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Thursday Thoughts – Waiting on Mitt and the Fed

Health Care in Reverse © Christopher Weyant,The Hill,GOP, Republicans, ambulance, health-care, healthcare, Barack Obama, Affordable Care Act, patient, uninsured, reverse, reversal, repeal, John Boehner, Congress, House of Representatives, Tea PartyAmerica is screwed!

That's what I learned watching the GOP convention last night.  About 5 minutes into Paul Ryan's speech I had to go outside to check to see if my neighborhood was in flames but, apparently, the seniors in my town haven't yet started rioting for their Medicare (which Ryan claims he's trying to protect) funds that Obama is stealing.  

Well, saving, stealing – same thing, right?  

As Romney's pollster, Neil Newhouse said on ABC yesterday – "We're not going to let our campaign be dictated by fact-checkers." and that was the perfect prelude to the BS festival that was held yesterday at the GOP convention.  

“Right there at that plant, candidate Obama said: ‘I believe that if our government is there to support you … this plant will be here for another hundred years.’ That’s what he said in 2008. Well, as it turned out, that plant didn’t last another year. It is locked up and empty to this day.” – Ryan 

Bush Catapulting PropagandaOK folks, this isn't a guy misspeaking, this is what Paul Ryan, Mitt Romney and 20 of the country's best speechwriters (well, best Conservative speech-writers – which is, I admit, a terrible mental handicap to overcome) decided to say to America in THE most important speech of their lives.  Opening with suck a blatant lie pretty much sets the tone for this campaign, don't you think?  Obama was not at the plant October of 2008, it was February, he did not say anything of the sort AND the plant closed in December of 2008 – NOT when Obama was President.  

Interestingly, Ryan test-drove this statement on August 16th in Ohio and was blasted for it by fact-checkers at the time but, as Nazi propagandist Joseph Goebbels used to say: "If you tell a lie big enough and keep repeating it, people will eventually come to believe it."  It's nice to see the GOP embracing the classics.  Goebbels said:  “The most brilliant propagandist technique will yield no success unless one fundamental principle is borne in mind constantly – it must confine itself to a few points and repeat them over and over” like "Drill Baby Drill," "Job Creators" or "Obamacare."  

Ryan slammed the president for not supporting a deficit commission report the same one that he himself, as a member of the committee, had voted against – killing it.  He also made a cornerstone of his argument the claim that Obama "funneled" $716 billion out of Medicare to pay for Obamacare. But he didn't mention that his own budget plan relies on those very same savings or that Obama's plan SAVES the $716Bn (over 10 years) through the Affordable Care Act while Ryan's plan uses the same money Obama is SAVING to give tax breaks to people who earn over $250,000 a year while killing the Affordable Care Act (job 1 for Romney/Ryan apparently) – truly leaving Medicare recipients with nothing to fall back on.  

Ryan also put responsibility for Standard & Poor's downgrade of U.S. government debt at Obama's doorstep. But he didn't mention that S&P itself, in explaining its downgrade, referred to the debt ceiling standoff. That process of raising the debt ceiling was only politicized in the last Congress, driven by House Republicans, led in the charge by – Paul Ryan.  The credit rater also said it worried that Republicans would never agree to tax increases. “We have changed our assumption on [revenue] because the majority of Republicans in Congress continue to resist any measure that would raise revenues,” S&P wrote.

I really liked the touching story of how Paul Ryan's mother used, as did her son, Paul Senior's Social Security death benefits and ongoing checks to attend a state-funded college and, as Paul says, his mom took the public transportation every day to go 40 miles back and forth to Madison, where there were better opportunities, because they couldn't afford a car, but her business in Madison became a success AND THEY DID IT WITHOUT ANY GOVERNMENT HELP!  How does the guy even stand there and say things like that?  Does he not understand what he's saying or does he not care?  

Needless to say, this was not a market booster and Asia was down 1% last night and Europe is down another half a point this morning and the US futures are down about half a point as we all wait to see if Mitt can inspire us this evening.  Of course it's Ben Bernanke that really needs to come through tomorrow morning, as he delivers his opening remarks at the Fed's Jackson Hole conference.  Whatever Chairman Bernanke is planning to do – he'd better do it quick because Romney has vowed to remove him from his post so the clock is ticking.  

Those waiting for Draghi to save us may be disappointed as well.  "The ECB can't unpack the big bazooka. It doesn't have such a mandate," says Lars Feld, an economic adviser to Angela Merkel. He instead expects the central bank to buy peripheral debt "bit by bit," but not have much impact on bond yields.

Copper jumped 2% off yesterday's low and is now (9:05) testing the $3.50 mark and that's an excellent spot to take a short position in the Futures (/HG).  We went long on the Russell (/TF) off the 810 line and the S&P (/ES) off the 1,400 line earlier this morning but we already got a nice pop and made our Egg McMuffin money and we're not long into the open but we will be watching those lines very closely to see if they hold up.  

Oil should hold $95 into the Natural Gas Inventories at 10:30 but, unless there is a big draw, it's doubtful they hold it.  Unfortunately, it's too close to the weekend and then next week's very bullish inventory report (because production is shut down and the shipping channels are blocked from the storm) so it's a little too dangerous to take chances in the Petroleum pits today.  

Personal Spending was up a disappointing 0.3%, matching the Growth in Personal Income but, adjusting for inflation – both were a zero.  Nonetheless, retail numbers are coming in strong as back to school shopping kicks in and, of course, last month's comps were TERRIBLE but we ignored them because Ben was going to give us Trillions of Dollar tomorrow – I can't wait – it's like Christmas!  

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  1. Pharmboy

  2. stjeanluc

    Oil Lines

    R3 – 97.62
    R2 – 97
    R1 – 96
    PP – 95.38
    S1 – 94.40
    S2 – 93.77
    S3 – 92.79

  3. stjeanluc

    Quote of the day:

    Sen. Lindsey Graham  (R-SC): "We're not generating enough angry white guys to stay in business for the long term."

    The Romney campaign is working on that though….

  4. Pharmboy

    This is my fear from that Ryan speech because we have already started down the path with what the GOP is doing to illegals and women….and he said it with a straight face, and conviction.  He scares the crap out of me.

  5. stjeanluc

    That sums it up for that Romney campaign:

    http://www.motherjones.com/kevin-drum/2012/08/lies-damn-lies-and-mitt-romney

     

     

    This is hardly the worst campaign attack ever. Swift boating was worse. Willie Horton was worse. The endlessly twisted quotes of Al Gore were worse. But those attacks were all based on at least a kernel of truth that was twisted for political ends. That's not admirable, but it's hardly unusual either. But Romney's lies aren't even remotely defensible, and the campaign barely even bothers to try. The welfare attack works, so they're going to use it. If you have a problem with that, go pound sand. You don't think it's right to just excise a big chunk of Obama's quote in order to make him say something he didn't? Tough titties. It's flatly not true that any money has been taken from the Medicare trust fund? Meh. And these are the centerpieces of his campaign.

    I struggle to describe this. It's not worse than past attacks, but it is different. In the past, you felt that maybe campaigns were at least a little bit embarrassed about this kind of thing. They'd blame it on someone else. They'd try to produce some lame defense. They'd haul out some fake white paper to give themselves cover. They'd do something. The Romney campaign just doesn't seem to care. If it works, they use it. It's like the campaign is being run by cyborgs.

  6. stocksandbondage

    Good Morning Phil,
    I've been watching and learning for a few months and now I am ready to join in the discussion.  Thanks for the fish that was V Sep 125 Puts, but more importantly for teaching me how to fish.  In the past, I would have just bought them all at once, felt great when they were up 40% then felt frustrated when they are down 10% and maybe even held them to expiration and lost 100%.  This time, I scaled in at $1.70 and at $1.50 and scaled out at $2.0 and $2.50.  I then bought a half position at $1.48 and sold yesterday at $1.65 for another gain.  Do you think that there is still a trade in them this close to expiration, or if I want to play V bearish should I look to the Oct 125 or 120 puts?
    Also, I watch during the day on my ipad, but I can't post comments using the ipad.  Has anyone else had this problem?
    Thanks

  7. rebelscum

    Pharm/Yoda! I knew the Force was strong @ PSW! 

  8. 1020

    Good Morning!

  9. aaronc

    Greetings from lovely Panama, here on business. So cool that when you get off the plane the customs official hands you a card and boom, you have health insurance.

  10. revtodd64

    Pharm – Awesome Yoda clip!  That's going on my Facebook page.

  11. 1020

    I'm not watching this weeks crap and won't be watching next weeks crap either….. :)

  12. Pharmboy

    And there is no inflation….CMG is rounding its registers to the nearest nickle…..

  13. millcreek

    pharm,
    are you still holding the crm puts and any thoughts re exit………tks

  14. stjeanluc

    Reforming the money market fund business seems to be of critical importance:

    http://www.ft.com/intl/cms/s/0/826e5056-f120-11e1-a553-00144feabdc0.html#axzz251LHbWT5

     

    The 2008 failure exposed the key weakness. If a parent cannot, or will not support a troubled fund, its investors have an incentive to take their money out quickly, igniting a panic that can easily spread. “It is like a banking system without capital. I cannot see why [a run] will not happen again,” says Gary Gorton of Yale University.

  15. stjeanluc

  16. Pharmboy

    CRM/mill – I am….and they are almost even.  As I noted yesterday, either get 1/2 out even or get out completely.  Personally, I am going along for the ride, but our rules here are very simple if you DD….noted above.

  17. Pharmboy

    AMZN up in the sea of red. Impressive.

  18. stjeanluc

    Notes:
    SQQQ – We DD at $1.45. We got to $1.50 yesterday
    PCLN – My calculations have the net on the short puts at around $5.00.

  19. stjeanluc

    There is formatting error on the PCLN puts as we are even!

  20. villashaka

    Phil- Think we'll get a bounce to play TNA for the day?

  21. stjeanluc

  22. stjeanluc

  23. jabobeast

    FU PCLN!!!!

  24. Phil

    Good morning!

    Wow, what a dip at the open.  Not too much volume but someone is dumping out.  So far, 1,400 is holding on the S&P and 810 on the RUT but watch out if they fail!   We're also right on that adjusted 3,060 line on the Nas – another bad fail if it happens.  In fact, let's call it very bad if we're below 3 of 5 on Dow 13,000, S&P 1,400, Nas 3,060, NYSE 8,000 and RUT 810.  

    Don't blame the Dollar for the sell-off, it's at 81.46 – I think that was just a fund dumping out and we can't read anything into it – I still like the long Futures on the RUT (/TF) 810 and the S&P (/ES) 1,400 until either one fails but not if the Nas or Dow fail either.  

    AMZN making new highs at $249 so let's buy out the Sept $220 short puts for .70 in the $25KP because either AMZN is rejected at $250 or we'll have to sell something else to pay for our next roll.  

    AAPL just failed $670 so we'll see which one of the Nas giants turns out to be right.  

     At the open: Dow -0.53% to 13038. S&P -0.58% to 1402. Nasdaq -0.54% to 3065.
    Treasurys: 30-year +0.46%. 10-yr +0.23%. 5-yr +0.11%.
    Commodities: Crude -0.42% to $95.09. Gold +0.16% to $1663.35.
    Currencies: Euro +0.13% vs. dollar. Yen -0.23%. Pound -0.15%.

    Market preview: How many ways are there to say "waiting for Jackson Hole?" Because that's what everybody's been harping on about for the past few days, although expectations are falling that Ben Bernanke will announce QE3, putting a bit of a dampner on global stocks. U.S. futures are lower heading into the open, with the S&P Benchmark -0.3%.

    Initial Jobless Claims: 374K vs. 370K consensus, 374K prior revised (prior week 372K). Continuing claims +9K at 3.32M.

    July Personal Income and Outlays: Income +0.3% m/m vs. +0.3% expected, +0.3% prior (revised). Personal spending +0.4%m/m vs. +0.5% expected, flat prior. PCE core price index flat m/m vs. +0.1% expected, +0.2% prior.

    It's a close call at this point as the whether more easing is warranted, the Atlanta Fed's Lockhart (a FOMC voter and considered a centrist) tells Squawk Box, "Bernanke will look at the spooos (stocks) in the morning tomorrow and call it," cynically replies Keith McCullough.

    Every party has a pooper and today's celebration over seemingly smashing retail number gets the business from Tiburon Research Group's Rob Wilson with his warning that Hurricane Irene tempered sales numbers from last year. Still, the storm was only an East Coast event that hit the last 4 days of the month and surely analysts are supposed to factor in such things (?).

  25. dclark41

    Thank you Jabob!

  26. angelcur

     NTE..a little update it seems like the HFT guys have latched onto it….the big thing is that sept q will remove any doubt about the end customer or the fact that top line and margins are trending massively higher….i am using weakness to accumulate further.
    .MIL remains wildly undervalued but rather than boring everyone with it just request my research and i will send it along.

  27. dclark41

    angelcur:
    I requested your research yesterday and never received it?

  28. stjeanluc

    NTE / Angel – Like I said the other day, 2 weeks of 20% gains were bound to attract attention…

  29. Phil

    That's a great quote StJ. 

    V/Stocksand – They are very close to failing the 50 dma at $126 and, since it's rising, they have to raise that bar about a dime a day.  I do still like them for a short and notice they are not up on the "strong" retail sales numbers because people playing MA and V are generally smarter than people buying retail stocks.  Once it gets to 3 weeks out, I do not like to open new front-month positions.  One of the things you need to learn is that cheaper isn't better and more upside leverage means more downside leverage so, unless you are day-trading – try to be in a more flexible position and nothing keeps you more flexible than time.  So the V Oct $120 puts at $1.70 are only $7 out of the money (6%) and the $125 puts are $3.25 so you make 90% on a 6% drop in V – that's a nice position to be in.  The Oct $115 puts are .90 so you are risking losing 50% to make 100% – that's a good risk/reward profile and you only have to get those right 1 out of 3 times to stay even – anything better than a 33% success rate should be profitable and I like that so much, let's get back in with 10 V Oct $120 puts in our $25KPs!

  30. Phil

    Wheeeee – all breaking down now!  Out of long Futures of course.  The point of those is to ride out a possible bounce against an otherwise bearish portfolio – that bounce is D – E – A – D already.   

  31. Phil

    Panama/Aaron – That's funny.  

    Volume still very low (14M on Dow at 10) and we are barely holding our levels across the board but bounce was very weak and selling pressure seems like it may overwhelm buyers who are trying to hold the line.  

    VIX only 17.50, so no panic there.  TLT $1.26 but that's a normal jack-up for a 7-year auction day.  

    Dollar 81.40 masking some of the market weakness.  

    Copper down very nicely to $3.48 – 0.005 stops at this point.   

    CMG/Pharm – They should just round up – figure 1,300 stores serve 500 people a day is 240M times a year they would make an average of 0.025 = $6M a year dropped to the bottom line, which is a 3% increase in net.  I wonder if "stealing" is a valid income category?  Actually the rounding (both ways) does make sense and we should toss the penny out from our currency…

    FAS Money – I hope I don't have to tell you to close that out for .30 – that should be a reflex!  With Bernanke tomorrow anything can happen.  We're well hedged on the longs and I'll be thrilled to sell puts if we get a nice drop (but not until next week).  If we get a pop – we may add more longs.  

  32. Gingbaum

    Phil,
    Sears is getting removed from the S&P.  Is trying to get the 2014 32 puts for $8.00 still a good idea?
    Thanks

  33. rainman

    Why The Big Issues Are Missing from the 2012 Race
     
    "Anything could change, of course, and Romney might win regardless. But the messaging that would be devastating – on housing, unemployment, incompetence and corruption on the bailouts – hasn’t been used systematically. There must be a reason."

  34. rainman

    Appropriate timing:  Navy Seal account of Bin Laden raid contradicts White House claims

  35. Jbur

    TZA/Phil: Those Jan 15/22 Bull Calls are making me feel all warm and cozy about now. Didn't expect some appreciation so soon.

  36. rainman

    Love the way the bots leap frog real orders that you place in the spread. 

  37. 1020

    Bin Laden – Any outrage of where, how and why, is ridiculous.
     
    I don't care if he was shot riding a unicorn – The Bastard Is D-E-A-D and anyone who has an issue with it shows that they don't care that it took thousands of lives, just to have that opportunity to put him down……

  38. newt

    V/ Phil: Would you roll the Sept 125 puts to the Oct 120's?

  39. angelcur

    CLARKIE i odn't thing i was on at all yesterday i am v sorry e mail?

  40. rainman

    1020 / Bin Laden — It's not about Bin Laden, it's about Obama.  And yes, ridiculous.

  41. rainman

    angelcur — I made the request as well with no response.  rainman.investing@gmail.com

  42. dclark41

    angelcur
    No problem. Thank you for your contributions.
    copy@chartermi.net

  43. newt

    Neptune Spear: writing under the pseudonym Mark Owen- He doesn't want to be PNG'd….

  44. stjeanluc

    Big swan dive on oil….

  45. jasu1

    Oil off a cliff just before the long holiday? what gives…./DX at 81.74…Huh!!

  46. shadowfax

    rainman
    I don't have the link or the time to find it but I watched an interview without those "facts" on how it went a couple days ago. How reliable is that site?

  47. zeroxzero

    Comments on platinum??  PPLT is rising, gold off, ???

  48. Phil

    Adelson-Backed Group Imports Europeans to Attack Obama

    ?

    Six European Parliament members expressed disapproval with the president at an event sponsored by YG Network, a nonprofit aligned with a super political action committee funded by casino billionaire Sheldon Adelson. Echoing a familiar Republican charge, they said Obama has put the U.S. on a parallel path with Europe, where some nations are muddling through a fiscal crisis.

    The group of European Parliament members sitting a few doors down from the Hooters restaurant in Tampa underlined the new reality in the time of mega-donors, fundraising groups and super-PACs: The campaign doesn’t always control the message.

    SQQQ/StJ – That's a shame.  Had someone told me it was .05 off I might have reminded them that I have said a time or two that I'm only GUESSING a target weeks in advance and 5% is close enough.  

    AAPL back to $666.

    TNA/Villash – This could all be just a ruse to sell 7-year notes at 1pm so I'll be looking for a move up around 12:30 – 1 (the auction ends before the announcement) but, in general, this is all part of the broader break-down we expect as the market slowly begins to realize (spoiler alert!) there is no Santa Clause and, despite months of anticipation – when they wake up tomorrow and rush to look under Bernanke's tree  - there will be nothing there.  Perhaps they will then wait for Draghi next week but how many times in a row can you disappoint the children like this before they have a tantrum?  

    And Jabob is back in form!  

    NTE/Angel – Thanks, great call.  

    SHLD/Ging – There were removed because they have already taken half the stock private at much higher prices than $32.  I still like the net $24 with SHLD at $53 but be aware that Eddie is a total prick and I would not put it past him to tank the stock to dump out remaining shareholders – like he did in December.  So, if you don't fully intend to ride out a loss and DD and roll when it drops 40% – I wouldn't get in it.  It might not happen but you're investing in a company that is fully controlled by a guy who it actively buying the other half, has no morals and knows every trick in the book to flush you out of a position.  

    Seal/Rain – Wow, that headline has almost nothing to do with the article.  Was Obama a clear threat?  Really?  Maybe not sitting in his jammies watching porn but, on the whole, I'd say yes.  As to the White House – they took an account from the people who were there and relayed it.  If those people were lying, I don't see how that can be spun that way.  

    And what 1020 said.  Same with Saddam – what a farce to keep him alive to hang him.  In certain cases, you know someone did something horrible, there are no doubts – so just end it right when you catch them and save everyone a lot of bother.  Imagine if all of Bruce Willis' movies ended with him cuffing the bad guy and giving a statement at the police station and testifying at the trial and then the appeal and the next appeal and then visiting the bad guy for 30 years until he dies in jail?  Just not as satisfying, is it?  

    TZA/Jbur – They aren't supposed to move much but, with TZA at $17 already, you can say $2 x however many is your offset to the drop and check to see if you have enough insurance.  

    V/Newt – Well I'd certainly keep tight stops on the Sept puts and then look to pick up the October puts on a bounce.  

    Oil/Jasu – I don't think the hurricane was big enough to keep the bulls in as they had huge, heavy bets coming into the holiday and last week they halted a big drop in progress on hurricane news so I think there must be a lot of people who are taking $95 and running and, if we fail $94 and then $93.50 – we may see some nice panic. 

    AAPL holding $666 so far.  DAX down 1.7%, CAC down 1%, FTSE down 0.5%.  

    KC more bad news: 

    Aug Kansas City Fed Manufacturing Survey: Rise 3 to 8 vs. consensus of 5, 5 in July.

  49. flipspiceland

    @Felipe
    what a farce to keep him alive to hang him. In certain cases, you know someone did something horrible, there are no doubts – so just end it right when you catch them and save everyone a lot of bother.
    Can we extend this to Blankfein, Cassano, Fuld, Mack, Lewis, Frank, Dodd, Cox, Paulson (hank) Greenspan, Reagan, Bush Clinton, and Geithner, Kashkari, Orszag, Shapiro, Dudley, Bernanke, Graham, Leach, Bliley??

  50. denlundy

    And Europe is sinking like a rock at their close!

  51. lflantheman

    2can/AAPL…Getting back to you from yesterday.   Jan '14 450 short puts, 45% up.   I would buy it back.  Actually, that's not a trade I would have any interest in making.  The options are worth $29 on my screen, with margin of about 4k, so it would take you 18 months to double your money.  That's acceptable to most traders, but as I've said before on this site, I'm not interested in anything that takes more than a year to get me a double.  I am not a conservative trader. 

  52. stjeanluc

    Quote of the day 2 on Paul Ryan's speech:

    When a Randian is speaking of a priority for the poor and weak, you know you have a world class bullshitter.

    The hypocrisy of these guys….

  53. 1020

    yeah phil… I hope you mean't OSAMA in his pj's….

  54. 1020

    :)

  55. Pharmboy

    Shhh…shares halted….IRWD gets approval….

  56. stjeanluc

    Making higher highs but with fewer stocks…

    http://www.bespokeinvest.com/thinkbig/2012/8/30/breadth-remains-weak.html

  57. shadowfax

    OIL FUTURES!!
    After holiday, holiday = consumption = consumers, prices infelexable downward, Econ 101.

  58. Phil

    Time to look for 5% Rule bounces:  

    • Dow 13,150 to 13,000 (150) means 13,030 is weak bounce, 13,060 is strong.  
    • S&P 1,414 to 1,398 (16) = 1,401 and 1,404
    • Nas 3,087 to 3,050 (37) = 3,057 and 3,055
    • NYSE 8,050 to 7,950 (100) = 7,970 and 7,990
    • RUT 819 to 808 (11) = 810 and 812

    My upside play would be the TNA tomorrow $55s (now $1.15) with .20 in premium if we cross two of our weak bounces but then right off again if one of them fails.  I don't think it's going to happen though.  Volume on Dow just 27M at 11:10 and if this is the kind of drop we get on light selling – imagine what will happen if people start to worry! 

  59. rainman

    shadow / guardian — as reliable as any media I suppose. They've been around for a long time (1821).  The book description on Amazon also uses the term "execution".

  60. rainman

    Bin Laden — Geeze guys, quit shooting the messenger.  Like I said, this isn't about Bin Laden, it's about Obama.  That will become apparent in the days ahead as the MSM picks up on it.  And yes the spin is ridiculous!   

  61. 1020

    Some of you may think it's odd to say, but I do feel that 9-11 was the catalyst and the excuse leading to much of the issues we face today.
     
    I'm sorry to say that OSAMA accomplished much more than a successful attack on 9-11, his deeds will haunt the "infidels" for many more years to come….. 
     
     
    Chin Up Everyone – Things really could be worse…. :)

  62. zeroxzero

    Flip: Bernanke?  His only sin, as far as I can tell, is being given a knife to take to a gunfight.  Agree all the others, though, although I'd raise you Countrywide's Angelo Mozilo.

  63. 1020

    WE LOVE YOU RAIN!   :)

  64. stjeanluc

    Tomorrow / Phil – Like I said yesterday, we are setup for one heck of an early morning tomorrow with the U. of Michigan Confidence, Factory Orders and Bernanke all 30 minutes after the open…. Not much time to adjust positions. Might actually make sense to wait after 10:00 AM to update the portfolios….

    And let's not forget the Chinese PMI tomorrow night and the long weekend to ponder all this information.

  65. rainman

    1020 — :)

  66. rainman

    Kirk upgraded to hurricane.

  67. shadowfax

    No no taxes! Below $20,00 per year pays taxes. Skip to bottom.
    http://money.cnn.com/2012/04/26/pf/taxes/income-tax/index.htm?source=yahoo_hosted

  68. shadowfax

    rainman
    Time means nothing like WSJ. Execution is propaganda in war, killing is the objective, the top is primary, until elections which now includes only 1 day per cycle.

  69. Phil

    PPLT/ZZ – I was sorry we missed it a week ago when there was a big discrepancy with gold but it's all chasing until they get back to $140.  

    Extending it/Flips – That's how they did things in the old days.  

    Tuition/Rain – Another crisis no one talks about:  

    We're down to just 41% of 25-34 year-olds having College degrees – IN AMERICA!!!  How's that next generation work-force going to be looking?  That was the thing that got me with Condi's speech – it was all about upward mobility and opportunity and the American dream from the same people who are raising the bar so high that no one can move up anymore.  Income disparity is at 1929 levels (when we had no labor laws and sharecroppers!) and there has NEVER been less upward mobility in this country's history.  

    Germany finishing down 1.6%, FTSE – 0.33%, Spain -1.5%, CAC down 0.7%.

    Notice how we JUST failed all those weak bounces so far.  

  70. flipspiceland

    @Felipe
    If i were to go away from the board for two weeks, AND I wanted to buy a blue chip and sell calls in the same proportion against it for the duration, which one would you pick?
    I have been considering BMY as I have has  decent returns on it in prior forays of this kind.
    Have you any better suggestions?

  71. qcmike

    Pharmboy
     Any update on IRWD?
    Thanks

  72. shadowfax

    Phil
    Do you find the German power house down 1.6% the most disturbing?

  73. jabobeast

    BPT/Jabob – Was a news item this morning (above) about trusts. A lot of issues there. I only like them when they seem very cheap, BPT is past it's prime
     
    looks like BPT isn't dead yet ;-)
     
    http://www.youtube.com/watch?v=grbSQ6O6kbs

  74. rebelscum

    I'm putting on my DJ 13K hat again. 

  75. shadowfax

    Today no one is buying IWM! As noon approaches trading has vertually stopped. Should I not continue to hold TZA? Is not the smart money out of the market and the suckers been sucked?

  76. villashaka

    The education costs are really disheartening- my hopes are for the increase in free courses online and the mentoring of our youth in the workplace- otherwise we will have a new class of poor – young people, highly educated, and without hopes of employment that can offset their education costs. Affordable education is the greatest asset to any society, without it we are doomed.

  77. Phil

    Osama/1020 – Oh no!  I have spent too much time listening to the RNC  - my brain has been washed!!!  

    A/D line/StJ – Interesting that they down't usually diverge like this.  Shows how much hope and mirrors are holding up this market.  

    Collusion/Angel – Well this is beginning to look like quite the coordinated attack.  I wonder who will come forward next ahead of the DNC.  They Reps want to take the capture/kill of Bin Laden away from Obama in the worst way as they hate the fact that they can't talk about national security after Bush and Condi spent 7 years looking for him and Obama got the job done in 16 months.  Oddly enough, the account in The Telegraph from May 2011 says, very clearly:  "Osama bin Laden was captured alive by US forces but shot him dead in front of family members, according to his daughter."  So what is it that the GOP has supposedly uncovered?  

    Tomorrow/StJ – We're either going to be happy or sad after 10.  

    Taxes/Shadow – It's a false way to keep score.  Just paying sales tax and property tax and SS and medicare leaves people who make $20K about $6K down – that leaves them $14,000 to spend – about what a $100,000 family spends just on cars each year.  

    Buying one/Flips – Well, for one thing, buying one stock is already a bad idea because anything can randomly happen to one stock in two weeks.  Since I expect a market correction BMY or anything not in TWIL territory worries me.  I like AA, BAC, MON and XLF as quick ideas.  

    Gemany/Shadow – I think they thought they would get more out of Merkel's trip to China.  Near as I can tell, Germany is giving China more than they are getting.  Also, Germans are preparing for fallout from collapse of the Euro – expect some Dollar buying to follow – especially if Bernanke doesn't ease tomorrow.  

    BPT/Jabob – Not dead but not exciting.  

    See how important those bounce levels are – keep us from doing anything foolish.  Now hopefully we can double-test the bottoms and have a bit of confidence to make an upside play at the lows (if they hold).  

    TZA/Shadow – It's a big all or nothing play tomorrow morning.  I always find there are more opportunities for those with cash – making a play AFTER a big event than betting on the binary outcome.  

    Affordable education/Villash – Sadly, that ship has sailed long ago in this country and we would need a brand-new big Socialist spending program to fix it and that ain't gonna happen in the near future.  

  78. shadowfax

    villashaka
    Free online courses? Any ever do any good except the ones that errase traffic tickets. Sorry they cost $35. The pay ones aren't worth a dime, marginal schools not worth much. You need one of Phils top 25 list and who can afford them?

  79. bdybdy2

    Phil/Tuition – conspicuous absence of Ivy league in that top 25 list

  80. stjeanluc

    It has been a roller coaster ride so far just like these markets. Equity curve for the 25KPMA:

  81. rainman

    zzzz — everything seems to have flatlined.

  82. rainman

    stocksandbondage / iPad — Can't post from Android either.

  83. newt

    Phil/ V: Thanks

  84. stjeanluc

    Same equity curve with the trend…

    Well on our way to $1M. Extrapolations are so much fun….

  85. villashaka

    Shadow- The basis for education is to learn how to think- technical skills can and should be mentored in the workplace. I do not foresee technical skills being taught online, only the basis to learn them. A society that is able to think and question every thing that is fed to them is an essential building block to democracy. I  know there are several professors at higher education institutions that are making their lectures free- this is the hope that I have as long as we continue to develop the means to access the information. I agree with you that many of the online courses currently are just an extension of the problem. Thanks for your insight.

  86. rj_jarboe

    Test from Ipad to see if posting works.

  87. shadowfax

    Fib retrace.
    Tomorrow the reset on the 20day will bring us closer to the first level of breakdown. Will the BOTS do the same thing? History says YES!!!

  88. shadowfax

    villa
    We both agree on your issues and Americans have stopped thinking. What I question and fear is these courses are set up and paid for by the same that buy politicians, just to easy and pocket change.

  89. shadowfax

    LAPD commander removed in probe of rough arrest
    This happened to me in December. I went to the hospital.
     
    http://news.yahoo.com/lapd-commander-removed-probe-rough-arrest-054751139.html

  90. shadowfax

    I wasn't arrested or even issued a ticket!

  91. scottmi

    Online Courses/Shadow – there is quite a lot of quality online content out there.. MIT offers OpenCourseware.

  92. RealJLJ

    stjeanluc, when do we hit $1M?! :)

  93. shadowfax

    Looks like April on the daily charts.That repeated could be the story until election day. No, it could never ever be planned. Who could do that much manipulating of the market? Why would anyone want to? Again why should I sell TZA?

  94. williex

    villa
     
    today they don't learn how to think they learn how to pass a test and to find things on the internet

  95. shadowfax

    scottmi
    Thanks for that link!!!!!!! I checked and it seems to be the real deal. I will most likely try them when they start. Will not do much for me except I never stop trying to learn. Hoping they will got on to advanced courses but even repeating basics again is something to do.

  96. jabobeast

    BPT from the mid 70s to over 90 today is not exciting?
     
    you must be related?
     
    http://bodyodd.nbcnews.com/_news/2012/08/30/13554806-womans-non-stop-orgasms-too-much-of-a-good-thing?lite
     
    ;-)

  97. 2can

    Lflan /  AAPL short puts. Thanks, and I'll take your advice, but I think I'll hold them today because they are balancing some shorts in my Portfolio.  If there's no QE tomorrow, I'll let them go and be very happy with almost 50% in a couple of months.  If we do get QE maybe I'll be glad I have them at least for a while longer

  98. shadowfax

    What is the symbol for dow futures? If it exists, my search nothing.

  99. cdel360

    I am along for the ride on the PCLN trade but never got filled on the roll for $1.10 yesterday.  I am still in the 555 Puts for $3.60 (net $4.55 including original $340/$3).  Rolling to 565 costs $1.25…DD $2.9…I like these types of trades and am (obviously) trying to learn how to manage them more effectively…suggestions? 

  100. Birdman

    Comment from a Louisiana resident about the hurricane:
     
    "We didn't have time to panic,"

  101. shadowfax

    If you have 5 minutes. This is the real story on Americans, you have to listen, the summary???
    http://finance.yahoo.com/blogs/daily-ticker/majority-americans-rich-greedy-dishonest-pew-research-poll-164536213.html
    There is another comment from the rich "Stop drinking!" Who invented the 3 martini lunch on Wall Street?

  102. shadowfax

    They took out the drinking comment!!!

  103. Phil

    Now the weak bounce lines are acting like upside resistance – not a good sign!

    Ivys/Bdy – Yes but they are all in the $50s now.  Just no one has had the balls to go $60 yet.  

    $1M/StJ – Might take a little while. 

    Dow futures/Shadow – On TOS it's /YM

    Ryan/Shadow – They guy makes a good point:  

    There was once a time when lying in a political speech--and getting called out on it by the media--was shameful or embarrassing…  the media is held in such low regard by Americans that getting called out for lying merely serves to confirm a widespread belief that the "liberal media" has an axe to grind against conservative politicians.

    As a result, the whoppers that dominated Republican VP candidate Paul Ryan's convention speech last night will likely not hurt the candidate's standing with Republican voters, says Greenfield. Rather, they'll reinforce the right-wing view that the media is "in the tank" for President Obama.

    It's not so much the hate-filled lies spouted by Ryan that bother me – he's just being true to form – it's the fact that there's such a large segment of the population that is willing to follow a man like this.  You look at Nazi Germany and you think that could never happen here but all it was was a man telling people what they wanted to hear in a time of crisis and finding lots of enemies that were easy to hate and blame things on and, ultimately, target.  If it doesn't matter to you whether or not your "leaders" are telling the truth – how many other lines will you be willing to let them cross – and ultimately cross yourself?  

    PCLN/$25KP, Cdel – I wouldn't sweat the .15 on the roll if you intend to stick it out as it's just .075 more after you DD and that's less than 5% and we REALLY think PCLN is toppy here.  The key is getting 1/2 back out at $5 so we're back to 5 at the much higher strike.

    Time to panic/Bird – Reminds me of this Tsunami documentary (be careful, you can get sucked up watching the whole thing).  

  104. stjeanluc

    $1M / RealJLJ and Phil – Using the Forecast function in Google Docs (it's never wrong), it predicts that we will hit $1M in the 25KPA on 7/1/2023. Looks like a perfect retirement plan to me!

  105. Gingbaum

    Does anyone know what time the Bernanke speaks tomorrow – is it 8am eastern?

  106. rainman

    shadow / dow futures — /YM in TOS.

  107. barfinger

    Assuming Ben says nothing about QE in his speech, how much of an immediate downward reaction do we expect? S&P 10 points, 20 points, 30 points or more?

  108. stjeanluc

    Paul Ryan / Phil – Here is another good article. The guy is just such a fraud!

    http://www.tnr.com/article/magazine/politics/106459/paul-ryan-nasty-philosophy-self-reliance-ayn-rand?page=0,2

    The problem for Ryan’s steely vision, of course, is that many people do need help, and they are usually not responsible for the circumstances that have driven them to seek help. They suffer through no fault of their own. Sometimes they suffer through the fault of people who have more money and more power than they do. And even if they suffer through some fault of their own, are we to let them sink? We may have extraordinary powers, as the fit and fiscal Ryan believes we do, but none of us—not even in private equity—are gods. We are all vulnerable. We are never sufficient unto ourselves. Who is more self-reliant, indeed, than a poor man, or a man without a job? Truly he has only himself on whom to rely. But a rich man has so many things done for him, because he pays for them to be done. Is that self-reliance, or is it expensive helplessness? And why is it not a stain of shame, or a “culture of dependency,” for a rich man, or his bank, to ask for help, and to be given it? [...]

    “I swear—by my life and my love of it—that I will never live for the sake of another man, nor ask another man to live for mine.” That is how John Galt concludes his testament, which Paul Ryan demands that his staffers in Congress read. What a frail sense of self it is that feels so imperiled by the existence of others! This monadic ideal is not heroic, it is cowardly. It is also dangerous, because it honors only itself. In his Roadmap, the intellectual on the Republican ticket lectures that “the Founders saw [Adam] Smith not only as an economic thinker, but as a moral philosopher whose other great work was The Theory of Moral Sentiments.” Never mind that everybody else also saw Smith that way, because he really was a moral philosopher and he really did write The Theory of Moral Sentiments. Has Ryan ever opened The Theory of Moral Sentiments? Has he ever read its very first sentence on its very first page? “How selfish soever man may be supposed,” Smith begins, “there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.” That is the least Galt-like, least Rand-like, least Ryan-like sentence ever written. And from there the conservatives’ deity launches into a profound analysis of “mutual sympathy.” So much for Ryan’s fiction of the isolato with a platinum card! If there is anything that Adam Smith stands for, it is the reconcilability of capitalism with fellow feeling, of market economics with social decency. But Ryan is a dismal student of Smith, because he likes his capitalism cruel.

    It applies to many as well….

  109. stjeanluc

    Bernanke / Ging – 10:00 AM EST

  110. Pharmboy

    IRWD/qc – what do you want me to update?  They have approval…but the stock is not trading…I think it is going up, and FRX should buy them….FRX needs something.

  111. Pharmboy

    I think the Fed is….

  112. stjeanluc

    Someone pointed out yesterday that the Dow Transports was diverging from the broader market:

    http://dynamichedge.com/2012/08/30/transportation-index-hasnt-derailed-the-rally-yet/

    Divergence is always observable in hindsight but in real-time it can just be lateness.  The transports have been a step behind for the last year and the market has continued to make new highs, albeit in very choppy fashion.  Is the transportation index refusal to trade tick-for-tick with the S&P 500 a sign of impending doom or is there something else we should be paying attention to?

  113. qcmike

    Thanks Pharm

  114. Pharmboy

    Well EXEL fell from the AH grace of the traders.  Nice.  Wait for a timely re-entry or DD or entry or whatever IF they fall below $4. 

     

    While we wait, how about the November $4/5 BCS, selling the Nov $4 puts for a whopping 10c credit.  I will start small on that one, but will start to accumulate in small doses (yes, whisper, doses)…. :)

  115. cdel360

    AMZN – is it at all funny that CNBC is STILL recommending AMZN based on "selling out" the Kindle Fire…how quick they forget that they actually LOST money this past quarter.  As a consumer I love AMZN, but this does not suggest a business model that is working. 
    I know the small portfolios have some puts, but, if I were to want to enter a put position now, I can pay $4.65 for the Oct 230 Puts, but they do not cover their next scheduled earnings date.  Nov is not available yet, Jan 2013 230s are $14ish (no thanks)…Thinking more about selling upside call spreads…
    go ahead and rip me a new one for that hairbrained idea…

  116. stjeanluc

    As Japan as shown low interest rates make it easy to carry a mountain of debt:

    http://www.cepr.net/index.php/blogs/beat-the-press/the-graph-you-really-need-when-watching-the-republican-and-democratic-conventions

    Note that this one looks considerably less scary. We don't get back to the same devastating interest burdens we faced in the early 90s until 2019. Yes folks, that was snark. Unless I've gone senile the interest burden we faced in the early 90s did not prevent us from having a decade of solid growth and low unemployment at the end of the period.

  117. shadowfax

    Thanks /YM etrade.
    STJ
    So true reading that wells up tears! I was a victom of circumstances most are not, but so many love watching me fall as I was considered well off. If only they would look at my tax returns. I was only great at making the most of under $35,000 per year. And the wealthy continue to believe that they are the goal of the struggeling when in fact the goal of the masses is to take down the arogant SOBs.

  118. diamond

    2can – RE: AAPL short Jan14 P450's …
     
    You can always roll them up to the (Jan14) P470, P500 or even P600 that way you take your profit (on the P450) today, but leave them in play to make more. The big boys may try to take AAPL back down to $600, but not only would there be many buyers before that, but also the Jan15 would be available by then to roll your puts to (if you were overly concerned). JMHO …

  119. Phil

    Euro failed to hold $1.25, Pound failed $1.58, Dollar 81.745, 78.57 Yen to the Dollar as they have been on the wrong side all month.  EUR/CHF same old – same old…

    Copper with an nice .04 dive off the open for a very nice $1,680 per contract gain – we're getting really good at that one!  

    2023/StJ – Clearly it was not compounding.  

    Bermanke/Ging – 10 am. 

    Nothing/Barf – It depends what hints can be derived from what he says but I think down 2.5%, maybe over two days but subdued as people still hope Draghi will save us next week.  

    Ryan/StJ – Good article but the problem is supposing he even understands this stuff.  He's not an idiot but he doesn't strike me as a deep thinker – he latches onto an idea and he went to a very Conservative economics program in College (C student) and was Mentored by a Conservative Professor who got him a job at the National Review, after which he went to work for Bob Kasten (psycho Conservative finally removed by Russ Feingold) and John Boehner (say no more!) and then he ran for office.  I doubt he even knows there is another side to his thinking…

    Kindle/Cdel – I think what's sold out is the old Kindles.  That's good and what they are really doing is letting people know there's something new coming without actually saying it (9/6 is launch date).  Still, let's say they sell 10M of the new ones and let's say they only lose $20 a piece – that's a $200M loss they need to recoup through app and product sales by the end of Q so I don't think there will be a big push until the end of Sept.  Of course, the overriding flaw in their strategy is upgrading.  When I buy a new IPad, my old IPad goes to Tina and hers goes to Madeline and Madeline's goes to Jackie.  At this point, we all have one.  APPL is fine with that because they make 35% on the sale of the IPad to me and the App revenues are gravy.  With AMZN, as kindles go through the cycle – each consecutive person has less and less need for more stuff on the Kindle so they are no longer generating new sales and it becomes harder and harder for them to recoup their losses.  

    The best-selling items on AMZN have been "Kindle Items and Content" since last November.  The money hasn't shown up yet on the bottom line and you can't say cycle one isn't mature by now.  AAPL is  on track to sell 56M Ipads in 2012 and they have about 2/3 of the market, that leaves 28M for the rest and AMZN is not even likely to hit their 10M goal next year unless the Kindle is spectacular as they have to compete now with the IPad, IPad Mini (probably under $300), Samsung, GOOG and a bunch of other guys. 

    I love the hype on a product no one has seen from a so-so product maker – so much possibility for catastrophic disappointment next week!  Don't forget – since no one has seen it, no one has costed it out but we do know, from AAPL and their "we don't make anything that doesn't make 35% rule," that $399 x .65 ($259) is the LEAST you can possibly pay for those features.  So, at $199 – what will be missing to save AMZN money and how bad will it make them look (GOOG had to give up on 3G & 4G to get Nexus 7 down in price).  

    44M at 2:30 on the Dow – we'll see which way the volume takes us.  

  120. shadowfax

    Sell signal! Clearly the best in a very long time. Will last yar's sell programs follow?

  121. kongen

    Pharm: IRWD gets a new drug approved and plummets!  Any clues?

  122. cdel360

    shadowfax – could you be more specific?

  123. shadowfax

    cdel360
    Biggest zig rue, spike money flow, EMA, SMA, Algo, and futures dropped for a few secconds a lot!

  124. shadowfax

    3 PM pump job still no volume, looks like non hours trades to me. WHY?

  125. escohen5

    Pharm — SDS — are you still holding the naked Sep 15 calls, or rolling out?

  126. Phil

    11:00 AM On the hour: Dow -0.79%. 10-yr +0.2%. Euro -0.30% vs. dollar. Crude -1.38% to $94.17. Gold -0.5% to $1652.35.

    11:50 AM European shares close sharply lower, as buyers stage a strike ahead of Bernanke tomorrow and the ECB next week. In 2011-redux (and making even less sense now then it did then), China is again trotted out as savior to the EU periphery. Stoxx 50 -1.2%, Germany -1.6%, France -0.5%, Italy -1%, Spain -1.5%, U.K. -0.5%.

    12:00 PM On the hour: Dow -0.79%. 10-yr +0.2%. Euro -0.30% vs. dollar. Crude -1.38% to $94.17. Gold -0.5% to $1652.35.

    1:00 PM On the hour: Dow -0.69%. 10-yr +0.23%. Euro -0.22% vs. dollar. Crude -0.94% to $94.59. Gold -0.34% to $1655.05.

    3:00 PM On the hour: Dow -0.64%. 10-yr +0.28%. Euro -0.18% vs. dollar. Crude -0.9% to $94.64. Gold -0.31% to $1655.55.

    The Treasury sells $29B in seven-year notes at 1.081%. Bid-to-cover ratio of 2.80, vs. a recent average of 2.79; indirect bidders take 38.4%, vs. a recent 42.3%. Direct bidders take 17.9%, vs. a recent 13.3%

    At pivotal moment, Bernanke low on economic ammo (Washington Post)

    Backing off already:  Bernanke may not deliver tomorrow, says Bill Gross, butfurther QE is coming "relatively soon." Don't expect much reaction though, he contends, as even The Chairman recognizes each new bout of stimulus brings smaller and smaller benefit. Gross (BOND) is a major holder of MBS, which presumably would be the target of the next round of asset purchases

    Taking the opposite view from Bill Gross, Jeff Gundlachdoesn't expect another round of QE from the Fed. While not doubting the Fed's ability to take the 10-year Treasury yield as low at it wants, he's sticking to his view the 1.39% hit in July will remain a bottom.

    Average U.S. fixed mortgage rates eased off a bit over the past week after gradually moving higher over the past month, Freddie Mac reports. The 30-year fixed-rate averaged 3.59% vs. 3.66% the previous week and 4.22% a year earlier, while 15-year fixed rates averaged 2.86% vs. 2.89% a week earlier and 3.39% a year ago.

    In case anyone forgot, the Russell 3000 closed 2010 and 2011 in the green after being solidly lower YTD pre-Jackson Hole. Don't expect much tomorrow – contrary to popular belief, nothing was announced in 2010 other than the Fed's readiness to act, i.e. nothing different than what Bernanke has said for months. 

    Economy Still Stuck in Low Gear (NYT)

    The financial system rests on quicksand (FT.com)

    Today's decline in Europe, the euro, and now the States almost had to happen given the recycling of the ridiculous 2011 idea that China is going to be the salvation of troubled EU sovereign bond markets. Such a notion last year was often good for a quick pop, but then disaster, notes UBS' Paul Donovan.

    The ECB has more room for accommodation, says an IMF spokesman in old news comments that seem to be taking down the euro. He also says the Spain has not requested assistance and the agency is working on no plan for such (yet?). The euro sheds its gains, now -0.2% to $1.2508.

    Angela Merkel says she wants to see talks between the EC and Chinese authorities to prevent the implementing of solar anti-dumping tariffs similar to the ones imposed in the U.S.. The EU's need for Chinese imports and debt purchases could lead it to take a softer line than the U.S., something that would go over well with struggling Chinese solar module vendors who have delivered one awful earnings report after another.

    BP Prudhoe Bay Royalty Trust (BPT +14.8%) is bouncing big after a disastrous three days since WSJ ran a cautious article on the group, which noted that royalty trusts trade at a premium to the present value of their cash available for distribution. Someone must be seeing blood in the Bay, now finding the risk/reward characteristics of this long-term cash machine more attractive.

    First Solar (FSLR -15%) goes into freefall following news it has halted deliveries for the $1.8B Agua Caliente Arizona solar plant due to construction being ahead of schedule. Agua Caliente, a 51/49 JV between NRG Energy (NRG) and Berkshire Hathaway's MidAmerican Energy, is already 85% built, even though the project isn't scheduled for completion until the end of 2013. The halt may be stoking fears First Solar's recent growth was padded by aggressive deliveries. (previous)

    Disney (DIS -0.9%) looks to squeeze a bit extra out of mega-hit The Avengers this weekend, with a major push to 1700 theaters over the Labor Day weekend. If all goes according to plan, this weekend the film will overtake Titanic to become the #2 highest-grossing movie of all time.

    The power of search: Wal-Mart (WMT +0.5%) says a new search engine designed to direct traffic on its website has helped toboost sales. The retailing giant spent a tidy sum to develop "Polaris" on the theory that an algorithm with a deeper semantic understanding of search queries would help drive conversions and avert frustrated customers from exiting the Walmart.com site for a rival's site. With online product views up 20%, it looks the algorithm refresh was well worth the investment.

    Pandora (P +18.8%) is breaking out of that trading range it has been stuck in, as shorts cover following a solid earnings reportfueled by soaring mobile ad sales. SunTrust and Canaccord are upgrading Pandora to Buy – the latter cites improving visibility, moderating content costs, and stronger mobile monetization. Canaccord now sees Pandora generating $40 in 2015 revenue per thousand mobile ads, up from a prior $25. Mobile display ad firm Millennial Media (MM +3.1%) is also higher. (transcript) 

    Facebook (FB +0.9%) is edging higher on a down day following positive comments and a CNBC appearance (video) from Piper's Gene Munster. Munster, best known for his undying love of all things Apple, argues Facebook is trading at the biggest discount to future potential growth of any other large-cap tech name; is encouraged by the success of Facebook's mobile Sponsored Stories ads; and thinks its pending launch of a "Want" button is also a positive.

    The Verge posts a picture of what's supposedly the next Kindle Fire (AMZN). As the site points out, the design is "still just a plain, simple, black box" (ed: Apple seems to feel differently), though it does look as Amazon went with a proprietary design this time around – the original Fire used a Texas Instruments reference design. All signs point to the next Fire being announced on Sep. 6. (earlier: III)

    IFA 2012 is producing a deluge of Windows 8/RT (MSFT) tablets. Notables include Dell's (DELLXPS 10 tablet and XPS 12  onvertible; new tablet and ultrabook models for H-P's (HPQ) high-endENVY line; and Toshiba's U925t ultrabook, which sports a slide-out display and Corning (GLW) Gorilla Glass. Between these products and Microsoft Surface, Windows 8 won't lack for quality hardware – its success will come down to the consumer/business response to itsmuch-debated software. (Samsung) (Lenovo) 

    Ahead of a Dec. 6 injunction hearing for 8 phones, Samsung (SSNLF.PK) says it will respond to Apple's (AAPL) legal win by working with U.S. carriers to "jointly develop modified design technology." Apple might not mind this response, to the extent it's pursuing its legal war to get Android (GOOG) OEMs to change their phone designs. But Samsung still plans to fully appeal Apple's win, and is investigating a report a patent owned by the California jury's foreman is used in Apple devices. (more)

    CNBC JUST said they had a 22% market share – it's not news, it's propaganda!  More on the Kindle Fire's market share: IDC estimated Amazon (AMZN) had just 5% of the global tablet market in Q2 (in terms of unit shipments rather than end-user sales) and 4% in Q1, after controlling 16.8% in Q4 '11. While the Kindle Fire's U.S. share is bound to be higher than its international share, since it's a U.S.-only product for now, the difference between Amazon's figure and IDC's numbers suggest something's amiss, at least as far as 2012 sales go. (Nexus 7 shipments)

  127. shadowfax

    Lastly lots of 100 share trades at fractions of a penny, up 4 cets on less than 1000 shares. These are little people or restricted BOTS.

  128. Phil


    Apple's (
    AAPL) Tim Cook and Google's (GOOG) Larry Page have reportedly been holding "behind-the-scenes conversations" about the companies' IP disputes. Discussions between lower-level execs are also said to be ongoing. One source claims a truce related to basic Android features is being considered, but it's unclear whether a broad-based settlement is on the table. Apple thus far hasn't shown many signs of backing away from its hard-line stance. (earlier)

    Three lunchtime reads:

    1) Pettis: Hard commodity prices will halve in 2 years

    2) Three best-performing small cap growth ETFs

    3) At pivotal moment, Bernanke low on economic ammo

    click for complete graphic

  129. Pharmboy

    IRWD – time….time….time.  Just wait.

  130. Pharmboy

    SDS/esch – holding through Labor Day.

  131. 2can

    Dia    Thanks for the suggestion.  This discussion with you and Lflan has made me think through the trade in a way I hadn't until now.  Rolling my 450's to the 550's would take all the profit off the table, but then I'd be in the same trade with a higher delta.  That made me realize that the whole reason I'm thinking about protecting profit, and still staying in the trade, is because I'm really uncertain about what's going to happen with AAPL, so I'm not to keen on being in it with a higher delta.  I think I'll just do what Phil always says.  When in doubt sell half.  Then I'll still have some apple exposure, but my anxiety level will be cut in half.  sweet!

  132. Rms5114

    Phil,
    SHLD,  I sold $25 Ps and your recent comments makes me wonder about the outcome  if Eddie sold off pieces of the company and disbursed the proceeds through a special dividend. Is this a risk I need to be aware of as a way to collapse the share price?

  133. Phil

    Wow, failed attempt #1 to stick us over the weak bounce lines – very interesting.  

    13,030, 1,401, 3,057, 7,970 and 810.  RUT right on the line but not the same as earlier when we liked TNA here – it's late in the day and the .20 premium is no longer attractive so my plan now would be to grab the laggard (Nas or DIA) if the RUT breaks up.  

    DIA makes a better choice at $130.13 than QQQ does at $67.85 because we have a floor to rely on.  The DIA tomorrow $129 calls have very little premium at $1.25 (about .12) so that would be the way I go if RUT hit's 811 and either the Dow or the Nas go green with a stop if ANY of the 4 green levels fall red.  

    Staring at it though – I'm not "feeling" a legitimate move up yet so I'm watching AAPL closely at $666 and XLF at $15.08 to see if they make any progress.

  134. rustle123

    Great Post today Phi, sent the political part out to a few friends.  You know hell must be freezing over when Fox News fact checks Paul Ryan's speech:
     
    http://www.foxnews.com/opinion/2012/08/30/paul-ryans-speech-in-three-words/#ixzz2532k8gZ4

  135. Phil

    Oh, and Transports very weak looking on the 5,000 line.  

  136. qcmike

    Pharmboy
     Is there any trade in  FRX
    Thanks

  137. shadowfax

    After thought big picture
    Bots restriced to semi- automatic, meaning trigger pull on every shot to support. BOTS saving ammo or holding nothing? No need to defend positions when you have none too defend. So it's all up to the FED now, both money and markets.

  138. Phil

    Fox/Rustle – WOW!  That is amazing.  They must be getting horrific blowback on Ryan for Fox to be covering their asses like this.  So glad you pointed this out (from FOX): 

     

    On the other hand, to anyone paying the slightest bit of attention to facts, Ryan’s speech was an apparent attempt to set the world record for the greatest number of blatant lies and misrepresentations slipped into a single political speech. On this measure, while it was  Romney who ran the Olympics, Ryan earned the gold.

     

    The good news is that the Romney-Ryan campaign has likely created dozens of new jobs among the legions of additional fact checkers that media outlets are rushing to hire to sift through the mountain of cow dung that flowed from Ryan’s mouth. Said fact checkers have already condemned certain arguments that Ryan still irresponsibly repeated.

    So I feel well-justified in my political rant today.  I usually try not to let things bother me but, as I said, I am disgusted to live in a country where a person like this can stand up as a serious candidate for the Vice-Presidency of this country.  Amazingly, it has taken Fox News to restore my faith in America – if not the GOP.  

  139. shadowfax

    Phil more than justified!
    I did not rant in 2010 like the last month because this time it has gone way too far!

  140. Pharmboy

    FRX/qc – no.  Short for me.  They are as bad as LLY.

  141. Pharmboy

    What a joke….

  142. zeroxzero

    Phil: My response to Revtodd on the Fox piece at 8:15 AM was "Revtodd:  Fox / Amazing:  Has there been a hostile takeover?"  It is deeply mysterious, surely.

  143. rustle123

    GOP/Phil
     
    I had to turn it off when Condoleeza Rice was speaking.  I got sickened remembering how she got up in front of Congress and the American people and lied about WMD's and the reasons we went into Iraq.  Then hearing her talk about remembering when she had to take different buses in the segregated south while she's representing a party that wants to eliminate roughly 20 million voters mostly minorities with the voter id laws that could prevent the 84 cases of fraud or perceived fraud that happened in the last election.

  144. CaFords

    What is up with CLDX? High volume as well.

  145. wappler

    There we go, Fox News has joined the left wing media conspiracy!  O tempora, o mores!

  146. shadowfax

    2 more sell signals, both weaker, 3:30 and now.

  147. Phil

    SHLD/Rms – If there is a special dividend that reduces the stock, it will be added to your puts.  I was just laying out the worst case but, if SHLD dropped back to $25 – I'll be selling puts hand over fist.  The point is, do you have the conviction to stick with it.  Do I think I want to own a share of SHLD for $25 when Eddie bought 20M last year for about $40ish – Hell yes!  

    Stick working now but I missed it – hopefully we don't pass strong bounce or I'll be pissed we didn't do longs in $25KP. 

    Dow volume 51M at 3:35.

    XLF stopped at $15.10, AAPL stuck at $666 (some bot programmer has a sense of humor), oil back to $95.86, copper $3.45, Nat gas way up at $2.75, gasoline $2.914, silver $30.50, gold $1,660 so not a broad move up by any means – I don't think it lasts.  

    Hostile/ZZ – That speech was so ridiculous that Fox would lose credibility to ignore the fact.  The lies were so big, so blatant and so easy to shoot down that they risk losing their own base by not spanking Ryan.  It's a war, this is a lost battle – will be interesting if Romney ends up having to cut him loose.  Tonight he'll have to make a bullet-proof speech because it's on thing to have your VP come across as a liar, but you can't afford the ticket to become the butt of jokes for the next 3 months.  

    Oddly enough, Paul Ryan has succeeded in making Sarah Palin seem like a reasonable choice….

    Condi/Rustle – You wonder how some people can live with themselves. 

  148. shadowfax

    What happens to the NASDQ if AAPL slips? /NQ weaker

  149. Pharmboy

    CLDX – small ADC companies are being bought b'c of the JNJ deal ($1B).  Our Feb $5 call (buy) put (sell) is now…positive!

  150. stjeanluc

    666 / Phil – That was actually AAPL's S3 today by some coincidence… But failing that now!

  151. Dennis

    That's amazing Phil, you called the whole day perfectly, right up to your last comment.  I look at my screens and I just can't see what you see, another 8,000 hours?  

  152. dclark41

    Phil:
    Not good when see AAPL fall. Would be more convincing if the volume was greater.

  153. rustle123

    About time someone burnt that stick!

  154. stjeanluc

    More China myths exposed:

    http://ftalphaville.ft.com/blog/2012/08/30/1127791/the-rapid-march-towards-urbanisation/

     

    However, Chan’s research suggests China’s urbanisation to date hasn’t created a booming middle class, and it won’t unless there are major reforms to the hukou system.

    So we’ve seen a surge of Chinese growth driven by export-focused manufacturing, followed by a surge of Chinese growth driven by infrastructure boom with its attendant financially repressive policies. Neither of these have created a surge in the number of “middle class” — in fact, although China hasn’t published its Gini coefficient for 11 years, inequality is widely believed to have become more extreme in that time.

  155. Pharmboy

    CELG call calendar – time to take 1/2 off.

  156. barfinger

    I just bought back both sides of my weekly strangle (1380P, 1425C). Just couldn't take the chance that Ben says something. And 2.5% is too much to tolerate. 

  157. randers1

     
     
    They must be practicing the pin’s: Dow 13,000 S&P 1,400..

  158. zeroxzero

    Thanks again, Angel, that Nam Tai is strong stuff, it seems, going off the bar to mix me another one!

  159. Phil

    Wheeee!

    This is what happens Shadow.  

    Closing below 1,400 not a good sign for Asia and Europe tomorrow.  13,000 in danger too.  

    Thanks Dennis – I do think, to some extent, it is just practice.  Some people have different abilities.  I could watch a doctor perform surgery for 10,000 hours or a mechanic rebuild an engine and I still wouldn't be able to do it but this stuff just plays to my strengths and the key, in your fist 2,000 hours, is to get a feel for what you are good at and spend a little more time on it – don't try to do everything – that's what groups like this are for – I don't have room in my Brain for what Pharm knows and I can't do charts like StJ, who also brings in fantastic insights from a very different angle than I usually focus on and Lfan's specialty on the Momos is invaluable as it lets me ignore them for the most part and concentrate on the bigger picture – so you don't have to know everything – just find a niche you excel in and you'll always be able to find people of quality to work with. 

    Lame volume finish – just 88M on the Dow – that last 35M was all downhill though, much like the first 30M. 

    LOL Rustle.  

    China/StJ – Ruh Ro Shaggy!  

  160. cdel360

    AAPL – wasn't the price of the first apple computer $666?  Steve is controlling this thing from the great beyond

  161. stjeanluc

    Thanks Phil…

  162. zeroxzero

    Mick Jagger, "Shattered", December 1977  [the year I moved to Manhattan] " [R]ats on the west side, Bed bugs uptown, What a mess this towns in tatters Ive been shattered"  - It was pretty grim in NYC that year, before the '80s took off.  Looks like "deja vu all over again" — A Sign of the Times:  http://www.nbcnewyork.com/news/local/Rat-Infestation-Upper-West-Side-Crossing-Signs-167936535.html?dr

  163. denlundy

    From Phil's morning alert – " In fact, let's call it very bad if we're below 3 of 5 on Dow 13,000, S&P 1,400, Nas 3,060, NYSE 8,000 and RUT 810."
    So we got 4 of the five and Dow at 13000.71 almost made it five.  Now if only Uncle Ben follows the script.  

  164. stjeanluc

    Another good article from Rolling Stone (which looks like required reading now):

    http://www.rollingstone.com/politics/news/the-federal-bailout-that-saved-mitt-romney-20120829

    In fact, government documents on the bailout obtained by Rolling Stone show that the legend crafted by Romney is basically a lie. The federal records, obtained under the Freedom of Information Act, reveal that Romney's initial rescue attempt at Bain & Company was actually a disaster – leaving the firm so financially strapped that it had "no value as a going concern." Even worse, the federal bailout ultimately engineered by Romney screwed the FDIC – the bank insurance system backed by taxpayers – out of at least $10 million. And in an added insult, Romney rewarded top executives at Bain with hefty bonuses at the very moment that he was demanding his handout from the feds.

    With his selection of Paul Ryan as his running mate, Romney has made fiscal stewardship the centerpiece of his campaign. A banner at MittRomney.com declared, "We have a moral responsibility not to spend more than we take in." Romney also opposed the federal bailout for Detroit automakers, famously arguing that the industry should be forced into bankruptcy. Government bailouts, he insists, are "the wrong way to go."

     

    But the FDIC documents on the Bain deal – which were heavily redacted by the firm prior to release – show that as a wealthy businessman, Romney was willing to go to extremes to secure a federal bailout to serve his own interests. He had a lot at stake, both financially and politically. Had Bain & Company collapsed, insiders say, it would have dealt a grave setback to Bain Capital, where Romney went on to build a personal fortune valued at as much as $250 million. It would also have short-circuited his political career before it began, tagging Romney as a failed businessman unable to rescue his own firm.

    The guy is basically a fraud, taking bailout from the government to save his hide….

  165. neetcorp

    Cdel360
    66, 666, 88, 888 are all lucky # for Chinese.

  166. stjeanluc

    Interestingly enough, the straddle on SPX at the close seems to predict a 0.85% move tomorrow on the index. The average daily move has been around 0.5% so some increased volatility in advance of Ben's speech.

  167. mrmocha

    EXEL / Pharm – with their PDUFA on Nov 29, I'm curious why would you not buy the DEC options now before the vol on them starts to crank up as we get closer to that date?  FWIW I've been selling the DEC 4/2 put spreads for .70 to fund buying the 4/7 BCS.  What do you see as the target for them with approval?

  168. Pharmboy

    MRM..there is no PDUFA date now.  It was canceled, so I am playing that they get approval before and that they ride up into the timeframe.  Yours is fine as well.  I already have the stock, Dec sold puts, etc.

  169. zeroxzero

    I'm suddenly getting ads for a "Chromebook", which must be some kind of Google [Wintel-Android?] based-computer.  Nothing wrong with taking a page from the Apple playbook, I guess.  Since I'm a Wintel guy who would like seamless capability among laptops and [more] mobile devices, it's an interesting play, given that my now-famous Galaxy Note is Android-based. Pontification on the subject welcome.

  170. shadowfax

    Bigger drop after the close and now very close to my off the cliff point, 80.40.

  171. Pharmboy

    Maybe this should be the woman's new theme song against white males who want to dictate decisions upon them…

  172. stjeanluc

    Chromebook / Zero – It's based on the Chrome OS developed by Google. Very web centric but allows for more affordable machines… Not from the Apple playbook at all.

  173. Pharmboy

    Self explanatory…..

  174. Pharmboy

    Holy….

  175. deano

    Pharm – where did you pull the Dow/BASE chart from? The recent action is most interesting – confirms Phil's printing theory regarding what it takes to buy the market up, but note how it drips when there's no printing.

  176. Pharmboy

    deano – SocialTrade site (Tim Knight at Slope).

  177. stocksandbondage

    Phil,
    Thanks for the advice on V puts.  

  178. denlundy

    Transportation broke through 5,000 line to end at 4993.03., 

  179. rebelscum

    California Municipal Bondholders Watch Out: State Controller Pounds Municipalities….no one is talking about this. Even the Crypt Keeper of Omaha is dumping his Cali munies. 

  180. stjeanluc

    Maybe we should not worry about the volume – today was a down day but yet no big volume change… Very strange!

  181. BertII

    ST J  /volume maybe the only people in the market are us  the Bots and the mutual fund people ; }

  182. deano

    Not 100% sure what this means – but when liquidity of this size dries up, its not usually a good thing:
    J.P. Morgan Chase is seeking to reduce its risks in a business that provides crucial plumbing for Wall Street’s money flows.

    http://online.wsj.com/article/SB10000872396390443618604577621561683343518.html?mod=djemalertMARKET

  183. deano

    Ugly and getting uglier:
     
     
    Global food prices jumped 10% in July from the month before, driven up by the severe Midwest drought which has pushed the price of grains to record levels, the World Bank reported Thursday.
    The price of maize and wheat rose by 25% from June to July, and soybeans rose by 17%, according to the Washington-based organization.
    http://www.latimes.com/business/money/la-fi-mo-world-food-prices-rose-10-percent-july-pushed-by-midwest-drought-20120830,0,1812447.story

  184. MrClark3

    90% of the Colbert Report' tonight can be summarized from phil's article this morning….. interesting : )

  185. villashaka

    Phil- Is there a play in DFS similar to our V puts ? What are your feelings about XLU- it seems the utilities are getting oversold but maybe no bottom yet ? Thanks   
    Pharm- Thanks again for your positions!

  186. scottmi

    Volume/Stj – markets need volume to make moves up, but can fall of their own weight without volume just fine. Volume is not necessary for any confirmation going DOWN..

  187. diamond

    Did Slaying The Knight 'X1000 Algo' Kill The Equity Markets? – ZeroHedge

  188. Phil

    Good morning!  

    Dollar down 0.4% and Futures up 0.4% so you don't have to be Sherlock Holmes to figure this one out.  

    81.40 seems to be holding for now and we're back at S&P 1,402.50 (up from 1,397).  Gold is not up ($1,660) and oil is not up ($94.94) with silver still $30.56, copper $3.45, Nat gas $2.75, gasoline $2.92 so no confirmation of the the index moves or even the Dollar drop, which is strange. 

    Euro hit $1.258 (up half a point) before being lightly rejected, Pound $1.581 and still 78.50 Yen to the Dollar and Japan did, in fact, run out of money today. 

    Eurozone August CPI +2.6% Y/Y vs. +2.4% in July and consensus of +2.5%. The increase takes inflation further away from the ECB's target of just below 2%, and may reduce the chances of the bank cutting rates at a policy meeting next week. (PR) - Inflation fighting is Job #1 for the ECB!

    Eurozone unemployment remains at a record high of 11.3% in July – in line with expectations – with 18M out of work. The number of unemployed rises by 88,000. (PR)

    Sounds like things are spinning out of control:  Angela Merkel has asked Italian PM Mario Monti to delay making a request for any bailout and will ask Spanish leader Mariano Rajoy to do the same in a meeting next Thursday, El Mundo reports. The report raises the question as to whether Monti was planning to ask for a bailout. For her part, Merkel hopes to resolve a crisis at the Bundesbank, whose president, Jens Weidmann, has considered resigning.

    Bundesbank President Jens Weidmann has recently discussed with other senior officials at the bank the possibility of resigning, due to his opposition to Mario Draghi's plans for the ECB to resume the buying of eurozone government debt, Germany's Bild reports. However, unlike his predecessor Axel Weber, Weidmann has stayed so that he can fight the program from within.

    Friday's economic calendar:

    9:45 Chicago PMI

    9:55 Reuters/UofM Consumer Sentiment

    10:00 Factory Orders

    10:00 Bernanke: ‘Monetary Policy Since the Crisis’ 

    3:00 PM USDA Ag. Prices

    3:35 AM Asian shares are mostly lower following more weak data out of Japan, particularly industrial production, and as Indian economic growth languishes near three-year lows. And then there's the long-awaited Ben Bernanke speech today at Jackson Hole. Japan -1.6%, Hong Kong -0.3%, China +0.1%, India -0.3%.

    4:11 AM European shares buck the overnight trend in the U.S. and Asia and find themselves higher in early trading. Maybe there's new hope that Ben Bernanke will hand out the candy after all, bringing sparkling growth to the U.S., reversing China's slowdown and lifting the eurozone out of its debt-induced haze. Or maybe not. Euro Stoxx 50 +0.6%, London +0.1%, Paris +0.5%, Frankfurt +0.2%, Madrid+1%, Milan +0.8%.

    6:00 AM Overseas: Japan -1.60%;. Hong Kong -0.36%. China-025%. India -0.85%. London +0.19%. Paris +0.63%. Frankfurt+0.45%.

    Here's The Full Text Of Mitt Romney's Convention Speech. - He did just what I said he should do – stayed totally away from attacks except the Medicare one, which is also a lie.  Biggest mistake was acting like he thought Ryan did them proud last night – makes Mitt own Ryan's comments.  

    The Election: It's The Food-Stamps, Stupid!

    What sideline money?  If you're looking for signs of a recovery, look no further than your own 401(k) retirement plan. They're back in vogue, with employer participation returning to pre-crisis levels. Nearly 73% of companies are now offering matching contributions their programs, which had dwindled along with performance during the height of the financial meltdown. Participant advice availability has has also soared to 83% of employers, nearly double the 42% in 2005.

    Hawkish Charles Plosser says there's no point in another round of Fed easing, in part because it risks future inflation. "Monetary policy today is at an extraordinary level of accommodation never before seen in history, and there are unintended consequences we are likely to face," the Philly Fed president tells CNBC.

    Financial crisis: the printing press has reached its limitsCentral bankers may have averted outright disaster, but they are powerless to do more.

    At pivotal moment, Bernanke low on economic ammo (Washington Post)

    China’s fears grow over eurozone crisisChina has expressed deep alarm at the escalating crisis in Europe and warned against austerity overkill as Europe's crumbling demand sends shock waves through Asia.

    "Don't Count Your Hahnchen": 40% Chance German Court Does Not Ratify ESM.

    Hollande’s Business Policies Slammed by French Corporate Leaders

    Italians Squeezed by $9.50-a-Gallon Gas Face Costly Drive Home.

    Moody's review of Spain's Baa3 rating to continue until end of Sept.

    Canada's Consumer Leverage Growth Is Not Going To End Well. (graph)

    Japan eyes suspending state spending as money runs out.

    Japan's industrial production -1.2% M/M in July vs. +0.4% in June and consensus of +1.7%. The fall was led by declines in the electronic components sector, followed by general machinery. CPI excluding food -0.3% Y/Y, unemployment unchanged at 4.3%, with both figures in line. PMI 47.7 in August, the lowest since April 2011.  In a further sign of trouble ahead, the purchasing managers index for August showed manufacturing activity languished at the lowest level since last year's earthquake as domestic and external demand suffer.Manufacturers said they expect output to rise only modestly in August and then fall again in September, which could increase the chance that the economy will contract in the third quarter. "Exports to China and the European Union have been decreasing, so electronics parts makers are cutting back on production to adjust inventories," said Seiji Adachi, senior economist at Deutsche Securities.

    Japan's Government Pension Investment Fund (GPIF), the world's largest public pension fund, posted a negative return of 1.85% in Q2, translating into an investment loss of $26B. With a $1.37T portfolio, the GPIF is closely watched due to its massive size. Its Q2 performance was hurt by the strong yen and stock falls at home and abroad.

    China's 2,453 publicly traded companies' combined 1H average EPS fell 28% y/y to .1749 yuan, citing the newspaper's own statistics. 1H combined inventory rose 18.6% y/y to 4.67t yuan, according to the report. – That's close to $1Tn in inventory piled up in a $5Tn economy!

    Cheap Chinese steel threatens Japan mills: reportJapanese steel mills are suffering as Chinese competitors ramp up production, even as prices fall, Japan's Nikkei business daily reported Friday. Steel prices have fallen sharply, with hot-rolled coil at a 19-month low, and the influx of inexpensive Chinese steel has forced some Japanese producers to take asset-impairment charges for their mills.

    China’s Stocks Head for Longest Monthly Losing Streak Since 2004. China’s benchmark stock index fell, heading for a fourth month of losses, after declining earnings at companies from Citic Securities Co. (600030) to Sany Heavy Industry Co. showed the impact of the nation’s economic slowdown. Signs that China’s economic slowdown is deepening have dragged the Shanghai Composite down 2.5 percent in August, a fourth straight month of declines. That’s the longest streak since August 2004, according to data compiled by BloombergMacquarie Group Ltd. lowered China equities to neutral from overweight, citing the deteriorating outlook for banks amid a “disturbingly” widespread weakness in the economy, according to a note dated yesterday.

    China manufacturing seen close to contraction. China's manufacturing activity likely registered zero growth in August, and instead teetered on the brink of contractionary territory where it hasn't been since November, signalling there is still some way ahead before for the world's second-largest economy bottoms out. The official manufacturing Purchasing Managers Index was likely 50.0 in August compared with 50.1 in July, according to the median forecast of 11 economists polled by Dow Jones Newswires.

    China’s Growing Economic Crisis. (that everyone is ignoring)

    Indian GDP +5.5% Y/Y in Q2 vs. +5.3% in Q1 and consensus of +5.2%. Manufacturing output +0.2%, mining +0.1%, construction +10.9%. The Reserve Bank of India has been hawkish on lowering high interest rates as it seeks to fight inflation, so, says Westpac's Jonathan Cavenagh, "rate cuts are still seem some way off."

    Korea Industrial Production Slides as Europe Hits Exports. South Korea’s industrial production fell for a second month in July as a global slowdown undermines growth in Asia’s fourth-largest economy. Output fell 1.6 percent from June when it dropped 0.6 percent, Statistics Korea said today. The median estimate of 12 economists in a Bloomberg News survey was for a 0.9 percent decline.

    Steel Slump Sees Aussie Dropping Toward Parity: Chart of the Day. Australia's dollar may fall to parity with the greenback for the first time since June after China's stock gauge and benchmark steel prices plunged to three-year lows, adding to concern that demand for commodities such as iron ore and coal will slump. "There's a risk the Aussie will fall to $1," said Masashi Murata, a currency strategist in Tokyo at Brown Brothers Harriman & Co. "We expect China's growth to slow toward year-end, and once economic data confirms that, it'll be a selling catalyst for the Australian dollar."

    Melbourne Hasn’t Seen Worst of Housing Drop as Glut Builds.

    With nearly 12% of all mortgages either delinquent or in the foreclosure process, one would think that housing would be at the top of the political agenda for getting the economy moving again – but it's not. Why? Most likely because recent studies show that communities hardest hit by the housing crash aren't likely to have a high voter turnout. Ignoring them could be a risky gambit however, because most of the nation's swing states also have the dubious distinction of holding the highest foreclosure rates.

    Banks Now Trying Extra Hard To Avoid Making Rookie Mistakes (Like Getting Caught Committing Fraud) (Dealbreaker)

    Buffett Railroad Sees Economy Sapping Pre-Holiday Peak: Freight. North American railroads from Warren Buffett's Burlington Northern Santa Fe to CSX Corp. are bracing for limited increases in pre-holiday shipments as weak consumer sentiment exacerbated shrinking corn and coal loadsBNSF, which moves imported Asian consumer goods from West Coast ports, hasn't seen a measurable gain in holiday-realated volumes, Chief Marketing Officer John Lanigan said this week.

    Crop Traders Extend Bull Run as Rain Comes Too Late: Commodities.

    Tudor Pickering analysts say energy markets aren't expecting "lasting disruptions" from Hurricane Isaac, but they are "looking for confirmation of this" from oil and gas companies. Phillips 66 (PSX) found some flooding at its 247K bbl/day refinery in Belle Chasse, La., but the markets are mostly reassured: Valero (VLO) and Anadarko (APC) are among firms reporting no damage at their facilities

    The United Steelworkers union says it's close to a new four-year labor pact with U.S. Steel (X) but that talks with ArcelorMittal (MT) have stalled. MT, which wants to cut wages and benefits for all workers ~36% from an average $77.40/hour, has started preparing its blast furnaces and other facilities for a strike "as a precautionary measure."

    New U.S. auto sales are expected to hit 1.29M in August, a 20% jump Y/Y and 12% M/M, led by sharp gains by Japanese auto makers, according to Edmunds.com. “Sales showed signs of flattening out in the first couple months of summer, so August’s sales figures will come as a nice surprise for everyone in the auto industry," the site's top analyst says.

    Supervalu (SVU) says it's successfully completed two debt financing transactions, totaling $2.5B. The debt is structured in a new five-year $1.65B asset-based revolving credit facility, secured by the Company’s inventory, credit card receivables and certain other assets, and a new six-year $850M term loan, secured by a portion of the Company’s real estate and equipment.

    Bing (MSFT) is now capable of searching Facebook photosadded by a user's "friends." The feature is the latest in a series of social networking-related enhancements made to give Bing a leg up on Google (GOOG), whose deal-making ability is hurt by its social networking ambitions. But thus far, Microsoft and Bing-powered Yahoo (YHOO) haven't done much to dent Google's search dominance, thanks to their weak mobile position and dependence on Internet Explorer, which is steadily losing ground to Chrome.

    At the end of Q2, Verizon Wireless' (VZVOD) 4G LTE network covered 230M people. That puts Big Red well ahead of AT&T (T) and (especially) Sprint (

  189. Phil


    At the end of Q2, Verizon Wireless' (
    VZVOD) 4G LTE network covered 230M people. That puts Big Red well ahead of AT&T (T) and (especially) Sprint (S) when it comes to 4G availability, and leads Jefferies to think the arrive of a 4G iPhone (AAPL) could be a "game changer" for the carrier. The firm thinks Verizon could sell 5M next-gen iPhone units in September, and a whopping 15M in Q4. Wells Fargo argued yesterday that a mass exodus of AT&T iPhone subs is unlikely.

    Amazon (AMZN) will incorporate mapping services from Nokia (NOK) in the new Kindle Fire, which is due to be unveiled on Thursday, Reuters reports. It's a further blow for Google (GOOG) – whose Android operating system is used in the Fire – after Apple dropped Google Maps in favor of its own feature and content from Tom Tom for iOS 6.

    Sharp hasn't yet started the mass production of screens for Apple's (AAPL) next iPhone, the WSJ reports. Sharp had hoped to have begun deliveries by now and it is unclear when it will be able to start, although the iPhone's two other screen suppliers, LG Display and Japan Display, have commenced shipments. Still, the delay at Sharp raises doubts about whether Apple will be able to meet demand.

    KGI Securities, among the first to report the next iPhone will use an in-cell touch panel, today claims Apple (AAPL) is struggling with unsatisfactory component yields for its upcoming products. This leads the firm to cut its estimates, though it still thinks Apple's early embrace of in-cell tech will give it a 1-2 year lead in panel quality over rivals. 8 days ago, Digitimes reported Q3 iPhone production has beenhampered by low in-cell panel and dock connector yields. 

     What is Value? What is Money? (Edge)

  190. Phil

    Dow now up almost 100 points from the close.   Dollar 81.30, oil and gold now moving up to confirm.  Silver and copper too.  

    2,775 on the Nasdaq (/NQ) is a good line to play long with very tight stops (because we know it's BS)..

  191. Phil

    Colbert – Very funny!  

  192. Phil

    Rolling Stone/StJ – The last bastion of actual reporting.  

    81.28 – they are just raping the Dollar to get the markets up.   The problem with this is – how are they going to break below 81 on the Bernanke speech?  Doubtful they can so this may be a major flush prior to taking this thing way down.   

    Monetary base/Pharm – Incredible, isn't it?  We've more than tripled the base in 3 years.

    Big Chart – Ouch!  Major breakdowns (with 2.5% adjustment) on all indexes.  1,314 on S&P is adjusted 50 dma – they have to get back over that to impress anyone.  

    JPM/Deano – Only an issue if other banks don't pick up the slack.  

    DFS/Vill – I prefer to play V as they are much bigger and a better proxy for the economy.  DFS is still small enough to make deals and gain market share that can move them against the market.  DFS is a very good company when they are cheap.  XLU – I don't see something as oversold just because it pulled back from $38.50 to $36.50 after running up from $34 in April.   Of course Utilities where a flight to safety in the May collapse but people started dumping out of them as QE fever took hold.  If Bernanke fails to deliver, then they should head back up again but, if we get more QE (and the inflation that goes with it) 

    Algos/Diamond – I think it knocked volume down but, otherwise, other bots seem to have picked up the slack.  

  193. mjjwo9b

    Rolling Stone –  Last bastion of Gonzo Journalism.     Hoping the PSW Vegas event does not turn into the epilogue to Fear and Loathing.

  194. BertII

    Dollar down to 81.16 is this a pump job or does someone have insider information. Maybe the accidently released the meeting speech 14 hour early to the banker peeps

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