far uncannily lucky central banks – including the Fed. According to Yves Smith, the problem’s even worse than Tett imagines

    Voting begins in Ireland where the Fianna Fáil party will lose its 14 year hold on the government. Fine Gael leader and next probable PM Enda Kenny will make a reworking of the EU bailout his first order of business. Don’t look for early results – counting starts tomorrow. 

    Lloyds (LYG): FY’10 pre-tax, pre-charge profit of £2.2B ($3.55B) vs. £2B consensus and a £6.3B loss last year. Improvements driven by the wholesale and retail-banking divisions; the wealth unit saw losses grow on higher bad loans to Irish customers. Central-bank funding cut to £97B in Q4 vs. £157B in Q4 2009. Shares -3.1%. (PR)

    Quick action in Spain, where highway speed limits are lowered and train ticket prices are cut in response to more expensive crude brought on by Libya. OIL +0.6%. BNO +0.7%. – It must be nice to have trains to fall back on… 

    The carnage in the grain markets looks to have driven out at least a portion of the weak and speculative longs. A new base from which to rally, or the start of a bear market? JJG +0.8%. CORN +0.7%. AGU +2.2%. POT +3.7%

    In a 2,000-word public letter released this morning, Huawei Technologies urges the U.S. to investigate the company, hoping a thorough probe will finally quash ongoing suspicions that Huawei has ties to China’s government and military and poses a threat to U.S. national security. 

    Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) both posted quarterly losses yesterday evening. Fannie Mae: Q4 loss of $2.1B, FY’10 loss of $21.7B, asked for another $2.6B in aid. Freddie Mac: Q4 loss of $1.7B, FY’10 loss of $19.8B, asked for another $500M in aid. 

  110. rainman

    Highlander / cost — That would be interesting as well. Average costs can be telling in comparision though. I’ve never tried to compare the costs of different miners so maybe I’m way off base here. I guess any kept up-to-date data sites would be worth a look.

  111. stjeanluc

    And we all know that busting teachers unions is the path to better education:
    http://www.lawyersgunsmoneyblog.com/2011/02/but-i-thought-union-busting-solved-all-educational-problems
    I know, sometimes facts have to be ignored, especially when they don’t match one’s belief…. 

  112. rainman

    BTW: I’m looking at NEM who was hit by higher costs and is bouncing on technical support. I’m trying to determine if it will break through or if it might be a buy here.

  113. samz3700

     Does anyone else find the market action crazy -
    The entire middle east is unstable and in play and the market is bouncing - 
    Who wants to be long into this weekend?

  114. Highlander

    Phil,
    Check out FTSE, CAC, DAX. They are booming at the close!!!!! Any carryover to our close?

  115. gucci

    FAS — Phil should DD for adjustment?

  116. amatta

     Phil, 25K on FAS, as I have mentioned I didn’t enter the DIA nor the VIX plays as I was way too bearish already… so based on your comment to John would you cover with something?
    Thanks

  117. lflantheman

    AAPL wants to push upward, so I’ve added a few more April 345 calls.  Will still hold the (now 1/3) Mar/Feb 240/240 spread till EOD and close out then. 

  118. pstas

     HERO  - Maybe this is the day it breaks and holds 5 bucks. 

  119. cwan120

    TBT below $38??

  120. ravalos

     Highlander/Sheen, where?

  121. Highlander

    Iflan,
    I went with aapl apr 350 and 360 calls. Up  6+ and 8+ % for the day!

  122. Highlander

    Iflan,
    BTW my aapl mar 350′s are up 14+ % for the day!!

  123. traderd

     Some big buying spikes in IWM

  124. Phil

    UUP/Red – I’d give it the weekend but then you may want to think about it as we’re down to 3 weeks.

    INTC/Red – No, just set a sensible stop on the rest and enjoy the ride if there is one.  

    Producing/Rain – Each miner is different, generally between $450 and $650 an ounce for the big boys with Jr. miners up to about $800 but I can’t think of anyone higher.  

    Thinking comedies/1020 – I submit 30 Rock and Big Bang Theory

    Bias/Gucci – Didn’t I say that?  Neutral!  I have no idea what’s going on

    Speaking of South Park, here’s the summary of the morning chat argument.  

    Oil prices/StJ – Notice this is the first time, ever, that prices have sprung right back to their highs.  Yep, this time will be different…

    Sheen/High – That is messed up!  Amazing when so many people depend on that guy to show up for work too…

    Education/StJ – That is certainly worth noting!  

     

    Only 5 states do not have collective bargaining for educators and have deemed it illegal. Those states and their ranking on ACT/SAT scores are as follows:
    South Carolina – 50th
    North Carolina – 49th
    Georgia – 48th
    Texas – 47th
    Virginia – 44th
    If you are wondering, Wisconsin, with its collective bargaining for teachers, is ranked 2nd in the country. Let’s keep it that way.
    This isn’t to say that the lack of collective bargaining explains these poor outcomes, of course, but it is true that the evidence that breaking teacher’s unions improves educational outcomes is somewhere between “exceptionally weak” and “non-existent.”  [Link]

     

    NEM/Rain – Tricky to play miners like NEM who are negatively impacted by higher crude and other costs.  I get bored saying it but ABX, HMY, NAK (who finally had a nice pullback).  

    Crazy/Samz – More like irrational and insane and unrealistic…

    EU/High – Yeah, they got a big stick too but there were sellers right at the close and I expect the same here.  The only question is will it be after a big pump?  Theirs came around 90 minutes before the close so 2:30 for us.  

    FAS/Gucci – No, I don’t want to put more cash in right now.  They have a month and can come back very fast.  

    Cover/Amatta – Yes, you should cover with something, how about the TZA play above?  I’m sure you don’t mind a little T for the long-term.

    AAPL is now driving the Nas with a 1.4% gain that accounts for 0.3% of the Nasdaq’s total gain (25%). 

    TBT/Cwan – Heavy POMO week is bad for them. 

     

  125. japarikh

    Phil,
      I bought back my NFLX March 200 calls for $25 this week. I was worried they may spike up. Had I waited, I would have made money instead of losing it. This seems to be a recurrent problem for me. I thought last week with the unrest in Egypt, the markets would go down. Instead, they went up. What was different about Libya? Was it that it correlated with no POMO as well? I feel that I often have the right idea but my execution is terrible.

  126. Peter D

    Happy Friday!  This is the 2nd consecutive big pay day for short strangles where VIX is clubbed back to 19.15.  I’m buying to close a few and move a few to April with more cushion in case we whipsaw down again.

  127. 1020

    Phil/morning chat   I love the smell of brush-up in the morning….. :)

  128. jr_mints

    Phil, On the TZA play, do you see a problem with RIG in lieu of T?

  129. rainman

    Phil / More like irrational and insane and unrealistic… — But it doesn’t matter! 

  130. pstas

     HERO- the newest MOMO stock – up 22% today. Why not? 

  131. b1ll

    Phil DSX has lowest p/e in group any thoughts ?

  132. Highlander

    1020,
    Yep thats it! Also can check out utube on charley sheen

  133. redlog

     Phil: NC/SC right to work
    Not having unions also did nothing to prevent all the furniture/textile manufacturing jobs from disappearing either :(

  134. augrusot

     HERO: April $4 calls have very little premium. Phil, thoughts?

  135. Highlander

    Phil,
    From the spikes in AAPL volume, it looks like the big fund AAPL call writers are getting spooked on the $345′s 14k contracts have traded with 10k o.e. Afraid AAP will gap up over the weekend after they have been called away.

  136. lflantheman

    I’ve converted all AAPL trades to spreads.  Anyone want the logic on this, I’ll do after hours.  The spreads are Mar 345/360  and Apr 350/365.

  137. rainman

    redlog / textile — wasn’t the textile industry responsible for the first unions? Or maybe I’m thinking OSHA after a disasterous fire?

  138. chuckerd

    Lunchtime Observation – Day 2:  CNN back to showing market performance today…on an up day.  Sneaky little buggers.

  139. nicha

     Iflan, High – AAPL: holding a $340 put that is down 50%. Any advise?

  140. amatta

     What spooked SPWRA?

  141. shadowfax

    Next resistance is 81.98 very strong and would take a big push to pass next 82.66

  142. lflantheman

    I would close the trade as a spread any time.  In other words, you must hold  a March 340 or so.   Sell the Mar 340 /Feb 340   spread.   If you buy the cover  back alone, then your long call may drop afterwards and give you a whipping.  If you close it as a spread you will capture the time value of the cover and be done with the trade.   Then if the stock drops in the afternoon you can just buy it back at a lower price (if you want it).  And of course you want it.  :)

  143. lflantheman

    nicha    I think I misunderstood your question/

  144. lflantheman

    What put are you holding, exactly?

  145. samz3700

     anyone having a hard time with tza options - 
    IB is not displaying any volume and you can only close positions so I am assuming it is tza2 (old) but prices are listed in the 30s and 40s so its the new??

  146. nicha

     Iflan/AAPL – Mar $340 P. Bought for $11. Now $6.

  147. jjflash

    Phil-Have Mar QQQQ 58 Puts @ 1.16 and am looking for a hedge over the weekend.  Thoughts?

  148. jromeha

    Amatta – I think SPWRA is just having fallout from FSLR’s earnings report yesterday or the day before. My STP is getting beat up a bit too.

  149. lflantheman

    nicha….You own the march 340 put…….I would sell it.  I don’t think AAPL will be at 340 in March.  If you think the market may tank, then use the 6 dollars to buy some downside protection, like TZA or IWM.   But I’d get rid of the AAPL March 340 put. 

  150. rainman

    Phil / FAZ / TZA — I think you’re mixing up symbols. I went back to find the TZA hedge and couldn’t find it. I could only find the FAZ hedge @ 10:30. They both reverse split so there might be some confusion.

  151. morxlntway

    i think he meant T as in AT&T, maybe

  152. shadowfax

    samz/TZA
    I got an bad fill that was .12 over ask, it was the stock, the spreads are extra wide. My timeing is off today,up .6% missed every bottom 100% cash now expecting a retrace.

  153. judy

    crude popping

  154. lflantheman

    How sweet it is (sweet crude that is).   Go Go USO.  You know the logic.  If you can’t control the price of oil (which you can’t) then at least try to make enough $ on it to pay for some of your gas. 

  155. lflantheman

    Phil….Oil going up.  Stocks going up.   Huh??

  156. Phil

    See how nice it is to talk about the markets instead of BS during trading hours?  

    VIX all the way back to 18.91 already, was just 23!  

    Libya/Japar – Well they have more oil and are more likely to descend into chaos.  As least Mubarak had fake elections so there was a system to fall back on when he’s gone.  Libya is a total wild card and that can get ugly.  We did go down at the beginning of Egypt and then they jammed us right back up so this is pretty much the same game plan.  As to the right ideas – if you have the right idea then stick with it.  If you have a plan to run against a team that has clearly poor running defense but your first series of running plays leads to a loss of yardage and a punt – do you throw in the towel and give up the game or totally change your strategy or do you make some adjustments?  Why should your stock strategies be different?  

    Sheen//1020 – You would think an actor would know not to piss off the guy who puts words in his mouth….

    RIG/JR – As long as you are down around net $60, then I like selling puts. 

    DSX/B1 – That’s a good one.  The seem to have plenty of cash and low debt and great cash flow.  Are you sure they are a shipping company?  I would say yes but you have to remind me on the weekend because they did some kind of strange split to create DCIX and I have a worry that the numbers we see may not reflect reality as they may have simply created a good-LOOKING stock by splitting off the evil twin and we’re not sure if either is viable as a sole entity. 

    Jobs/Red – Well, right to work is right to not work as well…  8)

    HERO/Aug – They were featured in some newsletter yesterday and I don’t think it’s a good idea to chase.  However, you can sell Jan $5 calls for $1.30 into the excitement and buy $2.50 calls for $2.75 to cover if they hold $5 and that’s $1.45 on the $2.50 spread with no margin.  If they head down and you don’t need the $2.50 calls to cover.  You can just wait until they are back to about $4.30 and then buy to cover and sell puts.

    AAPL/High – If we have a calm weekend, the whole market could gap up.  Also, I think March 4th is their next announcement date and what kind of fool shorts AAPL into a product announcement these days.  We already know Jobs won’t be there so he can only surprise by showing up (and then the shorts would be massively screwed).  

    CNN/Chuck – I’d love to see a study on that!  

    SPWRA/Amatta – Oil not holding it together, other solars giving poor reports (FSLR sucking as expected).  Also, budget cuts = subsidy cuts. 

    TZA/Samz – No counterparties established yet.  A few strikes are selling but very light so far.  

    QQQQ/JJ – How about selling 1/2 the March 4th Weekly $58 puts for .70 as they can be rolled to 2x the $57 puts or 2x the March $55 puts (now .35) for a $3 vertical.  Generally, they can’t really hurt you and make a nice buffer.  

    TZA/Rain – You are right but the same trade works there too except you can fill TZA!  The $37/43 bull call spread is $2 on that one and, same deal, just find something to sell for $1.50 that you REALLY want like the HPQ Jan $35 puts for $1.65 and it’s net .35 on the $6 spread that’s $5.70 in the money – what’s not to like?  

  157. Highlander

    nicha,
    I agree with Iflan, get rid of the put. I also would be careful buying such expensive puts in the future especially on such high growth potential stocks. Did you buy before or after Job’s Cancer center pic’s?

  158. matt1966

    Ahhhhhh.  Love it when a plan comes together!  I’d like to see the inverse of yesterday’s candle by end of today.

  159. shadowfax

    Phil
    Have we seen the top today? How has the volume done today?

  160. matt1966

    Dumbasses have already resumed buying the dip-

  161. shadowfax

    matt1966
    Did you catch that up today? Looks toppy to me now.

  162. jabobeast

    PCLN—have you seen this today? I still think that their growth forecasts are too high and eventually they will feel the pain like the others. What is your opinion Phil?
     
    http://www.fool.com/investing/high-growth/2011/02/25/is-there-turbulence-ahead-for-pricelinecom.aspx

  163. nicha

     High/AAPL – after the pics…

  164. yodi

    Phil  MOMO Salesforce is on fire any idea on plays??

  165. Phil

    Oil popping/Iflan – Back to $98.50 after falling from $103.50 is not very up.  I almost agree that speculating on oil is smart over the weekend but very possible it goes the other way entirely so not a "hedge" it would just be a gamble.  

    Top/Shadow – I thought so when I called on the QQQQ plays before but they jammed us right back over the line.  I still think afternoon sell-off but maybe not until we get a stick back to Tuesday’s opening drop, which is still up 100 for the Dow but not so far for the others.  

    PCLN/Jabob – It’s very difficult to apply logic against the story of infinite Chinese demand, which is the crux of PCLN’s growth story.  I could be saying "China is building 100 new airports that will give 500M more people access to travel in the next 5 years" and that sounds very impressive if you don’t think about the fact that 500M farmers don’t have a lot of time to go to Paris, even if they did have the money.  But, China is, in fact, building airports like crazy and, until they are built and stand as empty as their cities and their office buildings and their shopping malls – it’s going to be hard to convince people that PCLN won’t hit their numbers.

    MoMo/Yodi – Can’t fight today’s POMO.  Cashy until next week is way safer.  

  166. Phil

    1:00 PM On the hour: Dow +0.49%. 10-yr +0.09%. Euro -0.32% vs. dollar. Crude +0.25% to $97.52. Gold -0.56% to $1407.90. 

    2:00 PM On the hour: Dow +0.55%. 10-yr +0.14%. Euro -0.34% vs. dollar. Crude +0.99% to $98.24. Gold -0.43% to $1409.70. 

    Don’t kid yourself; of course gasoline prices could tip Americans back into recession – and considering the current fragility, maybe at lower price points than before, like $3.50/gallon. Old givens (such as: Saudi Arabia’s regime will remain intact) are facing new questions. 

    Daniel Yergin, chair of IHS Cambridge Energy Research, warns against calls by U.S. lawmakers to open strategic oil reserves to reduce the pressure on fast-rising oil and gasoline prices, saying the reserve should be used only to combat supply shortages and not to lower fuel prices. – Yeah, let’s take the oil guy’s advice!   

    Oil is quietly marching higher, gaining back all of the ground it lost on the Gaddafi shooting rumor yesterday. Libya’s Deputy U.N. ambassador says the export of crude may be stopped soon for security reasons, and warns/promises Gaddafi will not be taken alive.  OIL +1.9%. BNO +2.0%

    Cool way to disguise another stimulus:  Japan will shower private industry with $80B in an attempt to cut rare metal usage by one third. "By reducing the use of rare earths, finding alternatives, promoting recycling and diversifying supplies, we will escape dependence," says the official statement. 

    Maybe it’s not just QE that explains the two-year stock market rally. Eddy Elfenbein notes that S&P earnings for 2010 far exceeded expectations: "The S&P 500 earned $83.78 for 2010… [which] would have been considered insanely bullish a few months ago." 

    Wealthier consumers juiced consumer sentiment to its highest in three years: Among households with incomes of $75,000-plus, sentiment rose 9.7%; the index fell 1.4% among lower-income households. The spike in oil prices may hurt sentiment going forward – not from lack of supplies, but "the risk premium priced into oil" due to Middle East worries, an economist says. 

    Retail foreign currency trading in Japan is so popular that, occasionally, the collective Mrs. Watanabe is the whale, a remarkable fact given the $4T/day market usually dominated by large banks and hedge funds. As for being profitable, brokerages in Japan don’t report on it.

    Three lunchtime reads:
    1) Four crowded macro theme trades that may start unwinding
    2) Why Germany’s economic fortress could come toppling down
    3) Three ways to dodge the looming bear market in U.S. bonds

  167. matt1966

    shadow, I thought we’d topped.. but the RUT and SPX had different ideas.  Yes, I caught the ride up in FAS.  Twice.  Now short and looking for a pullback.  It’s not quite the ez ride I was hoping for!

  168. flipspiceland

    @Highlander
    I never expected the elite to  bear the burden of middle class. Look what lord Blankfein and AIG got away with. Their attitude has always been: If the middle classes want Social security then they will have to pay for it. If the middle classes want mortgage interest and tax deductions, they will have to pay for it. All the breaks that the middle classes supposedly get are going to be paid for by the middle classes. 
    The very wealthy live in a different world and they  know that they can make the middle classes pay for themselves thru that onerous taxation, thru control of the politicians.  All the complaining in the world a la Phil, will do nothing to make that change.
    Public service unions’ pound of flesh  will be paid for by the middle classes, not the rich. While our so-called "public servants’ earn more and more, the top level of these shysters retire as millionaires, they are taking that money not from the rich but from their neighbors, kids, and the 90% of the people who they claim to serve.

  169. Phil

    From Barry and SocGen:  

    Economic Surprise Indicator

    >

    Bonds no longer expensive vis à vis equities

    1 & 3: time to switch out of bonds into equities
    2 & 4: time to switch out of equities into bonds

     

     

    Is this bull market almost over, or will it thrive for years? (USA Today)

    • 

    BRICs Losing for Second Time in Decade as America Takes Over (Bloomberg)

    • U.S. Pushes “Cramdown” Mortgage Deal (WSJ)

    • BofA’s legal woes from Countrywide worse than expected (LATimessee also Legacy Countrywide mortgage investors rally against potential settlement with Bank of America (FT.com)

    • Market Crash 2011: It will hit by Christmas (Marketwatch)

    • Farmers Can’t Meet Demand as Corn Stocks Drop to 1974 Low (Bloomberg)

    • It’s the Inequality, Stupid (Mother Jonessee also Soak the Super-Rich (Balloon-Juice)

    • Political Unrest in North Africa and the Middle East (NYT)

    • The Billion Dollar Lost-Laptop Study (Intel)

    • Google Forecloses On Content Farms With “Farmer” Algorithm Update (SearchEngineLand)

    • Less Virtual Keypad for the iPhone (Gadgetwise)

  170. matt1966

    Libya is about ready to roll over.  Rebels have some of the oil fields and production will be shut down completely.  Meanwhile.. we don’t care because we have a wealth affect to create!  Insanity. 

  171. Phil

    What the Hell does this mean?  

    Federal Reserve Vice Chairman Janet Yellen says the central bank will use an "alternative communications strategy" to shape market expectations about its policy outlook. Conditions would likely "tighten immediately" if the market expects a more rapid selloff of the balance sheet while a slower exit might be stimulative, thus the Fed will use great care in its communication. 

  172. mampcsA

     IB is totally messed up. Wont allow to buy TZA or FAZ calls for some reason. Says these contracts can only be closed.

  173. rainman

    Phil / fed — means they aren’t going to give you a schedule to frontrun the market down like they did to run the market up!

  174. Phil

    Wow, there is a VERY serious seller on XLF right  on the $16.80 line.  No matter what they do they can’t pop that guy.  Also seeing sighs on the Nas now too.  Gonna be interesting.  

    Dow volume just 82M and Cramer doesn’t seem to be gung-ho bullish but this (90 mins to close) is when the big push came in Europe so let’s stay on our toes.  

  175. 1020

    Phil/Hell   Ebonics Phil, Ebonics….http://www.youtube.com/watch?v=EndozxolXKE
     
    ;)

  176. shadowfax

    matt
    No matter what the market goes up. Been ready to short since 13:15.

  177. flipspiceland

    @Phil
    Whatever, I expect no less from librerals who do not address a point with deflection, rhetorical flourishes, and lies. Your graph doesn’t begin to address my point.
    I put to you a simple premise that the middle classes are being HURT not helped by public service unions and you refuse to look at it. Can’t bring yourself to admit it, then moderate me.
    As I’ve said before, i’m not going to change your ways and you aren’t going to ever make a dent in my experiences.
    So once again, this is your board, your business.  I never joined it to become involved with an incestuous few liberals who see only their side of things. I came here to make money and I swear to you on my honor, and if that’s not good enough, cross my heart and hope to die, that I will never respond to your liberal, political raving rants ever again. That field I concede to you.  Feel free to rant away about the ‘benefits’  of public service unions, taxing the rich to pay for the deficit, and whatever else you fancy as a way to achieve social justice while the silent among us chortle at your diatribres. 
    My posts will confine themselves to this or that option, that b/w, or some exotic combination of puts and calls.
    Guaranteed.

  178. lflantheman

    Janet Yellen….It’s doublespeak, designed to confuse you and make you believe that she’s smarter than you and that , therefor,  you have no right to question what she’s "saying". 

  179. jasu1

     Phil,
    So, if it is time to switch out of equities and into bonds per Barry R., what would be the play you would recommend? 
    Thanks

  180. pahurik

    mampcsA, you must buy new tza calls, not olds, before split, simple

  181. lflantheman

    Waiting for the sellers, who want to be in cash for the weekend…..waiting.

  182. rehat

    Iflan,
     
    What do you mean waiting. Are you ready to buy AAPL or something else?

  183. Phil

    Fed Rain – It does sound like their brief flirtation with "openness" is at an end.  I suppose their "alternative communication strategy" means they’ll let the IBanks know what they are doing in advance and then the public will find out – "one day."

    Ebonics/1020 – There is an actual thing called ebonics and that is not it.  That joke was done originally, and much better, by Airplane

    Bonds/Jasu – I don’t think bonds are a good idea at all.  I’m not sure Barry does either, he’s just pointing out the cycle seems to be peaking and yes, when rates go up then people will move out of equities but until we can’t make more than 10% a years in stocks, I don’t think I’d be looking to tie up much cash in bonds. 

    Waiting/Iflan – Last half hour.  Notice XLF gave up trying.  

    3:00 PM On the hour: Dow +0.52%. 10-yr +0.13%. Euro -0.44% vs. dollar. Crude +1.02% to $98.27. Gold -0.43% to $1409.70.

    With all personnel now safely out of the country, the U.S. closes its Libyan embassy due to a "deteriorating security situation."

    A letter signed by mostly Republican foreign policy experts urges President Obama to call on NATO to send air and naval assets to Libya as soon as possible. Separately, Senators McCain and Lieberman ask for the establishment of a no-fly zone, and the abandonment of U.S. recognition of the Gaddafi government.

    Consumer Reports says Verizon’s (VZ) iPhone4 (AAPL) has the same "you’re holding it wrong" problem as the AT&T (T) version: "It can occur when you hold either version of the phone in a specific but quite natural way in which a gap in the phone’s external casing is covered. The phone performs superbly in most other respects, and using the iPhone4 with a case can alleviate the problem." 

    The legal mess Bank of America (BAC +1.6%) inherited from Countrywide keeps getting worse. Several large institutional investors, including BlackRock and Calpers, reject a court settlement where Countrywide had agreed to pay $600M to a number of national pension funds; instead they’ll pursue their own lawsuits.

    Just another day at the office in the grain pits – corn gives up a month worth of gains on Monday and Tuesday only to gain it all back and close about unchanged for the week. Beans, wheat, and rice see similar, but not quite as dramatic reversals. JJG +3.7%. CORN +3.8%. AGU +2.9%. POT +3.4%

  184. lflantheman

    rehat…..I was expecting a drop in the market this afternoon.  It was a tongue-in-cheek comment.   :)

  185. Highlander

    Iflan,
    sounds like the line from Casablanca

  186. shadowfax

    Trend lines will crash in 15 to 20 minutes.

  187. Phil

    Still liking the QQQQ puts!  3/4 $58 puts are now .73, $57 puts are .35.  Still risky, still fun.  

  188. Highlander

    Nicha,
    Normally you buy cheap protection puts (i.e. aapl) when everything looks great and then sell into the new/excitement in such negative events!

  189. lflantheman

    Weeklies Phil?

  190. shadowfax

    broke the upper trend line

  191. lflantheman

    Got it…yes, weeklies.

  192. dmci

     Phil 
    What do you think of the MRK Oct11 $28C @4.55. MRK looks like it has bottomed and only $.3 premium. I already own them @34

  193. palotay

     So long OIL over the weekend for a gamble?  Or short?

  194. palotay

     Phil/Deck – I’m a little unclear on how this position plays out.  Are we looking for the march calls to expire worthless, and then sell the April calls at March expiration?  

  195. lflantheman

    palotay……I’m long USO, as I think oil goes up most likely, but who knows?     Depends upon unknown world events. 

  196. 1020

    Phil/Ebonics  Yeah, I remember when the Oakland California school board recognized Ebonics in the nineties.
     
    I do like my boy, George Zimmer’s tutorial a bit better though….. :)

  197. ephmen85

    GLD   I’ve sold most of my position and I’m left with a +1 Mar 125 / – 1 Mar 35 Call vertical.  I was thinking of just letting the premium run off and cash it at op-ex, but I’d kind of like to keep some exposure to gold due to this whole paper-currency-collapsing- thingy people are talking about.  Waddayathink about rolling my long call something like Jun5 130 for a $3 credit?  I’d need to pick up $7 worth of premium rolls and price accumulation over the next few months to make it a better trade.  The alternative is to sell now get back in on a real pullback, but I’m less confident than you that we are going to get a meaningful correction.   Thoughts?  Anyone…Anyone…Bueller?

  198. ephmen85

    that’s obviously a 135 caller which I noticed as soon as I hit send

  199. jabobeast

    Looks like the RUT and NASDAQ ar ethe big winners today

  200. 1020

    Question:  Anyone here had the Lasik eye surgery?  How are the results?  Thanks!

  201. dmci

     Phil,
    Nevermind, I think the Apr are better for what I want to do

  202. nicha

     High/AAPL – thanks for the advice. Made a mistake buying the put and waiting even longer to sell.

  203. nicha

    1020/Lasik – got it done in 2003 in Canada. I went there because it was 2/3 the price than in the US. Haven’t had a problem except for a night glares (headlights of oncoming cars etc) for a couple of years. 
    My brother got it done a couple years ago in the US and he experienced an under correction. He had to go back one more time and is all set now. He also had problems with night glares for about a year.
    All in all, worth it.

  204. snow

    1020 / Lasik – I’d hold off on it- good friend of mine is a retinal surgeon, says long-term the eye tends to revert to its original condition – then you have to repeat the Lasik, but there’s a limit to how many times you can do that – scarring.

  205. doro165

    Phil, the QQQQ trade hold overnight?

  206. b1ll

    SPWRA & WFR headed in opposite directions all day

  207. nicha

     snow/Lasik – long term = how long? For me the difference over not having to wear glasses trumped (i had a high power and the glasses were thick).

  208. lflantheman

    NAS holding steady b/o AAPL.  DOW sliding a bit. 
     
    Lasik……I prefer glasses.  Any kind of eye surgery is more dangerous than glasses. 

  209. nicha

    1020 – the doctors do caution you that in rare cases you can go blind with surgery.

  210. rainman

    snow / revert — Isn’t that always the case? That is if you don’t change habits, your eyes will try to recorrect? Isn’t that why glasses get thicker over time? The eye just wants to get back to its comfort level. I refused to start wearing glasses in college and my eyesight is now better than 20/20 (but getting worse with age).  

  211. snow

    Lasik / nicha – not sure – have to check on the length of time. Bear in mind this technology has been around something like 15 years, so I’m thinking long term is around 10 years.  But i’ll check into it more.

  212. Highlander

    Lasik,
    I guess it depends on how long you plan to live, anything over 8 years, I would say no! I use progressive glasses and am a pilot and see better now than twenty five years ago !

  213. humvee4me

    Nicha:  my mother told me of other ways of going blind, but that never stopped me  :)

  214. nicha

     humvee – my mom told me that too! :)

  215. humvee4me

    Lasik:  my wife had it done before they used lasers  (actually used scapel) over 25 years ago.  It has never been a problem, although now she has to wear reading glasses because of the usual presbyopia that we all get.

  216. Highlander

    Phil,
    Looks like they are going to allow aapl to close the gap and get it over with!!

  217. lflantheman

    I’ve gone bullish/cash for the weekend. 

  218. nicha

     High/AAPL – what time frame chart are you looking at? Thanks.

  219. Phil

    Weeklies/Iflan – If you mean the Qs, it’s the NEXT Weeklies, not the Todays.  

    MRK/Dmci – I like MRK long-term but I don’t trust them enough to do an unhedged play.  Why not sell the $32s for $2.05 and cut it down to $2.50 on the $4 spread.  If you want, you can buy to of those instead of one naked call and make $3 if they just hold $32, rather than needing $32.55 just to break even.  

    Oil/Palotay – Pretty random but the odds of catching a $5 move up are more than a $5 move down.  Figure $1 in oil is about .50 in USO so a $5 move would be between $37.50 and $42.50 (now $40) on USO so you can play for volatility by buying the $39 puts for .60 and the $41 calls for .52 and figure the decay will cost you about 1/3 so risking about .35 to make .50-$1 on a big move.  

    DECK/Palotay – It was a credit spread.  If the March calls expire worthless than whatever value remains in the Aprils is just a bonus.  Now the 5 short March $90s are just $2.80 ($1,400) and the 4 Apr $95s are $3 ($1,200) so net $200 to kill the trade is a $540 profit.  Anything you do from this point forward is simply driven by your own greed as this play made $540 in one day on an entry that cost you nothing.  It was an earnings play, pure and simple, looking for exactly what happened to happen.  Now you have $540 in the hand and you wait for $740 in the bush plus a possible bonus to collect on the long calls, could be $2 more ($800) for a $1,500 win but, on the other hand, DECK could pop and you will cry and cry and cry and say how unfair it all was….  Isn’t gambling fun?!  

    Paper currency collapsing thingy/Eph – Ah, I see you’ve been brushing up on your terminology!  Good man..  We just did a gold play yesterday or the day before – still good as gold has gone nowhere.  How do you feel about short-selling TBT Jan $32 puts for $1.70?  About $9.50 in margin and you can use it to pick up the June $143/153 bull call spread at $1.85 so net .15 on the $10 spread that will pay you if we get a dollar collapse over the next few months ($1,530 gold) which will pay you $1,000 per $15 cash committed.  The risk is the assignment of TBT at a $6 discount, which is a longer-term inflation hedge.  

    Lasic/1020 – I’m too scared. Let me know how it goes.

    QQQQ/Doro – Well we’re not getting our sell-off now so only if you NEED bearish protection.  Otherwise, too much of a gamble.  Always remember Rule #2 – "When in doubt, sell half!

    WFR suddenly a power stock. 

    Glasses/Rain – That’s interesting because I have a similar theory and only wear glasses when I’m out, never around the house and my eyes have been steady for 20 years.  I think if you go too easy on them they do get lazier – they are muscles, right?

  220. lflantheman

    I think failure of this market to pull back here is a very bullish sign.  Barring any weekend middle east catalysts, that is.  I

  221. biorules

    Lasik/1020-  Save the money and pick up a set of glasses from the Bernak…..guaranteed to make you see whatever/however you want….best part he’s giving them away by the billions

  222. lflantheman

    Oh, and I’ve gotten out of USO, with a bit of a profit.  That’s a crap shoot.

  223. Phil

    This is why we are screwed:  A blank check for cleaning up Bernie Madoff’s mess: Through the end of last year, the SIPC-appointed trustee had spent $228M – not counting the money that has gone to victims – and likely will spend another $1.1B on the case, an amount equal to the SEC’s entire annual budget

    CBS (CBS +6.5%) shares hit their highest point in – ahem – two-and-a-half years despite ending production of TV’s top-rated sitcom after a rant by lead actor Charlie Sheen. CBS could suffer a ratings hit, but Warner Brothers (TWX +1.2%) would lose syndication revenue. Investors are more impressed with CBS’ advertising recovery and content deals with the likes of Netflix (NFLX -1.3%). Only one of the PIIGS (Italy, at No. 1) is in Maplecroft’s Europe-dominated top 12 countries for fiscal risk?

    Only one of the PIIGS (Italy, at No. 1) is in Maplecroft’s Europe-dominated top 12 countries for fiscal risk

  224. lflantheman

    You guys wouldn’t need glasses if you’d have listened to your mother and behaved yourselves.  :)

  225. snow

    Lasik / all: here’re coupla studies
    http://cat.inist.fr/?aModele=afficheN&cpsidt=16462223
    http://www.jcrsjournal.org/article/S0886-3350%2803%2900062-2/abstract
    http://www.ncbi.nlm.nih.gov/pubmed/10933011
    http://www.ncbi.nlm.nih.gov/pubmed/17996210
    The impression I get from my friend is that what’s he talking is clinical impressions and community wisdom, but there’s  paucity of actual studies because they can’t get funded.

  226. Highlander

    Phil,
    They are muscles attempting to stretch a less and less flexible material, your lens, Muscles fully relaxed = max focal length, fully applied = min focal length!l

  227. Phil

    Wow, today went by fast!  

    We held up very well into the close but still the worst week since November.  

    Have a great weekend all!  

  228. 1020

    Lasik – Thanks all!
     
    Have a great weekend!

  229. Highlander

    Good day for me, aapl options netted $20K gain overall! Have a good weekend everyone!

  230. morxlntway

    Phil it really wasn’t me. i was just doin my work, mindin my own business and they just started goin off. i’m innocent, man.

  231. samz3700

     this is a joke, right?
    who wants to be long into the weekend – I would like to meet all these people.

  232. morxlntway

    :)

  233. 1020

    Nice Job High!

  234. Highlander

    Phil,
    Interesting in that the published delta’s for AAPL $350 Calls for Mar and Apr respectively are 0.4822 and 0.5037 ! And yet today , my AAPL Mar $350;s out performed my APR $350′s!!  I.E. 18.32% vs 12.20%. I have started computing my own ‘rate of change when making buy, hold and roll decisions on these things. You must consider that the premium is dilutive in such matters and also compute the actual potential ROI factors.

  235. Peter D

    High,
    The difference in performance between Mar and Apr is due to the volatility drops (VIX is down by $2), hurting the longer dated option.

  236. yshenhar

     Phil
    I have been following the 25KP trades for the most part (missed a few of them – EDZ, VIX…) and trying to get to a balanced position. I have a general question though – with most indices making significant moves this week, -5% then up about 2%, my position stayed mostly in the same range. So with a balanced position, if not taking profits on winners, and many of the positions being buying of premium – doesn’t that set me to lose on time decay?
    I’d appreciate if you can explain that aspect of portfolio management – at least as it relates to the 25KP.
    Thanks and have a great weekend.

  237. amatta

    Lasik,
    I had it done and it was a pretty nasty experience they tout it as being painless and being in and out in an hour. Sure I was in and out in an hour but was the longest hour of my life. Sitting there while they pour some drops that blind you pitch black was scary enough but then smelling the laser burning your eye was not fun at all, after you are done I felt a stinging in my eyes as if they had pour a gallon of Tabasco sauce in them. That lasted for 8 hours and got better after that. The vision was corrected to 20/20 but I have severe dry eyes now and get up at night with the feeling of having something in my eye. Also see halos at night with stoplights and headlights/taillights. 
    Wouldn’t have done it if I knew, however it does feel good to not have the contact lenses anymore which had their own set of problems.
    I am also concerned about long-term side effects which the doctor (a very good salesman who has worked on the eyes of major sports players, and the like) was very good at dispelling at the moment of truth.
    So all in all I would weigh all these carefully and do some reasearch on it in more detail. I receive a newsletter from activists trying to bring down the Lasik industry and practitioners as there have been some pretty bad cases and they really don’t disclose the side effects I have described fortrighthly.
    Not to scare you but wanted to share my experience.
    This is the link http://www.lifeafterlasik.com  

  238. Highlander

    Peter,
     Actually that can not explain the difference, it is more of an ROI issue on which the two investments ratios are almost 2 to 1 but the returns are both strongly correlated (i.e. roughly same delta’s)  to the underlying stock movement. I am just saying that deltas can and are highly misleading without taking the ROI issues into consideration..

  239. rkpagadala

    Phil,
      When a call sold short runs away, you roll it out in time when 1/3 of it is premium. Generally speaking, do you roll out to higher strikes also? Can you give an example with say NFLX.
    Thanks

  240. Cap

     Looks like I missed a good rally since y’day afternoon.
     
    And some good name calling as well !
     
    Well skiing was fun, although we did not ski today due to bad weather, so we came home a bit early.
     
    Well, flips, be comforted that I have to side with you on this one, as the dis-organized labor thugs and bought and paid for Democratic politicians and Wisconsin act like the spoiled little children they are.
     
    Its amusing that certain folks here had no problem whatsoever with Obama and the Dems jamming ObamaCare down our throats, bankrupting us in the process.  Then the mantra was "elections have consequences" along with "you have to read the bill to find out what’s in it" (because, in fact, nobody save for a few lobbyists had any idea.   Ignoring Republicans and the public was just standard operating procedure for the Democrats.
     
    Well now, in NJ, Wisconsin, Indiana, Ohio and other places, the shoe is on the other foot.   Except this time, the politicians are trying to act responsibly and cut some of the massive debt that all parties are responsible for.  However, the public sector unions and their benefit feeding frenzy at taxpayer expense is a huge part of the problem.
     
    So, what we have now, are childish temper tantrums, politicians yelling "Runaway", and so on.
     
    http://www.youtube.com/watch?v=StHwAffUNxo
     
    Michelle Malkin coined a great term …. "Fleebaggers", which is what they are.
     
    So those "all about the kids" teachers close the schools, join up in drum circles with hippies and re-live their youth by occupying some building to stick it to the man.   What great fun !
     
    This may fire up the radical left … but it is alienating everyone else in this country.   The fact is the Dems and the unions have no ability to deal with our deficits and red ink … they want business as usual… more spending and more taxes on those chumps, the taxpayers.
     
    Sorry boyz and girls, that party is ending.
     
    http://michellemalkin.com/2011/02/23/fleebaggers-the-new-cut-and-run-democrats/
    http://hopeychange.blogspot.com/2011/02/unions-democratic-party-vs-budget.html

  241. jromeha

    Flip, I shut up bc the argument was getting ridiculous. Phil put out plenty of evidence but you choose to go back to the fox news talking points with your arguments. you make outlandish comments and then demand we supply evidence to refute you. Further, calling me a homo and female bc you think it will bug me was pretty funny. I felt like I was in middle school or something…. You sure got me, but I guess I shouldn’t have brought my knife to the gun show.lol.

  242. snow

    So, ummm, Caps & Flips, what’s your take on Lasik? ;D

  243. doro165

    Good to know a true independent like  Cap is back from his holiday.

  244. kustomz

    lflantheman
    February 25th, 2011 at 3:58 pm | Permalink  
    You guys wouldn’t need glasses if you’d have listened to your mother and behaved yourselves. 

    AHAHAHHAHHAHA o man, Iflantheman that one came out of nowhere and took me by surprise..gotta tell you I got a great laugh out that line!! ROTFLMAO!

  245. flipspiceland

    @jromeha
    Generally, i don’t go near the computer on this forum after 5 so I didn’t get your last post till this a.m. I am usually busy on other boards, more in synch to and much more raucous with my perspective.
    First, let me, if you will—--without giving a centimeter on my positions about Public Service unions—-apologize to you for calling you (what I, not you, considered an insult) something that betrays me as a bigot and bastard. 
    You are likely right on both counts. Stupid as well—- not for knowing how increased Public Service costs pass through in the form of higher taxes, and the Public Service unions taking only their own personal circumstances into account—but for saying so in such a infantile manner. Unacceptable, and only goes to prove what I have long held as proof that some adults (myself) are merely children with ear hair.
    I would consider someone calling me it,  an insult. That you don’t, proves that you are the better person between us. This cannot be easily helped because in the early days of AIDS and HIV  the community was rightfully blamed for spreading it, some of it thru blood donated by infected members of the community. I have no tolerance for it, never will other than as a source of humor like the two actors on, "Modern Family", particularly Eric Stonestreet .
    That may be my own hell, but on hot button social and cultural issues I am intolerant, likely from your perspective, in the extreme.  I don’t subscribe to being called a conservative though, since I consider that an insult. e.g. I see a grown man i his 40s with two earrings the size of a quarter in his ears, and I want to rip them out of his head.  I see two beautiful lesbians together and I pine for the injustice of such beauty being off limits to me. When someone wants an abortion and some politicians pass laws that I have to pay for part of it, and disguise it as a health issue, when my own niece had two and she was in perfect health,  I go nuts.
    As for being a son of a bitch, I do have a mean streak that is born of  past experiences dealing with poverty, personal responsibility, and cynicism in donating money to impoverished countries, specifically, Haiti. I don’t deny the accusation.
    I am not asking to be forgiven for my views, opinions and irascibility. I am not asking you to forgive and forget me  being a prick. That won’t change before or after I ‘join the majority’.  That said, this is not the forum for airing myself and my views. And if it weren’t for my reading of Phil’s daily dose of liberal lefty politics, I wouldn’t.  Consider forgiving me on the personal, one on one basis.  I meant to rile you, get your dander up, provoke you with what I considered epithets and got off on the wrong track, and how.  For that I am truly sorry.
    And I extend that apology to all the members who are here solely to learn how to use options to enhance their investment portfolios.
    Nothing would be better than for the moderators to strike nearly the entire episode from this stream, leaving only in place those few posts which point out what I am, not what you think of me. At least, I hope, until now.

  246. flipspiceland

    @jromeha
     
    I posted a longer explanation that seems to have disappeared in the ether.
    I don’t watch Fox or any other TV show on politics. My views are personal, uninformed by any talking head.  Phil hasn’t posted one chart refuting my main point: Public Service Unions are a burden on the middle class.
    That said, I ask your forgiveness, not for my views, opinions and perspective.
    Making it personal (what I, not you, considered an insult)  was a huge gaffe on my part. If you don’t,  i’ll understand. It was immature and provocative in the extreme and has no place in this venue.

  247. revtodd64

     Unions/ Middle class –  I think it is important to remember history when debating about unions.  My wife’s grandfather lost his left arm in printing press and there was almost no safety net for his family.  He became a union organizer and worked with both Roosevelt and Truman on labor issues.  When he traveled to deliver speeches, he often had a body guard outside his door to protect him from company thugs.  Labor conditions in the 19th and early 20th century were deplorable.  My "fun" reading right now is "Fall of Giants" by Ken Follett, which describes the vast gulf between the brutal conditions of Welsh coal miners and the Lord of the manor who owned the land royalties.  (The minors got 50% of the profits for their hard labor, which the owner got the other 50% because he had inherited the land.)  Unions are largely responsible for creating a middle class in America.  Unions protected the rights of workers and balanced the scales so that people could make a decent living and have a safety net if they were injured or laid off in down cycles.  Unions put enough money in the pockets of the blue collar workers that their children could start to dream higher and go to college, helping form a middle class.  
    The nature of unions have vastly changed since the Reagan years so that public employee unions are the major union entities still surviving with any power.  Most blue collar unions collapsed as their jobs went oversees and Reagan weakened workers rights.  The give power to the police, teachers and civil service workers to protect their salary and compensation packages.  I acknowledge that paying for health care and retirement benefits for state union employees is a major problem.  Unions will have to make some concessions on these issues.  There is no way around it and I think they know that.  Guaranteed pensions are a thing of the past and tough negotiations are coming.  It is naive for those of us who are liberals to think otherwise.
    Part of the problem in Wisconsin is the governor is not negotiating in good faith.  He wants to destroy collective bargaining agreements.  From what I have read, Wisconsin unions are willing to sit down and talk and make concessions, but they feel kicked in the teeth and disrespected.  Thomas Friedman wrote and excellent article in December  http://www.nytimes.com/2010/12/26/opinion/26friedman.html?_r=1&ref=thomaslfriedman
    about Kasim Reed, new mayor of Atlanta, and a Democrat, who slashed pensions, but did it with respect.  Here is an excerpt:
     

    Then Reed tackled the city’s biggest problem: runaway pensions, which were eating up 20 percent of tax revenues and are rising. In the early 2000s, the police, fire and municipal workers’ unions persuaded the city to raise all their pensions — and make it retroactive. So, between 2001 and 2009, Atlanta’s unfunded pension obligations grew from $321 million to $1.484 billion. Yikes.
    Reed couldn’t cut existing pensions without lawsuits, but he cut back pensions for all new employees to pre-2000 levels and raised the vesting period to 15 years from 10. When union picketers swarmed city hall to protest, Reed invited them all into his office — in shifts — where he patiently explained, with charts, that without pension reform everyone’s pensions would go bust.
    By getting the city’s budget under control, Reed then had some money to invest in more police officers and, what he wanted most, to reopen the 16 recreation centers and swimming pools in the city’s most disadvantaged neighborhoods, which had been shuttered for lack of money. “People were shooting dice in the empty pools,” he said. Local businesses have now offered to finance after-school job-skills programs in the reopened centers. Cut here. Invest there.
    Reed combines a soft touch with a hard head. I like how he talks about both Atlanta and America: “We are not going to be what we have been for the last 50 years if we don’t change, and everybody in a position to have more than two people listening to them needs to be saying that, because the time we have to make the adjustments is running out. We need to get on with it. Whether it’s the deficit, education or investing in young people or immigration — we are not tackling [them] in the fundamental ways required. We’re just doing it piecemeal. We’re just playing and surviving. And we need to be very clear where just surviving takes you: it takes you to a lifestyle of just survival.”
    In a recent address, Reed elaborated: “The bottom line is that for the country to do and to be what we have been … there must be a generation tough enough to stick out its chin and take the hit. … It is time to begin having the types of mature and honest conversations necessary to deal effectively with the new economic realities we are facing as a nation.

     
    Friedman has been influential to me lately because he has been talking about the necessity of hard choices.  We will not solve our problems staying stuck in the old ideological comfort zones.  If liberals see public employee pensions as untouchable, we have our heads in the sand.  If conservatives think they can force all the pain of austerity on the bottom 90% while showering more tax breaks on the wealthy with trickle down economics, people will revolt as in Wisconsin, because they already feel that the suffering and sacrifice are not equal across all income groups.  The example from Atlanta shows that tough choices can be made when there is respect and fairness.  

  248. Phil

    Dear Flips. 

    There may be many things wrong with unions just as there are many things wrong with government and many things wrong with abortion being used as a form of birth control but, in all 3 cases, that does not mean you throw out the entire thing in order to get rid of the things you don’t like.

    Unions haven’t hurt the middle class in America, they built the middle class in America.  You apparently haven’t got a clue what life was like for American workers before unions but it’s easy for you to learn because all you have to do is go to a factory in China and you will see the joy of the non-union lifestyle.  The rise of unions forced employers to treat ALL employees with respect because the workers had alternatives – there WERE good jobs to go to so they didn’t have to slave away in some sweat-shop any more.  When you take away the Unions you are taking away the benchmarks that most workers use, regardless of whether they are in a union or not. 

    58% of eligible workers WANT to join a union but only 7.4% do because joining a Union has now become vilified.  In 2005, 31,358 people were disciplined or fired for union activity and the courts have been unwilling to take the workers’ sides.  The weakening of Unions is directly tied to the erosion of the middle class just as the strengthening of unions was tied to its rise.  In 1998, the average income of the American taxpayer was $33,400 adjusted for inflation, in 2008 it was $33,000 – that’s 20 years without a raise for the average American worker during a time when corporate profits rise 600% (the S&P was 250 in 1988) and the top 1% added $34Tn of wealth to their own holdings.  

    Unions, at their heart, are simply about collective bargaining.  A large corporation can (and does) hand you a 120-page contract to sign and, even if the average person takes the time to read it, they don’t know what it means and, having not worked in the company before, even if they spent a couple of thousand dollars to hire a lawyer to read it for them before they accepted the terms and conditions, they wouldn’t understand the repercussions of them as they applied to that particular job, since they hadn’t had the job before.

    The same goes for negotiating salaries.  Corporations hire professional negotiators and big corporations, like Wal-Mart, drive away local businesses so people who buy homes in a town that once had 100 stores with 1,000 retail jobs now live in a town where there are, perhaps, 50 stores with 500 retail jobs plus WMT with 500 jobs.  The fact that WMT now exists forces at least half the workers to go there and WMT negotiates the lowest possible pay for the workers.  

    Of course the "good" workers stay at the independent stores but WMT doesn’t care, they hire the less-capable workers and pay them far less and people put up with the poor service in exchange for lower prices.  The lower prices at WMT put pressure on the remaining 50 local retailers to lower their prices and they then have no choice but to pay lower wages to their employees and that too is great for WMT because now they are more competitive in wages so they press their wages lower (because they have no interest in being competitive on wages when that money can be transferred to the bottom line) and that wages spiral down until 1,000 people that were making $15 an hour working in local retail stores ($600 a week, $31,200 a year) are now 1,000 people making $10 and hour ($400 a week, $20,800 a year). 

    Of course you can argue that they benefit from the lower prices of things from WMT but that $10M in wages that is saved is money that leaves the local economy.  It’s less money to pay the local doctors and lawyers and less money to pay the state in taxes and less money for those people to own homes and buy washers and dryers and go out to the movies or eat in a restaurant so all those businesses take a  $10M hit to their sales as the money is funneled up in the form of profits to WMT. 

    Even worse (and it’s so much worse), WMT has 90% of their $400Bn worth of good made in China, so that’s $400Bn worth of factory jobs lost in the US along with all the money they suck out of the local communities.  It’s all very, very efficient and a great tribute to Capitalism that it is clearly the most efficient way to deliver goods cheaply to the people who shop there and the Walton family has made over $150Bn selling about $35Tn of imported goods in the past decade but, even if the average worker produced $1M worth of items, that’s still 3.5M jobs lost to this particular brand of efficiency.  

    But it’s not just WMT is it?  KMart’s prices were so low they went bankrupt. They were literally driving out local retailers by selling things at prices that were so low that they couldn’t sustain them.  That doesn’t matter though as the overall goal of Big Business is to crush small business and Eddie Lampert was thrilled to screw $11Bn worth of creditors (more Americans screwed) and cherry pick what was left of KMart and create an even bigger retailer.  

    Once upon a time, working at Sears was a career.  People would worth their whole lives there and get pensions (and yes, medical benefits) when they retired and they would raise a family and buy a home and send their kids to college working as retail floor managers.  Single women were able to work the cosmetics counter and be able to afford nice apartments and have money to go out and buy things.  That was my Mom’s generation and she was born in 1940, when unions were on the rise.

    When I was a kid, I worked at Bamberger’s (now Macy’s) and there were still career people there (1980ish) but that is all gone now.  Who knows how many tens of millions of jobs have been shredded by the great Capitalist machine?  

    It’s not a complicated thing.  The process of production of goods and services yields profits.  Those profits can accrue to the commodity suppliers, the workers, the salespeople, the shippers, the financiers or the Capitalists.   Obviously they all want as much money as possible but the people with the least power are the ones who get the least and unions give the workers power.  Without power, they get less and the other people in the chain get more.  

    My argument is that if the chain breaks – even if the link is the lowly workers – then everyone is screwed because the workers ARE the customers too.  At the moment, we have been able to stick it to the workers while growing profits because Big Business has focused on overseas growth.  Chains have driven out virtually all local competition, local manufacturing has also died out so, like the WMT example, there are simply fewer and fewer choices available to the workers and outsourcing handles the rest to maximize profitability.  

    If we accept the premise that the main function of America is to maximize corporate profits, then this is all good news.  Eventually, US workers will make the same as Chinese workers or they simply won’t be competitive.  There are still Trillions to be made by getting people to shop at home so stores will no longer have to hire any local employees and won’t need to rent local space.  With luck, we can cut the workers and the salespeople entirely out of the supply chain other than those that provide the lowest possible cost to the business.  

    If that sounds great to you, then you are a good little capitalist.  As I have mentioned before – I’m not sure that trend can be reversed at this point and I’m looking at moving to Europe down the road, which is likely to be the last place on Earth where average people will be treated like human beings.  At some point, I have no doubt the people will revolt but that will be messy and I’ll come back after things settle down, maybe.  

  249. flipspiceland

    @Phil
    Like you, I have over the last two years, been planning a move out of the U.S. Belize, some locales mentioned in International Living look appealing, which ironically was mentioned to me at a wedding, by a wealthy development guy sittinig at our table who is seeking to escape what he and many of his peers see as an ever increasing assault on rich people, He alreadyt owns propert in the Bahamas, Rio, and is nixing Europe for the increase in taxes he foresees there as well.
    We will disagree forever on unions. You see a macro benefit to them, and I see hundreds if not thousands of the USW literally massacring a dozen towns surrounding Pittsburgh PA.  They finally overreched when they struck for months over the issue of getting 13 weeks paid in full vacation for a year.  They got it and the industry promptly moved out of the state rather than fight it any longer.  My dad’s best friends used to regale us with stories about how they got this really terrific money and benefits for doing essentially nothing. One guy took the midnight shift, found a place to sleep and did practically zero for 40 years.  His mates were janitors making as much as the guys working the furnace.
    That said, I have no gripe with private unions not because they are private but because I saw first hand management giving in to unions demands because after a few contracts they realized, as you have pointed out about everyone benefitting from unions strikes,  that they too would get increases many times surpassing their union employees compensation and benefits.  What happened in the aftermath is now well illustrated with the bankruptcy filing of the then largest corporation in the world, GM.$260,000,000,000 in sales and they couldn’t make one cent in profit because ALL the employees took every nickel and borrowed billions more to feed their avarice.  So let’s just agree to disagree on unions. 
    I will never back down from my premise that Public Service unions are taking money directly out of the pockets of their friends, relatives, neighbors and everyone else in their class, solely to benefit themselves. And the notion of government employees fixing their own compensation with no input from their employers, the public, will never pass the smell test for me. Collective bargaining will never solve the problem of middle class employment but only contribute to the ever-declining prospects of the middle class members 90% of them who have and will never get union power.   POWER, that is what is causing the problems of the middle classes, be it exerted from DC, Wall Street, or Unions. 
    As I wrote before, I will yield the floor completely to you since this is your brainchild. You every right as I would expect to had it been my blog, to mingle the savvy in options that have made me money, and your political, social, cultural PHILosophy.  I will not interfere with it any more. 

  250. jromeha

    Flip- no worries man, apology accepted. I’m AD mil and we build a high tolerance for putting up with sh!t.Lol. And, in fairness, although my comments were attacking your views (and not you), I did kind of start it.

  251. flipspiceland

    @jromeha
    Thanks. 
    Short WOR at 19.50

  252. rdn4evr

    LASIK – I thought I’d put in a good word to balance out the others. I had it done about 13 years ago and it was a life changer. I’d had 20/500 vision and didn’t know what the inside of the shower looked like, and between dry eyes and allergies I’d had to give up contacts. I went to one of the top rated doctors and had no problems, with my vision going to 20/15. The night glare was less than what I was getting before with my thick glasses. Everything was great, until I turned 40, and presbyopia started kicking in, which LASIK doesn’t help with. Now I’m back to needing prescription reading glasses because some astigmatism has developed. It’s still worth it because I don’t need glasses for distance.

  253. Cap

    revtodd — history is one thing.  today and reality are another.
     
    In the past, it was the union organizers and members that needed protection from company thugs.
     
    Today, however, it is the public that needs protection from the union organizers and their thugs. 
    Even though they are small in size relative to the workforce, they are the ones with political power, having bought and sold politicians at all levels (mostly Democrats, facts are stubborn things).
     
    They are the ones with their snouts in the trough, and we are the ones who pay, and get little for it.
    They are the ones with the outlandish perks and benefits, and we pay.
    They are the ones that use intimidation, abuse, foul language and so forth to get their way.
    Violence, name calling, SEIU thugs, payola, you name it, they got it.
     
    So, whatever romance you or Phil or anyone else have for the oppressed workers of the past; it is today the oppressed taxpayer and private sector employees who are deserving of sympathy and respect.
     
    I have nothing in particular against unionized workers.  What I detest are the unions themselves.  The union bosses.  The political corruption.  The burden being unfairly placed on the taxpayer, which has resulted in broken, broke and corrupt government, including a corrupt professional political class that is dependant on this corruption for their very jobs.
     
    Runaway, fleebaggers, runaway.

  254. Cap

    And this is not to defend corporate America either.  Lots to criticize their.  The abuse of worker pensions and benefits.  The buying of politicians as well (GE anyone).  The lack of paying enough in corporate taxes by hiding income offshore (GE again.  Or AAPL.  Or AMZN).
     
    My Dad once had a career at Sears a long time ago, and after leaving in his mid-40′s to become a small entrepreneur had little to speak of in terms of pension and so forth.
    Same for my Mom who worked for many years in a variety of admin type jobs.  No pensions there either.
     
    But what both do have are 401ks and IRAs they built up thru their own hard work and savings.   They contributed to their own plans.  The companies, very little.
     
    But the unions, they don’t want to contribute to their own benefits.  They want me to.  And my folks.   Ain’t that special ?
    Not only do we have to fund our own retirements, we have to fund theirs as well ?  Gold plated benefit packages no less.
     
    Is this the "fairness" that the Democratic party speaks about ?  That my parents vote for ?
     
    Hell no.
     
    The playing field needs to be leveled.  There cannot be sweetheart deals that you and I pay for because the unions bought and sold a political party.   And crapola for everyone else.   And bankrupt government.

  255. flipspiceland

    @Cap
    Falls on deaf ears…….I know.
    Meanwhile, in a fit of pre-spring spending I have just been informed by the distaff side, by cell,  that WFMI parking lots are overflowing to the point that she will not even wait for a spot, then went to Costco and the line to get in their parking lot is a 15 minute wait.
    So she will spend some time looking for supplier that advertises a way to obtain luscious hair.

  256. pstas

     I have a question for those here who have often expressed their desire or intention to relocate to foreign lands. I fear I may be missing some great opportunity or am blind to imminent armageddon. I have not had the luxury of extensive foreign travel so I admit to first-hand ignorance but I have many friends and family and business associates who have. Plus I can read books, newspapers and internet publications from afar. I have yet to hear a cogent or compelling argument (except for some unique preference for particular culture or climate) in favor of such a move. 
    Just what are you seeking? Adventure? More freedom? Greater security? Increased economic opportunity? Peace and quiet? Cheaper beer?
    It is  a serious question. Enlighten me. 

  257. jomama

    LASIK, most opthamologists wear glasses! Long term data is diffucult to follow as technique/technology has changed. no thanks

  258. bps2002

    Phil and others
    Shouldn’t there be a distinction made between the public unions and trade unions of the past? They are not the same at all. The trade unions served good purposes in training craftsmen for the growth of the US manufacturing and war making industry up until about 1975 or so. The demand for those skilled trades has been declining for many years, just like the demand for high-level engineering skills. When manufacturing began to leave the country, so did the demand for the skills and engineering that supports it.
     
    I work in the steel industry (our order books are currently overfilled fwiw), and there are union plants and non-union plants in the corporation that I work for. The wages and benefits are pretty much equal. The average pay in the facility that I work in is $80K plus benefits fro hourly employees. We are very lean in labor.
     
    I see two major mistakes that unions are currently making that is rapidly obsoleting their businees model. They can be applied to public unions as well.
    1. They refuse to offer variable cost structure that is tied to productivity and profits.
    2. They hesitate to adapt to new technologies that often eliminate positions.
     
    The reference of most union members is from a day that no longer exists, that has been outsourced to those willing to implement the above. That is happening and will continue to happen.
     
    The public unions have overreached and demand from the taxpayer growing benefits, better schedules and pay when the taxpayer is struggling to pay bills and are having to reduce spending to survive. IMO

  259. flipspiceland

    @pstas
    While I can only speak to my reasons and relate what others I have met with have told me about their motives, it does seem to come down to one premise: the promise of a rising standard of living in the United States has been compromised over the last 15 years to the point that other lands offer greater chances, more opportunities, and greater freedom. One from retirees or close to it and one from the still ambitious working classes.
    The wealthy I’ve met by chance that have already acted upon their thoughts are doing so because of the onerous taxation they see as better than an even chance of passing.  Other countries offer far better environments to retain the greatest part of their assets, their inheritance taxes next to nothing in comparison to what the progressives are trying to do here.  Whether they believe this will actually happen or not, they are already prepared to depart if necessary or if they haven’t already done so like, Jim Rogers.
    Others see entrepeneurial opportunities and better career prospects elsewhere. These are the ones who are still in the process of accumulation.  They would rather take their chance in fast growing markets in the third and ‘second’ world countries rather than one that has its best days in terms of percentage GDP, behind it.

  260. judy

    This is sort of off topic, but there are lots of smart people here and maybe someone has insight, thoughts…
    Basically, I am posting what I think is a legitmate post on a yahoo finance message board and it is being censored.
    If anyone has an explanation of why someone would find this post offensive or libelous enough to censor, please let me know. It is primarily factual, except for my opinion that this type of behavior increases liabilities and reduces customer confidence.
    I’ve gotten involved in the recall of bacterially contaminated sterile products and had chunks of my fingers removed on Thursday for further testing. I wrote the CEO of Walgreens a couple of weeks ago to ask that they notify customers and update their recall procedures to include customer notification of bacterial contamination of sterile products. A 2 year old in Texas died from this. The Triad (manufacturer) notification required it to be carried out to the consumer level.
    Walgreens just keeps saying that they are looking into the matter when I call them. However, I received an email saying that I should look at the triad website for information with no response to my request.
    I have posted this on YAHOO finance – WAG message board multiple times.  Each time it is deleted within 10 minutes.
    DO I LIVE IN CHINA,LIBYA, … ???
    Here is the post::
     
    On January 3, 2011 Triad issued a recall notice for contaminated alcohol swabs. The recall notice required all who had distributed or sold them to execute the recall to the user/consumer level.
     
    http://www.triad-group.net/media/pdf/Alcohol_Recall_Ltr_FINAL.pdf
     
    To date, 2/26/2011, Walgreens has not acted on this recall to notify their customers nor is this recall listed on their website.
     
    This lack of action on Walgreens part increases their liability if people become sick and/or die from these swabs after Walgreens received the direction to notify its customers from Triad. It also damages their reputation as an effective partner in people’s health care.
     
    Other companies (e.g. Kroger, CVS, etc.) notified their customers weeks ago.

  261. rj_jarboe

    WELFARE
    Instead of blaming all of our woes on the few unionized workers left in this country, why don’t we have a conversation centered on welfare? I know some of you are thinking hell yes, let’s talk about those welfare recipients that are causing us tax payers to be overburdened. Surprise, surprise, I am talking about many of you right here on this board. If you own a business of any size, you are a welfare recipient.
    I have owned 2 small businesses and many of my friends own them, so I do know a little about how they work. I suppose the numerous write offs we are allowed are not considered welfare to any of you. Who do you think pays for these tax breaks. I am sure some of those teachers you are chastising are paying taxes. I am sure some of that tax revenue is going directly into your pockets. When you get to write down equipment purchases who do you think pays for that. When you buy a new vehicle and claim it as a business asset who pays for the rapid depreciation? Who pays for the mileage that you charge back to the government? I will tell you who, it is the average worker who goes to work each day and pays the income tax required on the income they receive. These people do not have a litany of deductions; they simply pay what is expected.
    I know a business owner that has a son that is going to college at this time. His son has never worked at the business. His son is driving a new company car and is drawing a company salary. I suppose that is not welfare, or is it? I will bet that you will not find a Wisconsin teacher that is able to pull this off. No, they have to take those fantastical benefits and fantastical salary that everyone seems to think they make and buy a car and buy gasoline for their kids while they go to a State University.
    I am not going to drone on and on, but when you talk about how everyone else is gaming the system stop and think for a second. We all know corporations are gaming the system; it also appears that many of you think the Union Worker is gaming the system, but I hear very little about how you are gaming the system as a business owner. Just because the government allows you to take certain "credits" does not mean you are not gaming the system.

  262. Phil

    On February 3rd, the Economist came up with a list of “vulnerable” countries based upon the amount of democracy, corruption and press freedom:

     

  263. Phil

     On February 9th, the Economist came up with a revised index, which they call the “shoe thrower’s index” (throwing one’s shoes at someone is the ultimate sign of disrespect in the Arab world).

     

    The index gives a 35% weighting for the share of the population that is under 25; 15% for the number of years the government has been in power; 15% for both corruption and lack of democracy as measured by existing indices; 10% for GDP per person; 5% for an index of censorship and 5% for the absolute number of people younger than 25:

  264. Phil

    If anyone is interested in discussing the economy – I’ll be on the new post (Berkshire) tomorrow.  I’ll still read these but I’ve sort of moved on at this point..

  265. Phil

    Just when I thought I was out – they pull me back in!  Had to make a note of this one as it’s just what I predicted on Friday:  


    Pro-Union Rallies Held Across Country

    Thousands of people turned out at rallies across the country to show their support for union members fighting to retain their rights to represent workers and negotiate contracts. Republicans, however, said they didn’t think the protests would resonate widely with voters.

  266. Cap

     Like most union "rallies" and pickets, they pay people to go …
     
    thousands, huh ? ….

  267. pstas

     And here is how it works in the real world beyond the romantic notions of brotherhood of the downtrodden:
    http://www.chicagotribune.com/news/opinion/editorials/ct-edit-quinn-20110224,0,1484443.story
    And before the leftys get all twitchy about Chicago Tribune bias, note for the record the papers’ endorsement of Obama; Durbin, Emmanual (twice- for Congress and Mayor) – all Dems. They did not endorse Quinn- the current Gov. 

  268. revtodd64

     Good points RJ.  The tax code is laden with welfare.  There simply aren’t enough union jobs or aid programs to the poor to cut to get rid of the budget problems.  Budgets are mostly  made up of health care, social security and military spending.  We either cut those or close tax loopholes or both.  

  269. 1020

    Cap!!   Michelle Malkin?!   That deserves a  http://www.youtube.com/watch?v=K8E_zMLCRNg …..
     
    Shake Yourself Man!…..
     
    :)

  270. pstas

     rj- welfare? surely you are being overly simplistic to make a dramatic point but I trust you understand the concept of capital investment and depreciation? Where do you think the money comes from to buy the asset against which the "write down" is made? 
    The teacher or policeman or fireman or whatever public sector employee is free to start a business, invest his capital and put it at risk and in the process, write down those assets against income over time. 

  271. Phil

    Union Hunting Dog  © RJ Matson, The St. Louis Post Dispatch,Union Hunting Dog, Wisconsin, Governor Scott Walker, Koch Brothers, Public Employee Unions, Ronald Reagan 

    Unions and Middle Class  © Keefe, The Denver Post,middle; class; union; unemployment; homelessness; recession; wisconsin; collective; bargaining

     

    Entitlement Reform  © John Darkow, Columbia Daily Tribune, Missouri,Entitlement reform, democrats, republicans, obama, GOP

  272. Phil

    You know, if you listen to this phone call (and it’s really Walker, unedited talking to who he thinks is his boss, David Koch) and think about what’s going on here – I think my points are all made:

  273. Phil

    Part 2, where they discuss putting in fake protesters:

  274. kinkistyle

    moving abroad/pstas: I just took a look at the country stats and it was an easy choice.  I pay over $1000/month for healthcare for my family here, but in Japan I would pay $200/mo.  No hassle with "pre-existing conditions" etc..  they cover everything.  Plus for 1/5 the cost, my kids get to live 4 years longer on average.  Now thats what I call a bargain! 
     
    Plus the lowest crime and murder rates in the world, no guns — so no crazy shooting sprees, pristinely clean streets, a cultural love of nature and the environment, on the leading edge of technology, great food, extremely polite people. Just a no complete no-brainer for me  — I like their brand of socialism!     I am thankful that the U.S. and Japan have a dual-citizenship program that lets my kids and I travel back and forth freely.

  275. 1020

    kinki – I love the Japanese people and their culture. 
     
    Where do I sign up?  :)

  276. Cap

     Actually, it is clear from that crank call that Walker didn’t even know Koch, so what is your point ?

  277. pstas

     Koch/Walker- geez, it’s a diversion. Ignore it. 

  278. Phil

    Wow Cap, are you really that delusional?  OK, so Walker didn’t know Koch and he spends 20 minutes on the phone with him discussing strategy, including tricking the Democrats to come back to the state under false pretenses to jam a vote through on a technicality?   OK, I guess he could be THAT kind of idiot rather than just a despicable corporate tool if you insist.  

  279. Phil

    Ignore it/Pstas – Yes, very good advice.  Was that you advising Mubarak a few weeks ago?  We Americans ignored all the evidence that the previous administration was marching us into war under false pretenses and that didn’t work out so well and we ignored the very obvious math that the Bush tax cuts would plunge the nation into massive debt (and that was before the war(s) expenses) and here we are now and we’re ignoring Global Warming and that’s going so well too so let’s stick our heads in the sand some more until they get chopped off by reality and then we’ll run around like headless chickens wondering why nobody saw things coming.  "Ignore it" the Conservative solution for America – BRILLIANT!  

    Speaking of not mentioning the war – your boy Rumsfeld was on the Daily Show last week and it’s good to see it’s all a big joke to him how they rushed to war on poor information with no plan to win and no exit strategy but they sold it to the American people like soap.

  280. 1020

    Phil – Brilliant indeed.  I don’t need an ignore "it" button, just an ignore "them" button!  :)
     
    Cap and Pstas – you guy’s don’t have a problem with the faux Walker phone call?  I’d be pissed if that call was too any holder of public office. Wake up!  People like Walker are exactly whats wrong with American politics…..

  281. Phil

     

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