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Fiscal Thursday – To Cliff or not to Cliff – That is the Question

openingimageHere we go again!

We were moving along nicely when John Boehner decided to throw a temper-tantrum if he didn't get his way and his way is now know as "Plan B", which of course, sounds like the kind of thing a 10 year-old would come up with because that's the level we're now dealing with as the GOP is forced to show America their true colors as they throw the middle class and the poor under the bus to protect their wealthy benefactors – apparently at all costs.  

Plan B has no spending cuts – that was all BS – the GOP doesn't really care about spending.  They are, after all, the ones who spent us into this deficit in the first place.  Plan B simply raises tax cuts to include people who make $1M – that's PER YEAR, not Millionaires who accumulate $1M over the course of their working lives but people who make $1,000,000 in 12 months – about $20,000 PER WEEK.

That's who the Republicans are holding the rest of the country hostage for.  Look at the chart on the right and see who Boehner wants to pay for those tax cuts for people who make $20,000 PER WEEK – it comes from cutting $650 BILLION Dollars from Social Security & Medicare as well as cutting the $425Bn President Obama would like to use to stimulate our still-struggling economy, in order to help those many millions of people who don't earn $20,000 PER WEEK enjoy a few luxuries like heat and food.  

Boehner would be a great cartoon villain if he wasn't so chillingly real.  The entire GOP could teach the Star Wars Empire a thing or two about subjugating the masses but this time they have really gone too far.  Today's idiotic vote for the GOPs "Plan B" is a colossal waste of time when we are, in fact, only minutes away from a deadline that has the potential to trash the entire US economy.  

SPY 5 MINUTE The markets didn't like Boehner's end run one bit yesterday and we went straight to Hell following his announcement in the afternoon (see Dave Fry's chart).  That's right, the GOP doesn't give a crap about investors either – fortunately we were already wary yesterday morning because we've seen them trash the economy before (on the first rejected TARP vote) and we followed through with our plan to add some protection during yesterday's Member Chat.  

Yes, it was back in September of 2008 when the Republicans, at 4pm on the day of the vote, suddenly rejected the hard-fought compromise and pushed ahead with their own "Plan B" – which, at the time, called for a 2-year suspension of Capital Gains (so they could max profits from the crash lows) and, as I noted at the time:

  • Mr. Boehner pressed an alternative that involved a smaller role for the government, and Mr. McCain, whose support of the deal is critical if fellow Republicans are to sign on, declined to take a stand. The talks broke up in angry recriminations, according to accounts provided by a participant and others who were briefed on the session, and were followed by dueling news conferences and interviews rife with partisan finger-pointing.
  • In the Roosevelt Room after the session, the Treasury secretary, Henry M. Paulson Jr., literally bent down on one knee as he pleaded with Nancy Pelosi, the House Speaker, not to “blow it up” by withdrawing her party’s support for the package over what Ms. Pelosi derided as a Republican betrayal.  “I didn’t know you were Catholic,” Ms. Pelosi said, a wry reference to Mr. Paulson’s kneeling, according to someone who observed the exchange. She went on: “It’s not me blowing this up, it’s the Republicans.”  Mr. Paulson sighed. “I know. I know.”

Daryl Cagle - CagleCartoons.com - Fiscal Cliff Counter-Offer - English - Fiscal Cliff,budget,negotiations,elephant,GOP,Republican,Economy, fiscal cliffNow it's deja vu all over again as the same John Boehner pulls the same idiotic last minute moves that crashed the economy last time.  The S&P was at 1,100 that day and looked to be bottoming out from the fall from 1,500 but this simple act, at the time, nudged the markets over another cliff and sent us down to 750 – down another 32% – within two months and most of that (to 850) came within the next 7 days.  Don't tell me John Boehner has forgotten what kind of detrimental effect this kind of BS can have on the US economy – he just doesn't care.

I said yesterday it was time to go back to being "cashy and cautious" and, in Member Chat, we hedged with DIA puts, TZA spreads and USO shorts (off the $90 line, which is available again this morning!) beginning first thing in the morning with my 9:54 Alert to Members.  

Make no mistake about it – we are, for the most part, Members of that top 1% and we are thrilled, from a market standpoint, to have the evil Boehner destroying the markets and panicking out the retail sheeple so we can swoop in and go bargain hunting with our sidelined cash.  We are the rich people that the GOP manipulates the market for.  

Unlike most of the top 1% – we just think its wrong.  Just because it's wrong, doesn't mean we won't take the free money that's being offered to us but at least we'll complain about it and I'll point out to you how you are being screwed over by the Big Boys and their GOP lackeys and we'll do what we can to try to change the system so it's more fair – but the real change is only going to happen if you, in the bottom 99%, who make less than $165,000 per year, WAKE THE F*CK UP and realize how these people are screwing you  - over and over again.  

Your life is a joke to them, your Government Health and Retirement benefits you've contributed to your entire life is nothing more than a pension fund to be pilfered in the eyes of the Republican Party.  Your job is offshorable and your security only matters if their friends can make money pretending to protect it by charging $500 for a hammer and $75 for each sandwich served to a trooper in Afghanistan – those are the Government handouts and those are what Boehner and company are fighting to protect.  This madness has to end people!  

With any luck, the World will end tomorrow and we won't have to worry about this nonsense any more but, if it doesn't, we should really think about making some changes in this country.  This morning, we got an upward revision to GDP, from 2.7% to 3.1% for Q3 and Corporate Profits jumped another $45.7Bn for the quarter, a massive increase from the $21.8Bn gain in Q2.  How do they do it?  By screwing over the workers, of course – as you can clearly see from this chart:  

Wake up bottom 99% – you are being screwed over time after time and year after year with a 12% reduction in wages as a percent of GDP since 2000 alone!  Thank you Republicans may I have another?  You friggin' suckers!  This country will never get back to prosperity as long as you keep believing that what's good for Corporations is good for America – it's simply not the case.  And don't forget, those wages and salaries INCLUDE the massive compensation given to the CEOs and the top 1% within the Corporations – if you broke that money out – you'd see that wages for the bottom 99% are at an all-time low while Corporate profits are, of course, at an all-time high.  

As I said, we're in the top 1% – this is great for us.  We'll be BUYBUYBUYing these companies that you get shaken out of and we will be hedging ourselves against the inevitable inflation that will wipe out the rest of your savings later this decade but yes, we'd like to see the system change and become more fair – but if you people in the bottom 99% can't see the need for change and keep supporting these economic criminals – then we can't help you.  

Sorry.


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  1. terrapin22

    Freeport McMoRan (FCX) is upgraded to Buy from Hold at Deutsche Bank, which believes investors will move past anger over FCX's big move into oil and gas to acceptance. The firm views the move as a leveraged financial play to engineer a higher growth rate with an exploration upside kicker on Gulf of Mexico assets. FCX +1.4% premarket

  2. stjeanluc

    Oil Lines

    R3 – 92.59
    R2 – 91.46
    R1 – 90.53
    PP – 89.4
    S1 – 88.47
    S2 – 87.34
    S3 – 86.41

    Yesterday's high and low – 90.33 / 88.27
    Daily Fib lines – 91.60/90.89 and 87.78/87.48

  3. stjeanluc

    What is incredible is to see how the GOP has managed the economy over the last 12 years and still gets any fiscal credibility. Actually, they don't have much since the only reason they still have any power left is gerrymandering. 

  4. 1020

    Good Morning!

  5. stjeanluc

    Income Portfolio news:

    BBY - The President of their Digital Unit is leaving the company (rat / sinking ship?)

  6. 1020

    Phil!  I hope your keeping a fire extinguisher next to your keyboard!!!   :)

  7. stjeanluc

    Fighting words from Phil this morning… Of course it's also possible the madness will end tomorrow along with the world!

  8. aaronc

    Phil, excellent post again. I am sharing this one on my Facebook page because I too think this madness has to end. My friends, for the most part, are definitely the 99% and hopefully one or two of the Republicans will read it. They will, of course, react negatively but it's pretty hard to defend these antics.

  9. Pharmboy

  10. lol730

    ICE bidding for NYSE. They will push small traders out of game.
    ICE recently jacked up they data fees to like $100/month on their futures.
    I wouldn't be surprised if they make data feeds for NYSE traded stocks really unaffordable

  11. Phil

    Good morning! 

    As you can see, I was kind of fed up with the BS this morning but I got it off my chest now so let's play the markets! 

    Very good upward revision to GDP trumps cliff worries for the moment but keep in mind the drama of the day ahead as the House will vote for Plan B and the Senate and Obama will reject it and it will seem like we are miles apart going into the weekend.  

    We get Home Sales & Prices, the Philly Fed and Leading Indicators all at 10 – then we'll see which way we're trending.  Not too much reaction to GDP so far and the Dollar is back down to 79.16 (and was 79.05 an hour ago) so it's certainly not holding us back. 

    Oil (/CL) has already round-tripped from $90 to $89.50 twice and I'd take a break in either direction seriously but, hopefully, we break down now that those Jan contracts have been rolled out.  Not too terrible 313Mb on order for Feb but Feb is a short month and you know they don't really want 90% of those barrels.  Total for front 3 months is "only" about 550M and that's not too much for them to deal with so I'm not too keen on keeping our oil shorts if the Dollar doesn't start moving up. 

     

    Click for
    Chart
    Current Session Prior Day Opt's
    Open High Low Last Time Set Chg Vol Set Op Int
    Feb'13 89.69 90.20 89.26 89.70 09:17
    Dec 20

    -

    -0.28 32360 89.98 313073 Call Put
    Mar'13 90.20 90.70 89.78 90.24 09:17
    Dec 20

    -

    -0.22 6119 90.46 161193 Call Put
    Apr'13 90.66 91.16 90.31 90.75 09:17
    Dec 20

    -

    -0.21 2759 90.96 64868 Call Put
    May'13 91.06 91.64 90.90 91.23 09:17
    Dec 20

    -

    -0.21 2046 91.44 74904 Call Put

    Bottom line is the Fundamentals (GDP, Corporate Profits) look good but the Cliff nonsense looks bad and tghey might take us down again.  Of course, they may announce a solution and the markets pop 2% so be careful – either way.  

    And, of course, nothing to be bullish about if S&P can't take back 1,440 and especially if Dow is below 13,300.  

  12. stjeanluc

  13. stjeanluc

  14. stjeanluc

  15. stjeanluc

  16. stjeanluc

  17. Pharmboy

    MRK – Tredaptive (Cordaptive) cholesterol treatment failed to meet its primary goal in a massive study of 25,673 patients. The drug didn't significantly cut the risk of coronary deaths, non-fatal heart attacks, strokes or revascularizations compared with statin therapy. Merck will end its bid to for regulatory approval of Tredaptive in the U.S.; the drug is sold in 40 countries and had sales of $13M in Q1-Q3.  THAT'S A BIG FRIGGIN' TRIAL!  I would not have taken that drug anyway…..

  18. palotay

    Phil – Another Great Post!

  19. stjeanluc

    MRK / Pharm – Makes you wonder why these people in the other 40 countries are taking this medication if it doesn't achieve its goals…

  20. Pharmboy

    @ 13M in revenue, not sure how many are really taking it anyway……

  21. lflantheman

    MoMo trade:   STC  10 DECK Mar 42.50 calls @ 1.70    BTO 10 OPEN Jan 42.50 calls 3.00

  22. lflantheman

    That is a typo….I was thinking about OPEN but the trade is BTO 10 SODA Jan 42.50 calls at 3.00. 

  23. terrapin22

    Phil / GLD – do you recommend any adjustment to the June '13 145/170 bull call spread from Sept/Oct?  I'm down about 10%.  no prob sitting this out.  I have 3 spreads.  maybe add a fourth here or if it hits 155 support.  hopefully it holds here around 160.  

  24. stjeanluc

    Shale oil might not be that great…

    http://www.motherjones.com/kevin-drum/2012/12/shale-oil-might-be-less-awesome-we-think

    James Hamilton recently attended a lecture by David Hughes of the Post Carbon Institute, and he passes along some hard numbers on this. According to Hughes, the average well declines about 70% in its first year and about 30% per year over the succeeding four years. In the case of Bakken, which is the biggest shale formation currently active, this means that it might well hit its expected production rate of 1 million barrels per day, but it will then decline very rapidly, down to almost nothing within a few years. The chart on the right shows just how fast the decline occurs.

  25. Phil

    FCX/Terra – I like the fact that they are diversifying.  Better than just buying more copper and gold mines.  

    Credibility/StJ – You are right, if not for redistricting – political landscape would be very different.  

    BBY/StJ – Hopefully $12 is a floor for them with all bad news baked in.  

    LOL 1020. 

    Thanks Aaron.  Made today's post immediately available to the public as I consider it important info. 

    ICE/Lol – Biggest crooks on the planet (backed by GS, MS, JPM…) will be a sad day for all if this goes through (and it's even sadder that it looks like it will).  Headline should read "Foxes buy henhouse".  

    FAS Money – Premium calming down a bit.  Long time to play out.  

    $25KPA – Glad we sold a few calls.  That's $3,000 collected.  Costs $10,000 to drop to the $510s so, once we collect $3,000 more we'll spend money to roll but only if AAPL fails to hold $520 – then we sell 3 $520 calls for $10 and roll down our longs $20. 

    $25KPM – 3 short-term short positions.  Maybe too bearish with good GDP – depends on 10 am data. 

    AAPL Money – Same as $25KP.  If we have to, we sell 3 more calls for $3,000 and roll down the long calls with the cash.  

    10 am data actually pretty good.  

    At the open: Dow +0.06% to 13260. S&P +0.09% to 1437. Nasdaq +0.17% to 3050.

    Treasurys: 30-year +0.17%. 10-yr +0.07%. 5-yr +0.03%.

    Commodities: Crude -0.36% to $89.66. Gold -1.01% to $1650.85.

    Currencies: Euro +0.36% vs. dollar. Yen -0.11%. Pound -0.2%.

    Market preview: U.S. stock futures are oscillating around zero following a data dump earlier and as the talks over the fiscal cliff hit the latest bump. The S&P benchmark is -0.1%, while European shares are green in choppy trading. NYSE soars 42% on ICE'sgenerous acquisition offer, while Illumina is +9% on speculation it might be sold to Roche. Later: Existing Home Sales, Philly Fed Business Outlook, RIM and Nike earnings

    10:01 AM On the hour: Dow -0.14%. 10-yr +0.13%. Euro +0.35%vs. dollar. Crude -0.32% to $89.69. Gold -0.9% to $1652.75.

    S&P 500 futures climb back to unchanged following the 8:30 economic reports. It's nearly the end of Q4, but the final revision to Q3 GDP is of interest as it makes that quarter first of the year where growth was greater than 3%. Most of the bump looks to be from inventory buildPersonal consumption is actually lower on today's report than the initial estimate. The 10-year Treasury yield is unchanged at 1.79%. 

    December Philly Fed Business Outlook: +8.1 vs. -3.0 expected, -10.7 previous.

    More on the big beat for the Philly Fed Index: It's the highest read since April, led by a jump in New Orders to +10.7 from -4.6, and Shipments to 18.3 from -6.7. Employment goes positive for the first time in 6 months, rising to 3.6 from -6.8. Stocks take heart, the S&P 500 back to flat after a red open.

    Nov. Leading Indicators: Leading Index -0.2% to 95.8vs. -0.2% expected, +0.2% prior. Coincident Index +0.2% vs. +0.1% prior. Lagging Index +0.4% vs. +0.3% prior.

    The percentage of bulls in the AAII Investor Sentiment Survey climbs to its highest level since February, up 3.2 points from last week to 46.4%. Those bearish drop 5.3 points to 24.8%.

    The Bloomberg Consumer Comfort Index moves up to -31.9 from -34.5 last week, marking its highest level since mid-April. Though only 20% of respondents rate the economy positively, the number saying it's in "poor shape" is down to a five-year low of 33%. In a nod to timely consumer spending sentiment, 33% call this a good time to buy the things they want or need which isn't that far off from historical averages.

    "Did the Fed just tighten," asks BAML's Michael Hartnett, with a contrarian take on the decision to tie rate hikes to the unemployment rate. Previously, the Fed had promised ZIRP until late 2015. But what if headline unemployment falls to 6.5% before then? Hartnett notes bond inflows reversed into the largest outflows in more than a year in the days following the Fed announcement.

    Gold and silver slide again in a big late-year sell off taking on a curious resemblance (III) to the price action at the end of 2011. Followers of the precious metals hardly need to be reminded that bear market ended on the last trading day of the year, and was followed by a big bull run in Q1. GLD -0.9%SLV -2.3% premarket.

    After Mario Monti's 2013 budget gets the blessing of Silvio Berlusconi, the Italian Senate approves it, paving the way for the lower house of parliament to do the same. Once the budget is sealed, Monti has promised to resign the PM's post, with an election to be called early next year. EWI +11% YTD.

    Greece subdued, the IMF moves on to Cyrpus, demanding that country default before allowing a bailout. The government last night approved a depressingly familiar series of austerity measures, but it won't be enough for the IMF, which wants a debt haircut. "The situation in Cyprus is much worse than it is in Greece."

    October FHFA Housing Price Index: +0.5% M/M vs. consensus of +0.4% and flat in September.

    Housing prices rose 0.6% in November, according to Zillow, the 13th consecutive month of appreciation. Prices are up 5.2% Y/Y, the biggest annualized gain since August 2006"s 6%. Check foreclosure re-sales – 12.4% of all sales, down 3.8 points from a year ago.  Rents continue to grow, up 4.5% Y/Y.

    Dude, where's my margin? Despite its overall selling price increasing 14% Y/Y (earnings earlier), KB Home's (KBH) operating margin (adjusted) barely budged, growing just 10 bps to 15.2%. Check out the price of lumber over the last year. Shares -1.3% premarket.

    Cleveland Research downgrades Target (TGT -1.8%) to Neutral from Buy on valuation concerns and in light of the firm's channel checks showing the retailer is seeing sluggish December sales trends.

    Tesla Motors (TSLAisn't likely to post a quarterly profit anytime soon, according to John Shinal. Despite a tweet from Elon Musk indicating a cash flow positive week earlier this month, the automaker's cash flow and Q3 loss of $111M tells a different story. The real test comes when Q4 numbers are reported, most likely in February.

    Forbes contributor Igor Greenwald castigates Bill Ackmanfor shorting Herbalife (HLF -1.4%), accusing him (and David Einhorn) of possible "Look at Me!" self-promotion to "induce a desired result simply by attaching their name to it." Greenwald wants Ackman to "explain how a 'pyramid scheme' lasts 32 years without an army of disabused and dispossessed latecomers … clamoring for refunds," not to mention HLF's stellar financial performance. (Ackman is giving his reasoning now at the Ira Sohn conference in NYC.)

    SodaStream (SODA) could see a margin boost in upcoming quarters, according to Oppenheimer. A port closure in New Jersey and outsourced manufacturing are only temporary events, while an increase in its marketing spending could lead to growth down the road.

    Dell (DELL), H-P (HPQ), and other PC OEMs have pushed back the launch of Windows 8 Pro tablets running on Intel's (INTC) Z2760 (Clover Trail) Atom CPU to January. The Z2760 consumes much less power than Intel's Ivy Bridge CPUs, and is pivotal to the efforts of PC vendors to make a dent in the fast-growing tablet market as PC sales slump. And judging by recent comments from Acer, they could also give a lift to ASPs even if they don't boost total unit sales much.

    RIM's (RIMM) FQ3 results are due out after the bell, withanalysts expecting that its loss per share narrowed to $0.35 from $0.45 last year while revenue fell 8.6% to $2.65B. The company's in a bit of a holding pattern as it prepares to launch BlackBerry 10 in H1. RIM's 80M subscribers in FQ2 is giving cause for optimism that BB10 can succeed, says BGC analyst Colin Gillis. 

    The Apple (AAPL) vs Samsung (SSNLF.PK) patent war continues its back and forth, with the European Commission set to charge the South Korean company "very soon" and issue it with a statement of objections as part of an investigation into whether the company breached antitrust rules through its use of injunctions against Apple (AAPL). Yesterday, Samsung won a victory on the Western front.

  26. stjeanluc

    That GOP Plan B sure is a winner for the bottom 99%:

    http://www.washingtonpost.com/blogs/wonkblog/wp/2012/12/19/john-boehners-plan-b-would-raise-taxes-on-the-poor/

    The working poor, on average, would see taxes go up between $1,000 and $1,500 dollars. Barely anyone making over $100,000 would see a tax increase, and as a percentage of income, middle and upper middle class people making between $40,000 and $100,000 a year would see taxes go up less. But low income families earning $10,000 to $30,000 a year really take a beating under Boehner’s plan. Of course, if we do nothing, then the 2001 provisions expire as well and poor families are really in for a bruising.

    I just don't know how these people sleep at night….

  27. Phil

    Thanks Palotay.  

    MRK/Pharm – Really hammering them – possible overreaction given the relative sales?  

    GLD/Terr – We were discussing that on a CC for the hedge fund and decided to see if $1,650 holds up.  So far, not today but it's a long play with easy adjustment so I think give it the weekend.  Essentially, we're focused on the fact that the $145s are still $16.50, which is more than we paid for the spread originally and we can preserve that money by rolling to the Jan $145s at $20 for net $3.50 and surely we'll be able to sell more than $3 worth of calls over that extra 6 months, not to mention adding more cover when we are ready to roll the short June $170s (still $3) so that's the gist of the plan – along with probably selling something like the Jan $160s for $2 – even a 1/2 sale pays $1 towards the long rolls in the first month, right?  

    Shale/StJ – Yes but that's after recovering about 2Bn barrels of oil – that's the nature of the business but the expectations do take that into account.  

    Good chart StJ.  People need to be made aware of these shenanigans.  

  28. dclark41

    Phil:
    Is the move down in precious medals a foretelling a move back into equities and away from safety?

  29. Pharmboy

    MRK/Phil – Collossal waste of money for a 'drug' (it's really a vitamin – niacin) that is OTC, with another 'branded' drug that only reduces flushing from the side effects of niacin…

  30. stjeanluc

    Phil – Reading your comments about the big charts this morning I was thinking that as much as it can give us some indication of where we are, we are at this moment in a pretty simple situation:

    Fiscal Cliff deal – Bullish
    No deal – Bearish

    These guys in Washington are basically stringing along the markets right now and fundamental or technical analysis doesn't tell us much where we are going to be by Jan 1. Investing right now is akin to a coin toss with the difference that a smart trader can hedge one side or the other (or both) while the retail investor is just on for the ride.

  31. 8800

    Phil,
    What's your thinking on a TIPS position in our eventually inflationary  future. I realize timing is difficult but TIP does pay 4.41%. Buy -write, etc? Upward 200dma @120.50.
    Thanks

  32. rj_jarboe

    Phil,
    I agree with aaron, sometimes the morning posts alone are worth the price of admission.

  33. Phil

    Metals/DC – Yes, there's a general risk-on sort of rotation going on and it's only held up by cliff worries.  If we get rid of that, we can really pop but now no one is really expecting the cliff and that too is dangerous.  

    MRK/Pharm – I don't care about the drug but it seems to me it isn't big enough to move the needle on MRK, is it?  They already bounced off $42 but still down 2.5% on the day seems a bit much. 

    Simplicity/StJ – I agree with that.  We're right there on the edge of the cliff and ready to be pushed either way.  

    TIPS/8800 – I don't like TIPS.  Once inflation kicks in it will be massive and long-term and you can do way better with long call options than you'll do with TIPS.  2 years ago we did "Secret Santa's Inflation Hedges" and those made 100%+ – a bit better than TIPS will do for you.  I didn't do them again for this year because we didn't think this would be an inflationary year but either end of 2013 or 2014 we should start getting some action. 

    Thanks RJ.

  34. stjeanluc

    The entire world is close to being overbought now:

    http://www.bespokeinvest.com/thinkbig/2012/12/20/the-world-is-overbought.html

    Below is a snapshot of our most recent ETF Trends report, which is available on a daily basis to Bespoke Premiumsubscribers.  In the report, we provide a "Bespoke Trend" and "Bespoke Timing" score for each ETF, which allows investors to quickly see whether it's a good time to take a short-term or long-term position.  The "Bespoke Trend" score shows whether an ETF is in an uptrend, downtrend or sideways trading pattern, while the "Bespoke Timing" score analyzes entry point opportunities based on overbought/oversold levels.  While an ETF may be in a long-term uptrend, if it's extremely overbought, it's best to wait for it to pull back a little, hence a "Bad" Timing score.

  35. stjeanluc

    You probably should not read these end of year stock recommendations that all the financial magazine publish at this time:

    http://www.ritholtz.com/blog/2012/12/10-stocks-to-last-the-decade/

    For example - Fortune: 10 Stocks To Last The Decade

     

    August 14, 2000

    1. Nokia (NOK: $54)
    2. Nortel Networks (NT: $77)
    3. Enron (ENE: $73)
    4. Oracle (ORCL: $74)
    5. Broadcom (BRCM: $237)
    6. Viacom (VIA: $69)
    7. Univision (UVN: $113)
    8. Charles Schwab (SCH: $36)
    9. Morgan Stanley Dean Witter (MWD: $89)
    10. Genentech (DNA: $150)

    Closing prices December 19, 2012:

    1. Nokia (NOK: $4.22)
    2. Nortel Networks ($0)
    3. Enron ($0)
    4. Oracle (ORCL: $34.22)
    5. Broadcom (BRCM: $33.28)
    6. Viacom (VIA: $54.17)
    7. Univision ($? )
    8. Charles Schwab (SCH: $14.61)
    9. Morgan Stanley Dean Witter (MWD: $14.20)
    10. Genentech (Takeover at $95 share)

    That worked out well….

  36. biodieselchris

    Phil – good morning post. Agree on TIPS/inflation, but waiting is the hardest part!

  37. stjeanluc

    That was of course at the top of the Internet bubble, but shows that forecasting that long in time is somewhat foolish…

  38. Inkarri19

    Morning – StJ – Taking Phil's post into account, it would seem forecasting seems foolish period.  The new normal I suppose. 

  39. Inkarri19

    PHYS and PSLV – Does anybody hold these?  I was looking and they seem to be trading at a slight discount to their NAV. 

  40. randers1

    Does anyone else find it interesting/ironic/sickening that Cerberus Capital, the private equity firm that owns “Freedom Group” the maker of the Bushmaster AR-15 rifle used in the last two massacres is named after the mythical Greek three headed devil dog that guarded the gates of hell? Cerberus did announce they intend to sell the gun company;
    http://dealbook.nytimes.com/2012/12/18/cerberus-to-sell-gunmaker-freedom-group/

  41. zeroxzero

    "Unlike most of the top 1% – we just think its wrong." — PSW
     
    http://goodcomics.comicbookresources.com/2011/08/26/comic-book-legends-revealed-329/
     
    Actually, one doesn't need to be related to Mother Teresa to understand PSW's logic, which does not require any moral premise: if 99% of U.S. citizens have declining real incomes, even the reviled 1% will go broke eventually, because there aren't enough of them to consume what a consumer society-based economy needs to function.  But since it is almost Christmas, you may take this as a wan attempt at humor during an otherwise rather depressing market day.

  42. stjeanluc

    Forecast / lnk – Actually you could do it but for 10 year forecasts you might want to stick with companies that have been around more than 10 years… For example, in August 2000 IBM was trading at $120! MO was at $7.50. INTC was at 22 so at least you didn't lose money! And so on… 

  43. 8800

    Phil,
    Thanks for the TIPS perspective

  44. albo

    Started a small (very small) position in GLD calls.  Pure spec, chart looks horrendous.  Talk about catching a falling knife ! !

  45. newt

    Can some one pls verify prem on next week AAPL $530 calls?  I am working remotely today. I see $24.15. 
    Thanks. 

  46. stjeanluc

    AAPL / Newt – $6.98

  47. aaronc

    INK/PSLV – While I don't own either, I have a lot of respect for Sprott, he knows his metals. I can't really speak to the NAV arbitrage you brought up but I do know this. I was holding Orko Silver( OKOFF) shares, which I actually shared on the board a month or two ago (that paid off all my trading sins for the year). They were developing one of the largest silver deposits on the planet, La Preciosa in Durango, Mexico. On Monday I woke up to the news that Orko was acquired by First Majestic (AG) for shares, the transaction was equivalent to a ~69% premium. On the conference call, the CEO of First Majestic said that Sprott was a major holder of Orko. I'm not familiar with how he owned them, but one of his investment vehicles may have gotten a huge return with that one. Speaking of arbitrage, the Orko shares are trading at a discount to First Majestic in relation to the valuation ratio that will be applied to the transaction.
    http://www.orkosilver.com/s/NewsReleases.asp?ReportID=562291&_Type=News-Releases&_Title=First-Majestic-Announces-Friendly-Acquisition-Of-Orko-Silver

  48. Inkarri19

    Thanks Aaronc!

  49. 1020

    Hey Phil!   I own TLAB at 2.96.  They are due to have a $1/share payout on Dec. 24.
     
    How do you advise limiting the losses on the shares (5k) I own?  Thanks.

  50. newt

    Stj. Thanks. 

  51. shadowfax

    zeroxzero
    In the great depression most of the wealthy went broke and guess who didn't? History repeats, ignor the past because it worked out so goog for a very small select group last time. GOP not invited.

  52. scottmi

    AAPL – Susquehanna's Caso says iphone sales to miss..his previous estimate.  Anyone know if this guy is any good, or another one of the idiot analysts?

  53. millcreek

    phil,
    holding the feb 168 c on gld and the dec 161 put which has gone against me.
     
    am thinking about rolling down to the feb 164 for .75 or so and was looking for your thoughts on how to rehab the dec 161 put.tks

  54. angelcur

    i think hedgies had huge bets on gold and are unwinding and levering long stocks in effort to catch up some into year-end…also people think paulson blowing up…… wouldn't be surprised to see it bottom next few days…i have a feeling year-end is effecting it quite a bit..this market oozes complacency

  55. Phil

    Overbought/StJ – I'm not sure we are.  If we get past our issues and the economy picks up a bit, plenty of room to grow.  Perhaps just a bit ahead of ourselves ins some countries.  As I noted yesterday – we're 3.5-9% behind the rest of the World and we're the one who just got a 10% upgrade to our GDP. 

    Interesting that VIA and DNA came closest to holding their value over the decade.  

    Dollar rejected at 79.40, back to 79.30 and helping the markets.  Gold saved at $1,640 so far and oil with yet another bounce off $89.50. 

    Waiting/BDC – Yep, it's a decades-long cycle and we have a hard time waiting for months, let alone years.  

    Cerberus/Randers – Just bad luck for them.  Smart move to get out of the business, not worth the negative PR.  I'm sure some of their investors feel very strongly about this.  

    Love that Lone Ranger joke, ZZ, interesting site. 

    10 years/StJ, Ink – And, of course, if you simply sold calls every year, you'd do a hell of a lot better!  

    You're welcome 8800.  

    GLD/Albo – It's $150 where we have real technical support (longer-term) but the weaker Dollar (than the 2012 average of 81) made me look at the higher $1,600 mark for support.  Euro still not over $1.33, Pound not over $1.63 and Yen not over (weaker) $84.50 so I think we're running into proper support for the Dollar at 79 and that's not actually good for gold as the Dollar moves back up but it will be once it stops going up.

    Silver fell to $29.84 – NOW it's attractive if it gets back over $30 (/SI), copper down to $3.53, Nat gas having a good day at $3.43 and gasoline holding up at $2.75 (oil $89.85 in a very tight channel).   Pretty good demand for nat gas: 

    EIA Natural Gas Inventory: -82bcf. Futures +1.85% to $3.38

    The gold and silver could be end of the year cashing in as we started they year at $1,550 and $27.50.  Plus there are rumors of Paulson's fund forced to liquidate some heavy commodity positions.  We'll see if this sell-off lasts.

    And what Angel said. 

    AAPL/Newt – We sold 3 NEXT WEEK $530s for $10.40, those are now $6.50 so I'm not sure what you are looking at.  

    TLAB/1020 – Assuming it's a special and your options will be adjusted too, there's not much you can do – it's not a loss, you just get your $1 cash and the stock is then worth $1 less – so what?  You could go for the 2014 $4/3 bear put spread at .60 and then you make .40 if things collapse and don't come back and, if there's an adjustment, your higher-placed put will benefit and your short caller will still lose his premium.  

    Depression/Shadow – That's right, if you know how to play a collapse, it's actually a great opportunity.  That's why the GOP is happy to crash the markets.  Their big boys like TBoone or Shelly Adelson are thrilled to take advantage of the carnage.  Let the mother f*cker burn!  

    AAPL/Scott – It's like weathermen predicting how many inches of snow will fall.  What's the difference if they got it right last time – it's still a guess that's completely out of their control.  They can make an educated estimate but there are way too many moving parts for any possible certainty.  Look at what people said about China 7 days ago – no sales, no lines, no way AAPL would sell phones without China Mobile.  What actually happened?  Blow out sales record on first weekend, double highest expectations.  

    Just because no one has any idea what the scores will be in next week's football games, doesn't stop hundreds of "experts" telling you what they will be and that doesn't stop millions of idiots paying them for their predictions because everyone wants to believe someone can see the future for them and tell them what to do so they don't have to take responsibility for their own decisions.  It's just nonsense – you may as well ask if the palm reader at the carnival knows what AAPL's numbers will be…

    GLD/Mill – I'd roll longer, gold could drop much, much further before this is over.  Those Dec $161s are now .12 so really you're just making a new bet as there's nothing left to roll.  Those things were $8.90 back around Thanksgiving and have gone down steadily since then – if you held them through all that, perhaps the last thing you should be doing is buying GLD again.  As I said above, we have Junes but they were hedged as bull call spreads and we're not even comfortable with those anymore and we're probably going to bite the bullet and pay 20% to roll to Jan but only because we're confident that we can sell more than 20% over the additional 6 months to pay for the roll.  On the whole, we're not even betting gold is going up – just that it stays in a range (over $145) that allows us to sell enough calls every month to pay for the long position.  You are taking naked, out of the money calls and being the sucker paying premium in a very aggressive upside bet on gold – not at all the same thing.  

  56. stjeanluc

    Suddenly MSFT looks expensive…

    18c3868675bf4b7e4110cea40c649c61 Thursday links:  avoiding losses

  57. aaronc

    Mother Nature is showing a flair for end of world dramatics. Just had two earthquakes here, ummm, make that three in the past hour. Not showing up on USGS. Central Coast of California.

  58. yodi

    For the more braves HLF bear call weekly 35/37.5 sold for 1.05

  59. Phil

    Boehner again.  Man, he is really milking his moment in the sun.  Bush didn't have this many press conferences in his whole two terms!  

    P/E/StJ – Such madness. 

    Uh oh Aaron! 

    HLF/Yodi – Weekly is very brave.  

    Oil popped $90 and now up to $90.33 (was $90.50).  Wasn't the Dollar, still $79.30.  Seems to be people pushing that shale story to claim oil is more scarce than you think again.  

    I love how Boehner keeps calling it a tax hike when it's the expiration of "temporary" tax cuts that were meant to be an incentive 12 years ago and clearly have done nothing at all to boost the economy – as was their stated intention.  The other nonsense he keeps repeating is how their plan is better because it now protect 99.8% of all tax payers from increases vs 98% – that was the whole point – to tax the top 2% without hurting the bottom 98%.  Does he really have an audience he is speaking to that is so dumb that they fall for this nonsense???

    Speaking of dumb – and of course, the same news as yesterday once again spooks the market. 

  60. John Eickholt

    I think it was Phil that said every penny increase in Gasoline took $1.4 Billion out of the economy 



    Some how the Wall Street Casino is still trying to bid up the price of Energy.

    Wednesday Dec 19 Gas 2.7418 +0.0509Schaeffer's Investment

    Oil futures extended their winning streak to a fourth session, rising 

    $1.58, or 1.8%, to settle the day at $89.51 per barrel.



    Wednesday Dec 19 Government Crude Inventory Report

    http://1.usa.gov/qo6dU9

    Total motor gasoline inventories increased by 2.2 million barrels last week

    and are above the upper limit of the average range.

    Wednesday Dec 12 Government Crude Inventory Report

    http://1.usa.gov/qo6dU9

    Total motor gasoline inventories increased by 5.0 million barrels last week

    and are in the upper half of the average range. Distillate fuel inventories

    increased by 3.0 million barrels last week

    But no bearish oil news from CNBC



    Nothing like the Wall Street Casino taxings the Tax Payer and Consumer.

    Wednesday Dec 5 Government Inventory Report.

    http://1.usa.gov/qo6dU9

    Total motor gasoline inventories increased by

    7.9 million barrels last week and are in the upper half of the average

    range.



    Wednesday Nov 28 Government Oil Inventory Report.

    http://1.usa.gov/qo6dU9

    Total motor gasoline inventories increased by 3.9 million barrels last

    week

  61. qcmike

    Does anybody know the difference in the COLA the rep what to change?

  62. yodi

    HLF Phil I personally think they are toast. I put in a smal play only we will see.

  63. Inkarri19

    QCMike – I think the WHite House proposed that change.  The chained CPI I believe you are referring to. 

  64. Inkarri19

    QcMike – I believe their logic is that if someone consumes steak and the price goes up, they'll switch to chicken for example, since it is cheaper.  The Pres said it won't affect the "poorest" Americans whatever that means.  Bottom line, they seem to want to keep the inflation calculation down to save money on COLA adjustments over the next ten years. 

  65. stjeanluc

    This is what I have QCMike:

    Chained_CPI

    The solution is to build a "chain" between each month's basket of goods to provide "a more realistic measure of inflation," Marc Goldwein explained. This "chained" index would offer a more accurate picture of what consumers are actually buying. But we're not just changing measures for measurement's sake. It would also save between $200 billion and $300 billion over the next decade by very, very slowly cutting Social Security and raising taxes.

  66. yodi

    Phil while Bill Ackerman is talking on Bloomberg the stock HLF is falling like a rock!!!

  67. millcreek

    phil,
    sorry i misled you earlier.  i own the feb 168 gld call and was going to roll it to feb 164..
     
    im short the 161 dec put and was going to roll to jan first week for .90…wanted to get your thoughts..it sounds
    like you think i ought to go longer out.   tks

  68. Phil

    AAPL ($25KPA and AAPL Money) – Let's buy back the short $530 calls for $7 and we'll re-sell if we have to but S&P back over 1,440 despite Boehner is a bullish sign.  Also got RUT over 850 and NYSE 8,500 and Dow testing 13,300. 

  69. Phil

    COLA/QC – Cost of living?  Not sure what you mean.  I guess Ink and StJ have the right answer. 

    HLF/Yodi – Well they are a pyramid company.  Only matters when someone pays attention so a well-timed takedown by Ackerman to goose his fund performance this year.  He is still coming at them with guns blazing though and it's certainly working.  Only thing that can kill it is if SEC person says they've already been investigated and it's a non-issue.  

    GLD/Mill – I'd roll for time, not position.  It's not about the $4 but about how long you may have to wait for gold to cycle back.   So, in both cases, longer because I very much doubt the Dollar will help you by falling to 78 or less so it's going to be a tough climb for gold, short-term. 

  70. Inkarri19

    Anybody else notice the change in laguage the last few days or so from spending "cuts" to spending "reductions"?  I heard Boehner make that change.

  71. rainman

    stj / MSFT — or AAPL looks appropriately priced.

  72. qcmike

    Thanks to all for the information on the
     
    Cost Of Living Allowance COLA  

  73. Phil

    Spirit Airlines selling $29.80 trip segments on the premise that the World will end and they won't actually have to fly you…

    1:00 PM On the hour: Dow +0.06%. 10-yr +0.08%. Euro +0.08% vs. dollar. Crude +0.16% to $90.12. Gold -1.5% to $1642.75.

    1:05 PM The Treasury sells $14B in (reopened) five-year TIPS at -1.496%. Bid-to-cover ratio of 2.7; indirect bidders take 49%. Direct bidders take 10.7%.

    November Existing Home Sales5.04M vs. consensus 4.9M, 4.76M previous (revised from 4.79M).

    More on Existing Home Sales: Sales +5.9% M/M (seasonally adjusted) and 14.5% Y/Y. Median price +10.1% Y/Y. Distressed sales accounted for 22% of total vs. 29% a year ago. Inventory fell 3.8% M/M to 2.03M homes, a 4.8 month supply – the lowest level since September 2005. Median time on market is 70 days, down from 98 a year ago. (full report)

    The average 30-year fixed-rate mortgage edged higher to 3.37% in the latest Freddie Mac survey, up from 3.32% last week but still not far from November's record-low 3.31%. The 15-year fixed rate fell by one basis point to 2.65%. A year ago, the rates were 3.91% and 3.21%, respectively.

    Shiller: Housing Hasn’t Necessarily Bottomed Yet (Pragmatic Capitalism)

    More on the big beat for the Philly Fed Index: It's the highest read since April, led by a jump in New Orders to +10.7 from -4.6, and Shipments to 18.3 from -6.7. Employment goes positive for the first time in 6 months, rising to 3.6 from -6.8. Stocks take heart, the S&P 500 back to flat after a red open.

    Fed’s $4 Trillion Rescue Helps Hedge Fund as Savers Hurt (Bloomberg)

    White House Said to Tell Business Groups Talks Stall (Bloomberg)

    It didn't happen at last night's meeting, but the BOJ is ready to set a 2% inflation target, as demanded by incoming PM Shinzo Abe. "We intend to make the decision at the next meeting in January," says BOJ Governor Shirakawa … We took into account (Abe's) request." So much for independence. After strengthening overnight, the yen has returned to unchanged vs. the greenback.

    It's called the widow-maker trade for the generation of hot-shot macro traders who've shorted Japanese bonds – yielding less than 3%, then less than 2%, then less than 1% – only to be carried out on a stretcher. But the election of inflationist Shinzo Abe has something stirring. JGB yields are up sharply (relatively speaking) in the last 2 weeks, the 10-year rising 7 bps to 0.77%

    If the U.S. jumps off the fiscal cliff, 24/7's Paul Ausick believes crude prices could dive well below $80/bbl on the belief that economic growth will stagnate, noting U.S. and Canadian producers might shut-in production knowing they can't cover costs at prices below $60. "Fiscal cliffs, rising production and slow global economic growth all conspire to make energy production a pretty risky business in 2013," Ausick writes

    Hercules Offshore's (HERO +4.6%) share price target israised to $7.50 from $6.50 at Dahlman Rose, as the firm increases its 2013 EPS estimate to $0.50 from $0.35 (consensus $0.27) and its adjusted EBITDA estimate 9% to $351M due to higher leading-edge fixtures following yesterday's fleet status report.

    Management with Darden Restaurants (DRI -1.5%) all but declared a pricing war for the restaurant sector during today's earnings call in response to its sluggish growth for key chains. While at first blush the move looks bad for the group, analysts aren't so sure. Darden is battling a PR backlash from its decision to hire more part-time workers instead of full-time employees and continues to struggle to find a way to keep Red Lobster relevant. Restaurant peers could be unaffected.

    "IBM has a unique business model that is very difficult to replicate," declares Sterne Agee's Shaw Wu, who has made the IT giant a top 2013 pick. Big Blue's success in offering integrated hardware/software/services solutions makes it a lot like Apple, Wu argues, and the fact 60% of its profits come from recurring streams provides predictability. He's also optimistic IBM's Power server refresh will boost software/services sales. Shares have been in a trading range the last 2 months after falling in the wake of a disappointing Q3 report (III). 

    Sterne Agee reminds investors that the sale of semi-automatic guns is such a small part of Dicks's Sporting Goods (DKS-0.6%) business it will unaffected by the company's decision to pull the products from stores. The Buy-rated company is taking market share from Sports Authority and will see a 4% gain in same-store sales in Q4, according to analyst Sam Poser.

    Retail real estate brokers report that more web shops are inquiring about renting space as they mull setting up brick-and-mortar stores. Not burdened down with older software and cash registers or the necessity of stocking every product in its stores, web retailers can get off easy on costs. eBay (EBAY +0.6%) is into the physical game, as it Bonobos and Gap's (GPS -1.7%) Piperlime. But still all quiet on the Amazon (AMZN +0.4%) front. 

    Pershing Square's Bill Ackman gives his presentation on Herbalife (HLF -4.2%) this morning, and Barron's Brandon Conway was there to take notes. Ackman kicks it all off by saying he is in fact short the stock, but refutes the accusation that he's pushing the shares down because he owns puts due to expire at the end of the week. He focuses instead on what he sees as HLF's questionable R&D, phony reliance on PhD credentials, and flashy sales promotions as demonstrable proof of the classic pyramid scheme. Take a look:Barron's HLF presentation notes. 

    BofA Merrill Lynch comes to the defense of Herbalife (HLF-5%) this morning, saying there's no evidence to validate the accusation that the company's a pyramid scheme. The firm notes thatHLF has one of the strongest balance sheets in the group, with the potential to drive $1 per share in EPS accretion if it were to fully exercise its $1B buyback. The stock may be pressured over the near-term until this blows over, but Merrill reiterates a Buy with a $65 target.

    Shares of SodaStream (SODA -2.1%) slip lower after aBarron's piece is titled "Is SodaStream Getting Frothy?" Despite theheadline warning, the gist of the argument from Jack Hough is that short-term volatility could be seen for SodaStream, but over the long haul investors may see their just reward.

    AMD (AMD -4.2%) is slumping, and Intel (INTC -0.5%) and Nvidia (NVDA -0.6%) are slightly off, after Evercore's Patrick Wangjoins the estimate-cutting parade, and co-worker Rob Cihra offers mixed commentary about PC demand. While holding out hope Windows 8 and China will lead demand to stabilize in 1H, Cihra notes many industry suppliers appear to have under-shipped end-user sales (which themselves aren't great) in Q4 thanks to inventory drawdowns. "Early ultrabooks have been stymied by high prices and Win8 so far looks like a remarkable non-factor.," he adds.

    Hudson Square has downgraded Research In Motion (RIMM+1.5%) to Hold ahead of today's FQ3 report: the firm thinks the risk/reward is now less compelling going into the BB10 launch.National Bank and UBS offered cautious takes earlier this week. Expect the Street to pay close attention to subscriber figures, sales to increasingly competitive emerging markets, and any commentary about the specific timing of BB10 phone launches.

    eBay (EBAY) is hoping to win the business of gold (and silver and platinum) bugs through a new partnership with bullion exchange APMEX. The eBay-hosted APMEX Bullion Center provides listings on 200 precious metal products. Meanwhile, Gartner is predicting 1/3 of consumer brands will integrate payment options into their mobile apps by 2015 – that should benefit PayPal, whose mobile volumes are soaring in part because typing a PayPal login is more convenient on a phone than typing in credit card info.

    Though Google (GOOG) has its hands in several e-commerce-related initiatives, the company isn't interested in being a retailer itself, says its VP of Shopping. The remarks come as Google digests delivery locker startup BufferBox and online coupon platformIncentive Targeting, tries to expand the reach of Google Offers, trials asame-day delivery service, and bets a revamped Google Shopping helps it address growing direct and indirect threats to its e-commerce ad sales from Amazon (AMZN). 

    Apple (AAPL -0.8%) is ticking lower after Susquehanna's Chris Caso argues recent iPhone-related order cuts (confirmed by his own checks) are due to demand falling short of expectations. "Based on what we believe has been produced since 3Q12, we don’t see any way that AAPL can meet consensus sell-through numbers." On a brighter note, Digitimes claims Apple has ramped its iPad Mini ordersafter having cut them earlier due to component shortagesCRUS-3.4%SWKS -2%. (previous: IIIIIIIV)

    Three lunchtime reads:

    1) Future production from U.S. shale or tight oil

    2) Private equity for the average Joe? It's coming

    3) How to find undervalued energy stocks: Ray Saleeby

  74. Phil

    TASR having a good day – getting ready for mass riots, I guess. 

    WFR still going up.  

    AAPL can't get an up move together – we may have to re-sell but S&P holding 1,440 keeping hope alive so far.  

  75. shadowfax

    qcmike
    I can say that I buy by price and do the switch and everyone I know doese the same. The stores buy big lots when they get a deal because they know what the masses do. I say it will hurt the poor because people are already forced to do it, doesn't start new with the change. Besides this year I got a cola raise but because medical went up I net $60 less per month and that doesn't count. Check Phil's song it has gone on too long, nothing new," Let The mother f*cker burn" or keep burning those mother f*ckers  they don't need water either! 

  76. Amalfi

    C'mon AAPL!! Move ur aaaaaasssssssss!

  77. shadowfax

    Be patient, AAPL will move in January, I am not the only one privy to unrest at the top, but numbers speak a different language!

  78. stjeanluc

    Boehner can't even get his guys to vote for his plan B unless he agrees to let poor children die…

    http://www.motherjones.com/kevin-drum/2012/12/plan-b-relieve-rich-screw-poor

    When John Boehner needs to add spending cuts to a deficit reduction bill to make his most conservative members happy, they don't want to reindex Social Security benefits. They don't want to monkey with the Medicare eligibility age. That's not the stuff that gets them jazzed up. Taking food out of the mouths of hungry children, by contrast, is something they're excited about. They're eager to reduce regulation on banks and cut back on poor people's health care. Cutting spending on the elderly is something they'll maybe consider as part of a deal with Obama. Cutting spending on the poor is their idea of Christmas.

  79. Inkarri19

    Seemed to fit…George Carlin on the state of affairs:
    http://youtu.be/Dpcd0woY2KY
    They're coming for your Social Security…

  80. qcmike

    stjeanluc 


    I agree its to bad what they have become

  81. palotay

    Interesting.  The same analyst that is claiming that Apple reduced their order for iphone components, said the same exact thing last year at around the same time.
     
    Here is the article from today:
     
    http://blogs.barrons.com/techtraderdaily/2012/12/20/apple-fyq2-iphone-sales-to-miss-consensus-says-susquehanna/
     
    And the one from 2011.
     
    http://blogs.barrons.com/techtraderdaily/2011/11/11/apple-may-have-delayed-some-iphone-production-says-susquehanna/
     
    Blatant manipulation.

  82. shadowfax

    STJ The poor do everything they can to stay poor, so much fun at the bottom.
    There is a lot of money outflow!

  83. shadowfax

    Platoay
    That would be total BS. Why? Or is someone long Samsung?

  84. millcreek

    PHIL,
     
    tks for everything. you and your family have a happy holiday.
     
    the board…..have a merry christmas and a happy holiday.

  85. shadowfax

    palotay Sorry I should have looked first, that the second brain fade of the day.

  86. Phil

    AAPL uncover not working out.  Best we could have gotten was an extra $1 so let's re-cover in both $25KPA and AAPL money with 2 short next week $520s ($11.80) and 2 short $530 calls at $7.10.  Since we already made $3 on 3, if we stop out 2 of the new ones with a $4.50 loss, it won't be a big deal.  

  87. Phil

    Jones/StJ – I like that guy. 

    Carlin/Ink – Should be mandatory for school children to memorize his speech from that day's show.  

    Manipulation/Palotay – Good catch. 

    Merry Christmas Mill!  

    Another anti-stick day with a weak finish?

    Dow volume 72M at 3:20.

  88. Phil

    Oil held $90 to the penny at the NYMEX close.  Would probably be $190 by now if ICE had gotten their way and been able to buy the NYMEX…

    3:00 PM On the hour: Dow +0.09%. 10-yr +0.02%. Euro +0.10% vs. dollar. Crude +0.11% to $90.08. Gold -1.15% to $1648.55. 

    Jim O'Neill joins the swelled ranks of yen bears/Nikkei bulls,calling for the dollar to climb to ¥100-¥112 in 2013 from its current ¥84. The cheerful Goldmanite sees 25% gains not just in Tokyo, but Shanghai (soft landing a done deal), and Madrid (cheap, and crisis over). Earlier: The BOJ allows the line between the government and the central bank to be erased.

    It sounds like master limited partnerships will be safe from budget tinkering, as the Obama administration yesterday called on Congress to approve legislation that would let investors utilize MLPs for renewable energy. The mechanism is now available only to coal, gas and oil projects, and has been instrumental in funding U.S. pipeline construction.

    $12.5B loan package slated to back Freeport McMoRan's (FCX -0.4%recent big acquisitions reportedly is facing significant pushback, as banks invited to participate at the top tier level of syndication are finding the share of the bridge loan FCX and its lead banks are offering them too small. The second tier's hold level of the bridge is said to be ~5% vs. the top tier's 22%.

    Electric Vehicle Roundup: 1) Tesla Motors (TSLA -0.6%) sets it pricing for Europe and says in a blog post profits will be uniform across markets. 2) Cadillac (GM +0.2%) will unveil its 2014 ELR model at a major auto show next month. 3) It's a good start for Ford's (F -0.8%) C-Max hybrid, sales and reviews point to a competitive entry into the market. 4) German automakers will bring at least 7 new electric models to the market in 2013, led by Volkswagen (VLKAY.PK) and BMW (BAMXY.PK). The Western European plug-in market is forecast to grow to over 70K vehicles sold.

    A privacy intrusion or an effective way to limit spam? Facebook (FB +0.1%) is testing a feature that charges users (reportedly $1/message) to have messages reach the inboxes of users they aren't connected with in some way; it bears a strong resemblance to LinkedIn's InMail. Currently, messages from non-connected users end up in an "Other" folder many seldom access. Separately, Facebook's ad exchange now supports delivering targeted ads based on Google search data, a move that could provide a lift to ad rates. (yesterday) 

    The Kindle Fire and Nexus 7 could soon get undercut by Acer's Iconia B1, a 7" Android tablet just approved by the FCC and, reportedly set to sell for a mere $99. With 8GB of storage and a 1024×600 display, the B1 won't win any spec sheet crowns, but it could be an adequate option for many low-end/emerging markets buyers, or those looking to get the family a second or third tablet. It arrives at a time when Android (GOOG) is picking up tablet sharethanks to its pricing edge. ($99 Nexus tablet)

  89. 1020

    I'd like to nominate George Carlin as Patron Saint of PSW…… :)

  90. Phil

    Carlin/1020 – I'll second that.  Him and this guy: 

    “Summer has never been the same since the 2000 Presidential Election, when we still seemed to be a prosperous nation at peace with the world, more or less. Two summers later we were a dead-broke nation at war with all but three or four countries in the world, and three of those don't count. Spain and Italy were flummoxed and and England has allowed itself to be taken over by and stigmatized by some corrupt little shyster who enjoys his slimy role as a pimp and a prostitute all at once--selling a once-proud nation of independent-thinking people down the river and into a deadly swamp of slavery to the pimps who love Jesus and George Bush and the war-crazed U.S. Pentagon.” Hunter S. Thompson

  91. shadowfax

    Phil
    An I continue to say. "Told you so!" because I did every were I went.

  92. albo

    Sold the GLD calls bought earlier.  Up 12%.  Don't want to hold overnight.

  93. rpme

    Whenever I hear this Plan B thing, I think of Ed Wood, bizarre no.

  94. Phil

    Told me what Shadow?  

    GLD/Albo – Nothing wrong with taking a quick profit.  

    Uninspiring close but, hey, we're not going down and S&P still over the line with NYSE and RUT so things are technically a little bullish.  Now we see what happens when the Reps pass a bill and the Dems reject it in the Senate (I doubt Obama wants to let it come to his desk and force a veto). 

    We are getting a tiny bit of stick action in last few minutes but that's generally a sign that it's fake.  

    Dow volume 91M at 3:59..

  95. kustomz

    Short AAPL while going long everything else.WTF

  96. Phil

    Plan 9 – Rpme.  

    WTF/Kustomz – This market makes little sense at the moment.  

    Major punch-up on the S&P to 1,443.  VIX up 2% today, back to 17.72 – interesting on a green day. 

    Dow volume finishing weak at 119M – looks like they just triggered final buys early to goose things.  

  97. shadowfax

    Phil,
    Didin't know you or tell you but I sure warned everyone what would happen if Bush got in. I was exactly right.

  98. zeroxzero

    Facebook/LinkedIn:   These "social/biz" sites will end in tears; I even had to expunge Google+ from all my hardware, as it took the same "targeting" path.  These are businesses, and they sell a very valuable product  – you.  And you don't get a commission, unlike most businesses, which have to pay for the stuff they sell. They are, inevitably given their business models, serial dat mining scams.  Even though I've only participated through pseudonyms, and in a very limited way, I even regret going that far.
     
    Now when Facebook, Google [and LinkedIn, coming soon] begin to exchange data and interact, you know that we're reaching another level of privacy aggression.  It must be soooo tempting — all that saleable data, restricted by some little "only my friends" button.  What would be the harm of sending unsolicited messages to their Inbox from total strangers or….friendly companies?  They don't even have to open them — they could just delete them!!
     
    I can just see their Marketing Managers sitting in legal counsel offices, playing Twister with their ideas — "Would it be OK if we just divulged their geographical location once a month? How about their Hemisphere? How about the gender of their name — they have the freedom to falsify it, so we're not really disclosing a known fact?"  I've sat through many of these "what if" meetings with corporate counsel, eventually they will talk themselves into going farther and farther, and, "well, if they make us cease and desist and pay fines down the road, we'll probably come out ahead on a present value basis." 
     
    To bowdlerize Ben Franklin: Those who sacrifice privacy for convenience will not have, nor do they deserve, either one.

  99. terrapin22

    Pharm / which is your fav?
    Nine Big Expected Biotech Winners for 2013 (ARIA, CBST, INCY, JAZZ, MDVN, ONXX, THRX, VPHM, VVUS)
    from 24/7 wall st.  

  100. stjeanluc

    I told Peter I would do an equity curve of his virtual strangle portfolio and here it is:

    Nice and smooth so far… Red is the trend line, blue the actual P&L

  101. stjeanluc

    Russell and NYSE doing quite well… But kind of pointless right now as we are all try to read the color of the smoke coming out of the various buildings in DC!

  102. stjeanluc

    The equity curve on the Income Portfolio has been a little more rocky… A couple of SVU, HPQ and BBY surprises left some marks.

    But we are finishing the year very strong.

  103. stjeanluc

    These are not healthy unemployment numbers:

    PIGGS_Unemployment

    And BTW, France is above 10% now and the government agency in charge of statistics released their prediction for growth for 2013 and it's 0.1%. Not sure that is favorable to job growth! We should be dancing in the streets with 3% in the US! And actually, 3% might be the best we can do given the size of the economy. The law of big numbers eventually catches up to you – 3% of a $15T economy is $450B. That's a lot of growth no matter how you look at it. China is probably about to find out that you can't grow at 10% a year when you reach that size.

  104. Inkarri19

    What a surprise…..Boehner couldn't get the votes. 

  105. kustomz

    And down she goes!!

  106. Phil

    Holy crap! 

    I went out for dinner an come back to this mess?  

    What f'ing morons those Republicans are – they are doing it to us again….

    Dow Futures dropped 300 points but bounced back to down "just" 182 – great for our puts!  Glad we recovered AAPL.  

    I can't believe they would pull that crap and they didn't even have the votes lined up.  That's probably the end of Boehner's term as speaker.  

    Interesting that trigger of fiscal cliff makes Dollar stronger (now 79.46).  

    Looks like we're settling at -1.25% in Futures but real danger of down 2% at the open.  

    Also bad, the idiots at Congress didn't bother to pass the AMT exemption – which has nothing to do with the fiscal cliff and will totally screw about 30M middle class families.  

    Well, I warned people this morning – we had all day to have a revolution and get rid of these idiots but we left them in office another day and they've destroyed America yet again…

    We're going to be right back to seeing if those 50 dmas are going to hold now – if nothing else, it's a very exciting finish to the week.

  107. Phil

    Bush/Shadow – Well we saw that one coming a mile away.  Horrible day for America when that man was appointed President after losing the popular vote. 

    Privacy/ZZ – I think we should come up with a business model that combines aspects of social networking but shares half the revenue with the participants.  That way, we could effectively help the masses market themselves to advertisers and we'll get them to walk away from the sites that don't pay them for their eyeballs.  I think it's a workable model and clearly there are many Billions to share.  

    Strangles/Peter, StJ – Now that's impressive!  

    Growth/StJ – I don't know, if you can fake 8.5% at $6Tn and $7Tn, you can fake it at $8Tn…

    House Republicans won't bring their "Plan B" tax-cut proposal to a vote tonight, as Speaker John Boehner says he doesn't have the votes; the House will recess until after Christmas. DJIA futures slip 0.2%Boehner: "Now it is up to the president to work with Senator Reid on legislation to avert the fiscal cliff." Updated: S&P 500 e-Mini futures dive, limit down.

    Research In Motion (RIMM) has done an about-face: shares are down 11.6% AH following its FQ3 call. RIM mentioned its services business (36% of revenue, and a bigger share of profits) could be pressured by a pricing overhaul that will come with BB10 – it'll offer a variety of service options, and some of the basic ones won't cost much. Also, the fact RIM's subscriber base is now declining and shifting towards emerging markets will affect services revenue. The U.S., U.K., and Canada made up 36% of FQ3 sales, down from FQ2's 42%. (FQ3: III) 

  108. stjeanluc

    This Republican party is just not fit to govern anymore. It's theater and politics only. They hardly even pretend – a press conference here, another there but it's just a show. Even journalists are scratching their heads tonight at what we have seen. It's just surreal now. 

    They have only one job now – protect the interest of the top 0.1% while pretending to care for the country and through sheer arrogance and incompetence as we have seen with the Romney campaign and now the House, they can't even do that. They can't govern and they can't pretend…. 

  109. jfawcett

    Phil / Thanks – SLV that is.  Nice drop today!  Gas in Vegas.  COST – 2.99.  The rest of the town usually 5 to 10 cents higher.

  110. stjeanluc

    That's one way to look at it:

    http://www.motherjones.com/kevin-drum/2012/12/boehner-sabotaged-lunatic-wing-republican-party

     

    One possibility is that this makes falling off the fisal cliff much more likely. If the loonies won't even vote for Plan B, what are the odds they'll vote for a compromise bill along the lines that President Obama has offered? A second possibility—and I honestly don't know how likely this is—is that Boehner now knows he can't get the tea partiers to vote for anything, so he'll give up on the idea of bringing them into the fold. Instead of trying to craft a bill that can get 218 Republican votes, he'll round up fifty or a hundred of the non-crazies and pass a compromise bill along with 150 Democrats. On this reading, today's failure actually makes a fiscal cliff compromise more likely.

    Maybe. It all depends on what Boehner thinks he can get away with and just how vulnerable he is to some backstabbing from Eric Cantor. Time will tell.

  111. Peter D

    Just checking in – Thank you, stjeanluc.  You rock with producing a mountain of data every day!

    Thanks, Phil! 
     
    Future is dropping, so those who sold the SPX and RUT puts too close to the money may get burned tonight as there is no chance to make adjustment before the index options expiration tomorrow AM.  Of course, there is a chance that the futures could turn positive by tomorrow open.  I remembered a few times where the market reversed up or down, so if we want good sleep on Thursday prior to RUT and SPX expiration, we should buy back those near the money.

  112. stjeanluc

    Looks like the USO puts will do well too… Oil is taking a swan dive to below $89.

    Wall Street "job creators" might be calling "their" congressmen now.

  113. Phil

    Good morning!

    CNBC has a countdown ticker to the end of the World and, apparently, I only have 26 minutes to wrap up my thoughts (around 6:10 is the end).  

    Markets performing as expected (down 1.5%) thanks to Boehner's massive failure and AAPL looks like $512 at the moment – not so terrible, on the whole. 

    It's quad witching day with everything expiring today so all sorts of madness can ensure (assuming the World lasts long enough for the markets to open) and we have a busy data day too:

    Friday's economic calendar:

    8:30 Durable Goods

    8:30 Chicago Fed National Activity Index

    8:30 Personal Income and Outlays

    9:55 Reuters/UofM Consumer Sentiment

    11:00 Kansas City Fed Mfg Survey

    Asia was down about 1%, Europe is down 1% so, hopefully, we're over-reacting in the Futures and will recover a bit in the morning.  

    Oil is down nicely to $88.86 so congrats to our Futures players on the $1+ drop.  Gold, on the other hand, just tested (and failed) $1,650 again with the Dollar at 79.40.  Silver couldn't hold $30, now $29.83, copper $3.54 is just off the floor at $3.53, nat gas still strong(ish) at $3.44 and gasoline back down to $2.734 after visiting $2.775.  

    Euro $1.321, Pound $1.624 and 84.12 Yen to the buck means we gave them a whole week and they couldn't break higher.  Makes 79 a pretty tough floor on the Dollar. 

    Not much point in worrying about things now.  Durable Goods are likely to be down a bit from last bullish report so any upside number will be a positive surprise and not much is expected from Michigan Sentiment.  Personal Income and Spending are going to be a big deal as they need spending to be up sharply (0.4%) to signal a good shopping season.

    Meanwhile, the Russell is at 840 (/TF) and that's a fun bullish play off that line with very tight stops below.  Just playing for a little bounce – maybe 2 points…

  114. Phil

    Well, World still here and we only got 1 point out of the RUT – that's disappointing…

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