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Finishing Touches Friday – The November Comeback

What an amazing comeback!

It's hard to believe only two weeks ago I had to try to convince people the World wasn't coming to an end and that AAPL wasn't going to $400 or lower.  

Now AAPL is a hot stock again and the markets are looking up, up, up – but now I'm skeptical that maybe the bounce is a bit overdone as we haven't actually resolved any of the things we were worried about just two weeks ago (other than AAPL being worth more than $400).  

In fact, we did call the turn right on the 16th in "Finally Friday – Maybe Tomorrow the Markets Won't Fall" and on Monday, the 19th, I wrote "Monday Market Momentum – Changing for the Better?", where we first began to target our weak and strong bounce lines.

Now here we are, two weeks later and we've hit all our bounce targets but we're worried it may be just a bit of window-dressing into the November close and we're certainly not going to get too enthusiastic until and unless we come out of the box next week holding our levels.  In fact, yesterday we added some very aggressive TZA hedges for weekend protection in our $25,000 Portfolio – just in case…

SPY 5 MINUTE Yesterday's action was driven by commentary from Boehner, who tanked the markets by saying they were not making any progress on cliff talks but then it was saved anyway by Fed Speak from Dudley. who reiterated his known preference for QInfinity.   

As you can see from Dave Fry's SPY chart – we swung from the pre-market pop back to Wednesday's close (filling that gap) and then back to the highs on Dudley-speak.  It's a little tricky to trade a market that gets whipsawed up and down 1% depending on who last speaks so we've been mostly on the sidelines this week – hopefully next week we'll find a genuine trend worth playing with.  

Personal Income was flat while Personal Spending Fell 0.2% in October – possibly some blame can be laid at hurricane Sandy's feet but those are not good numbers. 

Europe is full of bad numbers but ECB President, Mario Draghi forecasts that the the Eurozone will probably start recovering from recession "in the second half of 2013." He also says that while "fiscal consolidation results in a short term economic contraction," the reforms are "inevitable" after years of wrong policies.  Of course, one may wonder how we suddenly know these new policies are "right" – but that's a problem for next year, I suppose. 

Eurozone Unemployment hit 11.7% in October – a new record but it very much depends on where you live over there as Spain's rate, for example, is 26.2% while Austria has just 4.3% of it's people out of work.  All this unemployment has been hitting even German Retail Sales, which fell 2.8% in October (and no hurricane there) and the latest Bloomberg Survey now shows EU investors betting even Germany slides into recession next year.  

Japan is in recession too and India is growing slower than expected and we all know about China's woes so, as I said – let's not get too carried away by this end-of-month rally – we need to see real progress on our Fiscal Cliff and several other fronts to get excited about doing more shopping. 

Have a great weekend, 

- Phil


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  1. stjeanluc

    Oil Lines

    R3 – 90.75
    R2 – 89.72
    R1 – 88.72
    PP – 87.78
    S1 – 86.69
    S2 – 85.66
    S3 – 84.66

    Yesterday's high and low – 88.69/86.66
    Daily Fib lines – 89.94/89.24 and 86.18/85.88

  2. shadowfax

    Almost forgot about the docs. Once again they face a 27% cut for medicare patients. If only the media could stop putting fuel on the fire. This started in 1997 so it is Obama's fault by association to Clinton. Like everything financial Bush kicked this can down the road. My co-pay goes down by 27% also but I still think this savings is about as necessary as cutting taxes for the rich.
     
    http://finance.yahoo.com/news/medicare-patients-risk-without-doctors-105500355.html

  3. 1020

    Good Morning!

  4. 1020

    Another Santelli meltdown - and he leaves the set!
     
    I'm glad I had the TV on mute….. :)

  5. stjeanluc

    Santelli is just out of control… Between him and Kernen, tough to tell who is worse. I guess Kernen because he has 3 hours to spell his crap every day.

  6. stjeanluc

    I had a nice discussion with a friend of mine who is an accountant yesterday. She was mentioning that taxing dividend is like double taxation because corporations already pay taxes on profits before they pay dividends. But I pushed back by saying that a lot of corporations actually don't pay any taxes or nowhere near the 35% actual tax bracket. She didn't argue that point though…

    How about that for an idea – dividend should be taxed at the difference between the tax rate the company pays and the actual corporation tax bracket. For example, GE didn't pay any taxes last year – if you get a dividend from GE you have to pay 35% taxes on it. Maybe shareholders would start pushing back against all these shenanigans that corporations go through to avoid paying taxes!

  7. 1020

    I watched Lawrence O'Donnell interview Howard Dean last night.
    They both agreed that all the new taxes and cuts on Jan. 1, would be the best outcome for Progressives, especially when it came to cuts in military spending (which the right would fight). While there are cuts in entitlements (we should expect that anyway) I think they may be right……

  8. rainman

    0×0 / retail — I consider myself relatively frugal and an informed consumer and I'm finding that more and more often, I don't need to see or hold a potential purchase before pulling the trigger.  What I'm finding is that online reviews are giving me more confidence in sight unseen purchases, so much so, that I research reviews before I decide if i need to see/touch the product or not. Most often, I find enough information that seeing/touching the product is not necessary. In retrospect, I'm somewhat surprised by this since I always have had high expectations and it use to be that one touch would tell me something is junk and should be avoided.
     
    This didn't happen overnight — my wife and I have been using online reviews/discussions as a decision tool for over a decade and there is certainly a learning curve (maybe even 10,000 hours worth). Some of this came about due to our rural location.  If you were to listen to our conversations about purchases, services, vacations, and most recently which apartment to lease, you'll hear language that suggests we have either did online research and/or need to do more research before a decision is made. The language is so natural to us anymore that we don't even have to mention "online" or specific web sites although we will suggest websites if the other isn't able to make progress toward a decision. I am also a geek (and introvert) and although I use to spend a lot of time in stores like BBY checking out the latest technology, I perform that task online now and only visit BBY if I need something in a hurry.  There is just so much more to be learned by reading online about a product than you can ascertain from a brief moment touching something or talking with a salesman about it.  I'm also not an impulse buyer which might make some difference.

  9. rainman

    stj / taxes — Nice thought on paying the delta on taxes. And as an added bonus, we'd drop the unemployment rate with the army of the accountants needed to track all those deltas. ;)

  10. Pharmboy

    PP for this 30 Nov 2012….TPbIF….(Pb does not equal lead….it is Pharmboy!)

  11. stjeanluc

    It would definitely add a layer of complexity Rainman… But I am sure we could find a solution like make corporation pay their taxes for example!

  12. Savi

    Good Morning—-did I miss anything   ;-0

  13. rainman

    stj / taxes — Yes. Removing loopholes would be the better approach.

  14. stjeanluc

    Howard Dean / 1020 – I watched that as well and he was saying that progressives would get 2 of out 3 things they want if we fall off the cliff – higher taxes and defense cuts. We would also get spending cuts, which the GOP wants but they get only 1 out 3 so a win there… 

    It's amazing that no one is really mentioning that the Bush tax cuts are 60% of the deficit. We keep on talking about entitlement and all that, but these frackin' tax cuts are the big problem. That and 2 wars and defense spending as much out of control as healthcare spending. But for some reasons, it's not a problem!

  15. 1020

    Rainman – I don't live in a rural area and have depended on reviews, not only from consumers, but also from places like cnet.com, for electronics and use "the Google" as well.  I'll take the best and worst reviews and see if the is exuberent love or complete hate for the product and go from there.
     
    Oh yeah, anything over 50% off retail is a personal "good place to start"……. :)

  16. 1020

    stjeanluc – Yes, I think 2 out of 3 would be a pretty good outcome…. :)

  17. rainman

    Today's WTF headline:  Bacon flavoured shaving cream goes on sale.  For those that can't get the dog to play with you.

  18. 1020

    rainman – LOL!

  19. albo

    stj – I think a better idea, and much simpler, is to tax every corporation at a certain rate, probably 25% or so, no matter what business they're in.  Would actually create more revenues, because as you've said a lot of corporations pay no tax.

  20. stjeanluc

    This looks just unreal:

    http://gizmodo.com/5964549/scientists-can-now-make-stem-cells-from-blood

    Until now, scientists have relied on embryos or complex techniques using skin cells to create stem cells. Now, though, a team from Cambridge University has manged to create them from the blood of a patient—which could make regenerative medicine a more real possibility than ever.

  21. stjeanluc

    Taxes / albo – It would be much simpler, but they would still find ways to insert loopholes in the the tax code… 

  22. 1020

    albo/25%   I like your idea, though, going off the "cliff" would be so much simpler….. ;)

  23. 1020

    Hey….

  24. albo

    TLAB – Stock was just too cheap !
    Tellabs Inc( TLAB) –  shares jumped 17% in premarket trades on Friday after the company set plans to pay a special dividend of $1 a share

  25. 1020

    Phil – albo brings up a small problem for me. I hold TLAB :)   What would you do?

  26. stjeanluc

  27. albo

    stj – No exceptions.

  28. stjeanluc

  29. stjeanluc

  30. stjeanluc

    Good luck with that Albo…. And then 100,000 lobbyist are suddenly out of work!

  31. stjeanluc

  32. stjeanluc

  33. rainman

    Is the tide turning?
    The Insourcing Boom

    After years of offshore production, General Electric is moving much of its far-flung appliance-manufacturing operations back home. It is not alone. An exploration of the startling, sustainable, just-getting-started return of industry to the United States.

  34. albo

    Isn't that the goal ?  

  35. japarikh

    Hi Phil- what are your thoughts on OCZ? I was thinking of a buy write with the JAN 2014 $2 calls. 

  36. stjeanluc

    Very good story rainman…. 

     

    So a funny thing happened to the GeoSpring on the way from the cheap Chinese factory to the expensive Kentucky factory: The material cost went down. The labor required to make it went down. The quality went up. Even the energy efficiency went up.

    GE wasn’t just able to hold the retail sticker to the “China price.” It beat that price by nearly 20 percent. The China-made GeoSpring retailed for $1,599. The Louisville-made GeoSpring retails for $1,299.

    And:

    U.S. labor productivity has continued its long march upward, meaning that labor costs have become a smaller and smaller proportion of the total cost of finished goods. You simply can’t save much money chasing wages anymore.

    I just read that FoxConn in China is ready to install 1 million robots in its factories to replace workers. If that is the case, what's the point of outsourcing. We have the space in the US for these factories and robots cost the same to run here. And the advantage:

    Time-to-market has also improved, greatly. It used to take five weeks to get the GeoSpring water heaters from the factory to U.S. retailers—four weeks on the boat from China and one week dockside to clear customs. Today, the water heaters—and the dishwashers and refrigerators—move straight from the manufacturing buildings to Appliance Park’s warehouse out back, from which they can be delivered to Lowe’s and Home Depot. Total time from factory to warehouse: 30 minutes.

  37. phil

    Good morning!

    Not expecting any major moves – they pushed us up here (1,415, 13,000, 3,000) and I doubt they want to give that up after all the work but could be some profit-taking later.

    Santelli/1020 – The guy is now just a cartoon character. 

    Dividend/StJ – Good idea.  I'd still rather see a VAT collect 20% of every transaction so we could just do away with all other taxes and have the government collect the $3.2Tn they need and be done with it. 

    Reviews/Rain – I agree.  A lot of sites have good, trustable reviews and I don't need to touch most things if there's a generally good opinion of a product.  Gotta love the crowd-think.  Also, to some extent, things are so similar in quality these days – there's less penalty to trying new things.  Used to be it mattered a lot what computer you got – now they are pretty generic.  Cars too, air conditioners, refrigerators, washers….  It's not like there is a huge difference in quality anymore from one thing to the next.

    Bush cuts/StJ – Unfortunately, we are still extending a great deal of them.  

    Bacon cream/Rain – Ewwww!

    Stem cells/StJ – That's a very good breakthrough if true. 

    TLAB/1020 – Not a terrible problem but $1 is 33% of what they traded for yesterday and, if you wait and collect, then you are left owning the stock for net $2 or whatever.   Not a bad situation long-term if you intend to stick with them. 

    FAS Money – Right down to the wire! 

    $25KPs, AAPL Money – Later

    GE/Rain – Yep, we are now going to be the World's low-cost laborers.  

    OCZ/Japar – They are kind of little.  I don't follow them.  It's a rough space these days and I think a lot of these little guys will get squeezed out under margin compression unless they have some key advantage. 

    Robots/StJ – Still won't create actual jobs (except for robot repairmen).  

  38. stjeanluc

    Jobs / Phil – As you say, we have to face the fact that increased productivity at every level will make a lot of people redundant. IBM Watson will soon replace every single call center job in the entire world for example… 

    Which actually makes it that much more important that corporation pay their fair share of taxes because they will soon be the only entities earning an income!

  39. dclark41

    Phil:
    I too like your VAT idea too. Just so we don't have to hear any more crap about the FISCAL CLIFF! :)

  40. albo

    Robots – Wouldn't create jobs, but would be good for our Balance of Payments.  ….and as you pointed out, a boon to robot repairmen and repairladies.

  41. phil

    Man these Republicans are whiny bastards!

    At the open: Dow +0.06% to 13030. S&P -0.03% to 1416. Nasdaq -0.02% to 3011.

    Treasurys: 30-year +0.27%. 10-yr +0.07%. 5-yr +0.02%.

    Commodities: Crude +0.22% to $88.26. Gold -0.31% to $1724.15.

    Currencies: Euro +0.04% vs. dollar. Yen +0.66%. Pound +0.22%.

    Market preview: Stock index futures slide off earlier highs and are now flat as investors balance sluggish data on U.S. consumer incomes and spending with gains in overseas markets. European bourses inched up as Germany's parliament approved new aid measures for Greece; Asian markets rose after Japan showed asurprise rise in industrial production.

    10:00 AM On the hour: Dow +0.14%. 10-yr +0.07%. Euro +0.13%vs. dollar. Crude +0.37% to $88.4. Gold -0.18% to $1726.35.

    The Thanksgiving rally prompts a rush to the bullish camp in the AAII Investor Sentiment Survey, up 5.1 points to 40.9% – now above the long-term average of 39%. Bears decline 6.4 points to 34.4%, still above the long-term average of 30.5%. Bears had jumped to almost 50% 2 weeks ago amidst the post-election sell-off.

    "I'm waiting for something to go kaboom," says Jeff Gundlach, sitting on 17% cash and a very short duration in his Total Return Fund. "If phase 3 takes two years (Phase 2 was the 2008 collapse), it's worth waiting for. The markets don't have lots of opportunity now."

    Nov. Chicago PMI: 50.4 vs. 50.3 expected, 49.9 prior.

    More on Chicago PMI: Employment 55.2 vs. 50.35 prior. New orders 45.3 vs. 50.6 prior. Prices paid 70.1 vs. 59.3 prior. Inventories 47.1 vs. 49.6 prior. Supplier deliveries 57.3 vs. 50.4 prior.

    Big jumps in supplier delivery times, employment, and prices look to be behind the improved headline read in the Chicago PMI, but the gauge's best leading indicator – new orders – took a big hit, falling to 45.3 from 50.6, the lowest level since June 2009. "Business sales (have) been slowing throughout the year, and continue to slow, but now at an increasing rate; becoming very alarming." (full report) 

    The ECRI Weekly Leading Index rises 0.9 points to 126.3. The growth rate slides 0.2 points to 3.4%. Sticking to his guns, Lakshman Achuthan says the U.S. is already in a recession (video).

    Canada's real GDP grew just 0.1% in Q3, slowing from Q2's 0.4%. GDP grew 0.6% on an annualized basis, short of expectations for 0.9%. A sharp 2% decline in exports – the biggest in 3 years – led the slow print. The loonie takes a small stumble, now -0.2% and buying $1.0064.

    Brazil's GDP grows just 0.6% in Q3, far less than forecasts for 1.2%. The punk print is lead by a steep 2% decline in investment. "If investment doesn't rebound then we are in trouble in 2013," says an economist. Interest rate futures – which had baked in no policy changes for more than a year – are sharply higher, now beginning to price in further rate cuts. EWZ +0.4% premarket.

    collapsed rail bridge in southern New Jersey caused a derailment of a Conrail freight train with hazardous chemicals on board. Norfolk Southern (NSC) and CSX (CSX) own the Conrail railroad line, holding 42% and 58% respectively.

    warning from Yum Brands on earnings growth in China for Q4 could spill over to taint other global restaurants chains. As the fast-food leader in China, Yum's track is closely watched to see where the growth engine may stall out. On watch: BKWWENMCDSBUX,DNKN. 

    Let the buying begin. Now that Hostess can officially entertain offers for its well-known brands in the liquidation process, the guessing game is on over which firm will buy what asset. P-E firms are likely to be an active participants, but Grupo Bimbo, Flowers Foods (FLO +1%), Sara Lee (HSH +0.2%), and Kraft (KRFT +0.1%) are also getting bandied around as potential players. The bidding is expected to be fast and furious with the brands freed from painful union contracts and factory outlays, while Hostess CEO Greg Rayburn expects multiple asset sales instead of a single buyer.

    Don't make too much out of the report indicating Richard Schulze could miss a deadline to line up financing, advises a piece in the Minneapolis St Paul Business Journal. The board has already extended the deadline for Schulze once and could easily do it again. P-E backers of the Schulze group might also be dragging their feet in order to see just how far Best Buy's stock falls, especially with the retailer not appearing to smash any records in the early holiday shopping rush. BBY -1.2% premarket to $12.80 after falling 3% yesterday.

    Strong price pressure could join the list of problems facing PC component suppliers, who are already struggling to deal withslumping volumes. Digitimes reports Taiwanese notebook contract manufacturers want component vendors to "lower their quotes for 2013" in order to offset the profit hit caused by declining system ASPs and lower utilization rates. DRAM prices have already tumbled, andGoldman argued yesterday Intel's ASPs are vulnerable.

    That was a well-timed entry for us:  AMD (AMD +6.1%) is planning to launch a solid-state drive (SSD) line based on its Radeon GPU brand, SemiAccurate reports. While AMD would have the brand power and OEM/channel relationships needed to make a dent, it would also be entering a very competitive market featuring many players (SanDisk, Samsung, Micron, Intel, Toshiba) who can source NAND flash memory at cost. But this might be a good time for the struggling chipmaker to try expanding into a growth market.

    Apple (AAPL) announces the iPhone 5 will go on sale in China on Dec. 14, and the iPad Mini and 4th-gen regular iPad on Dec. 7. That gives Apple a little over 2 and 3 weeks, respectively, to rack up (authorized) Chinese sales of the devices in FQ1. The iPhone 5 launch was widely expected, given regulatory approval and China Telecom's (CHA)  pre-orders. Separately, Apple has begun selling the iPhone 5 unlocked in the U.S. at prices ranging from $649-$849. (PR)

  42. rpme

    phil, who is making the robots?

  43. qcmike

    Pharm
    Any trade on EXEL?
    I have some DEC 5 Puts
    Thinking of rolling out May 6 Puts
    Thanks

  44. stjeanluc

    It's just amazing how AAPL just can't seem to get a sustained move… That $595 line is proving tough to crack! And the next one at $615 looks stronger to me, but we have to get there first!

  45. Pharmboy

    EXEL/qc – we are way up on those puts.  I will let the ride out a while and take delivery of the stock if necessary….I would sell calls ahead of delivery to lock in the price.  May is good.

  46. phil

    Taxes/StJ – That's right.  Simple enough concept, you don't need people to make money so the money you do make is redistributed to those people you don't need.  

    Who makes robots/Rpme – Not us!  Japan is going to have that market for a while, then probably Korea and China.  Japan actually plans their economy based on Robots being the next century's autos for their manufacturers.  They are miles ahead of anyone else. 

    AAPL/StJ – I'd prefer if they wait until we burn some premium first.

  47. shadowfax

    Phil STJ and all
    Was nice reading about labor and total costs. I still have to go to China for transistors, tube sockets, and a few parts that are unavailable, or out of production, but new parts are cheaper here and Aluminum first cheaper in KT but a supplier in ID beat them 160 miles RT but shipping is way out of control, so total cost 30% less that KT and only about 25% of China. They speak english!!

  48. phil

    Europe wrapping it up well off the highs – barely flat on the majors and plenty of red to go around.  We're heading the same way at the moment.  

    Dollar down at 80.14 though as they had a good week working our Greece and the Euro is $1.301 with the Pound $1.602 and the Yen is very weak on easing talks – down to 82.51 and the Nikkei loves it at 9.500.

    Silver ($33.50) and gold ($1,715) tumbling again, copper $3.62, nat gas $3.63, gasoline $2.73 and oil at $88.40.

  49. jasu1

    Pharmboy/Phil,
    In an IRA account, I am Looking to sell a gsk 2015 put $35. spread is kind of wide 3.00 to 3.6….would you suggest a 38 put instead at about 4.3 to 4.8. Thanks in advance or wait for a more opportune entry point. Thanks

  50. biodieselchris

    Now if we had only elected Gore and started on the infrastructure build that included 17,000 miles of high speed rail and upgrades to the 60 year old freeway system we'd be ready for this insourcing boom! Instead we got Bush and his Iraq war and his asset stripping give-a-ways. How irritatingly depressing.
     
    C'mon Obama, do something useful for a change …
     
    (I'm just bitchin' a bit here, quasi-universal health care is a great start — healthy workers are far more productive — but we have a LONG WAY TO GO. So get it done man!)

  51. biodieselchris

    StJ – I would say 505 to 585 in 2 weeks was a pretty sustained move.

  52. stjeanluc

    BDC – They had 2 big days which made all the difference – about 90% of that move… It's scary the way that stock moves.

  53. shadowfax

    STJ
    Some generics are so cheap that the copay is more than co pay price. So our on our side govt makes it against the law to not stick with the drug plan. Was a good deal until 2011 and now the copays go up. Who is making more money? Those private insurance companies that Bush assured us would do it cheaper. If you don't sign up for medicare or drug D ASAP the penalty goes up every year. This is all a big FU to the elderly and disabled. What will happen when we all go broke? It is coming!

  54. shadowfax

    Sorry I should have caught that, copay is more than the price!

  55. phil

    Total costs/Shadow – Things balance out over time but, unfortunately, it's because the pay bar gets lowered globally.  

    If only/BDC – Amen to that. 

    11:00 AM On the hour: Dow +0.04%. 10-yr +0.07%. Euro +0.22%vs. dollar. Crude +0.5% to $88.51. Gold -0.53% to $1720.25.

    12:00 PM On the hour: Dow -0.13%. 10-yr +0.01%. Euro +0.23%vs. dollar. Crude +0.42% to $88.44. Gold -0.65% to $1718.25.

    Forget threats to the mortgage interest deduction, the real tax hike worry is for those who get relief on their home loans – whether principal reductions or short sales. In 2007, Congress suspended a rule taxing such benefits, but must act to extend it for next year. Without it, the excellent results following the national "fraudclosure" settlement could be at risk.

    Complaints Aside, Most Face Lower Tax Burden Than in 1980 (NYT)

    That 3-to-1 spending/taxes deal GOP rejected last year? Its looking pretty sweet versus 4-to-3 deal now on table (Politico

    Republicans Reject Obama Budget as He Sells It to Public (Bloomberg)

    Watch what they do: CEOs actually fear higher taxes more than a recession (BreakingViews)

    Q4 should show a big improvement for Silver Wheaton (SLW) after its Q3 suffered from several sales lags, Scotiabank mining analyst Trevor Turnbull says in calling shares a Buy. SLW is growing production at a 70% rate, he says, noting much of the expansion has begun and is anchored by low-cost assets such as Penasquito in Mexico and Pascua Lama in Chile and Argentina.

    Disney (DIS -0.2%) chief Alan Horn gives some insight on plans over Star Wars: Episode VII, saying the film will have at its director named soon. The Star Wars revenue machine won't stand idle until the movie's 2015 release, Angry Birds Star Wars is already listed as the most popular iPhone gaming app and theme parks will soon be infused with more Star Wars merchandising and rides.

    eBay (EBAY) may be the next Internet giant to be targeted by European governments over its tax payments. Reuters notes eBay is able to charge EU customers a low sales tax rate by declaring a 9-person Luxembourg subsidiary its provider of services, and that it shuffles revenue to a Swiss unit to lower income tax payments. British and German lawmakers are calling for investigations – the EU allows tax regulators to challenge claims to Luxembourg residence in local courts. (U.K. investigation)

    Two of Apple's (AAPL -0.7%) biggest sell-side fans - Gene Munster and Brian White - like the arrival dates provided in this morning's Chinese announcement. The iPhone 5 will be available a week before Munster expected, and White wasn't counting on the iPad Mini arriving this quarter. However, White thinks the iPhone 5 rollout is going "a bit slower than expected," given Apple's comment about it being available in 47 countries. The iPhone 5 is arriving at the end of a year where Android made huge share gains in China.

    Polar Ice Sheets Melt Faster (WSJ)

  56. jophil

    Phil, what's your thought on ESRX? Is it time to play some options? thanks

  57. rj_jarboe

    Robots
    Many of the current industrial robots in use today are made by ABB.

  58. albo

    Boehner – Speaking.  Same old, same old.  Get off the couch !

  59. albo

    Wants to close loopholes.  Get specific.  Which ones?
    Meanwhile the Pres is out campaigning in Pa.  Someone please tell him the election is over.

  60. qcmike

    Pharm
    Do you think HITK would be a good short on earning or buy Dec puts?
    Thanks

  61. Savi

    Phil—-what do you think of CHKR for the income port?
    TIA

  62. 1020

    albo – While I'd like to see Obama at the W.H., raising hell from the oval office, the only way I see the republicans giving in on the existing sticking points, is thru public opinion. He "campaigned" on higher taxes for the "rich" and was re-elected. Nuff Said.

  63. phil

    Boehner – So now his job is to come on TV the same time every day and say the same thing with the same hurt feelings every day?  What a joke!  

    ESRX/Jophil – They really disappointed on earnings but seem to be forgiven now.  Earnings were actually good – just not as good as whispers.  They don't pay a dividend so you can just go artificial by selling the 2015 $50 puts for $7 and buying the 2015 $45/60 bull call spread for $7.50 so it's net .50 on the $15 spread that's $8.75 in the money to start and worst case is you own 1x at net $50.50.  

    Campaigning/Albo – It's called drumming up support for his programs.  They are going to hang the Reps on this Fiscal Cliff and Boehner is leading the GOP into 40 years of wandering the desert with his nonsense.  GOP needs to get real – if they let the cliff hit – bottom 99% pay 2% more, and unemployment extensions expire – those are the only things the Dems care about.  Other than that, it's like a Democratic wish list with the total rollback of the Bush Tax Cuts and massive military cut-backs – all that get blamed on the Republicants.  It's a no-lose for the Dems. 

    CHKR/Savi – We looked at them a while ago but they are very erratic and hard to cover so not much interest unless they are on one of their little spikes down (recently $16.23, now back to $19.12).  

  64. rperi

    Phil what do you think of a simple buy/write for DIS at $49.38, selling the April $50 call and $46 put for $3.36, also netting you the dividend of $.75, so net $46.02/46.01 with an 8.3% profit (if you include the dividend) in 5 months? Certainly wouldn't mind owning them at $46 and looks like a good way to earn 15% with two of those sales.

  65. shadowfax

    Albo
    Hope you saw my post to you yesterday after the close. I think Obama is doing the only thing he can, generating presure from the people. The worst thing he can do is compromise again. I think the best way now is we go over the cliff because it will help the deficit, the big scare is BS by the crying have it alls! They just want more, hopefully their greed will be their demise.

  66. phil

    FAS Money – Looks like we're on the button for a worthless expiration on the today $107.50s but still .20 with FAS at $106.81 and hours left to trade.  I want to wait and see if we can pop $16 on XLF next week before selling any more calls.

    $25KPs:

    • SVU – So annoying.  Will wait for next week.  
    • XLF – On target
    • FAS – On target
    • AAPL – The today $560s have to come off the table, now $24.50 and you can be fancy and call it a stop at $26 and see if we get lower but not worth messing around too much with.  
    • TZA – I still like those for weekend protection as we're pretty bullish
    • QQQ – Time to roll the 10 today short $63s ($2.80) to 20 next week $65.50s (now .75) 
    • QID – Don't really need that and TZA but we'll hold for weekend.  

    AAPL Money – Same adjustment as $25KP, we have to close out those $560s today for $26 or less. 

     

  67. phil

    DIS/Rperi – Not particularly cheap right now but the play is fine if you want to begin accumulating.  I would just sell the 2015 $45 puts for $5.60 and the $45 calls for $8.20 so you net in for $35.60/40.30, which is a nice 20% discount if 2x is put to you and you make $9.40 (26%) even if called away at $45 (10% lower than we are now) and you still get your dividend (just .60 actually).  

  68. biodieselchris

    If I had any capital I would be accumulating AAPL calls on dips like today. As it stands I have some Dec 605, 615, and 620's so I'm just sticking with those for now.

  69. albo

    Phil – You're probably right.  But shouldn't we try to solve this nations problems instead of just trying to give the other party a black eye ?  And isn't it the President's responsibility to lead and not just cheerlead.  That's what Biden et al are for.

  70. Inkarri19

    Hello ALl – Okay, so I'll assume that the $1.6T is spread out over 10 years(even though I've read language saying it is an "up-front" amount) and that the $400B in cuts is also spread out over 10 years.  This coupled along with $50B in increased spending on infrastructure gets us to $70B in increased revenue next year.  That covers a few weeks worth of borrowing.  I can't see how that is serious by any extent.    Just my opinion.

  71. biodieselchris

    I'm also accumulating VXX long term Jan15 puts whenever i can. If you have patience this is a very good, stable ROI. The decay kills these idiotic funds even when the VIX goes nuts. 
     
    (and for me this ties up capital so I don't gamble it away — so not a bad two-fer for me!)

  72. albo

    We need compromise ala Reagan and Tip O'Neill, two disparate phiiosophies for sure.  Stop all this divisiveness already !
    Sorry, this is fodder for after hours.

  73. shadowfax

    Republican compromise
    Give an inch, take a mile!

  74. 1020

    I'm not sure what people see when talking about compromise. I consider Obama to be at the right of Reagan and the republicans can't stand him. As a liberal, I have yet to see anything more than my kid's ability to get heathcare coverage.
     
    The main sticking point is going back to the same tax rates as under Clinton and with some non-elected jackass named grover that many are beholden to, I can't see any way to compromise.
     
    boehner may only be worried about having the support to be re-elected Speaker of the House, otherwise, he can lead quite a few on the right to accept the deal. GET IT DONE MR.SPEAKER!!!!

  75. stjeanluc

    VXX / BDC – That's my "Die VXX" portfolio. I think that you get the best return for your investment with the Jan 15 20 puts. You know that they will be worth $10 by then and they are $6.95 now. That's a 30% return in 24 months almost guaranteed! 

  76. stjeanluc

    And by the way 1020, if I were the Dems or Obama, I would not agree on any plans with the GOP unless they deliver 80% of their ranks for the votes. Because like I said yesterday, they'll turn around in 2014 and blame the Dems for higher taxes and entitlement cuts. But if they vote for them, can't do that anymore.

  77. scottmi

    AAPL – nothing very bold about AAPL today.

  78. stjeanluc

    Sign me up for that job:

    http://www.latimes.com/business/la-fi-ports-labor-20121130,0,2659465,full.story

    Stephen Berry, lead negotiator for the shipping lines and cargo terminals, said the clerical workers have been offered a deal that includes "absolute job security," a raise that would take average annual pay to $195,000 from $165,000, 11 weeks' paid vacation and a generous pension increase.

    I am generally pro-union, but that's pushing a bit far there…

  79. 1020

    stjeanluc – That is why I like the idea of going past the deadline, then lowering taxes on everyone other than the top 2%.
    The right and the left can then take credit, with neither side becoming the "bad guy"
     
    Oh, and can we flip a coin to see who gets the "clerical" job?….. :)

  80. stjeanluc

    Cliff / 1020 – That's probably what's going to happen now… Same thing for the cuts – it was automatic so no one is to blame. I still can't believe that the GOP would not fight harder to avoid defense cuts!

  81. boltdude

    SVU – not a single mention today of this albatross?  Oops, I mentioned it.   Sorry!
    Yes, I'm slightly annoyed with this one today.  Could be worse, obviously.  I've managed my cost basis down to 2.60, currently trying to buy-to-close my Jan14 $3.50 covers, so I can sell more on the next pop up (hopefully).  Yes, that's me on the ask with 60 contracts at .15.  
     
    Phil – do you see a problem with the above approach?
     
    So, can we talk about the worst case, bankruptcy?  I see negative book value and declining cash flow, both of which make me wonder why anyone would buy SVU.  Do we have anyone on these boards that could give an educated opinion after looking at their financials?  Is it a significant risk, or are fears overblown?

  82. shadowfax

    STJ Berry
    It is those types that make the rest look bad, that is more than 98% of the people get paid. They should be left out in the cold, paper pushers!

  83. stjeanluc

    This chart will tell you all you need to know about the strength of the rest of the world:

    http://www.bespokeinvest.com/thinkbig/2012/11/30/performance-of-sp-500-international-vs-domestic-stocks.html

    With that consideration in mind, using our Database of International Revenues, we have grouped stocks in the S&P 500 into two distinct groups.  The first basket, called Domestics, generates all of its revenues within the United States/North America.  On the opposite end of the spectrum, all stocks that generate more than half of their revenues outside the United States are included in the Internationals basket.  Based on this criteria, the Domestics basket contains 121 stocks while theInternationals contains 122.

  84. 1020

    stjeanluc/defense  That's the only reason they cave…..
     
    "Mr. boehner, Mr. LMT on the line….."   Oh Yeah….. :)

  85. zeroxzero

    It's bothering me that U.S. equities are struggling today with a weaker dollar.  Germany's weakening, and I have already expressed my opinion various times that France will be Ground Zero for the break in the Euro dam.  Timing, who knows,  but if the U.S. Administration and Congress get past their little diffferences, a soaring dollar could make a mess of the year end stock picture.  I don't have a contingency plan, unless anxiety counts.

  86. 1020

    zero – anxiety only counts if accompanied with a fetal position….. ;)

  87. Pharmboy

    HITK/qc – from the chart, sure.  But that is a moster move now, and they are at support. 

    GSK/j – I would go for the 35s at 3.4 and see if they fill.  Don't give up on more.

  88. Pharmboy

    IF CHTP can break $2, we have something!

  89. phil

    Solving problems/Albo – Well, if you consider the number one problem facing this nation to be a Republican Congress, then your point of view is slightly different.  The President has done exactly what he said he'd do and it's exactly what he proposed last year and exactly what he ran and was re-elected on just a few weeks ago and now he is going around to the voters to remind them that the need to remind their representatives that there is another election in 2 years and they need to get off their asses and come to the table or they will be held accountable for their failure.   Sounds like leadership to me. How do you think Roosevelt or Lincoln or Kennedy got things done?  Not by sitting in the White House playing footsie with opposition leaders in private meetings.  They go out and take their case to the people and create an environment in which they are able to push their programs forward.  

    Not serious/Ink – It's all a total joke if you don't address Corporate Taxes anyway.  

    Shipping jobs/StJ – That's the AVERAGE?  That's better than being a baseball player.  Doesn't sound right although maybe as it's just 800 specialists who seem to have an important job.  

    SVU/Bolt – Up 4% today.  Now they need to string them together.  I doubt they go BK but they might have to restructure at some point and that won't be pretty but supermarkets are constantly about to go BK – A&P has been doing it since I was a kid…  They have 2,000 properties and book them at $6Bn under "property, plant and equipment" so $3M each plus they service another 2,000 independent franchises so it depends if you think you can recreate all that for $1.5M per store but, then again, the whole company is only valued at $508M despite paying down $1Bn of debt over the past two years.  People bailed on them because they stopped paying their dividend but they stopped paying their dividend to pay down the debt so it doesn't make much sense to start complaining about the debt now, when that's what they're addressing.  

    Domestics/StJ – That makes plenty of sense. 

    Anxiety/ZZ – That's why I like the hedges over the weekend.  I'm a bit worried we get a quick dip next week.  

    OK – I have to go back to do all those tests I did at the doctors last Friday because something went wrong with their DVD recorder or whatever.  Real pain in the ass.  Hopefully we flatline into the close so no drama.  

    Have a great weekend all, I'll catch up tomorrow.  

  90. shadowfax

    Plil
    In any other field the retesting would be free because it was their fault, bet you get billed twice for everything.

  91. kinkistyle

    SVU/Bolt:  I watch the SVU bond prices to make sure everything is OK because as long as they can service the debt, the trade is "working.: https://fixedincome.fidelity.com/ftgw/fi/FIBondAnalytics?displayFormat=TABLE&preferenceName=&cusip=868536AT0 
     
    The seem to be trading close to par ranging anywhere from 90-95 so not bad.  Bond investors have not bailed on them and that is all that matters.

  92. lol730

    And oil today is up? Because? Just for no reason

  93. sank1

    FAS Short Calls,
    Could anyone comment on how things work at expiry? For example, we are short the today FAS $107.50 Calls. While FAS is currently trading at $106.25, and so we should have a good chance of the position expiring worthless, what happens if there is some kind of news after 4:30 pm and after-hours FAS goes up to $110? Technically, the options are supposed to expire tomorrow, correct?
    So, in such situations, does it make sense when the short options are as low as they are now ($0.08) to just close out the position?

  94. albo

    Hope all goes well, Phil.
     
    Sold the other 1/2 of DRWI.

  95. 1020

    albo – nice job on DRWI…..

  96. wappler

    stjeanluc/Die VXX,
    I remember you talking about this earlier in the month, but apparently I missed the actual VXX trade.  What does it look like?

  97. stjeanluc

    FAS / Sank – It's really up to you, but your scenario is really low risk… On TOS you can close options below $0.05 with no commission so maybe that solves your problem if you are worried.

  98. jerconn

    Phil, I want to go into INTC as a long term dividend play – I know we're not thinking highly of them at the moment but I anticipate they'll recover, they're too dominant in the sector to just melt away – but how would you recommend a buy/write at this point?  I was thinking of just selling the Jan '14 $22 puts…thanks in advance for your advice…

  99. 490union

    Pharm…Is CRME basically toast,or is there any light down the road? THX

  100. stjeanluc

    VXX / Wappler – The idea is that VXX has been basically reset every 20 months over its life so far – that's twice now. And we have gone through big moves in the market so it seems reliable. And they usually do it when it reaches about $10. My thinking is that Jan 15 20 puts stand a good chance of being worth $10 when that happens (maybe even higher depending on what happens between then and now). They sell for around $6.90 now. You do the math. I start with one contract and add more if and when VXX spikes… Not an exact science, but a good chance at winning. Even if you have a big VIX spike toward the end, VXX will be toast by then. And go small… I would not bet the kids college fund!

  101. stjeanluc

    FAS / Sank – Actually, weeklies expire on Friday….

  102. shadowfax

    For all those power hounds in the group the Teton Mountains are to get 40 to 50 inches of snow, mostly tomorrow. The first wave is 50 miles away and 40 degrees at my house before the cold front. Jackson Hole should be empty Sunday for the few that will get here, bring a snorkel.

  103. sank1

    Thanks, stj.

  104. albo

    1020 – Thanks, pure spec based on the chart.  Got lucky.

  105. 1020

    Shadow – Some of the best skiing in the world. Did a couple of seasons in the early eighties…..

  106. rexx

    BDC/ Philosophy?  Republicans haven't had philosophy since Eisenhower.  They are just shills for corporations and the selfish.

  107. Pharmboy

    CRME – not something that I know much about, but CV is a VERY hard space and takes body bag trials….if you are in them  now, just wait. otherwise, I would rather have GTHP.

  108. Pharmboy

    Now that is a Bohner…..literally.

  109. Pharmboy

    Must have been a fast acting Viagra…wearing off already.

  110. stjeanluc

    Of course, you would have done well closing at $0.09 sank…. What a BS finish!

  111. stjeanluc

    Or not…. Even more BS on FAS!

  112. shadowfax

    1020
    My last day of sking was March 3, 2001, 2 days before the crash, had season passes back through your time around here.

  113. sank1

    FAS / stj,
    I did go ahead and close out the short calls at $0.09 at 15:35. Glad I didn't have to go through the ridiculous vacillations toward the end. :-)

  114. shadowfax

    There was some serious selling into the close, I am holding QQQ Dec 22 puts expecting lower levels by Wednesday.

  115. sank1

    Weekly Options Expiry / stj,
    You're right. They expire on Friday either at 4:00 pm ET or 4:15 pm ET. While FAS, GLL, TLT etc. close at 4:00 pm, others like DIA, EEM, IWM, QQQ, SPY etc. close at 4:15 pm.
    Wonder when the monthlies close…. do they close on the Saturday am or have they switched those as well to Friday pm if weekly options are available on the underlying?

  116. shadowfax

    1020
    Mixed snow rain 38 dropping at 7,000 feet 2 PM. This could dump 7 feet at Grand Targhee, 50 inches is at 6,500 feet. I have the plow on the truck in the garage, chains?????

  117. stjeanluc

    EXpirations / Sank – Monthlies are still on Saturday.

  118. albo

    Phil – I don't think Obama is showing leadership by trying to put pressure on the Republicans.  He's not going to change the opinion of their constituents, he's just entrenching his base when he should be bringing the two sides together.  He doesn't have to make sure that the Republicans take the blame for the tax situation.  They are already wearing that issue and public opinion is solidly behind him.  You don't get a deal by playing footsie with the opposition leaders, you get a deal by bringing the two sides together to solve this problem for the country.  This problem belongs to all of us, our children and our grand-chlidren.  So far the Democrats are burying their heads in the sand regarding the entitlements issue.  Don't care for that term, what we're really talking about is making some serious changes to Medicare and Medicaid, and to quit spending more than we take in.  We need to take in more and spend less.  Pure and simple.  Both sides are at fault, that's why I said a pox on both of their houses.
    Hope everything went OK at the Doctors.  I love hearing your views since they are well-thought out and well-stated even if I frequently don't agree.  Have a good weekend.  I'm tired of bloviating.  …and BTW thanks for all you do !

  119. zeroxzero

    albo:  I tend to agree that Medicare and Medicaid seem to have sunk below the horizon in the afterglow of the Obama victory.  Arithmetic is, however, non-partisan, and it doesn't work.  Either Congress will have to outlaw junk food or exclude from coverage anyone with a BMI over 30 or they will have to become bother reasonable and creative in a hurry.
     
    Shadow:  Great news.  Last year I used my water filter for the first time in 29 years of hiking the Wasatch Range — the snow rivulets dried up all the way up to 11,000 feet, and I was reduced to filtering green pond scum and hoping the damned thing actually worked [it did].  I realize the Tetons aren't close by,  but any sign that the U.S. might not suffer another record drought next year is to be welcomed.

  120. zeroxzero

    Correction: "both", Freudian slip.

  121. lol730

    VXX – I was shorting VXX calls during downturn last year. VXX skyrocketed from $20 to over $50.
    Eventually it all resolved.
    But in between it was VERY margin extensive.
    In fact I had to roll from September to 1/2 of Jan much lower strike, because I was out of margin.

  122. shadowfax

    Zero
    Unfortunately big water is not in our long range forcast. I think they are wrong this year because we are more or less in the middle of of the nin-either way. Last 2 times we got our share late and that does good things for the center grow states. My freezer of cheap meats is in need of a refill next year. Big grass in WY equals nice organic meat for less. Healthy but somewhat wild tasting so the masses don't like it much. Maybe someone will help with an elk next year, I can find and hit one for half to any helper.

  123. biodieselchris

    VXX -  buy Jan15 puts and sleep easy. Forget the margin
     
    Rexx – I read that as "shelfish," was like, 'since when did the GOP care so much about seafood…' LOL
     
    Albo – where statements like these stop me in my tracks is like, Oh NOW it's time to be bipartisan, because back when we wasted $2T in Iraq and Afghan (and suffered though putrid commentary like "You aren't a Patriot if you don't support President Bush and our Troops," which still til this day angers me to the core), while they also REDUCED taxes (so the war was paid for on debt we are still paying interest on), and received NOTHING in return, so OK, after all of that infantile pedantry, now it's the obligation of Obama to come in and play the only-adult-in-the-room card? Instead, consider the proven fact it is the actual pathology of the republicans that is the problem, and the right answer is to do NOTHING their horrible, twisted agenda evangelizes. Boner plays the House card because they have the house so of course that is what he is going to do. Obama never has to run a political campaign for the rest of his life. Now is the time to stop being a pansy and pull out his can of whoop-ass.

  124. stjeanluc

    Agreed on VXX BDC…

    And on bi-partisan as well… The GOP ran rough shots over the Dems when Bush was president but now it's time to be nice. It always seem to go that way with them. Fillibuster are OK when the Dems are president, but horrible the other way. Bush had a mandate with a 2% win, but Obama doesn't with a 4% win. And on and on… These guys just don't play fair so why should the Dems? For all these years they played dirty tricks with Rove and Co. and now they bitch about Chicago style politics. Too frakin' bad!

  125. albo

    biodieselchris – Easy.  It's always the time to be bi-partisan.  We have to stop playing the blame game and get on with solving our problems.  That's it for me.  Time for cocktails !   Have a good weekend.

  126. wappler

    biodieselchris,
    You are right on the mark.  All the Republicans have ever done is play 'win-loss' scenarios, so from a game theory standpoint trying to be 'mature' and to play 'win-win' is just plain foolish.  We are dealing with a party that is held hostage by the tea party folks – let's not forget how these folks were willing to let the US go to hell last August.  We're talking the Christian version of the Taliban terrorists, now sitting in the House and the Senate of a G20 nation.  We are in the middle of a cultural war and if the Tea Party folks prevail, the book burning will begin in five years. 
    Nothing new, we have seen this movie in Germany a while ago, for those who care to remember!  Chamberlain wanted to be bi-partisan as well, we all know how that turned out…

  127. stjeanluc

    A good paper from Bruce Bartlett on why a VAT might be inevitable:

    http://growth.newamerica.net/sites/newamerica.net/files/policydocs/Bartlett_Bruce_VAT_NAF_November_2012.pdf

     

    In my opinion, opposing a VAT means implicitly supporting our current tax system, which imposes a deadweight cost equal to a third or more of revenue raised  – at least five percent of GDP  – according to various studies.

    This is insane. The idea that raising taxes in the most economically painful way possible will hold down the level of taxation and the size of government is obviously false. It just means that the total burden of taxation including the dead-weight cost is vastly higher than it needs to be. If we raised the same revenue more sensibly we could, in effect, give ourselves a tax cut by reducing the deadweight cost. A common conservative argument is that holding down taxes will somehow starve the beast and automatically lead to lower spending. Not only is there no evidence supporting this belief, recent research argues that it is perverse. By reducing the tax-cost of spending, starve-the-beast theory has actually caused spending to rise. 

    Those who oppose big government would do better to concentrate their efforts on actually cutting spending. Holding down taxes or insisting that we keep a ridiculously inefficient tax system because that will give us small government is juvenile and bad for the country. If people want small government, there are no shortcuts. Spending has to be cut. But if spending isn't cut, then I believe that we must pay our bills. I think it's better to do so as painlessly and efficiently as possible.

  128. zeroxzero

    Wappler:  Well written.  The Republic party used to be "Conservative" and I voted for them.  But they transmogrified into a regressive Igno-evangelical Party,  true believers — in what exactly I'm not they themselves know.  Osama Bin Laden has proved to be the most potent force in American politics over the last decade, triggering all the latent Ethnic Neanderthalism that was apparently festering below the surface of white America.  Democratic politics was transformed into "Us" and "The Enemy," the latter of whom turned out to be anyone capable of actually reading a Bible instead of believing what some BigHair Corncob of a preacher told them it said..
     
      Casting about for "who's to blame," my own sense of it is that the world domination and easy riches that came with the U.S. "winning" WWII, the deadliest conflict in world history which destroyed both the winners and losers in Europe, between 50-70 Million people – 8+ Million Germans [10%], 24 Million Russians [27%], 6 Million Poles,10-20 Million Chinese [3-4%], up to 12 Million in India, the Philippines and Vietnam,  3+ Million Japanese, and 400,000 Americans — which represented .32% of the population.  Not inconsiderable numbers for any nation, but the impact on both population and infrastructure was very asymmetrical in respect of the U.S., as well as the effects on political organization and stability. 
     
    So America became the richest nation and most militarily powerful nation since the Romans, almost overnight.  Which had the usual corrosive effect of unearned wealth, leading from the "Greatest Generation" to "Flower Power" in one, easy, over-privileged step.  Suddenly, it wasn't happenstance, or even a hard-earned democratic political culture forged in a Revolution and then a Civil War that killed 10% of Northern males and 30% of Southern males in four years.  It was the  American birthright — no effort required.  No surprise where that has taken us — no need for critical faculties, just praise the Lord for having been born American, and pull up the drawbridge to stop those danged foreigners. 
     
    Then along comes Osama, confirming everything Americans always suspected about the outside world --the non-white, non-Christian world.  We knew all along that foreigners were the enemy [any American Indian would gladly confirm that]. Touchdown.  Wappler's right — we have seen this movie before, triggered by WWI last time. And those who don't learn from history are indeed doomed to repeat it.  Ask the Romans. 

  129. stjeanluc

    Some good quotes in the same topic:

    http://www.motherjones.com/kevin-drum/2012/11/quote-day-plan-what-plan

    It’s really amazing to see political reporters dutifully passing along Republican complaints that President Obama’s opening offer in the fiscal cliff talks is just a recycled version of his old plan, when those same reporters spent the last year dutifully passing along Republican complaints that Obama had no plan. It’s even more amazing to see them pass along Republican outrage that Obama isn’t cutting Medicare enough, in the same matter-of-fact tone they used during the campaign to pass along Republican outrage that Obama was cutting Medicare.

    and

    Republicans always seem to be outraged. It’s getting boring. They need to step up and make a counter-offer. That’s how people negotiate. In this case, they need to be specific about the spending cuts they want….But it is time to stow the Republican intemperance. It might have seemed “righteous” indignation when the GOP was deluding itself about representing a majority of Americans; now, it just seem puerile and petulant.

    Says it all….

  130. stjeanluc

    Wow, talk about have some major effect:

    http://andrewsullivan.thedailybeast.com/2012/11/how-sandy-hurt-us-1-1.html

    Screen Shot 2012 11 30 at 9 28 23 AM

     

    Hurricane Sandy had a devastating effect on employment in New Jersey and a fairly large impact on employment in New York, as well. A leading indicator of unemployment is the weekly report of new unemployment insurance claims. A spike in new jobless claims means that a large number of workers were displaced from their jobs. New Jobless claims have quadrupled in New Jersey and doubled in New York in the aftermath of Sandy relative to November 2011.

    Using these data I estimate that Hurricane Sandy displaced 150,000 workers in the first two weeks after the storm hit, with 70,000 jobs lost in New Jersey and 50,000 lost in New York. These job losses could push the November unemployment rate above 11% in New Jersey and above 9% in New York.

    And to think that some people don't want to do anything with climate change…

  131. kinkistyle

    MT:
    France and Mittal reach steel plant deal

  132. stjeanluc

    Not much going on Friday! The broader indices are riding their 50 DMA. But these are currently declining so it's not a good trend!

  133. stjeanluc

    Some important numbers next week including the job numbers in the US. Although as pointed out above probably distorted by Sandy. Also possible confirmation that the next quarter might be tough in the Euro-zone

  134. jyoti

    Is the fiscal cliff a scam?
    http://www.youtube.com/watch?feature=player_embedded&v=aZOdjgYJu_s

  135. lflantheman

    jyoti….Yes,  the 'fiscal cliff' is a scam, and most of the U.S. population has been duped in this regard.   If you think foreign countries are the only population groups being brainwashed by their leaders, think again (or begin thinking).  Humans in all countries are easy to brainwash and manipulate.  All you need are some very smart people with some ideas and agendas.   

  136. stjeanluc

    Crazy bid/ask spread on the DMND option so tough to get a correct price.

    SVU and HPQ digging out of a hole. BBY making a bigger one! DECK worked out well and we had a stop on GT at $1.05 and here we are today. Do we close that one Phil?

  137. stjeanluc

    These cable bills are getting out of hands and mostly to give money to rich people employing rich athletes…

    The average household already spends about $90 a month for cable or satellite TV, and nearly half of that amount pays for the sports channels packaged into most services. Massive deals for marquee sports franchises like the Dodgers and Lakers are driving those costs even higher. Over the next three years, monthly cable and satellite bills are expected to rise an average of nearly 40%, to $125, according to the market research company NPD Group.

    I wish I could pick and choose the channels I want!

  138. stjeanluc

    And these guys are completely nuts now… They can't win elections anymore so might as well destroy the place behind us!

    http://livewire.talkingpointsmemo.com/entry/boehner-raising-debt-limit-will-always-come-with

    Congress is never going to give up this power. I've made it clear to the president that every time we get to the debt limit, we need cuts and reforms that are greater than the increase in the debt limit. It's the only way to leverage the political process to produce more change than what it would if left alone.

  139. tommyt

    hi phil,
    would the recent hpq double down be a candidate for following approach
    the best way to trade our picks is to wait for the ones that go against us
     and we decide to DD on or roll – THAT should be your initial entry and you’ll be 20% ahead of the game!\
    tommyt

  140. kinkistyle

    GT/StJean:  No kidding, so are we closing that position in the Income Port?

  141. rexx

    "Entitlement reform" is also a scam.  People have paid for it; and now the Republicans want to take it away.

    They do the same thing at the State Level – New Jersey is one example. In the 1990s Rep Governor Christine Whitman executed declared a pension surplus – at the height of the dotcomboon.  See this article .  And – lo – now another Rep Governor (Christie) says the pensions are too damn high. Here's an article about Christie's  "reforms"

    It is the same scam.
    Whether you paid into the Federal Insurance Plans (Social Security, Medicare); state plans; or private plans, the Republicans will try to steal it from you.  When the market is high, they will cut contributions and when the market is low they reduce benfefits. 
    And note that that's how Romney created "value" at Bain.

  142. nicha

    Felix Salmon on AAPL valuation

  143. stjeanluc

    GT / Kinki – We'll let Phil decide. Maybe roll higher to a later date to collect more premium.

  144. stjeanluc

    Reform / Rexx – When they take money from the bottom 98% to give it to the top 2% it's called reform. When you take it from the top 2% to give it to the bottom 98% it's called class warfare or redistribution… And 50% of the bottom 98% fall for that.

  145. rexx

    stj – only 47% fell for it this time

  146. shadowfax

    Update from Tetons!
    I have no idea how much snow fell in the mountains but it was not the notable power, changed to rain yesterday morning.
    Based on the amount of rain at 7,000 feet it has to be more than 5 feet and everything slowed down, it should be over.
    I show yellow on the weather radar comming in the next hour and this is backed up to the Pacific. By tomorrow I doubt an uncovered rock and the trees will be looking short. This can't miss as a good snowpack for next years rivers. This is at least a months worth of water up there when usually this time of year is dry.
    GOOD BY DROUGHT IN THE NORTRHERN ROCKIES!!

  147. shadowfax

    Timy G was optomistic this morning but made clear that the reps need to put out a plan that works. They still refuse to accept that the Bush tax cuts for the rich cost more than intitlement cuts so no gain without pain. I find it interesting that taxs are revieled by year and cuts are by ten year. Do they really believe that most Americans don't know that the conversion is add a zero! 82 per year is more than 790 over 10 years!

  148. shadowfax

    Latest is the only way east from here is closing because avalanches (more than one) have covered the road. Thunder and lightning, 1 to 2 feet more tonight, wind up to 60 mph! So global warming is a myth, NJ super storm, this is normal here, but this is not out of the ordinary or what science knows to be true. With enough tax cuts this will all go away, non-believers need to contact Boehner, Romney, or any tea party member for the true story.

  149. stjeanluc

    So far, it looks like Obama is standing firm and Boehner is not used to it:

    http://talkingpointsmemo.com/archives/2012/12/there_will_be_hilarity.php

     

    As we should expect from all players in this standoff there’s an element of playing to the bleachers. But what’s unmistakable in this case is some level of genuine bewilderment. Boehner and Co expect and are accustomed to President Obama kicking off negotiations with an opening offer that seems like something the two sides might eventually agree to after a lot of hard negotiating — and then going a little further in the Republicans’ direction. In other words, they’re used to an opening gambit that goes something like 70% or 75% toward the Republican position.

    Only now President Obama’s proposal is basically what he just ran on in his successful reelection campaign. And it’s got Boehner et al. flummoxed. (Adding to Boehner’s agida no doubt is the fact that he probably couldn’t deliver House Republicans for any deal.) This turn of events has left Boehner in the comical position of declaring negotiations at a stalmate without yet having said what his party’s position even is. They won’t present a counter-offer because in a real sense they don’t have one.

  150. stjeanluc

    Global warming / Shadow – It's a myth… There has been 24 papers denying that it's a factor:

    http://www.desmogblog.com/2012/11/15/why-climate-deniers-have-no-credibility-science-one-pie-chart

    And only 13,950 accepting it.   :-)

  151. stjeanluc

    Not a bad year after all… except for Nat Gas, Oil, Spain, Brazil and the yen. And 2 out of these 5 are good news anyway:

    http://www.bespokeinvest.com/thinkbig/2012/12/2/recent-asset-class-performance.html

  152. stjeanluc

    And futures are zooming up!

  153. deano

    worth some reflection – and note the financial contribution:
     
    http://www.ritholtz.com/blog/2012/12/4-companies-provided-half-of-2012-earnings-growth/

  154. phil

    Hello all! 

    Hope everyone had a nice weekend.  I was told to get some rest and avoid work, so I did.  Feeling better and we'll see if it sticks after getting back to it for the next week.  

    Dollar down to 79.955 is giving us a little pop in the Futures.

    Vietnam had expanding PMI for the first time in 14 months, South Korea hit a 5-month high but still contracting at 48.2, China back over 50 for first time in 13 months – these are big deal data points driving the bull train this evening. 

    INTC/Jerconn – I'd do it as a make your own dividend play, where you just go artificial with the short 2015 $15s sold for $1.75 and you can use that money to buy the $18/25 bull call spread for $2.30 so you net into the spread at .55 for a net effective entry at $18.55 to the upside but your put-to price on 1x is only net $15.55, which is 20% below the current price.  So, rather than wait to collect 22.5 per quarter, you can sell Jan $20 calls for .55 and even if you just sell 1/2, you are way better off but you are $1 in the money with up to net $6.45 to make on the spread so you can afford to sell more aggressively each month.

    You're welcome Albo.  Fortunately the Doctors seem to have some underlying purpose to all their seemingly random pill mixed and we seem to be getting somewhere this weekend.  As to Obama's leadership – leadership is about compromise when your party doesn't have it.  When your party is in charge – then leadership is about overcoming the opposition,  It would be nice to have Obama build some sort of consensus but, as can be evidenced by the last 4 years of Congressional votes – it's not like there are any people you can actually work with as the GOP essentially votes as a block on almost all issues.  This tax pledge will be a good chance to see if they have any actual leaders left on their side or if it's just a bunch of Norquist-following ditto-heads pretending to represent the people.  

    Big Chart – Still looking like it wants to break higher. 

    Income Portfolio/StJ – I will do a review by Tues.  No on GT for now.  I don't see any reason we shouldn't expect to collect that remaining $1.05 on the short Jan $10 puts.  

    Cable/StJ – And they won't let them get unbundled either – so silly.  

    HPQ/Tommy – Yes, I think so but, as we discussed in Vegas – HPQ is for a long-term hold only.  We expect results after a multi-year turnaround that still may have more pain ahead.  

    Samsung/Nicha – Interesting chart set.  

    Pensions/Rexx – Well that's half the point of a good LBO – raid the pension funds!  They asked Willie Sutton why he robbed banks and he said "Because that's where the money is."  So whether it's Corporate Raiders or Republican Congresspeople – if there's a pension that's been funded by workers – they are going to try to take it – it's in their nature…  

    Growth/Deano – Yeah, a bit too narrow for my liking. 

  155. 1020

    Ilene – Great Article. Thanks!
    http://www.thereformedbroker.com/2012/12/02/forget-fairness-lets-talk-about-stupidity/
     
    A must read for those "corporations are people" sympathizers…..

  156. 1020

    Glad you're feeling better Phil!  :)

  157. scottmi

    Josh Brown/ilene yes great article, and this other bit about CNBCs "over coverage" of the fiscal cliff..
    http://www.thereformedbroker.com/2012/11/30/the-littlest-cnbc-fan-loves-the-fiscal-cliff/

  158. shadowfax

    Phil
    Advice is easier said than done. I have had advice up to my ears, hell that is where it comes in. I had to stop listening and think for myself or I would be dead. Best of luck with whatever you do
    .
    Then there is this which I doubt!
    http://finance.yahoo.com/news/geithner-predicts-republicans-accept-higher-140252687.html

  159. scottmi

    Music - some sweet Guitar Monsters sound from Les and Chet

  160. zeroxzero

    Shadow:  80'' in Alta so far this year, 20% lower than average.  This week nothing special predicted, 12-18'', normal non-storm conditions this week.  Annual snowfall usually 400''-700'', last year's 390'' the lowest for at least seven years back.  We have some catching up to do.

  161. zeroxzero

    http://www.cnn.com/2012/11/30/health/medicare-fraud-case/index.html?hpt=hp_t3 
     
    Excerpt: "… one of DaVita's defenses to CNN is that the federal government itself declined to charge the company with wrongdoing, even after reviewing the fraud allegations.
     
    "The government has come in and thoroughly investigated what the allegations are, and in both cases the government decided to drop it and move on," Rivera said.  Federal prosecutors in Georgia declined to intervene in the case but stated in a letter that decision "should not be construed as a statement about the merits of the case."
     
    The short-staffed U.S. Department of Justice declines to join lawsuits all the time, instead allowing private citizens who hire private lawyers to essentially prosecute for the government, Burns said.  "The U.S. Department of Justice simply doesn't have the people," Burns said. "It should have the people. I think we all would agree to that. It simply doesn't."

  162. scottmi

    T – interesting entry to consider, even for IRA account that would require full cash cover: Sell Jan 14 $30 put for anything over $1.80 and you get a year's worth of dividends up front, with a possible entry at a 12% discount to current price. At full cash cover in an IRA, boosts the 5.25% dividend to ~6% return on cash "invested."

  163. phil

    Good morning!  

    Futures still up (0.4%), Dollar still down (79.93) so all is well at the moment. 

    Josh Brown Article/1020 – Ilene and I loved that one – it's on the main page and all should read.  

    Advice/Shadow – It's all input.  I read tons of junk and some stuff I learn from – not really different when you hear advice from various people but it's just as foolish to ignore all as it is to follow all.

    Lawsuits/ZZ – Good point about DOJ.  

    T/Scott – T is in a good buy spot at $34.  A nice, conservative entry is buying the stock ($1.80 dividend) and selling the 2015 $30 puts and calls for $8.50 for a net $25.50/27.75 entry.  It's very dull but getting called away with the $4.50 in profits plus $3.60 in dividends against the $25.50 cash entry is still 32% in the first two years and, of course, THEN it starts getting interesting as you roll yourself down to another $8 over the next two years off your lowered basis.  4 cycles like that and you've paid yourself back for the stock and the rest is an annuity!  

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