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Thank G20 it’s Friday – Will World Leaders Keep Markets from Collapsing?

No, of course they won't.

What can the World leaders possibly do to sustain these ridiculously over-priced markets?  Things have simply gotten too expensive to buy – as in, there's simply not enough money in the World to buy the S&P 500 for 100% more than it was priced less than 5 years ago.  That's 20% average growth in an economy where wages are rising at 4% and GDP is rising at 1.8% which simply suggests that stocks have gotten 100% more expensive for no particular reason.

We'll get some more payroll information later this morning but, historically, wages have grown 6.26% annually since 1960 and that INCLUDES the crappy growth we've had this past decade (wages were -5% in 2009, in fact) and the market has grown at about 8.5%.  THAT we can accept.  It makes sense, more money – bigger markets – sure, we get that.  

Image result for wages top 1% 2016What we have now, however, is a stock market that is outpacting wage growth, productivity growth, GDP growth – pretty much anything you want to measure growth EXCEPT the growth in income of the Top 1%, who are, of course, the primary owners of stocks.  Their salaries have jumped about 25% in the same 5-year period but still, even that staggering amount of money isn't enough to justify the 100% rise in market prices.

When we say market bubbles, it's not really a bubble.  People buy stocks every day and people sell stocks every day and prices go up when the buyers are more enthusiastic than the sellers and vice versa but the problem with that is, when the stocks get very expensive AND the sellers get enthusiastic – it becomes much harder to find buyers and you can get violent adjustments in price in order to satisfy the demand for CASH!!! (have I mentioned how much I love CASH!!! lately?).

When you have CASH!!! while other people are panicking, YOU are in charge.  When a marlet is in a frenzy, as it is at the moment, then no one wants cash and everyone wants stocks, so the sellers of stocks are in charge and stocks get bid up to higher prices.  Just because the small fraction of a company's stock that is being sold is sold at a high price does NOT mean the price set for the company is correct.  See Tesla (TSLA) and their idiotic valuation, which corrected by 20% in the last two weeks – erasing a month of gains in just over a week:

As with yesterday, TSLA shares are being pumped back up in pre-market trading but we told you it was BS yesterday and it's the same BS today and we're still watching the same bounce lines that failed yesterday, using our fabulous 5% Rule™.   Forbes just published: "Why You Should Sell Tesla On Week's $9 Billion Plunge" and Elon Musk's girlfriend is rumored to be leaving him and perhaps you should consider leaving the stock (we are short – see yesterday's report for details).   As noted by Forbes:

The highly-touted $35,000 Model 3 is likely to cost Tesla shareholders $2,800 per copy sold. As I wrote, UBS believes that in order to break even on the Model 3, consumers will need to fork over $51,250 for the shiny electric car.

The losses on the Model 3 are likely to make Tesla's cash flow situation worse.

Goldman Sachs set a price target of $180 — 45% below its current level. "Analyst David Tamberrino, who reiterated a sell rating on July 5th, wrote that the Model 3 will initially lower its profit margins. Tamberrino lowered his price target for the stock to $180 from $190. He believes that demand for Tesla's other higher-end vehicles, the Model S and the Model X, are 'showing plateauing demand.'"  according to MarketWatch.

8:30 Update:  Non-Farm Payrolls indicate a healthy 222,000 jobs gained in June and May was revised up 14,000 to 152,000 with unemployment up just a bit at 4.4%.  Average Hourly Wages went down 33%, from 0.3% to 0.2% and that's great for Corporations but bad for humans.  Who needs minimum wage laws, right?  Your boss should pay you only what you are worth and treat you like a disposable commodity and you should be thrown out without a safety net the second you are of no more use to the Corporations, right?

Yep, the G20 isn't going to save anyone – other than the Corporate Citizens who keep them in power. 

Have a great weekend,

- Phil

 


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  1. Good Morning!


  2. Good Morning

    1020—did Tan get back to u


  3. Yes, Thank You!


  4. Some more damage on the Nasdaq and the S&P testing its 50 DMA again… Maybe for good this time.


  5. I can't believe that they are letting Trump meet Putin with only Tillerson as a wingman! Neither of these guys have any experience in international affairs. I am surprised Jared and Ivanka are not in that meeting as well. We are so screwed! Putin is already licking his chops. Clearly dereliction of duty from McMaster and the rest of the team.


  6. The TSLA deal to build the largest grid for Australia in 100 days or it's free produces the amount of revenue of about 300 cars but with a 0 profit margin so that's better than the cars.  This was a huge PR move.


  7. Trump/stjean

    Why are you surprised?  He has already discredited our intelligence agencies yet again and said Russian had little to do with hacking and it was many countries involved without any proof of that.


  8. Might buy today's expiring puts on TSLA, already fading from the pump.


  9. Stjean – You're talking about someone who believes 'team' is spelled with an 'I'…… :(


  10. That was easy TSLA money again, almost a double on the 310 puts.


  11. in 10 minutes


  12. FU FTR!!!!!


  13. If TSLA breaks 306.70, goodbye.  100 day moving average.


  14. Good morning!  

    Big Chart – Big Action – S&P below the 2,413 and /NQ way below 5,710 with the 20 dma doing a death-cross on the Nasdaq = NOT GOOD!  RUT threatening to fail the 50 dma at 1,400 is also NOT GOOD and, once again 11,650 is key on the NYSE.  It's the amazing diminishing volume this week so you can't trust anything you're seeing – we'll be maintaining the same neutral/bearish stance into the weekend, of course.

    Date Open High Low Close Adj Close* Volume
    Jul 07, 2017 241.21 241.37 241.05 241.11 241.11 5,036,033
    Jul 03, 2017 242.88 243.38 242.21 242.21 242.21 39,147,200
    Jun 30, 2017 242.28 242.71 241.58 241.80 241.80 86,820,700
    Jun 29, 2017 243.66 243.72 239.96 241.35 241.35 103,933,000

    Oil having trouble with $44.50 = SAD.  /RB failing $1.50 = SADDER.

    Trump/StJ – No witnesses!  

    Australia/Rustle – But Musk on the other side of the Earth and unable to effectively pump his stock has been a disaster for the company (and, apparently, for his relationship).  He's got to get back to the US and start making bold statements soon or they'll fail $300.

    FTR/Jabob – I hope you have your DD money ready!    Split is moved up:

    Frontier Communications to Implement Reverse Stock Split on July 10, 2017

    Dollar still creeping higher.


  15. Phil/FTR

    I have around 6024 (dividend reinvested) shares of FTR at average 2.29. Why not double down now to get the average down? Does it make sense to double down after the split?

    thanks as always

    regards


  16. Just realized SPY didn't print yesterday or the 5th – no idea why as it's from Yahoo or Altaba (AABA) now.  Wow, that's ridiculous!  


  17. might take a second stab at the TSLA puts


  18. Just bought small TSLA 312.50 Puts expiring today.  Crap shoot. 


  19. FTR/Pat – In our LTP, for example, we already have 15,000 shares of FTR which will become 1,000 shares at about $37/share and we already have 40 short $4 puts we sold for $2,600 that will become 3 short $60 puts at about $56 ($16,800) and we'll want to roll those down to about 30 2019 $15 puts for $2.50(ish) for $7,500 and we'll sell 30 2019 $15 calls for $2.50(ish) for $7,500 and then we'll consider if we're ready to DD with 1,000 or 2,000 more shares at $15 but likely we'll wait a bit to see how things go. 

    So, we have a lot of money to spend – better to be sure!  

    TSLA/Rustle – Trying hard to get back to $315.  

    Dollar almost back to 96.  Oil below $44, /RB $1.477 – yikes!  

    /SI very weak, as we thought.  /YG down to $1,212.  


  20. TSLA/Phil

    Never went back in, looks like it's going to tank again, but decided to stay a winner on a Friday.


  21. Phil – I'm thinking that anyone looking to average down on FTR, might consider buying some today and the balance after the split, just in case there are buyers for the new stock (Since it'll no longer be a penny stock ).  The company is either going to survive or it's not.  If they are going to survive, averaging the two prices should work out well.

    I was very surprised when ARNA reversed last month.  The stock is up 50% since the split. Sometimes reverse splits actually turn out positive.


  22. That would make sense Albo although I am staying out! Maybe worth a BCS after the split for a much cheaper bet.


  23. ALbo FTR you must like the stock, just to make you more comfortable I am down 22K!!!!!!!!!!!!!!!!!!! great crap


  24. STJ – I'm not in the stock either.  Was stopped out a long time ago.  But thinking I might buy some today.


  25. Phil is there a point where silver goes from scary to a buy? $15.50 was always one of your poke spots, but is silver so weak that it is heading back under $15?


  26. And Yodi, I didn't get out unscathed.


  27. Phil/FTR,

    not sure I understand your extensive explanation.

    If I double down now my average would be around 1.11 (approx.). so lets say 12,000 shares at 1.11. so post reverse split it will be  800 at lets says 16.65. so do I not have a better chance to exit out in profit if the stock moves up more than $1.65 against the other scenario where I would have 400 shares at 34.35 and double down post split with more 400 shares to arrive at 800 shares at 24.65. much higher than 16.65

    am I missing something? of course the premise that company will do good is intact.

    thanks


  28. Phil  How is the press reporting on Trump in Paris and London?


  29. Well bye bye 15.50 silver, so that answers that question. Glad I'm just watching.


  30. Phil/FTR

    please ignore my previous comment. averaging price was messed up.

    regards


  31. DAX and CAC heading down into the weekend.


  32. NAS and S&P still being held up so far… wondering when/if they will follow down. 


  33. Market does look strong and holding up


  34. FU IMAX – FTR looks like a winner compared to IMAX. It has quickly surpassed my losses in FTR.


  35. Staying a winner/Rustle – Very sensible. 

    FTR/Albo – I'd rather be sure as we're clearly going to be heavily committed in the next round so can't really afford a mistake.  If they fly higher after the split – I certainly won't cry about that as we already have a nice chunk of it.

    And what Yodi said! 

    /SI/Craigs – Well after seeing it flash to $14.34, I wouldn't have much conviction until $14.50 now.  To me, a flash crash stops where there are significant standing buy orders.  Clearly there weren't any all the way down to $14.34 so I'd rather be patient than wrong on that one.  As I said, WPM is a much safer way to play it.

    FTR/Pat – I'm not counting on phantom profits.  I want to see how the stock behaves AFTER the split and then make intelligent decisions based on the actual prices of the options when they come out (might be a week later).  We already have a large commitment, making it larger without information is NOT better than waiting for information and THEN deciding how to size the position.  Feel free to jump in but, as I've said, I could see 0.80, which would be $12 and I'd be very happy to DD and sell puts at $12 but very pissed if I already doubled down at $16.50 ($1.10) and then it falls to $12.

    On the other hand, if I do nothing at $16.50 and it pops to $20, then my loss drops by $3.50 and I'm fine with that and I can still DD or sell puts or sell calls or whatever.

    Trump/Den – The general theme is he's Putin's stooge but the big fascination is with how America has completely blown it's World Leadership position (something Britain also did 50 years ago) and how America is turning into a totalitarian state and Trump is more comfortable with other dictators than he is with Democratic leaders.  They can't believe how docile our people are about what's happening. 

    Trump already rolled over on Syria, agreeing to leave Assad in power and is going along with Russia's proposed "safe zones" – essentially he's just put Russia in charge of Syria and the press here is disgusted by it.

    I will represent our country well and fight for its interests! Fake News Media will never cover me accurately but who cares! We will !

    Everyone here is talking about why John Podesta refused to give the DNC server to the FBI and the CIA. Disgraceful!

    ‘He Doesn’t Speak for the Rest of America’: Jerry Brown Torches Trump at the G-20

    The Centers for Medicare and Medicaid Services, which is part of the Department of Health and Human Services, last week released a report about a wonky aspect of the Affordable Care Act related to insurance payments. Tucked away in the report, however, was evidence that the health insurance marketplaces set up by Obamacare were relatively stable in 2016. Contrary to the “death-spiral” narrative, the CMS report found that the mix of healthy and sick people buying insurance on the Obamacare marketplaces in 2016 was surprisingly similar to those who enrolled in 2015.

     

    Per NYT, Russians wanted more people in Trump-Putin meeting, but Trump team insisted it be kept small to avoid leaks

    Replying to 

    Trump and Putin never criticize either other, take note. Kremlin media says Trump is a "prisoner of establishment" who wants to help.

    Fox & Friends goes to ridiculous extremes to justify Trump’s incoherent tweet about Podesta

    Europe actually closed flat – just off the highs.

    Indexes making power moves up on very low volume.

    IMAX/Learner – Makes you wonder what actually happened to ruin their business model since April, right?  

    B. Riley analyst lowers Q2 Imax estimates amid struggling box office

    3 Reasons To Own IMAX Shares For The Long Term

    It's idiotic to revalue IMAX based on current box offices which any half-assed analyst would know, are fairly random and have nothing to do with the company's long-term prospects.  Sadly, people are generally idiots and invest in companies they don't understand – which leads them to panic in and out of positions based on whatever the last thing they read said to do. 


  36. FWIW

    ~~Cliffs Natural Resources Inc. (NYSE: CLF) was started with a Buy rating and assigned a $9 price target at Jefferies. The firm noted that Cliffs is an under-recognized beneficiary of the U.S. steel market strength, and pending trade protections may help ensure higher average selling prices and demand for its high-grade pellets into 2018.


  37. I can't believe Trump saying "It's an honor to meet you" to Putin… The guy is a thug! We are turning into such a joke for the rest of world. Russia, China, Japan and Europe are all taking advantage of this buffoon… Oh well, the end of Pax America I guess.



  38. CLF/Albo – Wow, it took them that long to figure it out.   That's why we were buying them a year ago! 

    Obama/Trade – Hmm, that was a while ago but I'm pretty sure that's what diplomacy's about.  What exactly did Obama say to kiss Castro's ass?   Did Obama also hold out his hand like someone showing a dog they are not a threat?  

    As officials gathered around a table, Trump stretched out his hand to Putin and then patted his elbow as both men smiled. Trump then casually patted Putin on the back as they stood side by side.

    Maybe it was one of these times that I missed:

    80 times Trump talked about Putin

    Meanwhile:

    US First Lady Melania Trump has been unable to leave her hotel in Hamburg because of the protests.


  39. Caught in the news feed last night…

    Muck – " I support free markets, not central planning…. I prefer to see common sense make a comeback."

    What do Santa Claus, The Easter Bunny, The Tooth Fairy and Free Markets have in common? All bedtime fairy tales for the gullible, that have never existed, nor can. I concur with the want for common sense, but how do you regulate greedy pigs who will eat everything and one in sight?

    We necessarily have regulated and adaptive capitalism.

    StJL – "Insane! That's what happens when dogma gets in the way of common sense."

    No, this is what happens when the ignorant are allowed to breed and vote. Many pay taxes so… 

    And now a moment of ZEN, in this world of regulation, business, driving, bicycle, fishing, hunting, garage sale, panhandling, baby sitting, dancing, dog, cat, public performance, gun…

    What two things do not require a certification, permit, training or operator license?  

    Voting and having children. Now back to your regular programming and Out.


  40. FYI – In case you did not notice, 30 yr and 10 yr bond yields both crossed their 50 and 200 dmas.  In the last seven trading days, a global bond rout is in progress of which the "synthetic" effects are begininng to spread into equities viz. like the oil short squeeze forced tech liquidations, margin requirements on leveraged derivative positions are necessitating asset liquidation. In addition, US and corporate bond sales mean additional dollar float and depending on disposition of those dollars, a lower dollar and Out.


  41. Amazing, how the indices are propped up, trading flat line on low volume… calm before the storm ? … a few high volume trades and it will move this either way.  


  42. More new 52 week lows on both NYSE and NAS than 52 week highs.


  43. Phil – RB – is it time to short yet?


  44. denlundy… don't rub it in!!!

    FU ftr,tgt,imax,teva,gild,xom,abx,gnc,ge,jo,m,lb,amzn!!!!

    what a week ;-(


  45. Dumpster Diving :

    Bought some FTR at 1.04.


  46. StJL – regulation – here are 11 things that are more difficult for Annie to do, than get a gun and Out.


  47. from $0.15 to $2,500. What a ride


  48. Phil,  any thoughts on COST here? It keeps going down even though it had record June comps announced.  Investors are looking forward, I guess, thinking AMZN is eroding its base.  Butterfly put sale is getting roasted. 


  49. /RB/Den – Too iffy, everything is iffy on a low-volume week.  We won't get a real sense of things until Tuesday.

    COST/Learner – The market lives by the ETF and will die by the ETF – sentiment shifts and now babies are being thrown out with the bathwater.  Gadzooks – I'm starting to sound like Naybob!  I do need a vacation…  cheeky

    Speaking of which – time for my weekend to start! 

    Have a great weekend all, 

    - Phil

    PS – I will be back in London next week if anyone wants to get together for Breakfast or Lunch Weds or Thursday.

    ABX/Jabob – Is it time to buy ABX again?


  50. abx—I think so


  51. For what it's worth, COST is still looking overvalued to me.  Paying 24x forward earnings estimates in this retail environment for 11% expected earnings growth is a little too rich for my blood.  What happens when Amazon starts going after the bulk retail market?  Wouldn't shipping larger amounts of the same item lower Amazon's shipping cost, on a relative basis?  Costco's margin, may look like opportunity to Bezos.


  52. Yes. Palotay – I hear you.  I guess COST is going to lose some of its premium valuation despite its unique model. Based on their sales comps, at least, business trends continue to be solid … for now.  Let's see what happens when they announce earnings this qtr.  I am a customer of both COST and AMZN prime, and both appear unique to me.  


  53. Phil – The market lives by the ETF and will die by the ETF – sentiment shifts and now babies are being thrown out with the bathwater.  Gadzooks – I'm starting to sound like Naybob!  I do need a vacation…  

    Cash that reality check Bucko, what's for dinner? Salted beef sandwich with pretzels BABY!!! Enjoy and Out.  


  54. TSCO   mentioned here a while back and speculated to be internet resistant – perhaps not

     

     a trader buys 800 January 2019 $50 puts for $6.70 and sells 800 of the $45 and $40 puts for $4.10 and $2.50 respectively


  55. COST 

    shares weak today down 1.6% and breaking down under the 200-EMA.

     

     August $165 calls are sold for $0.70 to buy the $150/$140 put spread for $1.80, net debit of $1.10 for 2,500 contracts  


  56. 3 REASONS TO OWN IMAX SHARES FOR THE LONG TERM

    Font size: A | A | A

     

    2:08 PM ET 7/6/17 | CFRA

    SNPMarketScopeViewsNews2017-07-06 14:08:26.000IMAXIMAX CORPORATIONAcquire Media3 REASONS TO OWN IMAX SHARES FOR THE LONG TERM (BZ Newswire) — In what he described as a "draconian view," MKM Partners analyst Eric Handler reiterated a Buy rating on Imax Corp (USA) (NYSE: IMAX) and cut its price target from $40 to $30. The $30 price target still reflects a 41-percent upside from the low-$21 range IMAX shares were trading at intra-day Thursday. "We recognize investors have grown tired of overly optimistic sellside global box office projections and more often than not of late, downward estimate revisions," said Handler in a note (see his track record here). The stock is at its lowest level since December 2012. Related Benzinga Pro Headline: 3G Filing Shows Primecap Mgmt Reporting 8.29% Stake In IMAX Conservative Revisions The analyst cut his estimated 2017 global box office sales by 18 percent to $959 million, about flat year over year. He also assumed no increase in average revenue per screen in 2018 and is not considering any savings from the company's $20 million cost cutting plan. The result of which is a 2017 revenue estimate reduced from $424 million to $373 million and adjusted EBITDA down from $136 million to $100 million. Both of which went from above consensus to below. Estimates for 2018 were likely slashed, down to $415 million in sales and $128 million adjusted EPS down from $451 million and $162 million respectively. "In our view, this outlook should hopefully prove conservative given what appears to be a stronger film slate for IMAX screens," said Handler. Long-Term Growth Is Still Possible Despite these significant downward revisions, the company still warrants a Buy rating because of three drivers: IMAX has the potential to more than double its core theater network over the next 10 years. The company also has a strong first-mover advantage when it comes to new, out-of-home virtual reality centers, which is coupled with strategic exhibition partners. IMAX can continue to leverage the optionality from content partnerships to its advantage. Besides long-term development strategies, IMAX benefits from its strong balance sheet. The company currently has $190 million in cash and no noteworthy debt, which will allow for its second $200 million share buyback. Related Links: Analyst Gives IMAX Two Thumbs Down On Weak Q2 Box Office Movie Theater Stocks Tumble Following Bearish Comments From A Credit Suisse Analyst Copyright Benzinga (BZ Newswire, http://www.benzinga.com/licensing). Benzinga does not provide investmentadvice. All rights reserved.Write to editorial@benzinga.com with any questions about this content. Subscribe to Benzinga Pro (http://pro.benzinga.com). Acquire Media|US;IMAX|53885|CA|165739


  57. Bonds / Naybob – I am not an economist but aren't rates going up as a result of the Fed policies who are talking about liquidating $4.5T worth of bonds? That would drag prices down and rates up, no?


  58. StJL – "Bonds / Naybob – I am not an economist but aren't rates going up as a result of the Fed policies who are talking about liquidating $4.5T worth of bonds? That would drag prices down and rates up, no?"

    Thanks for the inspiration mon amie, at Boulangerie Nay-Bob, you get four croissants and a baguette to chew on…

    1. In The Synthetic Matrix? we outlined how important "what is" considered MONEY and the nature of its constituents. As of the end of 2015, globally, equity market cap = $70 – 90T; DWARFED by bonds (debt) at $200T of which $70T is sovereign.  The system is based upon DEBT, this is why we usually talk about BONDS (debt), because equities are just one of many by products. 

    2.  How is debt created? People think banks need outside funding (deposits) to make loans. Like those believing in Santa Claus, Adam Smith's free market hand (long since severed) and that monetary policy is loose, or that a single interest rate (fed funds) can control anything, all based in false doctrine, urban myth and dead wrong.  Without a single outside deposit, the commercial banks can make loans exnihilo.  Anyone who has ever done double entry accounting knows how this works.

    3. Not because I found it important or anything, for 2 years on this forum and longer in other parts, we have been steadily beating the drum on deleterious effect of ZIRP and QE viz. monetary policy.  In doing so, we have endeavored to explain why the cost of loan funds will rise (and must), and what the effects have been and will be on leverage, debt, housing, markets and the economy. Over the last 60 days, a half dozen at Censored Alpha framing the subject of balance sheet reduction and potential affect and effect.   

    4. Witness, rates are going up whether the Fed wants them to or not viz. they thought they could effect control, and are about to realize they have lost control and really, never had much if any. When bond yields rise, the cost of borrowing or loan funds rises and prices on older issuance drops. Newer issuance is subject to "market forces" and contrivances.  Again, there are no free markets, and as Phil might write and POTUS might tweet, "fake, fake, fake". (More later).

    5. Since 2008 in the US, (actually much earlier here and in Japan) we have been and are witnessing what happens when you tamper with and pervert markets (artificial guvmint additives) for self serving purposes viz. to bail out your sponsors on the public dime, achieving a witches brew of tight monetary conditions which punish good behavior, viz. investment in economic activity; and reward bad behavior, non GDP productive asset speculation, creating bubbles and ultimately strangling demand, output, causing economic contraction and socio economic asphyxiation viz. slowly killing the old culture and way of life.

    But, we are told, it's getting better all the time. Hence, our oft repeated mantra applies, (and considering Phil was recently outvoted at the box office, he should appreciate this)…  

    There is something is this more than natural….  Now chew slowly on that baguette.

    You saved your Nay-bob receipt? Smart, as it offers a desert discount and moment of ZEN at our symbiont, The Nattering Pâtissier…

    "and as Phil might write and POTUS might tweet, "fake, fake, fake"."

    Sorry Phil, that is one of those phrases you never thought you would hear, like "Donald Trump is picking up his Nobel Prize in Economics".  I did not write "President Trump", because those are two words that sound revolting together like, saturated taint and anal discharge.  No matcha latte please , just a Café au lait, something with cinnamon swirl, enjoy your weekend and Out.  


  59. Wow, Naybob, this was a hearty breakfast indeed! I guess I should enjoy my free croissant while I can.


  60. StJL – "this was a hearty breakfast indeed! I guess I should enjoy my free croissant while I can."

    We never let friends go hungry or thirsty brother.  

    I was thinking, looking at these migration patterns, we need to get that wall built. And our "take off hoser" friends in the Great White North might want to build one as well, quickly and Out.


  61. I assume we are categorized as mammals! I should start investing in beachfront properties around the Baffin Bay.


  62. Emini Russel 2000 index futures will begin trading on CME Monday 7/10- new symbol /RTY

    Same contract specs as /TF but no data fee will apply. 

    This was on the TOS home page- could not cut/paste the blurb. Looks like you will have to manually change any position you may have under /TF on ICE. 

    See article for details. 






  63. Nevada dispensaries running out of marijuana



  64. Phil,

    With the July 4 week over, is it time to look at shorting RB? http://www.zerohedge.com/news/2017-07-08/bofa-stunned-drop-gasoline-demand-where-driving-season


  65. ….and Nat   Your post on SA, looks like after the Aug contract is over, the deck chairs will be arranged for CL to sink to perhaps a new low?  

    https://seekingalpha.com/article/4086456-oil-bears-wal-mart-mayweather-vs-amazon-mcgregor?app=1&uprof=45&isDirectRoadblock=false


  66. Latch – "….and Nat   Your post on SA, looks like after the Aug contract is over, the deck chairs will be arranged for CL to sink to perhaps a new low?  "

    /NG – Since June 5th in what is being called the GCC crisis, Qatar has been sanctioned and boycotted by Saudi Arabia, Egypt, UAE and Bahrain.  Qatar is the worlds largest exporter of LNG, with 3rd largest known reserves (behind Russia and Iran), and recently announced a 50% increase in production through 2024.

    /CL  - I was being generous with the short squeeze potential running up to July 20th.  As stated, with the big downward candle that got hung up Thursday,  the current bear rally COULD break off and very well sink from now till Aug. TBD.  Exogenous risk?  attack on Lil Kim or something could break in the GCC and Out.


  67. I feel safer already, Putin denied being involved in the hacking and to prove it, he has agreed to work on a cyber security plan with the US to safeguard our election process. And Trump is going along with that. So now Putin is more believable than our security agencies. Insane…

    And Trump's excuse that they were wrong about WMD is BS because many disagreed with the White House but were silenced. That's not the case this time.Trump is such a patsy for someone like Putin. Tough guy he is.


  68.  SJL- you really need to find a new vocation. If your ire was was directed at how the dumbocrats lost the election we all might be better served than this incessant monologue. Seriously I hope you have audience beyond this blog here, like Nat does. Otherwise give us all a freckin break You are breakin my balls


  69. Latch – Feel free to ignore me… I wish you would, really.


  70. Larch, I for one appreciate STJ's commentary, and am appalled at the traitorous acts that have been committed by this administration. It is clear to me that you are just a blind GOP/Fox/Drudge fan boy, who has no interest in critical thinking or intelligent debate.  So please settle down. You are in the minority, on this board, and in this county. 


  71. Lurch, you're on permanent ignore now buddy.


  72. Good morning from sunny Bournemouth!

    Related image

    Took the kids to the ancestoral homeland (where my Grandparents retired to) to celebrate my aunt's 85th birthday.  I forgot how much I love this town in the Summer – great place for a relaxing  vacation!  Amazing amount of kids walking around without looking at their cell phones here.  My kids from NJ and their cousins from London actually look out of place walking around looking at theirs all the time – same in restaurants here.  Someone should study this town because THIS is out of control:

    Related image

    I see we've been having spirited political discussions in my absence so I don't need to stir the pot.  Donald Trump is just a funny sort of joke to the English.  As my Aunt said "Well, he made a lot of noise but he hasn't actually done anything terrible yet."  Of course, this woman lived through a war with Hitler so her bar for "terrible" is a little high…

    This Australian G20 broadcast summed the World view of Trump up perfectly.  

    “Where was the G20 statement condemning North Korea which would have put pressure on China and Russia? Other leaders expected it, they were prepared to back it, but it never came.”

    Instead, he wastes his time.

    “[He] barks out bile in 140 characters, [and] wastes his precious days as President at war with the West’s institutions,” he said of Trump.

    “Donald Trump has pressed ‘fast forward’ on the decline of the United States as a global leader. He managed to isolate his nation, to confuse and alienate his allies and to diminish America.

    “He will cede that power to China and Russia, two authoritarian states that will forge a very different set of rules for the 21st century.

    “Some will cheer the decline of America. But I think we’ll miss it when it’s gone.”

    TSCO/Stock – Solid but not much growth.    They were never worth $70 but $50 is reasonable.

    A lot of stocks are simply coming back to realistic prices.  If the whole market starts doing that – we're in for a 20% correction!

    IMAX/Jabob – The biggest threat to IMAX that I see is Odeon Theaters' iSense, which they have rolled out in the UK.  Odeon is the top chain in the UK and they were bought for $921M last year by AMC, who are, in turn owned by China's Wanda Group.   Nonetheless, I think there are problems with iSense as AMC recently signed a deal for 25 new IMAX theaters in Europe but you can see how any kind of competitor spooks investors.   

    Again, the key issue here is that IMAX is being used by filmmakers so films are shot in IMAX and know it's worth it due to the installed base – it's going to be very hard to break that monopoly as it took IMAX about 30 years to get widely adopted as no one is going to risk a $200M movie on unproven camera technology (think Zeiss).

    IMAX is simply so ubiquitous at this point that they've become a proxy for Hollywood's box office, so they'll go up and down for reasons that have nothing at all to do with the health of their actual business.

    Total buy at this price! 

    Sell 10 Dec $21 puts for $1.85 ($1,850)

    Buy 10 Dec $20 calls for $2.90 ($2,900) 

    Sell 10 Dec $24 calls for $1.20 ($1,200)

    That's a net $150 credit on a $4,000 spread and all IMAX has to do is stay over $20.58 and you break even and holding $21 makes you $1,150 and things get better from there! 

    Bonds/StJ – The Fed isn't liquidating, they are simply no longer buying bonds to replace the ones that expire but that still means the government has to give the Fed CASH!!! at the end of term and find someone else to replace the borrowed money (unless they balanced the budget – ROFL!).  The problem is, we haven't had a real bond auction in 8 years so we don't know how high the rates will have to be offered to sell more debt (on top of the $20Tn we already have) if the Fed isn't buying essentially all of it.

    Most likely other CBs will chip in to fake interest in our debt (and we'll do the same for them) and make it seem like there's plenty of demand (and low rates) for as long as they can.  As Naybob seems to be saying, however, this whole thing can unravel very quickly and rates could shoot up but I doubt the Fed will wait long before going right back to buying bonds again.  We MUST keep up appearances (really we must because the reality is terrifying). 

    /RTY/Pstas – Good for them, stick it to ICE – bunch of bastards (GS, JPM, etc). 

    /RB/Latch – I'm not enthusiastic about shorting it because it never got very high.  

    Even if you think we're going back to $1.30, we're only in the middle of the range but yes, you can play short at the $1.50 line with VERY TIGHT STOPS above because it only takes a word from OPEC to pop it up .05 on you.

    Same with oil Latch and Naybob – Very dangerous short.

    FTR/Jabob – That's right:

    Verizon wasn't an unfamiliar business partner to Frontier, which paid $8.6 billion in 2010 to acquire the wireless carrier's landlines in 14 states.

    This is what happens after an acquisition, FTR dropped 70% after buying the last batch from VZ and it took them years to grow strong enough to buy more and now they are down again and, as long as they don't go BK, you will get your 10% dividends and a massive bonus when they recover.  

    Frontier's executives say the business is trending in the right direction. Customer losses, excluding canceled past-due accounts, have eased. New managers include a former executive of Alphabet Inc.'s Google Fiber hired to improve network performance.

    Putin/StJ – So Trump's plan is to share our cyber security plans with Putin in order to stop "unknown parties" from hacking our elections?  And you are the bad guy for pointing this out?  

    Ire/Latch – You know, I read what you said first and I thought StJ must have made some inflammatory comment attacking Trump but it turns out all he did was question Trump's IDIOTIC decision to  work WITH Russia on America's cyber security and his UNCONSCIONABLE, possibly treasonous act of telling the world to ignore the unanimous consensus of our US intelligence agencies and take Putin's word for it that Russia didn't hack our election.  

    For that you say StJ is misdirecting his "ire"?  WTF happened to you?  Seriously, think about how deeply down the rabbit hole you are that you are defending a guy who LOOKS like he's selling our country out to the Russians.  Even if he isn't (and it's all just a funny series of coincidences that all turn out to be in Putin's favor due to good old-fashioned incompetence on our part) – don't you at least support the right of our citizens to ask questions and be vigilant against foreign interference with our Democracy or should we all just put our heads in the sand and take it up the ass?  

    It's like I was telling my kids re. how the Holocaust happened – Hitler took some power and good people of conscience left Germany and the people who remained felt it was better to ignore what was going on so Hitler got more power and things got worse and more people left and the people that remained either had to go with the program or remain silent and that enabled Hitler to gain absolute power and force people to go with his programs and no one dared oppose him.  

    I'm currently in the speaking out stage myself but I will leave if things get worse – as much as I love my country, this isn't my country anymore if people are willing to tolerate this BS.

    I'm currently enjoying a vacation in Socialist Europe where everyone takes public transportation and has free health care and inexpensive colleges and the streets are clean and crime is low and people are measurably happier than they are in America and healthier and better educated (with 6 weeks vacation!).  The people have the same disposable income as Americans but their retirements are much safer and poor people get public housing and assistance – I simply don't see the nightmare, other than my taxes going up a bit.  


  73. Hey, I just realized – on the Bournemouth post-card, the high brown building in the top right corner is my Grandpa's apartment, that top porch on this side was his penthouse apartment (not bigger, just the top floor).  I loved that place and we took a hotel right near it with the same view so I could give my kids an idea of what it was like when I came here in the summers.  

    Food is very cheap and good in Bournemouth and the hotels are reasonable (probably not so much in August) but the Channel is pretty cold swimming.  Fantastic town for walking around and relaxing though and I love the fact that I've already walked on the beach (listening to Quadrophenia) and watched the sun rise, went for a swim, had a nice breakfast and it's STILL 3am in NY and an hour before the markets open here.  I think I can get used to this! 

    I'll put a new post up and I should be back around 10 am to chat a bit.  Tomorrow I'm heading back to London to finish the week so post will be up and I'll check in around noon (EST) from my new hotel.