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Which Way Wednesday – Popping or Topping (again)?

Wheeee, what a ride!  

At 1am, in Member Chat, we were discussing why the market was selling off 1% but by 5am, we had rallied the Futures back above yesterday’s close causing me to say to Members at 5:33:  

The Euro itself is up 1% to 1.352 but not the Pound and the Yen is below 77 so still time for all this to reverse again and we’ll be back to where we were last night (down 1%).

Nas Futures are my favorite short (/NQ) at 2,365 with a stop at 2,371 and that’s $20 per point so be very careful. Oops, silly me – oil (/CL) is my favorite short at $99.50 with a stop over that line. 

We caught that move pretty much on the nose and the Nasdaq fell right back to that -1% line at 2,340 for a $500 per contract gain in less than an hour and oil came back to $98.60 for a $900 per contract gain by 6:10.  That was enough for our morning drive to McDonald’s AND a tank of gas so congrats to all the early risers and we really had it all this morning with the 3am trade working like a charm followed by the double dip we caught at 5:33 and now we have a silly bounce back (8am) but, so far, not high enough to get us excited about shorting again.  

SPY 5 MINUTEWe left off yesterday with plenty of short positions from our afternoon Member Chat – JUST IN CASE we had a repeat of last Wednesday’s 400-point drop.  While we didn’t expect such a violent move (caused last week by Belusconi’s resignation which was, a day later, turned into a good thing – see "Whipsaw Wednesday – Yawn!"), we did think yesterday’s rally was just A BIT overdone (see David Fry’s chart) and, since nothing that has happened overnight has changed that outlook, perhaps some of the following trade ideas from yesterday’s Member Chat at 3:21 will still be playable this morning:  

  • GOOG $625/620 bear put spread at $3.10 is a nice downside play – figure risking $1 to make $1.90.
  • MMM $82.50 puts are $1, also a good trade for a crash tomorrow.
  • WYNN $130/125 bear put spread at $1.90.
  • XOM $77.50 puts at .21 are a fun play too.
  • Still shorting oil (/CL Futures at $99.90 at the time) is my favorite bet at the moment. 

That short bet on oil is a great chance to stick it to the pump crew at the NYMEX, who are doing their best to fake demand for oil near $100 a barrel.  My premise is, if they are willing to pretend to want to buy oil for $100, then we should be more than happy to sell it to them!  There were, in fact, 143,659 open contracts for December delivery to Cushing, OK as of the NYMEX close yesterday.  Those contracts terminate on Friday.  Cushing can handle, at most, 40M barrels in a month so, at a minimum, 100,000 of those barrels have to be cancelled or rolled over the next 3 sessions.  Since the strategy by the oil crooks at the NYMEX has been to leave less than 20M barrels for delivery to Cushing each month (creating an artificial shortage of oil in the weekly inventories and robbing the American public of hundreds of Billions of Dollars while our elected officials do nothing – aside from accepting hundreds of Millions in pay-offs from the oil industry to look the other way, of course), we can assume there is a need to dump 120M barrels of oil over the next few days.  

Click for
Chart
Current Session Prior Day Opt’s
Open High Low Last Time Set Chg Vol Set Op Int
Dec’11 99.33 99.75 98.39 99.18 07:52
Nov 16
-
-0.19 35776 99.37 143659 Call Put
Jan’12 99.30 99.77 98.43 99.17 07:52
Nov 16
-
-0.26 24496 99.43 321702 Call Put
Feb’12 99.20 99.61 98.35 99.05 07:52
Nov 16
-
-0.30 5533 99.35 84773 Call Put
Mar’12 98.99 99.49 98.28 98.84 07:52
Nov 16
-
-0.43 3053 99.27 89125 Call Put

This is a fantastic opportunity to observe the workings of an actual criminal conspiracy to defraud the American people in action.  Those December contracts represent 143,659,000 barrels of oil that we have locked in for delivery.  This would give us a MASSIVE surplus of oil into the holidays and would provide enough oil to withstand a complete disruption of all imports (even Canada and Mexico) for two full weeks any time next year – it’s National Energy Security right there in front of us and you will see, over the next few days – how it is stolen from you in order to gouge you at the pump for another month.  

How much gouging?  Rex Tillerson of XOM himself said that oil prices would be $60 to $70 a barrel without this speculative manipulation of our oil supply.  He said that in May and I called for an investigation then but, of course, nothing happened and Americans have paid an average of $25 per barrel MORE than the head of the World’s largest oil company says we should be paying for the 20M barrels a day we consume for a total RIP-OFF of $500 MILLION PER DAY or $15Bn per month or $180Bn per year!  

But that’s just the cost of a barrel of oil.  At the pump, you pay $3.50 per gallon and, in a 42 gallon drum that’s $147 per barrel – almost DOUBLE where it should be.  Then there’s the pass-through costs you pay for heat and electricity and food and a host of other products that are derived from oil – all told, this NYMEX scam is costing the American people over $500Bn a year and, Globally, we’re talking about a $2.5 TRILLION crime (see my 2009 article: "Goldman’s Global Oil Scam Passes the 50 Madoff Mark!").  

THIS is what is crushing the Global Economy.  We did not used to spend 10% of our $60Tn GDP on energy products.  Under Clinton, oil was in the $20s – Bush’s deregulation of the industry and destruction of the CTFC sent energy prices not just in California to stratospheric levels courtesy of Enron but Globally prices rose from less than 3% of the Global GDP to over 10% – That’s over $4Tn that were taken away from other sectors to be spent on a commodity we literally burn.  We don’t get more production out of a $100 barrel of oil than we did out of a $25 barrel – our family car doesn’t go farther on a $50 fill-up than it did when a fill-up was $15 – we simply have $35 less to spend at the Mall once we get there.  

But NO ONE in the MSM or, of course, our Government talks about this problem because they are filthy and corrupt and in the pockets of Goldman Sachs and the Energy Industry, who are slowly but surely taking over our World Governments and ratcheting up the cost of necessities like food and fuel and medical care until there isn’t any room left for discretionary spending – just a life of wage slavery for the average American as they try to just make enough money to keep up with the inflation in the very items the Federal Reserve pretends don’t exist! 

Even as I write this, oil (/CL) is hitting $100 in the futures (9am), spurred on by TBoone Pickens’ special guest spot on CNBC – even as the markets continue to turn sour on the fundamentals of a Global Slowdown, caused by austerity measures and weak demand that is NOT going to turn around any time soon.  Globally, we are consuming less oil now than we did in 2008, when oil bottomed out at $45 a barrel yet $100 is the bid this morning and I say TAKE IT!   Offer to sell those barrels for $100 (a short position) on the assumption they can be bought at a later date for less money to fulfill your obligation.  

My advice to President Obama, who has 720 Million Barrels of oil in the Strategic Petroleum Reserve is to sell all 143M barrels worth of "demand" for $14.3Bn and then simply refuse to buy the contracts back.  Then you will see those prices plunge to $95, $90, $85 and $80 a barrel very quickly as the absolute WORST thing that can happen to these energy traders is that they would be forced to actually put 143M barrels of oil on the market into historically weak December demand.  Imagine a WEEKLY build of 35M barrels in our inventory reports for the month of December – what would that do to prices?   

Yet the entire reason oil prices are at $100 now is because the CRIMINALS at the NYMEX, who wear badges to trade for Goldman and the Morgans and, of course the Koch Brothers – are FAKING demand for 143 Million barrels of oil in December that, AS OF THIS FRIDAY, they will cancel.  It’s a scam and the scam is being played on YOU – even if you are in the top 1% – YOU are being robbed every single day – don’t you think you should do something about it?  

Send this post to your favorite crooked Congressperson and tell them we’re on to them!  Let them know that we are as mad as Hell and we’re not going to take it anymore!  Let them know they can no longer line their pockets with money that the Banksters and the US Energy Cartel picked from yours!    

I don’t have to tell you things are bad. Everybody knows things are bad. It’s a depression. Everybody’s out of work or scared of losing their job. The dollar buys a nickel’s worth; banks are going bust; shopkeepers keep a gun under the counter; punks are running wild in the street, and there’s nobody anywhere who seems to know what to do, and there’s no end to it.

We know the air is unfit to breathe and our food is unfit to eat. And we sit watching our TVs while some local newscaster tells us that today we had fifteen homicides and sixty-three violent crimes, as if that’s the way it’s supposed to be!

We all know things are bad — worse than bad — they’re crazy.

It’s like everything everywhere is going crazy, so we don’t go out any more. We sit in the house, and slowly the world we’re living in is getting smaller, and all we say is, "Please, at least leave us alone in our living rooms. Let me have my toaster and my TV and my steel-belted radials, and I won’t say anything. Just leave us alone."

Well, I’m not going to leave you alone.

I want you to get mad!

I don’t want you to protest. I don’t want you to riot. I don’t want you to write to your Congressman, because I wouldn’t know what to tell you to write. I don’t know what to do about the depression and the inflation and the Russians and the crime in the street.

All I know is that first, you’ve got to get mad.

You’ve gotta say, "I’m a human being, goddammit! My life has value!"

So, I want you to get up now. I want all of you to get up out of your chairs. I want you to get up right now and go to the window, open it, and stick your head out and yell,

"I’m as mad as hell,

and I’m not going to take this anymore!!" 

 


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  1. stjeanluc

    Manipulated Oil Lines

    R3 – 102.14
    R2 – 101
    R1 – 99.81
    PP – 98.66
    S1 – 97.48
    S2 – 96.33
    S3 – 95.15

    Yesterday’s high and low – 99.84 / 97.51

    Breakout lines – 103.61 / 91.41 

  2. stjeanluc

    The UK is facing some tough times and someone is offering options:

    http://ftalphaville.ft.com/blog/2011/11/16/749161/dr-glooms-reform-trilogy/

    Some will be tough and spending cuts have never promoted growth but his assumptions are not entirely wrong…

    There are solid economic as well as social reasons for slanting redistribution in this way. Economically, there is an imperative need to boost private consumption, and this can best be accomplished not by handing money back to the better off, but by raising basic tax thresholds and by cutting the rate of VAT.

  3. stjeanluc

    And they are warming up the printing presses in London as well:

    http://ftalphaville.ft.com/blog/2011/11/16/749381/prepare-the-printing-presses/

    Nope, austerity measures have not worked well so far… 

  4. stjeanluc

    And Barry has had it with the lies about who created the crisis and won’t take it from Gingrich:

    But I am upgrading Newt Gingrich from “Pompous Blowhard” to “Hypocritical Liar.”

    http://www.ritholtz.com/blog/2011/11/gingrich-was-paid-1-8m-from-gses/

    Here is the even bigger joke: Gingrich was paid a self-renewing, monthly retainer of $25,000 – $30,000 between May 1999 until 2002. That is according to Bloomberg, who verified the contract with “three people familiar with aspects of the business agreement.” The kicker: Gingrich consulted with Freddie Mac executives on a program to expand home ownership, and “helped pitch the idea to President George W. Bush’s White House.

    Gingrich has previously said that “You ought to start with Barney Frank when talking about people to put in jail . . . Go back and look at the lobbyists he was close to at Freddie Mac.”

  5. jomptien

    JAG, up 48% before the bell. One of Phils old B/W’s @ 5.50, now over 8

  6. button

    Oil over $100 / barrel.  Unfreaking real.  We better get the sell off now!

  7. GBorGH

    HOW does oil keep going up???

  8. hayward

    Looks like a concerted effort to hold oil up thru op-ex

  9. morxlntway

    Stjean & Revtodd – I have seen you mention trades in an IRA account. Is there an IRA section on PSW? I was snooping this morning but havent come across it. My IRA in vanguard mutual funds has gained about $60 this year. Maybe there is a better way. Thanks

  10. jromeha

    Oil up 1$+!?!?! Wtf!?!? I want to punch a dog.

  11. jmm1951

    XOM is not the world’s largest oil co. Only the largest independent. However U S is largest nation where torture is legal and openly advocated by leading politicians.

  12. stjeanluc

    Oil – What is interesting is the disconnect with gasoline… Oil is up 2.2% for the day and gas is up only 0.5%. Something has to give! 

  13. lol730

    Oil
     
    Did I miss some news about war?

  14. hayward

    Seeking alfa  
    "An interesting thought from Mike Bergen on the move higher in WTI crude this morning: Conoco’s (COP) sale of a pipeline to Enbridge (ENB) means its flow will reverse to Canada, reducing supply to the Cushing refineries where WTI is priced. Brent crude (BNO -1.8%) moving down as WTI (USO +1%) moves higher lends credence to this theory."

  15. kevinb63v

     Phil,
      At the beginning of this year I did the buy/write on HCBK you recommended and, with a recent assignement of the puts, I am now into the position with a net $9.89. What would you advise going forward with Hudson City trading under 6?
    I’m conditioned from your advice not to monkey around with buy/writes, but I can’t help wondering if there was something I should have done with the puts along the way as the stock price deteriorated over time. When you have time, perhaps you wouldn’t mind elaborating.

  16. stjeanluc

    Thanks Rsaxton…

    IRA / Morx – We started an IRA Strategies section with a couple of articles. The goal is to initiate and track trades there as well but given the current market conditions, we are hesitant to push trades. Most people don’t want to day trade their IRA accounts and the strategies that we promote such as Iron Condors for example are not being rewarded by the market for the risk especially on the upside. We’ll never completely get rid on all the uncertainties, but the current level is unhistorical… 

    BTW, trades like the AA Money trade can be initiated in an IRA account and we will probably shift to a monthly "format" which will lend itself even more. Our current short options will expire this week so we will open new positions. You could jump in then. But you can’t do that in a Vanguard account as their option commissions will kill you! Actually, none of the strategies we push can really be done in that account.

  17. Pharmboy

    PP for today….

  18. 1020

    Gingrich – Does this guy have some serious brass or what?
     
    Now watch him go up in the poles…..

  19. dclark41

    Phil:
    Should we try to roll the Dec $36 USO up to the $37 this AM? Perhaps this run up is based on an expectation of another strong EIA report. The API (not the real report) showed inventories in distillates were down 2.6 and gasoline down 2.9. On the other hand, it showed a crude build of 1.3. They are using whatever part of these confusing reports that support whatever scam they are trying to achieve. But I still ask, if the reports are correct, where exactly is the demand coming from? Where is there accelerated growth that we haven’t heard about?
     
    SAN FRANCISCO (MarketWatch) — Crude-oil supplies unexpectedly climbed by 1.3 million barrels for the week ended Nov. 11, the American Petroleum Institute reported late Tuesday. But gasoline inventories dropped by 2.9 million barrels and distillate inventories declined by 2.6 million barrels, the trade group said. Analysts polled by Platts had forecasted declines of 1.5 million barrels each for crude-oil and gasoline inventories for last week, along with a fall of 3 million in distillate stocks. Following the data, December crude /quotes/zigman/2084377 CL1Z +1.27% was up 2 cents a barrel in electronic trading – little changed from the level prior to the data’s release. It had closed at $98.37 a barrel on the New York Mercantile Exchange. The API’s figures come ahead of Wednesday’s more closely-watched Energy Information Administration report.

  20. dclark41

    Crude now $101.54!

  21. dclark41

    9:16 AM Oct. Industrial Production: +0.7% vs. +0.4% expected, -0.1% prior (revised). Capacity utilization 77.8% vs. 77.6% expected, 77.4% prior. 1 Comment
    Ok, maybe its because of this?
    Oil $101.80.

  22. alik

    Hello Phil, what would you advice to do with oil shorts? Maybe it is better to take the loss and to wait
    until the price stabilizes?

  23. Lincoln

     Phil: position sizing
    I’m thinking I have been too conservative writing puts on stocks I want to own.  What I have been doing is writing a number of puts that would represent  1/4 of a full position so I can scale to 1/2 and then a full position.  I see in the Income Portfolio you sell puts for what looks to be full positions in the stocks you want.  My question is if you would actually be planning to take the full position if assigned, or would you likely plan to roll some percentage of the puts so you still scale in to a full position?  I’m sure individual cases would vary so my question is looking for just a general answer as to whether I should be selling the full allotment of puts. ie if 4,000 shs of GE is full position should I be selling 40puts vs 10 like I have been?  TIA

  24. Pharmboy

    Wow, nice AH push (last 30 min) in USO. 

  25. stjeanluc
    AA Money Recap
     
    Long strangle:
    Jan 13 12.5 calls – $1.27 now $1.23
    Jan 13  7.5 puts – $1.04 now $0.94
     
    Short:
    November 10 calls – $0.56 now 0.30
    November 11 puts – $0.85 now 0.81 
  26. NF**X

    FAS 64/66 spread – Still sitting on this bull call spread, PD?  I know: "Don’t wait for me…" 

  27. rustle123

    With oil this high again, especially if it stays in this range for a few months, expect another 15-20% drop in the markets as 100% of the time it always follows about 3-6 months when oil trades in an extended range much above avg.

  28. NF**X

    Shorts – Thanks for the variety of shorts to pick from yesterday, PD.  Nice to have some green this morn.

  29. stjeanluc

    R3 for oil is 102.14…. it’s getting close. And once again, gasoline is not keeping up with these MoFo moves. 

  30. stjeanluc

    FAS Money Recap

    Long
    10x 2013 XLF 11/15 BCS –  $2.06 now 2.04

     
    Short
    1x Nov FAS 61 Put – $2.05 now 1.83

    2x Nov FAS 68 Call – $1.94 now 0.84
  31. stjeanluc

     IWM Money Recap

     
    Long
    6x 2013 70/77 BCS – $3.64 now $3.66
     
    Short
    1x Dec TNA 48 Call – $4.40 now  $4.60
  32. dclark41

    9:03 AM An interesting thought from Mike Bergen on the move higher in WTI crude this morning: Conoco’s (COP) sale of a pipeline to Enbridge (ENB) means its flow will reverse to Canada, reducing supply to the Cushing refineries where WTI is priced. Brent crude (BNO -1.8%) moving down as WTI (USO +1%) moves higher lends credence to this theory.
    ….or this is the reason for the rise in crude. So many ways to keep the price up.

  33. scottmi

    Gold just got stabbed.

  34. snow

    OWS -  your Homeland Security has been hard at work, coordinating crackdowns nationwide: http://www.examiner.com/top-news-in-minneapolis/were-occupy-crackdowns-aided-by-federal-law-enforcement-agencies

  35. NF**X

    stjeanluc – Sorry if I asked or this is asked too often:  Can you point me to relevant posts or section where I learn how to follow your trade recos?  I understand the trades as posted, but would like to learn more before jumping in.  Thx. 

  36. angelcur

    wow the feds helped clear the protesters?

  37. dclark41

    Out of QQQ $57 puts at .37 in at .25. Thanks Phil. 48% not bad for doing very little. Nice call.

  38. 1020

    snow/homeland secuity   ….and they are protecting who?
     
    sounds like the beginning of a police state….http://en.wikipedia.org/wiki/Police_state
     
    :(

  39. Phil

    Good morning! 

    Sorry if you are short on oil – up to $101 in the futures but I still like them short – this is just silly.  No news to justify it and the Dollar is at 78.40 so we can’t blame that.  

    Congrats, on the other hand, to our JAG players.  They got a $1Bn offer from Shandong Gold this morning.  I hate it when that happens, actually, it takes me a very long time to find a miner I think is really undervalued.  My last major comment on them was just after they missed earnings on Oct 19th:  

    JAG/Amatta – Man they got killed for that miss didn’t they? They were 20% shy of revenue estimates but some of it was pricing and some was luck as they have to mine 463,000 tons of rock to get 40,660 ounces of gold and sometimes the yields are better than others (of course downtrending yields are a bad sign too!). Guidance was reduced and it’s not expected they’ll produce at a better rate than they did this quarter BUT, that’s still a net cost of $850 an ounce for 40,000 ounces so figure they clear $600 an ounce and that’s $24M per Q of operating profit (not net) or $100M a year against a $400M market cap so I like them long-term but they are going to be a rocky hold.

    That sent them all the way down to $4.10 but notice my FUNDAMENTAL logic – we don’t look at the PRICE of a stock, we look at the VALUE of a stock and nothing changed in the VALUE so we stayed bullish, despite the 25% drop in price.  Now a Chinese firm comes along and the true VALUE of the stock is exposed in the PRICE of their offer.  Why does it take someone else making an offer for you to know what a company is worth?  Our job as investors is to find the hidden values and then we can be patient – waiting for the PRICE to catch up.  

    Good time to mention I just updated the Income Portfolio and congrats to those players as well as we’re already at our year’s goal ($48,000 profit) at the very beginning of our 6th month!  We’d be up a lot more, but we’re waiting for the PRICE of some of the short puts we sold to reflect the VALUE of the stocks!  

    Wow, oil $101.50 and it’s all about rolling now.  We want to stick with this, of course and pick up December shorts.  They can keep this up for a day or a week but a month is going to be very hard work.

    In the WCP, we have 10 USO Nov $39 puts at $1.03, now .38 so let’s roll them to the $40 puts, now .95 for .57 and DD at .95 for 20 at an average of $1.28 and we’ll play for a pullback on inventories.  The $40 puts are .67 in the money and were over $2 yesterday.   

    Gold is oddly down while oil is flying too – strange days indeed.  

    So we’re back to the pre-market lows, more or less and I guess we can blame the decline in the CPI, as if that makes any sense.  Lower CPI means maybe less consumer spending and deflation but doesn’t that mean more ammo for the Fed doves to give us MORE FREE MONEY?  

    October Consumer Price Index: -0.1% vs. +0.0% expected, vs. +0.3% prior. Core CPI +0.1% vs. +0.1% expected, +0.1% prior. 

    Perhaps our Corporate Masters are unhappy with this number:  October Real Earnings: +0.3% for real average hourly earnings M/M, -1.6% Y/Y. Real avg. weekly earnings +0.3% M/M, -1.7% Y/Y. Avg. workweek +0.3%. 

    Oct. Industrial Production: +0.7% vs. +0.4% expected, -0.1% prior (revised). Capacity utilization 77.8% vs. 77.6% expected, 77.4% prior.

    Wednesday’s economic calendar:
    7:00 MBA Mortgage Applications
    8:30 Consumer Price Index
    8:30 Real Earnings
    9:15 Industrial Production
    10:00 NAHB Housing Market Index

    10:30 EIA Petroleum Inventories 

    Notable earnings after Wednesday’s close: AMAT, CIM, LTD, NTAP, YOKU

    At the open: Dow -1.01% to 11975. S&P -1.01% to 1245. Nasdaq -0.95% to 2344.
    Treasurys: 30-year +0.37%. 10-yr +0.21%. 5-yr -0.406%.
    Commodities: Crude +2.38% to $101.8. Gold -1.06% to $1763.25.
    Currencies: Euro -0.41% vs. dollar. Yen -0.06%. Pound +0.34%.  

    Asian shares sink as concern about Europe weighs. Japan -0.9% to 8463, Hong Kong -2.4% to 18886, China -2.5% to 2467, India -1.1% to 16705. 

    Market preview: S&P futures -1% even after CPI falls into deflation territory, which would mean "an easy Fed forever." However, Italian bond yields are fluctutating around 7%, with the volatility spreading to shares. Tessera +16% after Samsung renews a lincense and Target +3.2% after beating targets, but Dell -2% and ANF -7.8% after earnings. Later: NAHB housing, EIA petroleum inventories

    Crude oil continues to make its way higher regardless of the shakiness of world economies and financial markets, WTI pushing through $100/barrel for the first time since mid-summer. USO +0.4% premarket. 

    An interesting thought from Mike Bergen on the move higher in WTI crude this morning: Conoco’s (COP) sale of a pipeline to Enbridge (ENB) means its flow will reverse to Canada, reducing supply to the Cushing refineries where WTI is priced. Brent crude (BNO -1.8%) moving down as WTI (USO +1%) moves higher lends credence to this theory. 

    More bullish oil news:  If the Socialist Party wins next year’s elections in France, an electoral pact with other parties could give enough support to a movement to phase out nuclear power in the nation to put it over the top. Under a plan swirling around between parties, 24 out of France’s 58 nuclear reactors would be closed by 2025. Shares of Electricite de France (ECIFF.PK) -6% in Paris trading.

    Mortgage applications filed in the U.S. last week fell 10% from the prior week, and refinancing activity dropped 12%, according to the latest MBA survey. The average rate on 30-year fixed-rate mortgages with conforming loan balances rose to 4.23% from 4.22%.

    A detailed forecast from Bloomberg New Energy Finance projects clean energy investments may double by 2020 to $395B. The report sees China taking over the renewable energy spending lead from Europe in 2014 with India, the Middle East, and Africa upping their spending rapidly. "Last year’s record renewable energy investment was no one-off despite the recent economic gloom." 

    More on Bloomberg’s clean energy forecast (previous): Data culled by energy analysts suggests the fastest growing clean energy sector will be offshore wind power with global investments reaching $140B in 2020, up from $82B last year.

    Just a few months ago expected to have a 7 handle, Greece’s budget deficit may top 9% of GDP this year, according to a senior official, who also sees the economy contracting by 6% (against official estimates of 5.5%). "Tax collection remains the main problem … There are no further measures planned for now," he says.

    Like a drug with an ever-diminishing impact, the effect of the ECB’s bondbuying has worn off already as Italian bond yields pass 7% again after falling earlier; they do seem to have stabilized a bit since Mario Monti named his cabinet, with himself as finmin. 

    The CEO of Unicredit requests the ECB widen the range of collateral it will accept from Italian banks in exchange for funding. This news, which signaled a worsening of the liquidity freeze for Italy’s lenders, short circuited a nice rally in risk assets this morning.

    "What has become obvious in the last few years is that debt-driven growth is a flawed business model when financial markets no longer have an appetite for it," writes Bill Gross. The structure of the eurozone – one rate and currency for all – makes it the most vulnerable to this truism. The math facing newly installed technocrats is daunting. "Risk off" mode works for now.

    The BoE lowers its already weak expectations for the U.K. economy, now predicting 2012 GDP growth of 1% vs. the 2% anticipated in August. As has been the case with the BoE for many moons, it is predicting inflation – currently at 5% – to fall back to its 2% target by 2013. "Particularly uncertain," says Gov. Mervyn King of the inflation forecast. You think? 

    U.K. Q3 unemployment 8.3%, +0.4% on the quarter, and the highest since 1996. Number of jobless +129,000 to 2.62M, the highest since 1994. (PR

    "We are indeed now facing a systemic crisis that requires an even stronger commitment from all," says EC President Barroso, addressing EU Parliament. He promises rules allowing even greater oversight over member nations’ budgets and calls for deeper economic integration (i.e. Germany effectively co-signing the continent’s debt). Not gonna happen, says Kyle Bass.

    Germany’s Merkel is out on the wires saying the EU difficulties cannot be solved without changing the governing treaty. "We are prepared to give up a piece of national sovereignty" to achieve that, she says. She must be talking about tweaks, as a major change would require almost certain to be defeated popular referendums. 

    Shandong Gold, parent of China’s second-largest gold producer by market value, reportedly makes a $785M offer to buy Jaguar Mining (JAG). Shandong is said to have bid $9.30/share, a 73% premium to JAG’s Tuesday closing price of $5.39. JAG +47.5% premarket.

  40. morxlntway

    thanks for the IRA responses. I was thinking of moving the account to TOS from Vanguard.

  41. jromeha

    Hayward- interesting piece….. It’s all bullish!t though…. It blows my mind they can take oil up when all the other risk on assets are down….

  42. Phil

    Dollar getting knocked back down, they are trying hard to get the equities going.  If Dollar fails 78.20 it’s going to be bullish for the Dow and we can play DIA Nov (Friday) $120 calls at .95 for DIA over the $120 mark (now) with very tight stops.  

  43. snow

    IRA/morx – on that move – go for it, mate! I did that exact move, and sorry I couldn’t have done it earlier.

  44. palotay

     Phil – If I’m long the $35 December USO puts, what roll would you suggest?

  45. Maya1

    Phil
    Good morning
    Watching AAPL.
    Watching your take on AAPL over e past 12 months: sell 2013 $250 puts some months ago to concern about SJ’s health.
    You seem to warming up to AAPL over the past couple of months.
    What would you recommend now for longer term investor.
    I am specifically concerned about the Samsung competition, reports of order cutbacks.
    And from the income portfolio, (from this am) out of the puts that are in the red, which single one would you go for? GE $15?

  46. NF**X

    Shorts – okay.  green for a while – so far.  lol.   Setting those stops now.

  47. Phil

    Gingrich/StJ – The joke is that anyone takes him seriously.  What does a GOP politician have to do to lose credibility?  

    Oil/GBor – Well it seems the entire industry has circled the wagons to pump oil this week.  Conoco sold a pipeline that supplies Cushing to ENB in Canada and, of course, they had the industry analysts poised to now float the rumor that oil will be sucked out of Cushing and sent to Canada in the future – forgetting of course, that we import 4Mbd from Canada currently and they import ZERO from us.  Don’t ever try to use logic on speculators though – just let them run and short when their momentum slows.  

    XOM/JMM – Good point.  

    78.20 hangin tough so far on the Dollar – that’s it for the DIA calls (at least I tried to be bullish!).  Now we’ll see how far we sell off.  Dow volume just 23M at 10 so far. 

  48. Maya1

    Lflan
    Hey, noticed from your posts from last Fri and yesterday that you are bearish on APPL.
    What has happened to change your stance on the stock? On the company?
    Competition from Samsung? Order cutbacks?
    They are getting more bullish at ‘Seeking Alpha’ over there.
    Keep up your posts although you move too fast for me to take part…
    And happy holidays

  49. scottmi

    Gold/Oil – i would not be suprised if it turns out gold was shorted/sold off by the same ones using the proceeds to pump up oil price..

  50. dclark41

    Phil
    Don’t you think it would be prudent to wait for EIA report before adjusting USO positions?  Another strong report may give better prices on any USO rolls.

  51. stjeanluc

    Trades / NF – Which one do you want to know about? IWM and FAS were just started this week by Phil using a new format – financing a BCS with either a short strangle (XLF/FAS) or a naked call (IWM/TNA) sold every month (or week as we could with FAS).

    AA Money is more complex and started with a FAS trade last July. The original recap can be found at:

    http://www.philstockworld.com/2011/07/18/monday-market-madness-gold-1600-edition/#comment-1162711

    I probably should add that to the wiki. This should give you an idea of what we have tried to do. FAS Money worked out well if you had the patience and the will to get through some tough periods! 

  52. stjeanluc

    French Nuclear / Phil – In addition to closing about 1/2 the nuclear plants in France, fraking has also been banned for natural gas exploration (not that I mind, there is still a lot to learn about the dangers there) so they will have to rely on Nat Gas from Russia and North Africa to make up for the difference I guess as wind and solar can’t pick up the difference in 15 years. Of course, these are not the most reliable sources of energy! I see some possible danger there. 

  53. jromeha

    Dclark- /cl has went up nearly 40% the past 40 days, I’m not confident we can get better prices on the USO trade this week…

  54. Phil

    HCBK/Kevin – Huge disappointment but still a good little bank.  They pay a .08 quarterly dividend so our goal is to own LOTS of shares and not worry about what they cost us.  $9.89 however, sounds like a very expensive net for the buy/write, about 50% over what we did in the Income Portfolio.  Nonetheless, you can simply sell the April $6 calls for .50 and the $7 puts for $1.65 and that drops your net to $7.74/7.37 while you wait for them to print 2013 puts and calls and, during the year, you’ll pick up another .32 in dividends to drop your basis even further.  

    In general, when you are assigned a stock off a short put, you have benefited from the cancellation of the premium you sold.  All you have to do is sell the stock and sell another round of puts and you are back in business.  Unless some drastic move happens right when you get the assignment, this sort of thing is generally a non-event.  

    USO/DC – The Dec $36 puts are .60 now and well-worth spending .55 to roll them up to the Dec $38 puts, now $1.15, which were over $2 just 2 days ago, with oil at $97.50.  Doesn’t seem like too much to ask, does it?   I also like the Dec $38 puts as a new trade into inventories.  

  55. dclark41

    jromeha
    Good point. I am in Dec dated USO puts (37′s) and looking to adjust.

  56. JRW III

    Good morning, nothing new, lines are the same !!

    At Cashin said it best this morning:

    "The S&P appears to be at an important juncture. We have previously discussed the idea that the index has been tracing out a triangle since its October 27 high. Since Tuesday’s rally occurred in the context of an outside day (a lower low followed by a higher high compared to Monday’s extremes), a case can be made that the minimum requirements for a complete triangle have been satisfied. As such, a rally through 1266-1267 in the next day or two would help to confirm the completion of the pattern. Since triangles are continuation patterns, a breakout would signal the resumption of the fourth quarter rally and pave the way for at least a test of May’s high. A failure to immediately break out would not upset the triangle count. Indeed, the pattern could easily withstand a pullback to 1242-1235 and remain valid. However, any near term weakness should not break 1226 and cannot break 1215. However, if the latter level were to be violated, the triangle would be invalidated. The risk then would be for further weakness to at least 1209; we view 1197-1191 as important second support."

    Here is a visual:

    And here is the theory:

  57. NF**X

     stjeanluc/Trades – Interested in IWM and FAS.

  58. stjeanluc

    Trades / NF – The IWM trade was setup by Phil at:

    http://www.philstockworld.com/2011/11/14/monday-morning-musings-2/#comment-1475301

    The FAS trade was also suggested by Phil:

    http://www.philstockworld.com/2011/11/14/monday-morning-musings-2/#comment-1475481

  59. NF**X

    TASR – You see the story on (I think) 60 Minutes this past Sunday?  Was already interested based on Phil’s long endorsement – and the company is laced with aggressive marketing geniuses (kind of like a mini-Carlyle Group the way their door revolves.)  So I’m sticking my toe in with a modest but bullish play.  On Monday I opened the 5/7.5 June bull call spread for about a $1.  Should I write the same-month $5 Ps too round out the trade?

  60. dclark41

    API not a strong report.

  61. dclark41

    I meant EIA.

  62. hayward

    may not have been a strong EIA report, but they are whipping me good with it.

  63. jabobeast

    FU USO!!!

  64. hayward

    amen!

  65. stjeanluc

    FU Oil Gonifs… 

  66. stjeanluc

    My crystal ball is already projecting one oil analyst predicting $150 oil on CNBC today! 

  67. Phil

    Oil/Alik – I still have faith that they are spiking out the shorts prior to taking the NYMEX contracts down.  Too many things happening to call it all a coincidence but it is time to retreat to December, certainly if the oil inventories don’t take it back below $100 in short order.  

    Sizing/Lincoln – Generally, I’ll sell a 2x position with the expectation that I will roll the puts once before actually committing to purchase so if, for example, I wanted to buy $50,000 worth of BA in a full position, I would sell maybe 5 2013 $57.50 puts for $6.40.  That would put 500 shares to me at net $50.90 ($25,450).  Now, let’s say I had sold 5 of the Nov $75s at $6.40 last year and BA was disappointing at $67.  Well the net entry is $68.60 so no real harm done but, now that it’s November and the premium has bled out – perhaps I want to roll them to those same 2013 $57.50s as an even roll.  So, although I committed to spend net $34,300 to buy 500 shares of BA last year, the reality is I’ll only have to spend $25,450 if they are ultimately put to me at that price.  As you say, it does very much depend on the stock and maybe with BA, and having put a year’s wait into the trade, I may decide instead to just roll the caller along to the 2013 $75 puts at $15, picking up another $8.60 and dropping my net 2013 entry to $60 ($30,000) because I’m comfortable with BA’s VALUE at that price.  That way, if not assigned, I still pick up $7,500 for 2 years of not owning $30,000 worth of BA (25%) and that’s not so bad, is it?  If you are looking to own 4,000 GE, now $16, that’s $64,000 in a full position so you can sell 25 2013 $15 puts for $2.20 ($5,500) which is almost 10% of your full allocation but you are only really allocating the net $32,000 the stock would cost if put to you so 17% gained if NOT assigned and, if assigned, you have 2,500 shares at net $12.80 to get started.  In reality, the net margin is just $5,000 so you have $59,000 of untouched buying power to mess around with while you wait!  

    Draw in oil inventories but not too exciting:

    EIA Petroleum Inventories: Crude -1.1M barrels. Gasoline +1.0M. Distillates -2.1M. Crude futures rose, +2.18% to $101.6.

    That’s enough to maintain the price though – $102 and climbing at the moment but I still like shorting (/CL) below the $102 line as well as the USO puts mentioned above until I see what they do with those barrels.  The Dollar is failing 78.20 at the moment and we’ll see if they can break 78 but I doubt it.  Still very cashy and cautious but we’re good until tomorrow’s data unless we get some drastic Fed speak now.  Volume still very low (36M on the Dow) so all is meaningless but meaningless moves up have been the market specialty this year!  

    XLF/FAS still the best long play.  

  68. JRW III

    Breaking WTF News:
    From the Conflict-of-Interest Desk (Giant-Vampire-Squid Department)

    Mario Monti, the Italian Prime Minister-designate, will soon be Finance Minister in the new Italian government (announced pre-market). Monti’s “resume” shows that he is an “international advisor” to Goldman Sachs.
     

  69. checho

    Oil – Phil, I understand your logic on oil that the NYMEX longs have no intention of taking delievery, but isn’t the other side also valid that the shorts (majority) don’t have the intention to give delivery and therefore those speculatively short are in no better position that the speculative longs?  It then all boils down to who’s bluff is called and currently it is the bears who’s bluff is being called ie, no intention to tender delievery? 

  70. angelcur

    What the F***, Pres Obama just agreed to deploy a full Marine task force to Australia?? anyone know what’s up

  71. stjeanluc

     For a historical perspective – this year’s oil prices:

  72. jcaesar

    @ All / ECB Question – I keep hearing that the ECB is not empowered like normal central banks.  It can’t buy it’s members’ debt like the Fed (or something like that).  Then I hear that that’s exactly what it’s been doing (albeit sporadically) with Italy and France (i.e., it’s been buying their debt to keep their interest rates down).  Does anyone know of a good primer which explains this issue?  I’ve done my own searching but a lot of the articles I read aren’t that clear.

  73. jabobeast

    FU oil gazlanim!!!
     
    (they don’t even hide their robbery)!!!

  74. pentaxon

    rdn4evr,
    here is the long chart that you have requested yesterday: http://www.pentaxon.com/psw/VIYlong.png

  75. jcaesar

    Angel / Marines – The Australians clearly need someone to watch over them.  ;-)

    In all seriousness I doubt anything’s up.  We’re just redeploying our troops on the other side of the globe to more a more friendly country.  Remember all of those people we’re pulling out of Iraq.  Also, I think we’re not liked in Uzbeki-beki-stan-stan (or whatever Herman Cain called it) as we once were.

  76. jomptien

    Phil/SCO,
    I started a position a few days ago with a Dec 41/44 BCS (5 contracts), selling 5 Dec 36 puts. Yesterday I bought back 1 41 call. I think this is OK but what do you think now? Thanks

  77. JRW III

    Be ready to take profit at IWM 74.48 – 58 !! (or we could go to the moon as well)

  78. Phil

    FAS/NF – Still a good play to hold on the bull side for balance.  Time decay hurts the short call more than the long but it’s only worth holding if you need something on the bull side, of course. 

    Drop/Rustle – Funny how the pundits on TV are unable to make that connection…  

    Short plays/NF – Hope you took money and ran into that sell-off excitement.  

    FAS Money/StJ – See NOW I’m interested again!  

    HomeSec/Snow – Good to know that our specially funded unit to protect us against external threats has already been turned inward on our own people.  Funny how they pick and choose which parts of the Constitution will be held sacred. 

    QQQ/DC – Good exit, congrats.  

    USO/Palotay – I’d spend $1.16 to roll up to the Dec $39 puts and DD there.  Hopefully, the madness will end soon.  Don’t forget, when you DD like that, your primary goal is to get 1/2 back out even at the new basis.  

    AAPL/Maya – Well the fear factor is gone from AAPL but so is some of the WOW factor as well.  Now they are an industrial product company that needs to execute on their game plan (MSFT does this) and, hopefully, continue to innovate and expand (MSFT fails to do this).  MSFT has a p/e of 10 (a great deal) so let’s say 12 would be fair and AAPL has a p/e of 11 based on forward projections and I think AAPL has a better chance of executing innovation and expansion than MSFT and I have no doubt they can execute production and distribution so yes, I’m very warm to them at this price.  As a long-term entry on AAPL, we still have a good VIX so you can take advantage and sell the 2014 $300 puts for $44.30 and use that money to buy the $300/450 bull call spread for $71 for net $26.70 on the $150 spread that’s currently $80 in the money and your worst case is owning AAPL at net $326.70 (and that’s rollable, of course).  TOS says net margin on the short puts is $3K so you are setting aside that plus $7,100 in cash to make $12,330 – how is that a bad thing?  

    As to the best of the bad puts from the Income Portfolio.  HPQ is my favorite but the time-frame needs to be pushed back.  You can sell the 2013 $25 puts for $4, that’s a good deal.  GE 2013 $17.50 puts sold for $3.55 is a good one and CCJ 2013 $18 puts can be sold for $3.30 for another 25% off if assigned at net $14.70.  IMAX I still like as well and GLW – pretty much anything but RIMM!  

    QQQ $59 puts at $1.15 have very little premium.  10 in the WCP with a stop at $1

  79. NF**X

    Phil/Sizing – Thanks for that. Great summary post.

  80. Phil

    Also in WCP:

    FAS Nov $64 calls can be bought back for $2.30, leaving naked short $66 calls at $1.40 with stop at $1.75

    SCO Dec $43 calls can be bought back for $1.30

    SCO Dec $38 calls can be rolled to the $36 calls for $1.  

    DXD Nov $17 calls can be bought back for .80

    USO Nov $40 puts are .95 still so fine for now.  

    Obviously bearish moves across the board.  We’ll have to scramble if Dollar fails to hold 78.  

  81. sparky123

    Phil,
    I read on a blog last night that the US military, the biggest oil consumer on the planet, is buying oil like crazy before the committee meets in case the cuts kick in. Don’t know if it’s true.

  82. David Ristau

    Phil -

    What do you think of GOOG?

  83. stjeanluc

    FAS Money / Phil – Gee, it only take 12% return on margin in 2 1/2 days to get you interested! 

  84. JRW III

    Isn’t TA great !! Now the question is do I reload or short at IWM 74.14 !!

  85. zeroxzero

     While we’re on the subject of Neil Young: http://www.youtube.com/watch?v=qUSj164pwEM ….The Levee, you know.

  86. zipla

    FAS
    I missed the FAS Nov $64/$66 spread in the WCP but happened to get on the "FAS Nov $64 calls can be bought back for $2.30, leaving naked short $66 calls at $1.40 with stop at $1.75." Does this one need any adjustment?
    Thanks

  87. amatta

    Phil, 
    I have shares in JAG, spread very wide, would you get rid of them just at midpoint now? 

  88. amatta

     Phil, Have 20 USO Dec 36 Puts  (rolled from Nov for net 1.70). Would you DD on these?  

  89. stjeanluc

    FAS Money / Phil – BTW, given FAS current price (great for commissions as you don’t need as many contracts), there is something to be said about selling a strangle with weeklies every morning and buying it back at the close of day. Jeff Augen suggests something like that in one of his book for highly volatile stocks. FAS falls in that category. Looks like you could make 2-3% per day on margin committed (more on expiration day). Doesn’t sound like a lot, but hey, who can complain about 500% a year! 

  90. vic55

    Interesting
    New York-based Paulson & Co., which has $28 billion in assets. Paulson and his employees account for about half of the firm’s capital. Paulson & Co.inc.’s 70-100 employees help advise 11-25 clients.

  91. jmm1951

    Sparky OIl
    If US military is buying a lot of oil, that is good news for BP/Amoco, short term at least. I’m long the BeePers anyway.

  92. jmm1951

    DECK is getting killed today.

  93. Pharmboy

    CRIS – buying more if it moves under 3.60.  BPAX is starting to move up again as well (thank you Jefferies for that blurb….now if you could get DEPO and DCTH going?).

  94. Phil

    Oil/DC – Didn’t see it likely that anything would be strong enough to support $102. 

    France/StJ – But how does that affect the price of oil in December?  That’s like running up the price of this year’s corn because next year a fat guy is coming to Thanksgiving dinner.  

    Nice S&P rundown JRW, thanks.  I think we’re tracing that last descending line down to retest the bottom of the wedge at 1,240 either Friday or next week.  

    TASR/NF – If you are looking to accumulate, why not?  I know it’s not much to sell them for .40 but it’s still net $4.60 and don’t you WANT to buy TASR for $4.60?  

    Monti/JRW – As I said this morning, they are slowly but surely taking over the World Governments.  

    Bluffs/Checho – Sure but it’s easier to sell someone a barrel for $100 and have to buy a barrel for $105 than it is to be forced to buy a barrel you don’t want at all for $100 – especially when you can’t find any more buyers.  

    Australia/Angel – About time we showed those Aussie bastards a thing or two!  

    ECB/JC – You’ve got me.  I don’t even think they know what they can and can’t do from day to day. 

    SCO/Jomp – Like the WCP position, I’d roll down the longs and buy back the caller.  You can always re-cover but you caught a very good run so why not take advantage?

    You’re welcome NF! 

    Military/Sparky – That’s right, our Iraq/Afghanistan crew alone burn over 1Mbd of fuel.  I don’t know if they are stocking up – that just sounds like one of the 100 rumors being floated to keep oil going this week.  More to the point, as we wind down operations, that’s a lot of oil consumption off the market (5% of US consumption).  

    GOOG/David – We shorted them for the week yesterday, just a bet they won’t pop $620.  Overall, I like them but too pricey for me to be excited about at this price.  Long-term, they are a good bet.  

    FAS Money/StJ – OK, so I’m spoiled…  

    Reload or short/JRW – Short I hope. 

    Neil Young/ZZ – I love that guy. 

    FAS/Zipla – Oh my bad!  I meant to SELL the FAS $64 calls that we bought in the WCP and leave the naked $66 short calls to expire worthless.  I am now bearish on FAS going higher.  

    JAG/Amatta – I have no idea what that means.  What do you have?  

    USO/Amatta – I’d spend .95 to roll them up to the $39 puts ($2.65) and then DD at $1.45 for net $2.05 avg but don’t forget your goal is to get 1/2 back off the table at $2.05 and, frankly, coming back off that loss – maybe just get out and be very happy!  

    FAS/StJ – OK, now you have hit the point where it’s too much trading for me!  That kind of stuff is just so boring but it might be worth a test as it does add up over time.  

    78.27

  95. angelcur

     Frankfurter Allgemeine Zeitung:

        European Financial Stability Facility Chief Executive Officer Klaus Regling is drawing limited interest in his search for investors to boost the fund’s firepower. Euro area finance ministers are unlikely to be presented with guidelines on leveraging the bailout mechanism that they can decide on at a meeting in two weeks, citing European Union diplomats.

  96. l4real

     JRW, A short at 74.14 doesn’t seem to have the conviction to go much lower from there IMO.

  97. NF**X

    TASR/Accum – I AM looking to accumulate – wow – I made a sensible trade, PD!  (That’s assuming you also approved of the bull call spread.)

  98. Phil

     

  99. kurtww

     stj – can you give a specific example of a strangle on FAS you would sell? Just an ATM put and call in the morning and buy back before close? It doesn’t sound too boring to me at 2-3%. I’d like to at least paper trade it a few times. 

  100. amatta

    Phil, JAG, it means I have naked shares so I just want to cash out, the problem is that there is a wide spread (as apparently they are still halted and don’t really know what the fair price would be to unload them? More importantly the bid ask is 7.33-8.76 1Bn divided by 84 Million shares would be around $11 a share…

  101. stjeanluc

    France / Phil – Actually, not related to oil prices (for now). I was following up on the news you had in your previous post. The point is that Germany and France now are talking about closing close to 50 nuclear plants over the next 15 years. This will impact something long term – Nat Gas, solar, wind. The problem with Nat Gas is that they banned fraking so they’ll have to import it from somewhere, Russia being the obvious (and not so reliable) candidate. If we do end up with as much gas as they say we have in the US maybe there will be a play on LNG as this would be the only way to export it there. And of course, there are the solar stocks!

  102. NF**X

    QQQ 59 P – I rolled to 59.  Gotta take my visiting dad to lunch – so I’m going to take the 15% gain.  Cool?  I only ask because you/we may have additional expectations thru tomorrow on this one – but I’m following earlier advice re taking money off table – and I hate this market – and I can’t watch the damn ticker every minute.  lol.

  103. stjeanluc

    FAS / Kurtww – At this point, it’s just a theory… This week, Phil picked strikes that were 5% ITM and we are already showing 12% in 2 days (we started Monday afternoon) so I am guessing for 2-3% per day to be on the safe side (with no movement, it should be more as weekly options decay faster than that). The advantage of a daily play is that you can get some insights very quickly and try a lot of different stuff. And also, you have no exposure overnight! But paper trading for now is what I will do as well… 

  104. JRW III

     

    U.S. tells  ECB  to BUY BUY BUY !!

  105. Phil

    Speaking of above cartoon – very funny to hear top 1% analyst having a panel discussion on Bloomberg and all saying that there is no way a country can sustain 7% interest rates on the money they borrow when they borrow 100% of their GDP.  Well, isn’t that the ENTIRE CONCEPT of the US Banking industry and the way they destroy people’s lives by lending them 500% of their salaries to buy a home and then charging them 6% interest so they are paying 30% of their annual salary in interest alone and doesn’t our own Government encourage that behavior through tax and other incentives?   

    We have a very, very, deeply screwed up system that is rotten to the core.  I don’t think we can really fix it without first wrecking it.  

    Tough on crime (unless it’s Corporate Crime):  Federal prosecutions for financial institution fraud have tumbled over the last decade, despite the troubles in the banking sector, according to a new analysis of Justice Department data. The decline stands in contrast to federal criminal prosecutions in other areas, which have nearly doubled during the last decade.

    Failing to Prosecute Wall Street Fraud Is Extending Our Economic Problems (December 15th, 2010)

    CEOs seeking a tax holiday on their overseas earnings send a not-so-subtle message to Congress: We can spend the money here or we can spend it over there. In a letter to be released today, the CEOs write that “the simple truth is that the longer we wait, the more money will be spent overseas." Among the signees are top execs from MSFT, ORCL, CSCO, PFE and AMGN.

    A Nation of Suckers (Marketwatch)

    11:00 AM On the hour: Dow -0.35%. 10-yr +0.14%. Euro -0.06% vs. dollar. Crude +2.51% to $101.92. Gold -0.75% to $1768.85.

    11:12 AM The Federal Reserve completes its reverse POMO, selling $8.63B in short term bonds. Dealers attempted to buy $40.8B, giving a 4.7 bid/cover ratio. Treasury yields remain lower on the session, the 30 year down 3 basis points at 3.06%, the 10 year down 3 basis points at 2.03%, the 5 year down 2 basis points at .89%

    11:39 AM Europe closes mostly higher in a session that saw stocks stay within a 2.75% range – a nearly unheard lack of volatility for the past few months. Stoxx 50 +0.8%, Germany -0.2%, France +0.7%, Italy +0.9%, Spain +1%, U.K. flat. Euro -0.3% at $1.3496.  

    12:00 PM On the hour: Dow -0.53%. 10-yr +0.18%. Euro -0.26% vs. dollar. Crude +2.16% to $101.58. Gold -0.53% to $1772.75.

    NAHB Housing Market Index: 20 vs. 18 expected, 17 prior (revised). The confidence gauge is now at its highest level since May 2010. "This second consecutive gain in the HMI is evidence that well-qualified buyers in select areas are being tempted back into the market by today’s extremely favorable mortgage rates and prices," NAHB’s David Crowe says. 

    How Did Jumbo Prime Loans Blow Up? (Eisen Tower) see also N.Y. Fed Asks Primary Dealers for More Margin on Some Mortgage Securities (WSJ)

    Richmond Fed chief Jeff Lacker says the Fed’s moves in response to the crisis amount to an ill-designed reallocation of capital that directed resources from taxpayers to financial markets and politicized the institution. He believes it’s worth considering rules restricting the Fed to buying only Treasury securities. So much for that Jackson Hole invite. 

    An agitated Willem Buiter (former BoE, now Citigroup chief economist) tells Tom Keene the ECB is abdicating its role as lender of last resort and needs to step into European sovereign debt markets in size to stop the contagion. He sees Italian and Spanish defaults within months unless the ECB acts. (live video here

    He said it, we didn’t. Eurogroup chief Juncker says Germany has higher debts than Spain, but "no one wants to hear about that." Is he trying to talk up Spain? Talk down Germany? He may want to consider the German economy has better ability to pay those bills and he might think about including bank and household debt. 

    JPMorgan Joins Goldman Keeping Italy Debt Risk in Dark (Bloomberg) Whats $708 trillion is derivative exposure between friends? (WSJ)

    Business Insider provides a summary of how Iceland effected its phoenix-type recovery, but warns Europe should be careful about looking at the country as a model. Iceland is tiny and "not too big to fail," and unlike the eurozone nations, having its own currency enabled it to devalue its way back into growth.

    Italian 20 primary dealers – those with the previously lucrative, but now dubious privilege of purchasing debt at government auctions – are growing increasingly worried of being able to fob off the paper at a profit. Their status requires them to buy at least 3% of all debt offered, meaning failed auctions if each sticks to the minimum amount.

    Yet another confidence vote is concluded in Europe, this one in Athens where the government of new Greek PM Papademos has secured the necessary votes in parliament. 

    The ECB, EC, and IMF – the Troika – concludes Portugal is making the right moves to meet its budget deficit target of 5.9% of GDP in 2011 and 4.5% in 2012. In so doing, the group gives the go-ahead for release of the next tranche of bailout loans – €8B to be disbursed in December and January. 

    The battle continues in Europe over the proposed financial transaction tax. The parliamentary head of Angela Merkel’s CDU party says the U.K. will not "get away with" its opposition to the levy. "I can understand that the British don’t want that when they generate almost 30% of GDP from finance … but Britain also carries responsibility."

    With West Texas crude jumping to nearly $102/barrel and Brent crude off a bit today, the Brent-WTI spread has fallen to its lowest level since May. The Conoco Phillips (COP) sale of its stake in a key pipeline that was causing much of the oversupply of WTI lifts the lid on a glut that had kept prices low, Liam Denning writes: "Now one of those bottlenecks on WTI is likely to be eased." 

    Refiners are getting slammed as the Conoco (COP) deal will squeeze profit margins by eliminating some of the glut of cheap oil at Cushing. Phillip Dunham notes the rally in refiners was "all about the Brent-WTI spread, not organic growth. Nice job with late summer upgrades, sell side." Valero VLO -5.7%, Western Refining WNR -8.5%, Marathon MPC -6.1%.

    What inflation?  Starbucks (SBUX), which has been dealing with high coffee bean costs, has raised prices on a number of drinks in several major U.S. markets, including Los Angeles and Chicago. Starbucks increased prices for its grocery packaged coffee in March.

    A survey by BDO USA finds CMOs from major retailers are gloomier about the prospects for Black Friday sales than a year ago as preholiday sales absorb the day’s impact and heightened competition cuts into pricing. A survey of the execs shows the expected Y/Y sales gain for the post-Thanksgiving shop-a-thon to come in at a modest 1.6%.

    Retailers See a Split in Behavior of Shoppers (NYT)

    Does one hand know what the other is doing at Morgan Stanley (MS)? On Monday, the firm issued this call: Get Long Emerging Markets for the 39% Rally, China’s Soft Landing Will Be Dandy. On the same day, it said this: Recession Likely, Sell Stocks and Risk Assets, Overweight Cash and Bonds. Which Morgan Stanley should we listen to?

    Conservatives searching for the next anybody-but-Romney Republican candidate might have to keep looking, after Bloomberg reports Newt Gingrich made at least $1.6M from consulting contracts with Freddie Mac. Gingrich has claimed he was hired as a "historian" who pointed out flaws in its business model, an account disputed by former Freddie executives.

    The Balanced Budget Amendment Delusion (Economix)

    Top Favorite Stock Holdings of Congress

    Occupy Wall Street appears to have lost more momentum after NYC police evicted protestors and roused the fewer than two dozen who tried to spend the night from their sleep. Next phase: Planners say the movement will try to mobilize the support it says it has from unions and religious groups.

    Technical analysts are excited today about a triangle pattern in the S&P that could portend a super-bullish breakout. If the index breaks below 1226, the triangle pattern could be in trouble; if it only drops to ~1235, the pattern is intact and could break out to May’s highs, Walter Murphy says.

    "By 2016, more than 900 million tablets will be in the hands of users," claims Gartner, and it expects a lot of those tablets to be used in the corporate world, as applications such as collaboration, file sharing, business intelligence, and medical support drive demand. Though often seen as a consumer device, the iPad (AAPL) is being increasingly adopted by enterprises. (previously)

    Great quote from Barry:  

    I am upgrading Newt Gingrich from “Pompous Blowhard” to “Hypocritical Liar.”

  106. JRW III

    Buyig TNA on the break North !!

    Watch IWM 74.45 ish

  107. stjeanluc

    Best ways to create jobs:

     

    What is Congress more likely to pass? A program that benefits the 99% and creates lots of jobs? Or a program that benefits the 1% and creates hardly any jobs at all? Hmmm….

  108. kevinb63v

     Phil,
    Should the Nov $42 SCO sold puts be rolled, and to what, if so?

  109. stjeanluc

    Looks to me like a good analysis:

    http://thinkprogress.org/yglesias/2011/11/16/369784/memo-to-the-ecb-policy-commitments-matter-more-than-purchases/

    This should come as no surprise to anyone. Central bankers around the world seem to repeatedly fail to grasp that their most important power is the ability to set expectations. Ordinary market participants impact prices by buying and selling things. But central banks have a unique capacity to buy and sell certain classes of things in essentially unlimited quantities. That means they can move prices by simply threatening to buy and sell things. [...]

    If the ECB wants to cap Italian interest rates that’s what it needs to do. State clearly and concisely what the target is. There’s an old saying about how you shouldn’t pick a fight with someone who buys ink by the barrel. By the same token, it would be absurd to gamble in Euro-denominated asset markets against an institution capable of printing Euros in unlimited quantities. But if they insist on intervening without setting a target, they’re going to fail to achieve their goals and simultaneously discredit themselves in the public eye. 

  110. rdn4evr

     Pentax, Thanks much!

  111. zeroxzero

    A newt is a kind of slimy lizard, as I can best recall from 3rd grade nature studies.

  112. Savi

    rdn4evr—hi--how are you?—have not seen you on the site for sometime

  113. zipla

    FAS
    Actually I wasn’t asking about the WCP FAS play but the one from the day earlier the BC Nov $62/65 BCS with the offset Nov $60 puts. Wondering if that needs to be adjusted?

  114. zipla

    Sorry meant the FAS Nov $62/65 BCS with the offset Nov $60 puts.

  115. l4real

     Good call at 74.45 JRW!

  116. Savi

    zipla—took the profit and closed out the position due to Phil’s negative slant into tomorrow—- FWIW

  117. gmarts

    Bingo, $150 oil prediction on CNBC, I need to get one of those crystal balls!

  118. jmm1951

    I have just upgraded Hermann Cain from total idiot to certified lunatic, although to be fair world leaders such as Attila the Hun implemented programs of rape and torture without suffering any loss of popularity. It would be. No surprise if he carries Pennsylvania either.

  119. rdn4evr

     Hi Savi!  I was laid out by this pneumonia thing going around.  I’m just now surfacing and surveying the chaos.  Did you guys know that there’s this thing called Thanksgiving and that it’s Next Week?

  120. Savi

    rdn—just heard about it  :-)   —  glad you are feeling better--i wish my portfolio was the same but the oil positions are killing me

  121. zeroxzero

    I’ll celebrate Thanksgiving the moment that oil prices break down.

  122. stjeanluc

    ROFL Jmm… 

  123. stjeanluc

    Crystal Balls / Gmarts – I am taking orders… 

  124. joel

    The VIX is rising, Oil is rising, markets are losing their steam, financials are a dog that just got kicked, but TZA and SDS are not preforming minus small intra day blips.  What gives?  What am I missing?
    FU ECB!!

  125. kustomz

    joel, strong energy sector means strong AUD and strong AUD means risk on..for the time being.

  126. scottmi

    today’s strategy – holding oil shorts, holding short puts, taking profits on BCSs, replacing non-dividend stocks with long calls (if short calls were on them) building up cash and usable margin.

  127. jmm1951

    Phil/Genel

    Any thoughts? iPod London Nov 22 Stupid self correcting ipod, that should be IPO. Guess no way to play with options unless ADR comes later.

  128. zipla

    Savi/FAS
    Done. Thanks Savi.
    I still have the 1x Nov FAS 61 Put + 2x Nov FAS 68 Call offset against the XLF Jan 13 $11/15 BCS. Any reason to adjust that too?

  129. 2nifty

    Is the fact that the Russel is outperforming the other indices mean something? I had IWM poking out above it’s upper triangle trend line.

  130. Phil

    Dollar bounced off 78.10 but very slowly.  Gold zoomed back from just over $1,750 to $1,780 again and oil still strong at $102.35.  No rally in XLF means no trust in the move but we could drift like this into Friday (and, if not, then why did they pump it up so hard?).  

  131. stjeanluc

    That crack spread collapse is taking a toll on Phil’s fave VLO. Down 6.6% today. You can play them between $18 and $28 so a little patience…

  132. Phil

    TASR/NF – Yep, I like it. 

    JAG/Amatta – They seem to be trading around $8 now, seems like the right price.  

    Nukes/StJ – 2 years ago, they were happy to have nukes, 2 years from now, they may be planning more.  The cycle is so slow, I don’t put much stock into what is still a knee-jerk reaction to Fukushima and then there is the practical reality of energy availability and cost.  They can want to cut out 50 plants but what are they going to replace it with?  You can speculate on LNG but it’s too thin a premise for me to get behind.  

    QQQ/NF – Very cool to take a quick 15%.  

    Repatriation/StJ – Good chart, it’s a total disaster.  Just shoveling more money at the top 1%. 

    SCO/WCP, Kevin – No, they are essentially a goner if oil doesn’t radically pull back.  The entire spread was a credit so it’s all about rolling the short puts down next month to stop it from being a loss (assuming oil doesn’t go over $105).  

    China/Angel – Please, that’s next week’s crisis.  

    FAS/Zip – Same concept, the short puts are safe and you can pull $4.25 off the table on the $62s and leave the short $65 caller ($2.30) to twist in the wind with a stop at $3. 

    Good call GMarts!  

    Pennsylvania/JMM – Didn’t Santorum win on a "rape and torture" plank?  8)  

    Thanksgiving/Rdn – Thanks for the heads up.  Black Friday is next Friday folks!  Actually I’m off the hook this year as we’re eating at friends so it’s just a good day to watch football for me.  

    What gives/Joel – Day 3 of very low volume, so easy to push things around but not enough to get us over levels. 

    IPod/JMM – What are you talking about?  What IPO? 

    Russell/2nifty – They should be outperforming on a strong Dollar (good for businesses that do most of their revenues in Dollars).  

    VLO/StJ – A bit high in the range for a bullish play and I never play them bearish.  

  133. celesteschein

    Were any orders rolled today?

  134. Phil

    Check out the NYMEX – Almost 35,000 contracts simply disappeared today.  Looks like they might win this one:  

    Click for
    Chart
    Current Session Prior Day Opt’s
    Open High Low Last Time Set Chg Vol Set Op Int
    Dec’11 99.33 102.58 98.39 102.23 14:18
    Nov 16
    -
    2.86 318435 99.37 109230 Call Put
    Jan’12 99.30 102.58 98.43 102.25 14:18
    Nov 16
    -
    2.82 281952 99.43 321163 Call Put
    Feb’12 99.20 102.44 98.35 102.06 14:18
    Nov 16
    -
    2.71 84536 99.35 84562 Call Put
    Mar’12 98.99 102.37 98.28 102.00 14:18
    Nov 16
    -
    2.73 64118 99.27 89125 Call Put

    Not a single contract traded in March, Feb up just 200 contracts and Jan up just 600 – what happened to the other 34,000 contracts from December?  Such a friggin’ joke.  

  135. winningdean

    Is the DECK Nov 105 short call still open? Trade management for USO Nov 40 Put or leave it for overnight?

  136. rustle123

    for those short on oil, Mr. T has good advice:
     
    http://www.youtube.com/watch?v=lBdbE9dtFnQ&feature=related

  137. amatta

    Phil, 
    BTW where are you drawing the line to give up on the USO Puts (I did the roll and DD as suggested, now 40 DEC 39s for net 2.65)… Stop loss on an additional 20%? Or we keep hanging in there as Oil is just plain ridiculous above $100 with the world falling apart?.

  138. button

    Phil / USO,
    Phil I have the Nov 40 Put rolled & doubled from the 39 this morning.  My basis is about $1.20 now $.70.  I also have the same number of Dec 39 Puts basis $1.04.  Those are still fine.  Would you hold the Nov 40′s and look for a pullback in oil or should I just dump them and look for a drop before Dec expiration?

  139. jromeha

    Phil- what are the plans for the $40 USO puts expiring Friday? Have they managed to dump a decent amount of contracts today? Also, with futures contracts actually cheaper over the next few months will that make USO a decent near-term ETF (for once) bc the contango problem is eliminated?

  140. nicha

    winning/DECK – stock at $105.89, and the $105 calls have $1.40 in premium left. We wait till Friday and hopefully it expires otherwise we will still have a lot of profits.

  141. button

    Phil / USO
    Sorry those are Dec 38 that I have not 39

  142. peedlew99

    was that Phil capitulating on oil?

  143. angelcur

    this is precisely what i have been saying for months.making .the notion of some huge reserve is preposterous…and a huge imginary lifeline that the i banks have been marketing for two years…

  144. Phil

    1:00 PM On the hour: Dow -0.49%. 10-yr +0.15%. Euro -0.14% vs. dollar. Crude +2.05% to $101.47. Gold -0.66% to $1770.45.

    2:00 PM On the hour: Dow -0.01%. 10-yr +0.02%. Euro +0.03% vs. dollar. Crude +2.69% to $102.11. Gold -0.32% to $1776.45.

    Market booster for the afternoon (I forgot he was speaking):  Giving a bit of bid to stocks in the past few minutes, is the Boston Fed’s Eric Rosengren – responding to a question after a boilerplate dovish speechsaying the current crisis may warrant coordinated action by the Fed and the ECB.

    What inflation? With CPI cooperating immensely with the Fed’s dual mandate, talk on the risk of running up against the unofficial higher end of the inflation target range is calming. The Boston Fed goes so far as to tweet that the 3-year period ending with the last quarter experienced the lowest rate of inflation over any similar period over the last 30 years

    Home remodeling activity rose for the 23rd straight month and reached record highs in September, according to the latest BuildFax index: "Homeowners are not only doing important maintenance projects, such as fixing their roof, but also taking on projects that add to the livability of their homes by adding decks, remodeling their bathrooms and updating their kitchens." 

    Moody’s takes action on 12 German Landesbanken to bring ratings in line with the view of a lower likelihood of state support, if necessary – curious, because the banks are state-owned. To summarize: 6 receive 3 notch downgrades, 2 receive 2 notch downgrades, 1 gets a 1 notch downgrade, 1 stays the same, and 2 others have their reviews extended.

    Goldman Sachs (GS) and JPMorgan (JPM) have sold CDS protection on more than $5T of debt around the globe, just don’t expect to get detail on whom it was sold, who the counterparites are, or how the banks have hedged themselves (perfectly if you ask the banks). Only a run – similar to what has occurred to Jefferies (JEF) – is likely to force them to divulge any more information.

    As Bank of America (BAC -1.5%) teeters precariously near the $6 level, Sterne Agee’s Todd Hagerman remains uninterested in the shares despite their huge discount to book value: The "ongoing sale of non-core legacy assets (CCB), recently announced stock swap, [and] persistent legal claims highlight ongoing capital needs [and] diminished core EPS power." 

    Wasn’t this pipeline NOT going through the reason oil rallied earlier this week?  TransCanada CEO (TRP +0.4%) Russ Girling hammers out the message that it’s all systems go for the Keystone XL pipeline project that currently sits in limbo. He says the firm can "quite easily" reroute the pipeline in Nebraska and aims to gain approval from state and federal regulators in six to nine months.

    Freeport-McMoran (FCX -1.9%) cuts its already slashed production estimates due to the ongoing strike at its Papua, New Guinea mine. Estimating production rates at 75% of normal one month ago, "we’re going to have to adjust that downward," says the CEO, as work has come to a complete stoppage since October 22. 

    KeyBanc (KEY +1.4%) gains after Raymond James ups the shares to Outperform, citing the bank’s accelerating commercial loan growth and improved net interest margins.

    Shares in biotech Dendreon (DNDN +9.7%) are halted after hitting circuit breakers to the upside. Update at 1:18: Shares back online now, +5.7%. No news has yet hit giving a reason for the move.

    Three lunchtime reads:
    1) Can the U.S. consumer carry us all?
    2) Actively passive asset allocation
    3) What the market’s light volume tells us

    So we’re up for the same reason we were up yesterday – doveish Fed speak.  Piantalto (another dove) speaks tomorrow at 12:30 but should be safe to be bearish between now and then with Housing Starts, Jobless Claims, Consumer Comfort and Philly Fed scheduled for tomorrow morning.  

    78.20!  

  145. manitowocdave

    I own Dec USO puts, but I can’t bring myself to sell them and take a loss.  I just know in my heart that, fundamentally, oil is priced too high.  This really sucks…….sometimes I really hate the market.  I know, deeply, that I’m right…..that collectively, we in this group are right.

  146. droptimator

    manit: Take heart, it’s only November. Dec  is a long way off!

  147. zeroxzero

    The Dow following the Euro down like a pet dog. Same story, different day, I may have to change my handle to JRZ!!

  148. winningdean

    nicha/DECK – Thank you. Follow up question: does time decay erode the profits when the stock price is higher than the sold call strike price when nearing expiration? In this case, if on Friday DECK opens at $105.50, would most of the profits be gone then? Thank you

  149. nicha

    winning/DECK – if on Friday DECK opens and closes at $105.50, we would owe the caller .50 cents which will be the intrinsic value (strike price – current stock price).

  150. scottmi

    Mr.T/rustle – LOL!  Perfect for the market i am calling "Churnageddon!"

  151. manitowocdave

    Thanks for the encouraging words, droptimator!

  152. nicha

    winning – time decay is for premium only. So, on Friday the time portion – extrinsic value – will be zero leaving us with the intrinsic value of .50 if stock closes at $105.50.

  153. angelcur

    is bergen suggesting…that because the EFSF cant sell their bonds that the Fed and ECB WILL BE BUYERS OF LAST RESORT?

  154. angelcur

    or is running it up the flagpole to check reception potential..its an awful idea

  155. winningdean

    nicha – Thanks for the clarification!

  156. Phil

    DECK/Winning – Yes, we expect it to expire worthless and I sure wouldn’t pay $2.20 to cancel it.  We can always roll it to Dec $115 short calls if we have to.  On USO, I still think they have to reconcile those contracts and someone is going to panic but hats off to whatever scam they pulled that made 35Mb worth of contracts disappear today. 

    USO puts/Amatta – I don’t really have a line.  I’d certainly want to hang on over the weekend to see what happens but there is nothing fundamental holding oil up – it’s really just a game of chicken between the bulls and the bears at this point.  I do hope your net is $2.05 and not $2.65 though as those $39 puts are just $1.33 at the moment and a 50% pop is reasonable ($2 drop in USO to $37.50 should do it) while a 100% gain is a bit much to expect.  

    USO/Button – Time is against the November positions but these are .45 in the money so I think OK to hold overnight, hoping for some sanity tomorrow.  If not though, then gotta roll to Dec $39s (now .65 for the roll).  Our best chance for a big sell-off is between today and Friday so you want to keep a good delta on the position – painful though it may be.    As to the ETF, still wouldn’t touch it long. 

    USO/Button – Oh well that’s totally different as they are toast so better off paying $1.10 to roll those to Dec $39 puts (better delta, less decay) if you intend to stick with it.  

    Capitulating/Peedle – No but you have to concede when your opponent has the advantage.  With the disappearance of those contracts, our position for Nov is no longer looking good.  Logically, it can’t last but logic and oil trading are not often on speaking terms.  

    Lang/Angel:

    Lang Xian ping claims a depression has started in China

     

    Next Big Future12 hours ago
    Larry Lang seems to be saying things for shock value. Like a Rush Limbaugh or a Bill O’Reilly. China has the currency reserves and resources to bail itself

    Larry Lang warns of China’s asset bubble risks – People’s Daily Online

     
    english.people.com.cn › ChinaBizCached

    Dec 7, 2009 – "If China’s asset bubble bursts, a new round of global economic crisis will break out in 2010," said Larry Hsien Ping Lang at a conference on

    Larry Lang Live canned – The Standard

     

    Mar 17, 2006 – For the past two years, Larry Lang relished his role as China’s business talk- show king. On Friday night television, the Taiwan-born host of

    Larry King’s Chinese Twin: Challenging the Communists with "Larry

     

    Mar 21, 2005 – The Chinese Business Network usually broadcasts stock and company news, rather than satire. And Larry Lang, the host, is certainly no TV

    If you would have listened to Lang and shorted China in 2005 or 2006 or 2009 – you wouldn’t have the money to be posting his comments today using your tin can and string set-up…  Please try to verify your sources so everyone else doesn’t have to.  

  157. angelcur

    cme nasty volume break

  158. angelcur

      be careful….soo much negative news out there market been ignoring.

  159. Phil

    Wheeeeeee!  

  160. Pharmboy

    INCY jumped on approval…now back down.  Damn, cant go to a meeting any more with out more shenanagans…..

  161. jcaesar

    Tyler Durden’s getting sloppy.  No immediate explanation from that crack team for the drop.

  162. gmarts

    Spike down is a result of everyone in Congress dumping their trading shares on news of insider trading hearings by Lieberman…

  163. thechaser

    All right Phil!  I kept the faith and held short with you and now it’s all green.  It’s good to have our captain back. 

  164. kustomz

    I second the WHEEEE!

  165. zeroxzero

    And Euro still dropping. Arf!!

  166. jcaesar

    Anyone know what got broke in Europe?  I assume that’s the reason for the spike down.

  167. kevinb63v

     Phil,
    Are we waiting for the next couple of days until the expiration of the Nov $42 SCO sold puts to get the best price and strike before rolling to Dec, or am I missing something?

  168. jcaesar

    Come on Phil!  Tell your friends at Zero Fudge to get on the ball!  A drop like this with no explanation?  They’re better than this.

  169. kustomz

    Jc not sure if you watch currencies but AUD/USD took a big dump EUR/USD less so…more telling as far risk on or off

    Fitch says Eurozone large threat to US banks

  170. diamond

    jcaesar – IMF European Department Director Antonio Borges resigns for personal reasons. Mr. Borges has been a key figure in the rolling rescues/bailouts, most recently jetting off to Moscow and Beijing to try and drum up funds for the EFSF.

  171. jcaesar

    kustomz  – Thanks, but I think the currency action like the equities is a reflection of the news.  I guess what Fitch said?

  172. Phil

    LOL Gmarts!  Good a reason as any.  

    Thanks Chaser and congrats on riding that out.  

    SCO/WCP, Kevin – Yes, I’m still holding out hope we get a big move down.  

    ZHedge/JC - Maybe this is the catalyst?  

    The IMF’s Europe chief, Antonio Borges – who sparked a brief October rally by talking about the fund investing alongside the EFSF – has quit for personal reasons.

    IMF European Department Director Antonio Borges resigns for personal reasons. Mr. Borges has been a key figure in the rolling rescues/bailouts, most recently jetting off to Moscow and Beijing to try and drum up funds for the EFSF. (PR)

  173. droptimator

    Everyone is jumping the gun today… they weren’t supposed to sell this off until the market closed.

  174. jcaesar

    Ah very nice, thanks Phil.  Still a black eye for Tyler Durden.

  175. jcaesar

    Thanks Diamond.

  176. angelcur

     fitch just warned of US bank exposure to europe…hahaha…really?

  177. NF**X

    angel-Phil/giving – After hours, of course, but I’m thinking my little outfit is going to give something a whirl – esp based on Phil’s Marxist rants every day (lol).  I think this can be done with little legal complexity and it’s surely not a "put your money where mouth is" challenge to anyone here.  I’m just picking up a baton.
     
    Our company’s tagline is (basically): "Work That Matters" – growing into a variety of bases, but "services" are aimed at job seekers, providers and holders – in the interest of making it easier to find such work, do such work (and have a life) or provide such work.  We’ve though about various "rewards" – I’d like to do something at the job "holder" end.  More thoughts later.  But the idea as it relates here would be something like WCP – but my firm would put up the initial $ in a trading account – and "we" – among other things – would trade to grow it for whatever non-profit or altruistic purpose is appropriate.
     
    No liability – no professional responsibility – details to be worked out.  One thing for sure though:  I won;t be trading in the account – no time, not enough skill.  Others could, etc.
     
    Food for thought.  More later heading into Thanksgiving.

  178. Phil

    Here’s one for you Angel:

    With real estate prices sinking and sales volumes drying up, the balance sheets of Chinese property developers are starting to feel serious economic strain – the debt/asset ratio for 133 listed firms rising to 63% at the end of Q3. Developers are left needing to slash prices to unload inventory, angering existing owners. It’s Phoenix all over again, complete with analysts saying the damage will be contained. 

  179. NF**X

    Web – PD, here or off-line, please remind me again who your web team is – about to turn ours over.

  180. winningdean

    Phil – Thank you and all the other contributors. It’s reassuring to read and hear insights from a group of intelligent investors who are helpful in answering investment related questions.

  181. sns1

    Phil- Likely explanantion for drop …Fitch made a comment on US bank ratings impact from Europe mess

  182. Phil

    Oil futures still a short on that cross under $102 (/CL) of course!  

  183. sank1

     QQQ Puts / Phil,
    Have taken profits on a partial position. hold on for more downside on the rest, overnight?

  184. stjeanluc

    China / Phil – I guess Chanos is getting ready to cash in his shorts! 

  185. nicha

    winning – DECK looking very good now!

  186. jcaesar

    This article is great – http://www.bbc.co.uk/news/uk-15752918

    The Brits managed to find out that two pieces of bread and some butter is the cheapest sandwich in the world at 7.5 pence.  Apparently you get 200GBP for that discovery.  I wonder if they ever thought of just the two pieces of bread.  I’m sure we could bring the price down to 5 pence.  I should be the winner.  ;-)

  187. zeroxzero

    STj: And I was just looking for my next victim in FXI. Too late to follow Chanos?

  188. stjeanluc

    I guess we’ll be able to sell a December 10 straddle for AA Money on Friday as AA being taken to the cleaner today (-3%)! 

  189. stjeanluc

    China / Zero – Might just be the beginning if you are patient. I am sure they will revive the corpse many times between now and 2020! 

  190. winningdean

    nicha – after your explanation I was ready to have a good night’s sleep. Now I’m ready to sleep through its expiration

  191. zeroxzero

    And oil coming down? This really could end up the perfect day, gracias Philippe!

  192. sns1

    Zerox- By the way, never had a chance to thank you for the response to my question on China this weekend..very much appreciated.

  193. rainman

    jcaesar — Sandwitch: An item of food consisting of two pieces of bread with meat, cheese, or other filling between them, eaten as a light meal. No butter, no santwitch!

  194. Phil

    Jumping the gun/Drop – Good point, they don’t usually screw people out in the open like this.  

    Fitch/Angel – Don’t forget they are the hit man for GS interests so I guess it was time to pull the rug out.  

    Charity account/NF – Nice idea but a legal nightmare, I imagine.  

    Webs/NF – Sure, remind me after hours.  

    You’re welcome winning – I really missed the immersion while I was on vacation – this is about the only activity I do that fully engages me so I love it – especially when our plan comes together.  

    Fitch/Sns – Got a good one-two punch with Fitch and IMF guy.  

    QQQ/Sank – I’d take this money and run – overnight is a total crap shoot and you just got a 2% reversal so – GREEDY!  

    Sandwich/JC – Cool!  I prefer taking 2 slices of bread to Roy Rogers (or Fudrucker’s)  and throwing on lettuce, tomatoes, ketchup and mayonnaise – all for free.  Now THAT’s A CHEAP SANDWICH – where’s my prize?  

    EDZ chugging along off our $18 entry.  

    AA Money/StJ – Holy smokes, testing $10! Still too much to pay for Nov $10 calls at .17 though.  Dec $10 puts can be sold for .54 but I guess waiting for tomorrow at least is prudent.  

    You’re welcome ZZ – It’s like the last mighty tree to fall but timberrrrrr when it does.  

    Ouch – getting ugly now.  See, I can never enjoy sell-offs, even when I bet on them – that’s why I make a lousy bear.  

    78.39

  195. rainman

    Of course, some extra t’s don’t make a sandwich either!

  196. sank1

     SPX Put Spread / Pharm,
    The June 1200/1125 Put spread you recommended at 2200 per contract has a nice 10% profit. Is this something one would hold for a period of multiple weeks to see if we can get a much higher profit, given the 3:1 potential payoff if we hold through expiration and SPX is below 1125 at that time, or would you wrap it up for something so small as 10%?
    Thanks.

  197. stjeanluc

    So far, on track for the week:

    I guess we go up tomorrow…

    How about one of them crystal balls Gmarts! 

  198. kustomz

    Euro-Dollar Basis Swap Cost Jumps to 2008 Crisis Levels
    http://blogs.wsj.com/marketbeat/2011/11/16/euro-dollar-basis-swap-jumps-to-2008-crisis-levels/

  199. NF**X

    Charity – We’ll see.  It’ll be an LLC giving away all the money.   Very clean.   We’re going to do these "awards" anyway – thought it would be fun to add some "premium" to the "funds" we’ll give to people or group.   

  200. JRW III

    Sitting on the ascending triangle support; now the range is IWM 72.98 – 74.38.

    We shall see tomorrow  !!

  201. kustomz

    Anyone here play TVIX? Payed out nicely today…

  202. Pharmboy

    Sank….that is my insurance…so hold.  I think there is more to be had….

  203. Phil

    Wheeee -saved by the bell!  

    That was totally excellent – congrats to all the WCP players as we nailed it!  

    Euro-Dollar/Kustomz – Uh-oh!  

  204. kustomz

    Nice to finally see a scramble for good old US currency today….Bernanke, im sure would love to through some water on that fire. DXY has one healthy looking chart.

  205. stjeanluc

    Outrage of the day – Obesity in America costs us $147 billions in health cost alone and yet, Reps in congress have just blocked possible new guidelines for school lunches because these would be burdensome regulations! Who needs vegetables and fruit juices when you can have Coke and Tastycakes! We are talking about the health of our children for frak sake!

  206. NF**X

    Webs – Let me know if you have to email the info or post here.  Thx. 

  207. zeroxzero

    Sns1: In these turbulent markets, nearly everyone gets their 15 minutes of being right once in awhile. Still, China does not inspire confidence, for the reasons stated.

  208. zeroxzero

    Stj: Nah. We’re talking about bankrupt school districts and corporate bribery.

  209. stjeanluc

    Industrial production slowly coming back:

    http://www.bespokeinvest.com/thinkbig/2011/11/16/stronger-than-expected-industrial-production.html

    Of course, it all comes down to better productivity so no need to hire anyone… It’s hard to believe that we have gained 10 points in 2 years and unemployment is still where it is. Well, I am jesting of course… all you need is to squeeze your existing employees a little more. It’s not like employers lack leverage right now!

  210. 1020

    stjeanluc – I heard yesterday it was the "pizza" and "potato" lobby that was working to block Michelle Obama’s "bill"…..
     
    Figures I heard that on am radio…..

  211. stjeanluc

    Lunches / Zero – In Congress, I would bet on corporate bribery… but still! 

  212. stjeanluc

    Pizza / 1020 – I heard they wanted to count the pizza sauce as a fruit! Un-frakin’-real… I guess school lunches in the top prep schools where the top 1% send their children have healthy meals and that’s all that counts for the GOP today! 

  213. angelcur

    i am partial to lil debbie cakes! the obesity thing has been going on for twenty years….its just showing up now..once you start in th ehigh schools or whatever you will soon have the govt in restaurants…its a slippery slope..but what a horrid porblem..look around in airports or public place..v v sad..i am fat coz i love food!

  214. 1020

    stjeanluc – Yeah, I heard that too!  Then I asked my 12 year olds. My boy (atta boy!) says a vegetable. My daughter says a fruit and before I could blink, she shows me this:
    http://www.sciencebob.com/questions/q-tomato_fruit_vegetable.php
     
     
    Scoreboard boys!  :)

  215. stjeanluc

    Slippery slope / Angel – Probably more like a greasy slope… but needs to be addressed! 

  216. elliotteldrich

  217. sank1

     Pharm, thanks.

  218. lflantheman

    Maya/AAPL:   Answering your  10:05 post.   No, I’m not really bearish on AAPL, at least not intermediate and long-term.  But all things considered…….supply issues, European problems, percieved competition………I see them perhaps pulling back in the short term.   So I’m waiting for a better entry, if you will.  I’d really like to see a pullback to 370 before getting back in with longs.  And if I miss it, well…….AAPL is not the ONLY thing I invest in.        :)         I think one of the things I’ve learned over the years is to have patience and wait for an appropriate entry point.   Every stock price will eventually pull back, even if it’s on a run.   And patience will allow you to come in at a lower level  much of the time.  Even with trades recommended here I very seldom will move in on the trade at the price mentioned; if I agree with the trade I will often place an order to be triggered at a lower price than that noted on the board.  That way, if I get in, and if the trade is a good one, I’m already way ahead of the game.  So with AAPL, right now, I prefer to wait and watch.  

  219. NF**X

    Obesity – See any Whole Foods in poor neighborhoods?  Of course not.  Not their demo – way too expensive for the average shopper (and viciously anti-union to boot – naturally, few if any of the store staff live in neighborhoods where the stores are located – they emigrate from poorer ‘hoods.)   In general, schools or private eating, tho, carbs and fat are cheaper (wholesale and retail) than fiber, etc.  Are folks fat cuz they wanna be?  Maybe in the sense that they don’t care about being thin.  But that’s about the only bone you can throw the naysayers re impact of obesity on healthcare.  Why do people eat from the various "dollar" menus?  Because it’s affordable and everywhere.  
     
    The famed French diet that results in better cardio and lower obesity has been found to be a function of the "way" they eat – not what they eat.  Kids on up are raised in a culture of cooking – not scarfing on the run.  But those days are about over.  Where even just 5 years ago you’d rarely if ever see a kid on the street sippin’ from a Big Gulp or liter bottle of Coke, it’s becoming pervasive.  McDs and company will rule where they choose to rule.

  220. joel

    At  this point is it too late to pile into EDZ spreads?  I don’t want to chase, but lack of any kind of coherent plan for EU direction is making me wounder.  I didn’t want to count out some kind of intervention, but after all this lack of action can intervention even do anything but fan the flames of destruction?  Is this capitulation on my part?  My head hurts.

  221. Phil

    Great call on ANF by Alik by the way!  I thought $50.25 would be safe but they blew that.  I still like them to recover but let’s not go bottom-fishing just yet.  

    At the close: Dow -1.63% to 11900. S&P -1.59% to 1238. Nasdaq -1.8% to 2324.
    Treasurys: 30-year +0.5%. 10-yr +0.21%. 5-yr -0.495%.
    Commodities: Crude +2.36% to $101.78. Gold -0.99% to $1764.55.
    Currencies: Euro -0.5% vs. dollar. Yen -0.02%. Pound +0.54%.

    Market recap: A wave of red ink washed over the final trading hour, triggered by a downbeat Fitch report on U.S. bank exposure to Europe. UniCredit’s request for more access to ECB borrowing spotlighted Italy’s funding concerns, Bank of England said Europe’s economy is worsening, and crude oil’s pop above $102 sparked new recession fears. NYSE decliners led advancers three to one.

    While not a worrying issue at the moment, Fitch says the broad outlook for the U.S. banking industry could worsen "unless the eurozone debt crisis is resolved in a timely and orderly manner." This can’t be the reason for the late day selloff?

    Some worrying action in the Eurodollar pits, where the shorter-dated contracts blew out a bit today, bringing the Libor/OIS spread to a 41 bps vs. 17 bps 3 months ago, and just 5 bps 1 year ago. The spread – measuring the difference between the Fed Funds rate and 90 day bank deposits – is a key indicator of financial stress; it spiked to over 200 bps during the Lehman episode in 2008. 

    BoE Governor King gets the ECB’s back, applauding it for resisting pressure to monetize EU sovereign debt. "It’s not the job of a central bank to do something which a government could do perfectly well itself." As for the resolution, King urges "proper medical treatment" as opposed to "sticking plaster," i.e. band-aids.

    A proposed U.S. rule requiring automakers to double average fuel economy of vehicles to 54.5 MPG would add an average of ~$2,000 to the price of each new passenger vehicle sold by 2025, two federal agencies say in a draft report, while reducing oil consumption by 2.2M barrels per day. - Yes but it would save the consumer, even at just 500 gallons a year, almost that much PER YEAR of ownership and the $2,000 is financable and will hold up somewhat in resale value but just listen to the Conservatives tell you how "awful" this is!  

    Scenes from a modern-day gold rush: Meet the "Cubs" – an Aussie acronym for Cashed-up Bogans (Bogan being a blue-collar worker) – keeping the Australian economy cruising with the riches they’re earning working in the mines. A "historical shortage" of workers in Oz (really worldwide) to dig up the minerals to feed China has led to soaring wages in the sector. 

    Rambus (RMBS -60.4%) resumes trading after being halted in the wake of a federal jury’s ruling against the company in a case in which it had alleged Micron (MU) and Hynix had conspired to prevent its computer memory technology from becoming an industry standard. Micron shares, also halted, now trading +21.8%.

    American Airlines’ (AMR -5.1%) board meeting has broken up with no major announcement filed yet. A blog covering the industry from top to bottom reports that AMR employees are bristling with the decisions of current management, begging for a change in a letter sent to the board: "You are the last line of defense. We implore you to make the difficult decisions to remove these executives from the company…" 

    Chesapeake Energy (CHK) plans to spin off its oilfield service business next year in a public stock offering to establish the value of the unit to investors and pump up the share price of the parent, CEO Aubrey McClendon says. CHK will retain control of the service company’s board and retain as much stock as it can while allowing a liquid market for the public shares, he says.

    Google (GOOG), Facebook, and several other big Internet names are up in arms over a new piracy bill would grant law enforcement officials broad powers to shut down sites deemed by media companies to be enabling the flow of pirated content. Critics of the Stop Online Piracy Act (SOPA) claim the bill would "effectively promote censorship" and expose law-abiding Internet companies to new liabilities.

    Green Mountain Coffee (GMCR +9.3%) is up strongly for the second straight day (previously). Shares could be getting a boost from Canaccord’s Scott Van Winkle, who’s again trumpeting the company’s growth potential (previously). Some insider buying might also be helping; while the sums are small, they represent the first insider buys seen by Green Mountain in 3 years.

    Abercrombie & Fitch (ANF -13.9%) plummets after its big earnings miss on weak gross margins, but the company indicates in its conference call it would start raising prices next year, which could help boost margins. Brean Murray comes to its defense, keeping the faith in "robust European growth opportunities and that Asia also could be a burgeoning market."

    Google (GOOG) claims 200M Android devices have now been activated worldwide – twice as many as were activated as of May. Apple (AAPL), for its part, claimed in October that 250M iOS devices had been sold. (Gartner data

    Why all the angst about Apple (AAPL) when shares are down only 10% from their 52-week high, holding up relatively well vs. the S&P’s high? Yes, there are questions about Apple’s outlook, but as long as the stock remains in an uptrend and above its 200-day MA, Bespoke thinks it’s "too early to write off a stock trading at a below market multiple with an expected growth rate in 2012 of 35%." 

  222. Phil

    Big Chart looking as expected but bad that NYSE and RUT failed -5%.  S&P right on the Must Hold so very bad if we fail tomorrow as it’s a long way down to catch up to the broader indexes.  

    EDZ/Joel – If it all hits the fan, they can run up quite a bit.  Remind me tomorrow and we’ll look for a couple of good hedges.  

  223. jmm1951

    stjeanluc/Food
     
    It is a real tragedy that food in the USA is so bad.
     
    Here in the Dominican Republic there are half a dozen places within walking distance of my apartment where I can get a pizza, and every single one of them beats the pants off Domino’s Pizzza. Same for burritos and Taco Bell. The potatoes taste like potatoes, the eggs taste like eggs, and the bread is great thanks to several local German bakers. The fruit is excellent, and a $5 bacon and egg breakfast includes a fresh  fruit salad of papaya, mango, pineapple, melon, mandarin, orange, and banana. There are wonderful cookies made by a local factory, and they are not full of sugar even though sugar cane is a local product. The local. chocolate milk has a wonderful deep dark chocolatey flavour and just a touch of sweetness. A 5 gallon bottle of drinking water costs 80 cents for a refill compared to $1 for a small bottle in the US. People rarely eat desserts but excellent ice cream is available at ice cream parlors, and I like a place where they will puree frozen fruits into frozen yoghurt for you on demand. I always get blackberry.
     
    There is not a single franchised or chain restaurant in sight. Owners supervise and train their staff in preparation of food. In my opinion big business has made US food unpalatable and unacceptable.
     
    Part of the problem is what I believe to be a gross misinterpretation of US law. It is widely believed that corporations are legally obliged to screw over both their customers and their employees so as to deliver maximum profts to shareholders. I believe that the intention of the law is only that management should work on behalf of shareholders and not run companies just  for the benefit and personal enrichment of managment, in the same way in which state employees are required to work on behalf of citizens, and not just for their own convenience.
     
    The end result has been a complete degradation of the food supply in the US. Of course this does not affect the 1% because they can easily afford to employ someone to grow produce, herbs, and chickens for their kitchens, and a cook to bake their bread, make their pies, and prepare their meals so that they never have to face the awful dreck that working Americans stuff their faces with. You have to be able to step back from the US to see how bad the situation has gotten there.

  224. barfinger

    Comment for those suffering on the wrong side of oil shorts: if you still believe in the premise, just roll it out and take a small credit. I sold a bunch of dec 40 calls on USO because at this level, you gotta say its absurd. To play this game all you have to be is right eventually.

  225. barfinger

    Phil – of course it would be better if cars got better mileage. With the present technology, that mileage can only be obtained by a spruced up skateboard under an umbrella, but if this is unsafe at any speed, will that matter to the government that is self-satisfied that they "mandated" better energy use?
     
    I am not a conservative, but frankly, this is another liberal "push the perfect button" solution, and so, I remain skeptical.

  226. barfinger

    Jmm: you live full time in DR? You do not feel threatened by the abject poverty that is so obvious everywhere? I have no agenda in saying this, I’m just wondering… I came ashore at Peurto Plata from a cruise ship a few years back, and I was immediately surrounded by kids offering me whatever I wanted, stuff, girls, drugs, and other things I don’t even remember, and I was walking with my wife.
    My impression was, beautiful, but, geez….

  227. jmm1951

    Bar finger/ wife

    Visit some trailer parks in the US. Pity the wife cramped your style. You definitely could have got anything you wanted, and the wife too, for that matter. I really don,t think the poverty is much worse than the US. People are well fed and well dressed. Unemployment about 20 per cent in PP, but there is no unemployment benefit. US will be the same if T party has its way.

  228. sparky123

    jmm/et al/food
    Don’t get me started. Have you read "The Omnivore’s Dilemma"? If not, it’s a good place to start. This country is being poisoned by corn syrup, sick beef, and that high fiber white bread= wood pulp. Yes, the cellulose left over from your last home improvement project is what goes into high fiber grocery store bread. Did you ever wonder why European Oreo’s tase so much better than the ones here?

  229. barfinger

    JMM: The poor in the US dont have the enterprise to meet a cruise ship and sell whatever they can.

  230. scottmi

    DR/jmm – "US will be the same if T party has its way." so you are claiming that the T Party will turn the US into the DR? I presume you are putting that forward as a positive as you have chosen to live there, and have been extolling the superior standard of living. Am i getting this right?

  231. sparky123

    Look, the T party likes their tea so sweet they can’t tell the difference between cane sugar and industrial corn sweetener anyway. The point is that we are a very rich nation and eat very poor quality food.

  232. stjeanluc

    Food / Jmm –  I am sure we could find something here in the US that would be better than what we currently feed our children in school. I am not looking for fancy stuff… For example, replace the regular burger by a turkey (without hormones) burger on a whole wheat bun. Toss the mashed potatoes and feed quinoa salad or whole wheat couscous. Replace the fries by regular vegetables. It doesn’t have to taste bad depending on how it’s prepared and doesn’t have to cost a fortune either. Trained early, kids will eat anything. We don’t have to go organic… Anything would be better than what we have now. And finally, replace all the sugary (and fake sugary) drinks by real 100% juices (preferably some with anti-oxydants) or milk. What we will save in health costs later would pay 10 times what we spend on the lunches! Do I miss the food from other countries, yes. But we can still make better choices here.

    As for the argument that "better" lunches would be burdensome regulations, the same people are only too happy to enforce a ridiculously high drinking age (you can go get killed in Afghanistan but can’t drink), make weed illegal and force schools to preach abstinence (and not sex education), all of which I am against and which burden our police departments and schools with almost unenforceable mandates!

    And I agree about corporations – but it’s widespread now, not just in the US!

  233. stjeanluc

    Technology breakthrough of the day:

    http://www.engadget.com/2011/11/16/researchers-increase-charging-capacity-speed-of-lithium-ion-bat/

    In fact, Professor Harold Kung and his team say they’ve successfully managed to increase both the charging capacity and speed of lithium ion batteries by a factor of ten. 

    This could be big for a lot of industries…

  234. jmm1951

    Scott/Tparty

    I think if government programs that help the poor are slashed people will have to be allowed to make a living any way they can. There may be unintended consequences, but not all of them bad. I think a person who has $1000 per month can live much better in the DR than in the US, however that person is probably one of the 1 per cent in the DR. But then do you need a car if you have public transportation. How many calories of food do you need? Do you need a TV of your neighbor has one?

  235. barfinger

    jean-luc:: anyone who has ever had a medium-rare burger (not the school norm, i admit) would never consider a turkey burger on whole wheat to be an acceptable substitute.There are better food choices that what is typically offered in a school cafeteria, but jeez, i would bet they would rather starve than face your menu.
     
    It is just not as simple as all you think it is.

  236. jmm1951

    Stjean/juice

    Juice has a lot of sugar. Give them water

  237. sparky123

    St J
    I agree with you completely, but I don’t see why we have to have more regulations to do what we should be doing anyway, which is feed and teach our children properly. I’ve seen one public school principal make a huge difference in the quality of lunches at an elementary school without any input from government. As the twig is bent the tree will grow-you are right that young kids are the best place to start if we want the future to be better.

  238. stjeanluc

    Food / Barf – I guess they won’t starve now, just die of heart attack at 60 or struggle with diabetes for 40 years… I am not a nutritionist, there are people paid for that who could come up with better stuff. In any case, I like my menu just fine and I like a rare steak as much as the other, just not every day!

  239. stjeanluc

    Regulations / Sparky – I would rather not have the regulations, but face it, not everybody will do the right thing! Your principal is in the minority I am afraid – not that more would not want to do it but they might not have the fight in them. The right thing would also be for corporation not to release pollutants in the air or the water but without regulations, they would do it (I have been to countries without regulations and it’s not pretty). It’s too bad, but that’s the world we live in! 

  240. stjeanluc

    Water / Jmm – I am OK with that as well. I grew up on water… But juices in moderation are good for you as well – vitamins, anti-oxydants, etc..  I would say unsweetened green tea would be good (or sweetened with agave syrup which has low glycemic value and is cheap enough). Plenty of options much better than a soda!

  241. stjeanluc

    China might not turn out like we think it will:

    http://www.businessinsider.com/it-is-time-to-admit-that-china-is-not-becoming-more-democratic-2011-11

    Mann lays out three general scenarios for China. In the first, the “soothing scenario”, trade and engagement with China brings capitalism, political liberalization and eventually democracy (Western-style democracy, not the intra-party democracy China has introduced). In the second, the “upheaval scenario”, China is headed for chaos, disintegration and collapse (see Gordon Chang and his now two decades of foolishness on this topic).

    His third scenario is the most controversial.  It also increasingly appears to be the most prescient. For the third scenario Mann asks:

    What if China manages to continue on its current economic path, yet its political system does not change in any fundamental way? What if, twenty-five or thirty years from now, a wealthier, more powerful China continues to be run by a one-party regime that still represses organized political dissent much as it does today, while at the same time China is also open to the outside world and, indeed, is deeply intertwined with the rest of the world through trade, investment and other economic ties? Everyone assumes that the Chinese political system is going to open up—but what if it doesn’t? What if, in other words, China becomes fully integrated into the world’s economy, yet it remains also entirely undemocratic?



  242. sparky123

    barfinger
    If you had been raised on turkey burgers instead of beef you might not be so quick to defend those medium rare beef burgers. The beef that goes into most of those burgers comes from feed lots. Those animals cannot survive in the conditions they are being kept without antibiotics. Read the book I suggested, if you dare, it might make organic beef or even turkey burgers more appealing.

  243. sparky123

    St J
    That prinicpal was in a small town in Mississippi. She managed to replace a very high starchy meal with fresh fruit, vegatables and meat. If she could do it anyone can. Maybe what we need is to reduce the influence of the education lobby and get some different people in our schools.

  244. jmm1951

    Jeanluc/water

    Yes I grew up on water too. The only things I drink now are water and unsweetened black tea which I make daily. About. $1.50 for 6 gallons. A glass of OJ or GJ for petit dejeuner. Occasionally a glass of red wine for dinner usually diluted with water or tea. I am not dead yet.

  245. pstas

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    Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience. CS LEWIS

  246. stjeanluc

    Schools / Sparky – I believe most teachers would be in favor of better meals as they would also promote better attention. But schools administrations are also probably victims to the food industry lobbying (in a different scale of course). And they probably don’t pay as much attention to that problem as they should. But that’s also the parent’s fault for not electing the "right" boards! 

  247. jmm1951

    Bar finger/poor

    I suspect there are all kinds of regulations in the US to stop the poor meeting cruise ships. I think if programs to support the poor and unemployed go, then a lot of the restrictions on how you make a living have to go too.

  248. stjeanluc

    Good one pstas (well, we are not preaching a tyranny), but we already live under robber barons and their cruelty doesn’t sleep and it doesn’t seem to that they will get satiated until they own everything and everybody! It’s not going so well so far… 

  249. stjeanluc

    In the meantime, futures have calmed down and Asian markets are mixed with Japan stable but China down over 1%. There are some worries about real estate now with prices down last month… 

    Tomorrow is another day!

  250. sparky123

    pstas,
    What a great quote! Less government regulation and smarter more responsible citizenry is only impossible for people who have been completely brainwashed into thinking that the growing government they support is able to decide what is best for everyone, even though clearly that government is for sale to the highest bidder.

  251. sparky123

    St J
    I don’t know that school admistrations are the "victims" of anything or anyone. I do believe that the parents in every school district in every state in this country have the power to improve school lunches, and education in general, if they have the knowledge and the will to make that improvement a priority. The problem I see with bigger government, and perhaps government in general, is that over time it tends to erode both knowledge and will, and the education system seems to have become a tool to that end, perhaps because it is in the best interest of government to govern those without knowledge or will.

  252. jmm1951

    Euro 2012

    Now that the seeding for the euro 2012 soccer championship have been made it is possible there will be a PIIGS group of Spain, Italy, Greece or Portugal, and Ireland. Or Germany instead of Italy with three little piggies.

  253. angelcur

    i am going to go to the dominican w my wife but first without her to be certain its safe!…did all of you see the article i sent about the highly respected prof in china deriding the china story in a big way…

  254. Kwan

    I’ve updated a bunch of stuff on the wiki tonight based on comments made throughout the day (linked up yours, StJ) but please feel free to make edits wherever you see fit. I’m just trying to get content linked as I see it, and I’m not necessarily organizing it in a sane way.
    Good discussion on school food, but like it or not you either pay for it now (by eating a bit healthier) or you pay for it later via medical bills. Or you die and someone else pays for it. Option #1 is probably the cheaper of the two, but it’s not necessarily cheap to eat healthy.  (Compare the cost of a meal from CMG to once from MCD – someone noted a month or two ago that it’s nearly $10 now for a burrito with guacamole.)
    I actually went to grad school with a guy that said the reason he was vegetarian was because it was economical. I’d never heard that one before…

  255. zeroxzero

    Angel:  The Dominican Republic seemed to me to be reasonably safe, and fairly democratic as poorer countries go, although I did have an unobtrusively armed Dominican driver when I visited as a precaution.  Unless you are there to meddle in local affairs, I wouldn’t hesitate to second Jmm’s recommendation.  I have an old college roommate who lives there and had me visit.  Punta Cana, at the eastern end of the island, is a highly controlled tourist zone, and entirely safe.  I took my family there for Xmas a few years ago, and found it an excellent value. 
     
    The DR is run by an "upper class" of kleptocrats who work little and surcharge the population for all imported goods as a work-free method of supporting themselves.  They, for example, at least double the price of imported cars [all cars], electronic equipment, and all other imports, and rights to run large businesses are parceled out to family monopolies --supermarkets, drug imports, etc. .  Nonetheless, they appear to "trickle down" enough cheap medicine, health car, some unemployment benefits, subsidized electricity, cheap public transport and local representation to sustain the consent of the governed.  

     
    Police are underpaid and earn their living by levying fines for breaches of public order, and no business exists without paying "protection", but at standard rates rather than arbitrary extortion.  There are prices for tourists and prices for locals in respect of most services.  I found it all very curious, from a political science standpoint — a kind of "Benign Kleptocracy."
     
     A key point is that the system would be unlikely to work as well in in Asia or Africa:   it is fifth on the list of countries sending legal immigrants to the U.S., behind Mexico, China, India, and the Philippines, despite a population [@ 9M, only a fraction of the others.  U.S. remittances from family members overseas hence provide a substantial economic buffer — and a political one, as the truly discontented can usually find a way to leave.  I did find it a pleasant place, as Jmm has described, although his view of Dominican poverty appear to derive from a tourist zone. The national per capita income of @ $8,500 seriously misrepresents the inequality of distribution, and the poverty to be found in  rural areas and extensive urban areas that in the U.S. would qualify as slums.

  256. dclark41

    Phil:
    I know you mentioned this earlier, but it is a stellar example of being careful what you read. Look at the difference in the two paragraphs about ConocoPhillips’ sale of its stake in the Seaway pipeline. Can you explain to me how this story can possibly drive prices up?  If there is a glut at Cushing doesn’t that mean, in general, that there is an oversupply of oil in the US? Or does there exist unmet demand because of a distribution problem? Even though that oil goes elsewhere won’t it just inflate the stocks of other refined oil products, or will it be used to satisfy unmet demand outside of the US (increased exports)?
    On Wednesday, Enbridge Inc. ENB +0.76%  said it would pay $1.15 billion for ConocoPhillips’ COP -0.01%  stake in the Seaway pipeline and reverse the flow of oil in the line to carry oil away from Cushing and down to refineries along the Gulf Coast.  MarketWatch

    "An interesting thought from Mike Bergen on the move higher in WTI crude this morning: Conoco’s (COP) sale of a pipeline to Enbridge (ENB) means its flow will reverse to Canada, reducing supply to the Cushing refineries where WTI is priced. Brent crude (BNO -1.8%) moving down as WTI (USO +1%) moves higher lends credence to this theory." Seeking Alpha

     
     
    http://blogs.wsj.com/overheard/2011/11/16/conocos-brent-control/

  257. Kwan

    Then again, I completely forgot about cheaphealthygood, where a food blogger spent $25 for an entire week’s grocery for her and her husband-elect. Of course you have to cook to cook, but maybe that’s part of the problem: people would rather watch 6-8 hours of television a night than spending 30-45 minutes making a meal, and they result to (less than healthy) fast food(?)

  258. angelcur

    ZERO are you currently working?…and THANK YOU for that wonderful write up of the DR you are v generous to take the time!

  259. Maya1

    Phil/AAPL
    Thanks for your thoughts and reply.
    Much appreciated!

  260. Maya1

    Phil
    I almost forgot
    I had also asked which stock from your income portfolio that is in the red in terms of sold puts would you pick if you had to pick one ( or two, ok)
    GE?

  261. Maya1

    Lflan
    Thanks for your reply today.

  262. zeroxzero

     Angel: You’re very welcome, I’m glad if you found it of use. I am not employed nor operating a business, but having to deal with a very dispersed set of investments while raising a family is sufficiently bewildering to make me wish for the simplicity of doing so. 

  263. zeroxzero

     I understand why the pipeline reversal plan would narrow, or even eliminate, the spread between West Texas Intermediate [WTI] and Brent by clearing the 32 million barrel glut presently stored in Cushing.  I fail to understand how that would affect the global price of crude oil, except perhaps within a brief time frame.  I’ll stay short crude.

  264. Phil

    Food/JMM – The worst thing is that the US model is spreading and crowding out local food production.   It already breaks my heart to travel and see how many KFC and McDonalds there are where there used to be independent, local restaurants.  Just because something can be done cheaper and faster, certainly does not mean its better.  Great point on the misinterpretation of law – as a society we have certainly lost our way.  

    Eventually/Barf – One would hope.  As to cars, the average mpg in Europe is 37mpg, almost double ours – the cars we use in the US are shameful gas guzzlers and one of the reasons the US, with a population less than 5% of the Earth, uses over 20% of its oil.  You may not be a Conservative, but you sure spout the party line on that one.  As to DR – don’t judge a country by what you see at a tourist port – where do you think the poor people go?  When you arrive at Port Authority in Times Square, you get the same greeting – does that make NY a third World country?  

    Choices/StJ – That’s one of Tina’s things, working to improve school lunches.  It’s really sad what we feed our kids, mostly out of laziness.  Even on the cruise ship, the most popular kiosk was the one that had chicken nuggets (which were actually really good), french fries and burgers (with the untouched salad bar next to it).  My kids wouldn’t eat with their friends in the morning because they never wanted to go to the adult buffet, where my kids liked to get omelets, fruit salad and, for Madeline, all the lox she could eat – which is quite a lot!  Because my girls are 9 & 11, almost every restaurant we go to assumes they want the children’s menu – generally nothing but junk food but, of course, much cheaper.  That’s the trap for the bottom 99% – they are just pushed towards making bad choices day by day.  

    Batteries/StJ – Very nice but that’s what I thought when I read "poking holes" – it lowers the life-cycle.  That’s a tough trade-off.  Still, it’s a big move in the right direction and even a compromise that doubles capacity and halves charging time while maintaining a decent life-cycle would be huge.  

    Third China scenario sounds right to me – why would they change?  

    Red wine diluted with tea, JMM?  I’m a big green tea drinker but not a cheap habit as I like the exotics.  Still, not too much to make a pitcher of iced green tea which I drink all day long.  I just got a new iced tea maker I’m really happy with and highly endorse - very good if you are a loose tea person.   Also, while on the subject, a word from my "dealer".  

    Lewis/Pstas – He also said: "A man who was merely a man and said the sort of things Jesus said would not be a great moral teacher. He would either be a lunatic – on the level with the man who says he is a poached egg – or else he would be the Devil of Hell. You must make your choice. Either this man was, and is, the Son of God, or else a madman or something worse. You can shut him up for a fool, you can spit at him and kill him as a demon or you can fall at his feet and call him Lord and God, but let us not come with any patronising nonsense about his being a great human teacher."  He’s one of those unpredictable Irish guys…

    For sale to the highest bidder/Sparky – Aren’t Corporations, by definition, for sale to the highest bidder?  Isn’t every self-interested Capitalist in that Corporation, by definition, for sale to the highest bidder?  Less Government and less regulation?  We tried that for a few thousand years and it sucked.  There is a great sickness in this Country where people seem to have been brainwashed into worshiping the amoral Capitalist and vilifying those who choose a path of service to others – as if that’s some kind of weakness that must be rooted out.  

    Once upon a time, it was only the Church who would stand up in the face of tyranny and yes, there was plenty of corruption in the Church as well, but it was the only protection the bottom 99% of their time were afforded.   Back in the 1500s, Martin Luthor crusaded against the sale of "indulgences" by the Church.  In the good old days, you could sin all you wanted and pay for forgiveness – must sound like a perfect society to you, right?  Poor guy was excommunicated for his troubles… 

    China/Angel – See above, he’s not a highly respected professor, he’s a shock jock who’s been playing that song for a decade. 

    Wiki/Kwan – Thanks!  All should make use of the Wiki and contribute to it if you can.  Wikis get better when they are used and we don’t have millions, we have hundreds so it takes some active participation on all of our parts to make this project work as well as it should.  Thanks.  

  265. Phil

    Meanwhile, Dollar smacked down to 78.35 does not make me feel warm and fuzzy about the half-point bounce in the Futures.  Oil at $102.75!  

    Vegetarian/Kwan – I guess it depends what kind of meat you buy.  I certainly spend more on steak than I do on veggies, even though we eat a lot of veggies and not too much steak.  From a social-economic standpoint, meat is a ridiculous thing to eat:

    Meat vs. Veggies:

    1. Amount of potatoes that can be grown on 1 acre (over 4,000 square meters): 20,000 lbs. (over 9,000 kg)
    2. Amount of beef that can be grown on one acre: 165 lbs. (75 kg)
    3. The same land to feed 1 “meat-eater” could feed from 20 to up to 150 vegetarians!
    4. Amount of protein fed to chicken to produce 1 lbs of chicken: 5 lbs. (1 to 5 ratio!)
    5. Amount of protein fed to hogs to produce 1 lbs of hog flesh: 7,5 lbs!
    6. Number of people who starve to death yearly: 60 million!
    7. Number of people who could be saved if Americans reduced their meat intake by just 10% percent: 60 million! World hunger could be solved by just introducing a meat-free day.

    Water:

    1. Water needed to make 1 lbs of wheat: 25 gallons (95 liters)
    2. Water needed for 1 lbs of meat: 2,500 gallons (9465 liters)
    3. Cost of 1 lbs of wheat: $1.50
    4. Cost of 1 lbs of beefsteak: $15.40
    5. Cost of 1 lbs of beefsteak if the water that is needed for its production wasn’t subsidized: $89

    Energy and materials:

    1. Time that petroleum reserves would last if everyone ate meat only: 13 years.
    2. If everyone was vegetarian: 260 years.
    3. Percentage of energy return (1 unit of food energy compared to 1 unit of energy used to produce it) from meat: 34.5% (over 65% of energy loss).
    4. Percentage of energy return from plant food: 328%!
    5. Raw materials consumed for all purposes for a meat-centered diet: 33%.
    6. Raw materials consumed for all purposes for a pure vegetarian diet: 2%.

    Health:

    1. Frequency of heart attack in US: every 25 seconds.
    2. Frequency of death from heart attack in us: every 45 seconds.
    3. Heart attack death risk by average American man: 50%
    4. Same risk for a pure vegetarian: 4%
    5. Same risk for a raw-foodist: 0%
    6. By reducing your meat intake by 10% you wouldn’t only help fighting world hunger, but reduce the risk of heart attack by: 9%.
    7. By consuming 1 egg a day your blood cholesterol rises by: 12%
    8. Increased cholesterol by 12% rises the heart attack risk by: 24%
    9. Risk of dying from a disease caused by clogged arteries if you don’t consume saturated fat: only 5%
    10. Breast cancer risk of a woman who eats meat daily compared to a woman who eats meat less than once a week: 4 times higher.
    11. Ovarian cancer risk of a woman who eats eggs over 3 times a week compared to a woman who eats eggs less than once a week: 3 times higher.
    12. Pesticides of total pesticides in our diet supplies by meat: 55%
    13. By dairy products: 23%
    14. By fruits: 4%
    15. By grains: 1%
    16. Pesticide contamination in breast milk of meat-eating mother compared to a vegetarian mother: 35 times higher.
    17. The Meat Board says you don’t have to be concerned about dioxin pesticide in your diet. What they don’t tell is that dioxin is a incredibly potent pesticide: an ounce (28 grams) could kill 10,000,000 people!
  266. Phil

    DR/ZZ – I was down in St. Martin on my trip, that’s a very interesting little island.  Half French, half Dutch and just about 100,000 people on the whole island who seem to be having fun in general.  Plenty of good restaurants, casinos, nude beaches, clubs, nice airport…  I’m going to go back and stay a few days to get a better feel for it.  

    Glut/DC – Yes, it is silly but WTIC is a unique thing so it is possible to force pricing more in-line with Brent by shifting the distribution hub away from Cushing, where they are always bottle-necked.  The promise of this pipeline is that is can siphon 400,000 barrels a day away from Cushing and that simply means 12Mb a month that can be hidden elsewhere and that’s like telling a 3 Card Monty dealer that the mark has agreed to turn around and not even look at the table while he’s hiding the Red Queen – so the NYMEX crooks are celebrating like it’s Christmas.  

    Cooking/Kwan – Good point.  I was tied up on the phone tonight and my kids were pissed that I only had time to make Chicken and Ravioli Alfredo and not the veggie and tofu curry they were promised.   Whole meal took me about 20 minutes to make (I cheat with sauce and ravioli from Whole Foods and yesterday’s leftover chicken) and the curry would have taken maybe 40 but so worth it.  

    78.43 just ahead of EU open. 

    You’re welcome Maya.  See above (11:15) for notes on puts.  

  267. Phil

    Europe dropping off at open, down about half a point.  

    Thursday’s economic calendar:
    8:30 Housing Starts
    8:30 Initial Jobless Claims
    10:00 Philly Fed Business Outlook
    10:00 E-Commerce Retail Sales
    10:30 EIA Natural Gas Inventory

    12:30 PM Sandra Pianalto Speaks

    4:30 PM Money Supply
    4:30 PM Fed Balance Sheet

    Notable earnings before Thursday’s open: DLTR, GME, HP, ROST, WSM

    Notable earnings after Thursday’s close: ARUN, CRM, FL, FMCN, GPS, MRVL

    France, Spain Sales Test Contagion as Yields Ascend: Euro Credit. France and Spain sell 12.2 billion euros of bonds today in a test of investor demand as surging borrowing costs infect the region’s core.

    Citi Chief Economist Willem Buiter: A Spanish or Italian Default Could Happen Soon. (video)

    Greek Protesters to March as Warning to New PM. Thousands will protest in Athens on Thursday to warn Lucas Papademos’ new government that despite parliament’s backing for more austerity steps, many ordinary Greeks are not ready to endure further years of painful belt-tightening. The size and mood of the rally, the first big protest in almost a month, will signal just how bitterly a restive public will fight further tax rises and spending cuts that international lenders demand in return for a massive bailout.

    Money-Market Spreads Surge to Two-year High on Europe Crisis. Investor demand for the relative safety of Treasuries during the European debt crisis has sent the difference between U.S. short-term yields and credit-market rates surging to levels not seen in more than two years.

    Euro-Dollar Basis Swap Cost at 2008 Crisis Levels. Elevated concerns about the fate of the euro zone sent a widely tracked measure of European funding costs to levels not seen since the 2008 financial crisis.

    Political Fires Are Alight Across Europe As Currency Debt Burns Again. The widening spreads of eurozone bond yields over Berlin’s anchor rate are consistent with a currency system breaking apart.

    Banks Face Funding Stress. European Institutions Resort to Potentially Risky Swaps to Generate Liquidity. European banks, increasingly concerned about their ability to access funding, are devising complex and potentially risky new deals that enable them to continue borrowing from the European Central Bank. 

    U.S. markets have been re-accelerating, despite the crisis in Europe, says Mesirow’s Diane Swonk. Unfortunately, it hasn’t been enough to jump start our labor market, and the rapid deterioration we’re now seeing overseas will inevitably impact our markets beyond what we’re seeing right now in our banks – it’s just a question when and how hard. (video)

    Spain’s Salgado Cuts GDP Forecast, Says Too Early to Know Regions’ Deficit. Spanish Finance Minister Elena Salgado said the economy will grow about 0.8 percent this year, less than the government’s target, and it’s too early to know if the regions will meet their deficit goal this year. The new forecast is below the 1.3 percent government target that Salgado had said since August would be hard to meet, and is in line with the estimate of 0.7 percent published by the European Commission last week.

    Weil: UniCredit Bombshell Shouldn’t Be the Last One. Everyone in the world who pays any attention to the financial markets seems to know that the balance sheets of European banks are a joke. All you have to do is compare the stock prices of these companies with the book values on their balance sheets to see that. On average the shares of the 32 companies in the Euro Stoxx Banks Index trade for about 44 percent of book value, or common shareholder equity, according to data compiled by Bloomberg.

    Singapore’s Exports Slide the Most in 30 Months as Electronics Sales Slump. Singapore’s exports fell the most in more than two years in October as a slowing global economy curbed demand for electronics products. Non-oil domestic exports fell 16.2 percent from a year earlier, after a revised 4.6 percent decline in September, the island’s trade promotion agency said in a statement today. The median of 12 estimates in a Bloomberg News survey was for a 7.8 percent drop.

    Zoomlion Sees ‘Drastically’ Slower Demand for Cranes, Excavators in China. Zoomlion Heavy Industry Science & Technology Co. said a slowdown in China’s demand for cranes and excavators will carry on next year because of waning economic growth and cutbacks in railway building. “Demand for construction machinery has shrunk drastically and growth will no doubt continue to slow next year.

    Chinese Buyers and Developers Face Some Harsh Home Truths. Confidence shaken amid falling property prices as real estate agents suffer sudden slowdown in top-tier cities, Hu Yuanyuan reports in Beijing.

    Average home prices for China’s tier 1 cities may fall between 20% to 30%, citing a research report by Ba Shusong, a researcher at the State Council’s Development Research Center. Tier 2 cities’ home prices may fall 10% to 20%, Ba says. China’s property industry may face its first "meaningful" big adjustment "soon", Ba said.

    The China Banking Regulatory Commission has barred banks from selling wealth-management products with maturities of one month or less, citing people close to the regulator. Banks rely heavily on sales of short-term wealth-management products to increase deposits, causing volatility and liquidity risk.

    Some Commodities to Take Hit from China: Analysts. Demand for industrial commodities is headed for a softening because China won’t be able to offset dwindling consumption in the euro-zone economies, Capital Economics analysts said in a note distributed to reporters Thursday. Views that China’s rising demand will support the global commodities is misguided, the analysts said. China’s annual growth rate is set to slow to about 6% on average during the next decade as the supply of cheap labor dries up, cooling from current annual growth of about 10%. Crude oil in particular may see a potential drop as falling demand in Europe outpaces rising consumption in China.

    How do you ignore FACTS about lower oil demand?   Release the TBoone!  We need to get off OPEC oil now, and we have the resources to do it, says T. Boone Pickens. Things are going fall apart in the Middle East, and soon. Saudi Arabia is on the brink, and at 9.7M bpd in production, if they come off line we’ll be looking at oil prices around $300 – $500 a barrel. That risk, plus the trillions of dollars in cost savings we would get from pulling our military forces out of the region, Pickens says, more than justifies ramping up our own production at home. (video)

    Oh no, more reality:  BHP Billiton(BHP) Turns More Cautious On Outlook. BHP Billiton, the world’s biggest miner, has turned more wary on the outlook for commodity markets, warning on Thursday that customers are starting to face tighter access to trade finance and some are cutting production. BHP and rivals such as Rio Tinto and Anglo American, have warned that markets are likely to remain volatile in the near term, but BHP is the first to highlight that customers are starting to face tougher credit conditions. "The heightened volatility and uncertain economic outlook are expected to continue to weigh on sentiment in the markets for our commodities," Chief Executive Marius Kloppers told shareholders at the group’s annual meeting in Australia.

    And more!  Applied Materials(AMAT) Warns of "Challenging Economy". Chip gear maker Applied Materials Inc gave a cautious quarterly revenue outlook and warned it expects to be affected by a tough economy. Economic uncertainty in the United States and Europe has hurt demand for consumer electronics in recent months, leading many chip manufacturers to put expansion plans on hold.

    One more:  NetApp(NTAP) Sees Q3 Profit Below Street, Shares Fall. Data storage equipment maker NetApp Inc reported a 6 percent dip in fiscal second-quarter profit and forecast lower than expected results for the current quarter as large corporations trim technology spending in a shaky economy.

    Gotta love that EDZ!  India Stocks May See ‘Sharp’ Fall, Franklin Templeton Says. Indian stocks, the second-worst performers among Asia’s biggest markets this year, may decline further as investors shun riskier assets amid the global economic turmoil, according to Franklin Templeton Investments.

    The congressional supercommittee charged with devising $1.5T in budget cuts is showing little real progress, so it may resort to statistical gimmicks to do the job. Some are familiar D.C. deceptions – massaging budget assumptions, painting rosy economic scenarios – and others include "saving" money on wars that are ending and putting off what lawmakers don’t want to deal with now.

    Finance Job Losses Near 200,000 as BNP, Citigroup Cut Staff.  The reductions add to the 195,000 banks, insurers and asset managers announced this year, and surpass the 174,000 losses in 2009, data compiled by Bloomberg show.

    A Look At People’s REAL Holiday Shopping Plan. (graph) Based on their historical data, Gallup explains that "The 7% increase in Americans’ 2011 November Christmas spending forecast compared with last year’s — from $714 to $764 — points to a modest increase in 2011 holiday retail sales, perhaps on the order of 3% to 4%."

    That’s not good:  Auto parts maker Delphi Automotive (DLPH) prices its IPO at $22 a share, the low end of its expected $22 – $24 range. Delphi, which emerged from Chapter 11 bankruptcy protection in 2009, will begin trading Thursday on the NYSE.

    Mosaic(MOS), the largest U.S. potash producer, said additional supplies from so-called brownfield expansion projects will make prices unsustainable above $600 a ton through 2020.

    China, Russia Resist Sanctions Against Iran. A new U.S. and European-led push to censure Iran before the United Nations nuclear agency for alleged efforts to develop atomic weapons is facing resistance from Russia, China and a bloc of developing countries, which threaten to dilute any international punishment.

    Frame job of the week:  The Guy Arrested For Firing A Shot At The White House May Have Spent Time At ‘Occupy’ Protests.

    Samsung (SSNLF.PK) intends to launch a redesigned 10.1-inch Galaxy Tab in Germany this week as it looks to get around a ban on the tablet device because of its similarity to the iPad (AAPL). Samsung hopes that changing the design of the frame and the location of the speaker will do the trick.

  268. Phil

    OK, that was depressing. 

    I would have to say that I do not believe I will be looking to BTFD at the moment…

    Time for a nap.

    78.48…

  269. flipspiceland

    @Feilpe
    re:  St Martin  While there, take a day and hop or sail over to St. Bart’s, it’s not far . You might meet some limousine liberals-democrats- lefties along with a bunch of  conservative republicans dining al fresco at the same table enjoying freshly caught langouste, pomme frites, and salad nicoise on the beach at St.John’s bay.
    You won’t be sorry.

  270. Phil

    That’s a good idea Flips, why waste a trip on one island.  

    I have a lot of friends who go there but I’ve just never gotten around to it so far.  After this last trip, I’m more motivated.  

  271. Phil

    6:00 AM Overseas: Japan +0.19%. Hong Kong -0.76%. China -0.19%. India -1.87%. London -1.37%. Paris -1.31%. Frankfurt -0.89%

    Hey, it’s not 7%!  Yields on Spanish 10-year debt rise to an average of 6.975% in an auction, the highest in 14 years. The sale has sent the Spanish-German yield spread in the secondary market to a euro-era record of 501 bps, with the Italian equivalent also expanding.

    More on Spanish bond auction: the Treasury sold €3.56B ($4.79B) of the bonds vs. a plan to sell €4B ($5.4B) worth, with the maximum yield 7.088%. Spain is very much in danger of LCH.Clearnet raising collateral demands, which could spark more selling.

    France’s borrowing costs rise in an auction of medium-term debt, with a €950M line maturing in Sept. 2013 carrying an average yield of 1.85% vs. 1.31% a month ago, and a €1.07B line maturing in July 2015 an average yield of 2.44% vs. 1.96%. In total, France raised €6.98B ($9.41B), at the top of its projected range. 

    With China laying the groundwork for internationalization of the yuan, the renminbi could "mount a challenge" to the dollar in 5-10 years, a Congressional report says. The yuan still has much catching up to do, though, as it accounts for 0.3% of international currency trading while the dollar is involved with 85%. 

    The British government agrees to sell Northern Rock, the first U.K. bank to be rescued during the financial crisis, to Richard Branson’s Virgin Money for an initial £747M ($1.2B). The price could rise to as much as £1B in the future, although this would still be below the £1.4B the state has invested in the bank. (PR)

    An FDA advisory panel has backed extending to the over 50s the use of Pfizer’s (PFE) Prevnar 13 vaccine for helping to prevent pneumonia. Should it win FDA approval, which is contingent on an ongoing trial, the drug could add almost $2B in sales in 2015. It’s already approved for young children.

    Energy Secretary Stephen Chu is due to today appear before a Republican-led House committee, where he will probably have to fend off accusations of political cronyism and incompetence in the government’s provision of a $535M loan guarantee to Solyndra.   Stephen Chu’s appearance in front of a House panel over Solyndra comes a day after the bankrupt solar panel maker postponed an auction of its California manufacturing plant until January after it didn’t receive any acceptable bids by last night’s deadline.

  272. Phil

    Barry R sharing my sentiments on Corporate Kleptocracy:  

    I did an interview with a print reporter yesterday about what has been going on with lack of prosecutions, the banks, and Wall Street in general. We discussed the corrupt exchanges and HFT.

    I dropped lots of F-Bombs, called out cowards and crooks and held nothing back. (“That fucker belongs in prison; this son of a bitch should hang“)

    Afterwards, she commented that I seemed angry.

    I wrote back suggesting that I am a happy dude, and its not Anger — its closer to an ineffable sadness that comes once you realize you have lost something dear. I am old enough to have grown up when this nation was a Democracy, but that era has passed. We now live in a nation no longer run by the citizens — it is a Corporatocracy — and that makes me sadder than angry . . .

    She suggests perhaps a better word is outraged.

    I wonder: Why have the Europeans figured out they are getting screwed, and we haven’t? Why are they taking to the streets en masse, while we seem to be watching our own control over our own futures slip from our hands almost as if from afar?

    In America, we are too busy dropping the kids off at soccer, running around looking for sales and bargains, racing to keep our heads above water. We seem to forget to get outraged. Our control over our once Democracy — the one we had a revolution against a monarchy dictating decisions from afar — slips away from us. Not with a bang, not even with a whimper, but with a 1000s acts of gradual ceding of power to the new Monarch. We have given up hard won rights to a coordinated attack from all three branches of government; Our Congress has become the legislative branch of eBay — Congressmen are auctioned off to the highest bidder; they even have a Buy It Now button to get specific legislation passed. The executive branch has fallen under the sunk cost fallacy, afraid to prosecute banks because we spent so many billions bailing them out. It turns out that even our once venerable Supreme Court is just as corrupted, with lobbyists partying with Justices and backdooring ethics by hiring their wives.

    In short, our new overlords are enormously well funded, well connected, relentless and perhaps most of all, patient. This new King was not appointed by primogeniture, or even Divine Right, but by acquiring enough profits in the free market that they can buy control over society, even as they thwart that free market ideal for their own ends. We have become, in short, a Corporate Monarchy.

    The right question isn’t why am I angry, sad and outraged. The proper question is, why aren’t you?

  273. Phil

    Wheee on oil – finally!  
    See, lose a few nickels at each stop on the Futures going against us and now making $2 and counting in one quick shot!  

  274. BertII

    I’ll second the whee on oil hope it stays down to affect our sco amd uso put

  275. Phil

    $100 held so far. 

  276. NF**X

    Islands – Longer flights and stops, but as long as we’re touring colonial playgrounds, St. Vincent and the Grenadines are awesome. Bequia? Mostly a sailing stop – only added first airport 15 years ago- it’s 7 square miles of beauty and a tiny town of great food, beaches, etc. Also, closer to home, the BVIs are without peer – try Jost Van Dyke. No docks. Great bar or two.

  277. jmm1951

    Angel/DR

    Better to bring the wife as rental costs can mount up.

    Xerox/poverty DR

    True but rural poverty in US is not pretty either. DR kleptocracy typical of island economies. Descendants of missionaries still economically prominent in Hawaii.

  278. NF**X

    jmm/DR – I like the kleptocracy rap – and I agree poverty ain’t pretty stateside. But all the islands we enjoy are ghost lands of slavery and ongoing oppression. Occasioned by kleptos in the service of well-heeled tourist and neo-colonial property owners. Locals in 90% of the islands we love to visit absolutely hate “us” – the islands that haven’t been able to “persuade” locals over time that tourism is all they’ve got either have protected resort or wealth enclaves – or they are St. Croix. DR is a a cheap Carib alternative because the standard of living is universally poor – not just pockets of trailer parks. I’d employ some of the currently cheap labor to build a wall, man. Cuz when it comes, my favorite waiter at Little Dix Bay and your smiling well-dressed locals are gonna chop you and me down like so much meat on a hook. And we’ve got it coming.

  279. jmm1951

    Angel/wife DR
     
    Perfectly safe to bring your wife to the DR as there are many gringas already in residence. Of course, local short or long term rentals may be available.

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