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Labor Day is Over, Postpartum Depression Sets In

Image result for north korea hydrogen bombNow what?

We made it through the Holiday that marks the end of the Summer of Trump (like the Summer of Love, but with a lot more Hate) and now we are stuck with the baby World we've made and it just spit up a hydrogen bomb.  Daddy Trump promised "fire and fury the likes of which the World has never seen" if baby NoKo simply fired another missile, which they did over Japan last week but the weekend's HBomb was a move to a whole new level of telling Trump to F off. 

Now Mr. Trump has to either put up or shut up but, of course, no one actually believes a word he says (including, obviously, Kim Jong Il), which makes him sort of totally ineffective as a figure of authority in this situation.  That's the downside of constantly lying, I suppose, people don't believe you when it matters the most.

Of course, the President probably didn't read "The Boy Who Cried Wolf" as it's a book, with words and stuff – so how could he possibly know that losing all credibility might come back to bite him in the ass one day?  After all the bluster about what he WOULD do if North Korea crossed the line they just leap-frogged over, all the Trump Administration has actually done as the Doomsday Clock ticks forward is to call for more sanctions – and China won't even let them do that!

Hopefully America won't come out of this looking like an impotent laughingstock in the World Community – not that we haven't already gone that way for the past 8 months…  Of course, the damage Trump has inflicted on this country hasn't only been on the World stage – he's done a lot to destroy us domestically as well.  The Guardian did a nice job this weekend of summarizing Trump's war on Labor, in honor of the holiday, and some of the highlights were:

As Donald Trump celebrates Labor Day by proposing to slash taxes for CEOs such as himself, it may come as a shock that a president who was previously best known for firing people on TV might not have been completely sincere in his promise to put “American workers first”.

A new report from the Institute for Policy Studies shows, the job growth rate for corporations that paid the least amount in taxes over the past eight years was negative 1%, compared to 6% for the private sector as a whole; businesses for the most part spent tax breaks not on job creation but on stock buybacks and executive pay.

It’s also beside the point whether Trump actually believes corporate tax cuts benefit workers. They benefit him, and the people he goes golfing with, and that’s all that matters. This is a president who embodies rent-seeking at its purest.

Consider the Department of Labor, an otherwise low-profile department targeted in Trump’s budget proposal for a 21% funding cut, the largest of any federal agency after the Environmental Protection Agency and State Department. 

Under Puzder’s replacement, Alex Acosta, the Department of Labor has taken measures to ensure deadbeat employers will go unpunished. These include ending a policy holding businesses responsible for violations committed by subcontractors, rescinding disclosure requirements for law firms engaging in union busting, overturning rules to prevent companies from misclassifying employees as independent contractors (making them ineligible for overtime, unemployment insurance and workers compensation), and excluding many workers from overtime by lowering the disqualifying income threshold former president Barack Obama had raised from just over $23,000 to $47,000.

Nevertheless, under Trump, the Department of Labor has delayed rules protecting workers from lung disease caused by exposure to silica and beryllium, barred union representatives from certain health and safety inspections and, in a petty but symbolic move, erased a tally of deaths from workplace accidents from the Occupational Safety and Health Administration website.

It’s hard to imagine a more anti-worker agenda from any president, much less one claiming the mantle of champion of the American worker. Yet despite this record, Trump continues to show up at factories wearing a hardhat and taking credit for saving jobs that have already been shipped overseas. 

That's right, Trump has, in just 8 months, undone 80 years of the rights American Workers have fought and even died for and it paves a very dangerous path for what's left of the middle class in this country.  As our Top 1% Rich get much, much richer and the Middle Class becomes poorer, they are being hit with, aside from having their rights taken away, the lowest level of real wage compensation since the 1950s as real wages haven't come close to keeping up with inflation.

In a study done by HowMuch.net, they plotted the federal minimum wage for every year since 1940 (the blue) and then adjusted for inflation to reflect how much purchasing power an hour’s work would be worth today (the green on the chart below). For example, workers earned $0.40 per hour in 1945, which doesn’t seem like much, but it gave you the ability to purchase the equivalent of $5.90 worth of stuff in 2017 dollars. 

If you think about the minimum wage in terms of purchasing power, you can see how an hour’s labor was worth more in the 1960s. Low-wage workers could do the most with their paychecks in 1968, when they earned more than $10/hour in 2017 dollars. Congress passed a few adjustments in the 1990s and 2000s, but the wage is back to the same level it was in the 1980s.

This is why you hear so many idiots who are my around my age (54) spouting off that minimum wage is enough to live on – it actually was when we were working in the 70s.  Since then, however, things have gotten considerably worse – 35% worse, in fact, yet most people don't understand the difference and, sadly, those people are in Congress, as well as in state-level Government and they bow to business interests who will do anything to keep wages as low as possible for as long as possible.  

Image result for rich poor economyThat's why there is such a dichotomy between the stock market, which reflects the sentiment of the Top 10% and the economy, which reflects the actual commerce of the bottom 90%.  Even the economy is distorted because, with the Top 10% doing so well – their spending and their wages boost the averages and make it SEEM like the whole economy is broadly recovering but there is PLENTY of data that indicates that's not the case – including last week's radically adjusted Non-Farm Payroll Report.

When America was "great" – our labor laws were strong and our mimimum wage was the highest in the World and new factories opened in our country every day.  What this Administration is doing has nothing at all to do with making America Great Again – it's just dismantling all the things that made us great and whether it's a Russian plot or simply the greed of our local Oligarchs, who managed to put one of their own in power – the results are the same for the American workers and the Middle Class.  

Contrary to Republican opinion, the destruction of the Middle Class is not good for America or even the stock market and Barron's this weekend has come to agree with us, stating:

MOVES THAT VERY RECENTLY might have been written off as a run-of-the mill market pause now raise questions about this bull’s durability. After all, the S&P 500 is up 265% since bottoming on March 9, 2009. Stock valuations have surged to extremes rarely seen except at market peaks. And expectations for market-friendly legislation seem to be as up in the air as ever.

Two conditions now exist that could increase the chances of a sharp selloff. The first is valuation. The S&P 500 is trading at 17.7 times 12-month forward estimated earnings, near the highest price/earnings ratio since the dot-com boom. As a short-term measure, such high valuations have almost no predictive value. But bear markets almost never begin when stocks are cheap.

At the same time, the Federal Reserve is normalizing interest rates. That, on its own, won’t precipitate a bear market, but it could be a catalyst for one if the central bank hikes too much, too fast. The interest-rate backdrop, combined with high valuations, suggests the risk to the bull market is higher now than at any time in the past eight years. “The two most important pieces are there,” says Antti Ilmanen, manager of the portfolio-solutions group at AQR Capital Management. He stresses, though, that neither means a bear market is imminent.

 

September is a month that will be fraught with peril, including:

  • 8 Central Banks making rate decisions – most leaning towards a tightening
  • The Debt Ceiling – Sept 29th is the deadline, so the debate could drag on all month
  • summit of BRIC leaders hosted by China just ended — days after tensions between the world’s second-largest economy and India caused a standoff in the Himalayas
  • The Trump team will continue to renegotiate NAFTA
  • Germany is having an election on the 24th - watch out for more populism/nationalism
  • Noway has elections Sept 11th – watch out for more populism/nationalism
  • New Zealand has electionss Sept 23rd - watch out for more populism/nationalism
  • Brexit talks are scheduled to continue
  • Initial jobless claims will give the earliest indication of Hurricane Harvey’s potential economic toll. Judging by past storms, the peak effect will occur three weeks after the disaster, according to economists at Morgan Stanley.
  • A much worse hurricane is barreling down on us as we speak with more to possibly follow.

Image result for hurricane irma

  • @realDonaldTrump will surely tweet

So let's be extra careful out there this month.  We have our hedges in place and we'll keep our eyes open for short-term opportunities.  Last Friday, we took full advantage of the Dow's pop to double down at the highs (during our Live Member Chat session) and yesterday we took full advantage of what turned into a nice $4,370 gain (up $437 per contract) as the Dow came back down and tested 21,900.  

That bought our total gains in Futures trading to well over $20,000 last week (you're welcome!) and no, we don't expect to do that well every week – the hurricane and the holiday weekend conspired to make for some very obvious trading patterns we were able to take advantage of.  The trick is not to force these trades – when there's a good set-up, we take it but, if not – best to just stand pat and wait for events to unfold.  

Our favorite short at the moment is oil (/CL) below the $48.50 line with very tight stops above.  We also like the Russell (/TF) below the 1,415 line – tight stops too.  

 


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  1. Good Morning.



  2. I am really surprised we don't have a bigger reaction to these N. Korea stories. We are dealing with a crazy guy who has nuclear weapons and apparently willing to use violence… On the other side, Kim Jung Un is probably not suicidal but will walk to the brink to consolidate his power. So a tough situation.


  3. Apparently we can't even impose sanctions:

    http://www.motherjones.com/kevin-drum/2017/09/trump-cant-implement-his-own-north-korea-sanctions/

    The Trump administration is also moving to cut off from the international financial system Chinese banks and trading companies that supply Pyongyang, however, those cases are moving slowly because of the hiring freeze at the State Department and personnel shortages at the Justice and Treasury departments, according to Stanton. “The government has made some of the right policy decisions, at least in sanctions, but they are not putting enough people on task,’’ he said.

    Sad…


  4. A bood review on crypto – the writer is not a fan but the reviewer sees potential:

    https://valueandopportunity.com/2017/09/03/book-review-attack-of-the-50-foot-blockchain/

    The author clearly makes a good case that there are many issues with Bitcoin and current cryptocurrencies. Nevertheless I think that many of the issues can be resolved and that cryptocurrencies could develop into something useful.

    However I still would not recommend to “play” the cryptocurrency market in its current form as it rather looks like a gamble without knowing the odds than an “investment”.


  5. "which makes him sort of totally ineffective as a figure of authority"

    I agree, but different conclusion… I think this makes him much more dangerous as he is more prone to "show 'em who's boss." I can't help comparing Trump to Cartman of South Park fame… "Respect my Athoritay!!!" It isn't funny, it's downright dangerous. Our country has been digging itself into a hole for a while now… we did not need Trump to bring in a backhoe. Had we minded our own business, practiced defense instead of pre-emptive war and avoided the delusion of empire, the "we must be the policemen of the world" mentality we would not be in this situation. It's a long slow decline for the dollar until we reach that tipping point… even that is sold as a positive for corporate profits. Yeah, like jumping off a 30 story building, ask at the 10th floor and the guy says "so far so good!"



  6. Wow, Marvel's Inhumans really bombed out this weekend… Not helping IMAX I imagine.


  7. GNC under 8 again..


  8. Phil – Morning Diatribe – Top Ten material indeed. 

    "Noway has elections Sept 11th "  

    I thought we just had elections in Nov. and are stuck for another 3.5 years? As in, Noway Out ;-)


  9. Phil/WFC

    Good morning!

    I notice it's broken below some support…and there is still headline risk

    Would you consider dipping a toe in with some $50 puts? Or another bank? Or are MA and V better and safer?


  10. NBA Houston Rockets bought in 1993 for $85 million sold for $2,2 billion. That's an ROI ! 


  11. North Korea – don't believe the hype.  We lived for 45 years with Soviets having the bomb (and still another 25 years with Russia itself having the bomb) and 25 years with China (when it was our worst ideological enemy) having it.  We can live with it. 

    We actually withdrew our tactical nuclear bombs from South Korea to defuse tensions.

    They had help – maybe Pakistan, maybe China, maybe Russia, maybe even Iran (with missiles).  It is too bad. 

    But our diplomatic goal should be to normalize them; not to kill them.   Maybe we'd get lucky if we tried – but it's risky.  Look how long it took to get OBL, and he was on the run.

    Instead look what engagement has done for China. They were our worst enemy in 1965.  Suddenly they became an ally (of sorts).   But for that we need diplomats, not people on Fox crying out for blood, crying out  for the elimination of all threats.

    And we need to keep assuring South Korea and Japan that we will defend them.  We should have more diplo-military engagement (along with Australia) with Vietnam.  They don't get along well with China.

    Its a subtle tricky game – not something we've been doing well lately.


  12. Inhumans/Stjean

    I don't think many people expected it to do that well considering it's the first two episodes being shown of a TV show that you can watch for free in your home.


  13. Wow, Sept 29 TZA $15 calls for $1.32… saying TZA won't go up 10c in the next 3 weeks is just silly cheap. I feel like cookie monster! chomp chomp chomp


  14. When Trump says he loves your group. watch out! He loves the Dreamers he said last week right before deciding to end the program! Where is Ivanka? Wasn't she supposed to be the voice of reason for the downtrodden? I guess even she can't get through to this moron. Oh, is that disrespectful? I meant intellectually challenged person who is ruining our country and all that we stood for.


  15. Good morning!

    I hope everyone had a lovely holiday weekend.  I did except my Uncle Marty died yesterday (92) and the funeral is tomorrow at noon so I'll be missing much of the day – AND I have to do BNN at night so lots of craziness for the next two days.  Obviously, we'll skip the Webinar but I'll reschedule for Thursday and hopefully can get things back on track then.

    Hasn't been a good summer for uncles, lost my Uncle David just before we left for England – only one Uncle and one Aunt left before I'm the oldest living Davis!  surprise

    Big Chart – Looking strong.

    NoKo/StJ – On such thin volume the money is all Central Banks and ETFs who will buy no matter what.  It is surprising no one is selling but people seem to have become numb to bad news and considering the mess our own Government is – that's not really shocking.

    Speaking of the State Department, aside from the hiring freeze they also are gutting the budget – practically begging for another Bengazi-type incident as their own investigations determined that security budgets should have been beefed up – not cut.  

    Bitcoin $4,300 after coming close to $4,000.  Strong bounce is $4,400 (from $5,000) so we'll see how it does today.

    Dangerous/Mkucs – This whole rising nationalism thing really concerns me – the World can't afford it.  We learned that lesson in WWII but seem to have suddenly forgotten it now.  War can break out in so many different places and it only takes one spark to start the fire.  

    Image result for gavrilo princip shooting franz ferdinand

    Bonds/StJ – That can go catastrophically wrong for bondholders if the Central Banksters begin raising rates.  Looks like, in the past 9 years, we've added about as much debt than we did in the first 2002 years – hard to imagine that's sustainable.  

    Inhumans/StJ – Should never have been released.  They got cocky and released the first two hours of what's going to be a TV show as a movie – really treats their fans like suckers and these fans read and don't like that kind of BS. 

    WFC/Maya – Looking more and more like a crime syndicate though I suppose that the additional instances are a result of the investigation running its course so not really "new" news on them.  If $50 holds – I like them LONG again (we liked them last time at $50), not short.  As a long, I'd keep an eye on selling the 2019 $50 puts, now $5 against 2019 $45 ($7.70)/$55 ($2.70) bull call spreads at $5 for net $0 on the $10 spreads that are $5 in the money to start.  

    As to V and MA – neither one seems cheap to me but they are very scary to short.  V seems more overbought to me and the March $95 puts are only $2.50 – not a bad gamble.  

    Teams/Craigs – Steinbrenner bought the Yankees in '73 for $10M and that was an obvious success in the 80s and the Phillies went up for sale in 1984, while I was in college and I tried to figure out a way to buy them ($30M).  My idea was to float a public company that would buy them but all sorts of regulatory issues since we didn't actually own the team, so too speculative and I was too young to be taken seriously fast enough to put $30M together from private investors, unfortunately.   Forbes says $1.65Bn for them now

    NoKo/Rexx – Don't get too complacent.  They just fired a missile right over Japan and then they exploded a hydrogen bomb and then they will fly another missile over Japan and Japan is supposed to do what – diplomatically engage them and hope it isn't loaded?  

    Nice dip in /TF!  Taking that and running at 1,410!


  16. Long oil from Thursday, my cycle guy says we rise until end of month. I was going to watch until that drop, took a flyer and up 60% so far.


  17. Dow going cliff-diving now, 21,800.  /TF still lagging at 1,409 if anything.

    Oil/Mkucs – At $49(ish), I'm actually starting to build into a conviction short.  


  18. last weeks YMs are finally ok


  19. Oil – Phil   I understand, will cash out on any sign of weakness but looking good so far


  20. XLF (financials ETF) $25 puts looking golden too!

    On a roll, found $140 in the parking lot at Aldi's (getting milk on Sat) so decided to play some poker with my found money… won first small tourney ($65) 199 entrants, 7 way chop for $650, damn thing took 7 hours! Had a blast :)


  21. WPT series end of month, million $ guaranteed, gonna invest in a few satellites


  22. Hi ho Silver!


  23. Obama was evil and sessions is a weasel…. :)


  24. It's a wonder he needs a drink with all that BS coming out his mouth…..


  25. Sessions looks more like an elf, but yeah I see the weasel too… can't imagine the thought process that made him AG materiel.


  26. Well, Trump just fired 800,000 people by terminating DACA.  Not only that but those people were contributing to SS/Medicaid so now those programs get bigger holes.  This crackdown on immigration is killing restaurants and farmers – especially ones that need cheap, seasonal labor.  

    Sessions playing it off like Obama went beserk with executive order and they are only defending the constitution.  Meanwhile, the US takes another giant step forward on the road to Hell.  

    $140/Mkucs – What?  Who drops $140?  I do love my poker tourneys, wish I had more time for those. 

    Sessions said DACA encouraged illegal immigration.  It's amazing how these guys can say such obvious lies and the media doesn't challenge them:

    Image result for illegal immigration over time 2016

    I like how Sessions flees the room the second he's done with his statement.  Like a cockroach when you turn on the light!  

    Image result for sessions lying animated gif


  27. Mkucs – All it took was his support of trump from the start….


  28. And Trump is such a big coward! Could not even do the deed himself – has to delegate to his henchman!


  29. Good time to get rid of workers when you will need all men on deck to help rebuild tons of houses in Houston and other parts of Texas when people already will be displaced and living in rentals for a year if not more.  Helping the people and making America great again.


  30. $1.65 BILLION for the phillies?  And the Daily News sold for $1…(here's their rivals gleeful coverage http://nypost.com/2017/09/04/ny-daily-news-may-finally-have-a-buyer/)


  31. FU TEVA!!!!


  32. Craigs – "NBA Houston Rockets bought in 1993 for $85 million sold for $2.2 billion. That's an ROI !"

    Try this one on… The "model" in professional sports is the Dallas Cokeboys, the most valuable franchise in the world at +$4B;  #2 Real Madrid FC at $3.3B.  

    The Cowpokes had to build a $1.2B stadium with $325M in taxpayer money, which is considered in the valuation. Revenue considers TV, merchandise licensing and ticket concession sales. The Pokes are also #1 in revenue and growth 2004 – 2014.  

    In 2015, the NFL (#1 globally) cleared +$1B on $13B in revenue, while Jerry Jones North Dallas Forty (these days 53) booked $700M in revenue.  Putting that high payroll and overhead operation into perspective…

    Not far behind in 2015, a bunch of ragtag, tatted up, mixed arts fighters at UFC took in $600M with no stadiums, uber low payroll and no overhead.  

    That was prior to NY state matches being legalized in March 2016. UFC matches are broadcast in over 156 countries and territories, to nearly 1.1B television households worldwide, in 29 different languages.   

    In 1993 UFC was launched, almost went BK in 2000, and was purchased for a paltry $2M by casino operators Lorenzo and Frank Fertitta.  

    In Aug 2016, UFC was sold for $4B, making WWE at $1.5B a bargain, and representing a 72% annual ROI, every year for 16 years.  Punch, kick, grapple, gouge, scratch, bite, cup check and Out.  


  33. TEVA – Cantor Fitzgerald reiterates Neutral rating, $27 PT. This price target represents a 69.81% upside over the stock’s previous closing price of $15.90.

    SEP 5, 2017 | 11:27AM | BY STOCKNEWS.COM STAFF


  34. analysts/jabo

    You will never figure out the illogical ratings of an analyst.  Cantor Fitzgerald has a neutral rating on stock that they believe has a 70% upside and there are analysts on TSLA that have an outperform on the stock even thought the price target is lower than the current price.


  35. QCOM down to 50 again same level as Jul 2016, not much of a fliyer


  36. N Korea – missiles over Japan. Nuts. Kim is just playing chicken. That was direct response to Trump's throwing gas on the fire. He dared them.

    Appropriate responses needed.  So we flew some B1s over SOUTH Korea and Japan.  And talk about AnitMissile  Missiles.

    Look at the Chinese "islands" in South China Sea.  We just ignore them and steam right by them. (Hopefully, right by them – a little navigator trouble lately).

    I'd certainly like Kim to pipe down but need a plan and just screaming at him isn't really working.  But he's also taking very deliberate steps. So we need appropriate responses.  First strike isn't going to work.  Why not sell Kim a piece of the Phillies?


  37. Bounce coming today at some point, or is this just going to keep dropping further?


  38. rustle--makes no sense to me..

    but i doubt they really believe in their price target.


  39. aapl sells bonds…stock drops.  tsla sells more shares…it goes up.   go figure!


  40. News/Rexx – I wouldn't have paid $1 for the Daily News.

    Sports/Naybob – I can't believe robot fighting doesn't catch on – that's one of my favorite sports.  They try it on TV once in a while but they can't seem to keep an audience.  I'd buy them cheap and then work with SV sponsors to turn it into a national college competition (to get more team spirit) with grants to schools to get them interested in fielding teams and scholarships to push it down to the high schools.  Might take a decade but I bet you can build that into a decent-sized TV sport.

    QCOM/Yodi – Very disappointing performance but at least they are proactive in getting the next-level chip-sets into production.  

    Kim/Rexx – The man wants to be a nuclear power, probably figures we'll pay him Billions to be nice eventually.  The whole country only has 25M people with a $12Bn GDP ($583 pp), if he could scam $2Bn/yr to not nuke people then he could keep half and still have a huge impact on the country's economy with the rest so why wouldn't he do that?  

    You know what's really crazy?  The life expectancy in NoKo is 70.34, ours is 78.  That's only 10% better spending about 300x more per person.  

    Bounce/Craigs – /ES 2,480 to 2,450 is 30 so 6 is weak (2,456) and 12 is strong (2,462) so watch for that:

    More likely we're on the way back to 2,420 (as the rally was total BS) so the bounce off the 60-point drop is 12 (2,432) and 24 (2,444) so 2,444 is the line that would indicate a bearish break back towards 2,420 and would make a nice downside bet (or a failure at 2,462, of course).  

    /NKD worse for the wear, will be interesting to see what they do too:

    1,400 gone on /TF!  5,900 being tested on /NQ, 2,450 on /ES and 21,750 on /YM – very bad if those fail.


  41. life expectancy – Really should measure against middle ages (40 I'd guess as).  So then we're 20% better!  And of course that's the AVERAGE.  But for average POOR American its probably close to 65.  Of course they probably only pay 100 times as much as NKo.

     

    And I bet that NKo stat leaves out the famines of the 1990s.


  42. NoKo is the closest anthropomorphic embodiment of Orwell's Animal Farm in existence on the planet. I have always questioned the regime's stability from the inside. After 50+ years of scaring the minions that "war is imminent" I wonder how they really fell about it. I'd probably be "well let's get it out already" or come to the slow conclusion we're being manipulated. It's easier to feel that way when you're starving to death.

    Despite what Kim tells his people or believes himself (which are unlikely the same thing), the US is not "at war" with North Korea. If we were, they would've lost in about a week. Kim's predecessors understood the saber-rattling was for self-preservation only, not putting a legitimate stake in the ground they would win any actual "war." They benefited from having the support of Russia and China that prefer a totalitarian state bordering them as opposed to a unified, democratic and capitalistic South Korea.

    To that end, Kim's H-bomb and missile tests of late look like a serious misstep: the nation was never an actual threat to the United States (or China or Russia). The US really has no vested interest in a war: if an actual nuke was used that would effectively end North Korea's existence immediately (and Russia and China would not stop us from retaliating). The real stake holder here is China.

    China prefers a well controlled totalitarian state sharing it's 900-mile border, as opposed to South Korea, which is their primary motivation to allowing Kim to exist. China provides them with 90% of their trade, and without this, the whole regime would implode quickly.  China's other motivation is to avoid war, because North Korea's masses would stream across their border into sparsely populated northeastern China. Simply out, China wants Kim to sable rattle to control his regime internally, but avoid any actual conflict. The consternation coming out of China's foreign policy department now is palpable. The situation with North Korea is changing more dramatically for them than it is for us, south korea or japan.

    A good leader what play these cards. Trump, of course, resembles nothing even remotely close to a leader or even a "good person," so he says stupid shit like "hell and fury" or whatever nonsense that a country that developed nuclear ballistic missiles in 1958, some 60 years ago, never has to say out loud. A good leader would pressure china to see there most stable bet now is a south korea type of country bordering them is far superior to their safety, security and economic interests than have a divided North Korea regime acting as a block like armies on a risk board. Once China is forced to choose between these "lesser of two evils" (in their minds), the fate of Kimmy the Pig is all but sealed and no war ever has to take place.

    China's time for this is running out. If a ballistic missile can hit Guam, it can hit Beijing. If Kim goes down with a "ah f*** it" attitude, China might have a real problem on their hands. However, it is clear at this time that the status quo is no longer, and new things are in motion. I wish to God we had Obama in office for this but we don't. Trump will screw it up, because he's an evil twisted horrible man that does exactly the opposite of anything a decent human being does. But that's just my opinion on it.

    And people say "Obama is evil?" Why? I just don;t get how twisted some human beings are. It really blows my mind.


  43. Will indexes ever go down again? Impossible to be short, currencies will devalue faster than companies. 


  44. biodieselchris 

     

     hear, hear!


  45. Bio Very good points


  46. Yodi – re: QCOM,  dividend yield is now 4.4%,  I don't see much downside from here and after NXP gets sealed, this stock should go up.  If it falls, it is setting up nicely for your trademark armchair trades… your thoughts?  


  47. sorry to get snippy about tRump but he really rubs me the wrong way. My brother voted for him and I love my brother. But it's hard for me. I'm not perfect. I'm trying ….


  48. Learner QCOM I already hold this stock in my Armchair play with a Jan 19 strangle  set up in July 52.5/55 with a combined value of 12.50$ Obviously at today’s price you can look for the Apr 18 50/52.5 strangle of 7.36.

    The only question you will have "how low can you go." with today’s market condition the market could still go quite a bit lower. Difficult to say with all the crazy clown in Government.


  49. Is the fed meeting this week? I know it's soon


  50. 65/Rexx – Good point on poor.  As to famines, I bet the US leaves out slavery (36).

    NoKo/BDC – We are at war with them.  We've been waging economic war and our POTUS has threatened them on numerous occasions.  You might not take Trump seriously, but they do.  Bush called them part of the axis of evil – though I'm not aware of any North Korean terrorists.  As to NoKo's "masses" the whole country could fit in one of China's empty cities – I really don't think that's what motivates China.  I think it's more likely that China likes to have an economically disadvantaged state next door to them because they can show their citizens what life would be like without submission to party rule.

    1-month TBill shot up to 1.3%, all notes flying with it:  

    Fed/Mkucs – Next week I think.  They wouldn't meet on a holiday week.  Beige Book on Weds (2pm).  Kashkari speaking now, probably doveish as we're heading up a bit.  


  51. Thanks Yodi,  Yes, with the current market- how low can it go….

    I don't hold the stock right now, my Jan 2018 put sales will get me in at $42, which will be a 5.6% div yield and then I can sell 2019  calls and puts around it.    I think at that level, I might just sell puts and wait for some recovery before selling calls… all this only if I get assigned stock.  Otherwise, my 50/60 BCS is on in the background. 


  52. Federal Reserve September 19-20


  53. Dreamers, by the numbers


  54. Does Trump Want a Nuclear Japan?


  55. Phil – "I can't believe robot fighting doesn't catch on – that's one of my favorite sports."

    As for automaton's I prefer the Mighty Casey, who pitched for the Hoboken Zephyrs. And I am sure that Battling Maxo and Atom would agree with you. Both the Twilight Zone episode and 2011 movie with Hugh Jackman, were based on the 1956 short story "Steel" by Richard Matheson.



  56. Phil/NoKo – what? North Korea doesn't subject their people to single party rule?

    That's the most enigmatic thing I've read in awhile.



  57. Is Amazonification real?


  58. Phil –  Bonds – Yield shot up on the 30 day +3% or +.030 ticks as they sold off and price fell, all annual tenures 1yr – 30yr got the bid with price shooting up and yield's declining 3 – 4% or - .070 ticks on average.

    There are disturbingly large duration mismatches on some unhedged balance sheets and Out.


  59. AMC – started a position.. Bot shares (ex-div on 9/8) and covered with Dec 16 calls for net $13.35. 9% discount on current price, boosts div yield to 5.9% annualized, and gives a 20% gain in December (71% annualized) if called away. Contracts started filling, but going slow.


  60. FOXA – what news clobbered them today?



  61. These articles are interesting. I see people lining up, especially in "yahoo article" comments to make cryptos illegal. Some of them are pretty visceral about it. Obviously some sour grapes, but also the final nail in the conservative hypocrisy is exposed (the claiming a "moral authority" and then electing trump). now any government-free, regulation free pure capitalistic mechanism shouldn't just be "regulated" (globalist liberal Phil is on board), but just made outright illegal? I think Mao and his communist ilk would be proud. Oh those poor granny purses that are getting snatched by "Madoff" types. This author, what a loser.


  62. Phil – Bonds – scratch those amounts was looking at a stale screen. Still 1yr – 30yr price up, yields down. Nice catch on the short term divergence, looks like somebody had to liquidate 30 day notes today to cover something?




  63. RF – looks like a bad hire today: "~Regions Bank  today announced that  Mark Hardison  has joined the Healthcare group as Managing Director…" stock down 5%
     


  64. Casey/Naybob – One of the few episodes I've never seen.

    NoKo/BDC – No I meant under China's party rule.  

    FOXA/Scott – Probably rumors on their Sky merger in the UK.  

    Cryptos/BDC – Until BitCoin raises a money and taxes its citizens, it will be at the mercy of Governments with the power to regulate it.  Could have seen this coming 1,000 miles away and yes, there does have to be regulation when a person can ICO while holding 10-20% of the currency in their pockets.  Just because people are idiots and don't understand they are making some random coin floater a multi-millionaire while they pay pennies for a currency that is worth 1/100,000th that much – doesn't mean it's OK to rip them off.  

    30 days/Naybob – I think it's because those notes run right into the debt ceiling so they are kind of a measure of people's confidence (or lack thereof) in Congress to fix the problem in 3 weeks. 

    This Irma thing is shaping up to be quite a disaster.  Miami would be a catastrophe, Gulf would be a catastrophe – best we can hope for is a curve north where it hopefully loses some energy in colder waters.  

    • Dovish Federal Reserve Governor Lael Brainard made news about three months ago when her views took a hawkish turn.
    • That didn't last long though. This morning she takes note of inflation falling "well short" of target, and urges the Fed to be cautious on any more rate hikes until prices behave.
    • More: "I believe it is important to be clear that we would be comfortable with inflation moving modestly above our target for a time."
    • Apartment and retail would be among the REIT sectors most affected should Irma hit Florida as bad as current models show it might, according to Bloomberg Intelligence's Jeff Langbaum and Lindsay Dutch.
    • They're not expecting to see big declines in rent or occupancy, but rather high clean-up and damage costs.
    • Aimco (NYSE:AIV) earns 7% of its NOI from Miami – more than any other publicly traded apartment REIT. In single-family rentals, Invitation Homes (NYSE:INVH) has 14% of its portfolio in South Florida.
    • For retail, Regency Centers (NYSE:REG) gets 12% of its rent from the Miami/Ft. Lauderdale area.
    • Wells Fargo has a look at the lodging names, and finds Sotherly Hotels (SOHO), Ashford Prime (AHP -3.7%), Hersha Hospitality (HT -3.1%), DiamondRock (DRH -3.1%), and RLJ Lodging (RLJ -1.3%) as most exposed to the Caribbean, Florida Keys, and South Florida.
    • Spirit Airlines (SAVE -3.6%) estimates that it will see a negative impact of $8.5M in Q3 from Hurricane Harvey.
    • Factoring in the hurricane and "aggressive competitive" pricing in key markets, Spirit now expects revenue per available seat mile to fall 7.0% to 8.5% during the quarter. The prior forecast from Spirit was for a 2% to 4% drop.
    • SEC Form 8-K
    • Valero Energy (VLO -2.7%) asks the FERC to allow or direct Colonial Pipeline to lift gasoline grade requirements in the wake of Hurricane Harvey.
    • The waivers would allow VLO and other Gulf Coast refiners to resume shipments without "undue and unreasonable" hindrances, VLO says in a filing with the regulator.
    • VLO says Colonial's move to restrict the grades of gasoline flowing on its system is inconsistent with the intended effect of the EPA's emergency fuel waivers for 38 states and D.C. after Harvey shut refineries and gasoline prices spiked.
    • The EPA's waiver, in place until Sept. 15, allows gasoline with higher volatility to be sold during the temporary emergency period.

    Boeing digs in with dispute against Bombardier, says affects all aerospace

    • Boeing (BA -0.9%) shows no signs of backing down in its trade dispute with Canadian rival Bombardier (OTCQX:BDRAFOTCQX:BDRBF), a conflict the U.S. company says could have long-term ramifications for the future of the entire aerospace sector.
    • “In Canada, we face a situation with a competitor, an emerging competitor, that has, yes, long received government support – but that just went beyond the pale in 2016," says Marc Allen, president of BA’s international division.
    • BA complained earlier this year that Bombardier was selling its CSeries passenger jets to Delta Air Lines at an unfairly low price, thanks to loans and grants from both Canada's federal government and Quebec's provincial government.
    • Some have questioned why BA is being so aggressive, as the CSeries planes manufactured by Bombardier do not directly compete with the BA’s existing passenger jets, but Allen believes the situation is akin to the ascent of Airbus, which BA says entered the market in a "very similar fashion."
    • Allen says he expects the dispute to drag into next year, as U.S. officials finalize their findings and decide whether to level fines or tariffs against the Canadian firm.
    • Deutsche Bank raises its price target on Tesla TSLA to $320 from $240 to adjust for the potential of the electric truck business to be meaningful.
    • The firm thinks Tesla will have the ability to leverage its technology to offer disruptive pricing on Class 8 trucks.
    • DB has a Hold rating on Tesla.
    • Companies with eyes on truck pricing include Cummins (NYSE:CMI), PACCAR (NASDAQ:PCAR) and Navistar (NYSE:NAV).

    Mallinckrodt targeted by Missouri AG over opioid marketing; shares down 14%

    • The market's selloff notwithstanding, Mallinckrodt (MNK -13.9%) is getting some rough treatment on double normal volume. Last week, Missouri Attorney General Josh Hawley announced a widening of his investigation into the marketing activities of certain opioid manufacturers. Targeted companies include Allergan (AGN -1.3%), Depomed (DEPO +0.5%), Insys Therapeutics (INSY +0.9%), Mylan (MYL +0.2%), Pfizer (PFE -0.5%) and Teva Pharmaceutical Industries (TEVA -2.6%).
    • Hawley sued Endo Pharmaceuticals (ENDP -4.1%), privately held Purdue Pharma and J&J's Janssen Pharmaceuticals (JNJ -0.6%) in June accusing them of violating state consumer protection laws by misleading doctors and consumers about the risks of taking opioids.
    • SA Contributor Shock Exchange has just published a new article on the issue that should be of interest to MNK investors.
    • Update: Bloomberg reported earlier today that the company lost its bid to block the entry of a generic competitor (Praxair) to Inomax (nitric oxide), which accounted for over 15% ($125.5M) of the company's Q2 sales of $824.5M. A federal judge in Delaware invalidated patents covering Inomax. The company plans to appeal the decision, adding that it has regulatory exclusivity until October 2018

    Microsoft extends Windows 10 S upgrade period, offers to pay Dreamer legal fees

    • Microsoft (NASDAQ:MSFT) is expanding its free upgrade period for customers purchasing a Windows 10 S device and wanting Windows 10 Pro.
    • The upgrade period was originally meant to end with CY17 but will now stretch on for three months until the end of March 2018.
    • Microsoft offered the upgrade period to give customers a low-risk way to try out Windows 10 S, which only runs Windows Store apps for an experience the company says offers a more streamlined and secure performance. 
    • Windows 10 S is the default OS on the new Surface laptops. 
    • In other Microsoft news, President and CLO Brad Smith promises the company will pay the legal fees of any employees who face deportation as President Trump ends the Dreamers immigration program.        
    • Previously: Huawei, Microsoft expand cloud app partnership (Sept. 5)

    Bloomberg: Facebook ponying up for music rights for videos

    • Facebook (FB -0.8%) has gone to the music industry with hundreds of millions of dollars in handto secure song rights, Bloomberg reports.
    • Tellingly, it all comes back to video: The company's making the move so that users can legally include the music in their uploaded videos, sources tell the news service.
    • That would save the social network the trouble of constantly policing infringing usage. Facebook has promised to build a system to identify and tag infringing music, but it could take a couple of years to build; a rights-based solution will be far quicker (and Facebook would like to stop frustrating users).
    • Previously: Facebook's failed $600M cricket bid may presage NFL streaming dreams (Sep. 05 2017)
    • Piper Jaffray says customers aren’t as excited about this year’s Apple (NASDAQ:AAPL) iPhone models, according to CNBC.   
    • Analyst Michael J. Olson writes that the firm’s survey of over 400 U.S. iPhone users found that 16% were planning to upgrade this fall and 24% said they might upgrade. Those numbers compare to 15% and 29%, respectively, in the survey last year.
    • Olson thinks the drop could be due to customers not understanding that the premium iPhone will offer a “more robust feature set” and suggests Apple can combat that problem by explaining the features clearly at the September 12 launch event. 
    • Bernstein reiterates its Outperform rating on Apple (NASDAQ:AAPL) and outlines three ways the company can keep the rally going after the September 12 launch event, per CNBC.
    • Analyst Toni Sacconaghi writes in a note that Street consensus on iPhone 8 average selling prices ((ASPs)) and unit shipments could be overly conservative and Apple shares have historically outperformed when its product cycle exceeds expectations. 
    • Sacconaghi also notes that Apple shares would need to trade at $186 on FY18 estimates to match the peak multiple during the last iPhone launch cycle. Apple is well below that multiple with its current trading price around $163. 
    • The final rally driver could be currency tailwinds and the launches of other products like the Apple Watch Series 3, expected at the launch event, and the December launch of the HomePod smart speaker. 
    • Price target: $175. 
    • Apple shares are down 0.64%.  
    • Barclays thinks Apple’s (NASDAQ:AAPL) smart home products won’t drive sales but will drive customer loyalty.
    • The note from analysts Mark Moskowitz, Daniel Gaide, and Chang Liu says Apple has an advantage over Amazon in that Siri is available on more than 700M devices compared to 20M for Echo. The iPhone makes a “natural control panel” for a smart home “due to its user-friendly interface and constant presence with the user.” 
    • The analysts are skeptical Apple can leverage the smart home usage into material revenue in the near-term because they expect December’s HomePod smart speaker to be “an ancillary offering.”
    • On the positive side, the analysts say that customers who do use the iPhone for a connected home won’t want to switch platforms in the future. 
    • Price target is $146, below the current trading price of about $161 as Barclays expects a soft iPhone 8 launch. 
    • Apple shares are down 1.18%.   

    • "It’s very possible that our rate hikes over the past 18 months are leading to slower job growth, leaving more people on the sidelines, leading to lower wage growth, and leading to lower inflation and inflation expectations," says Minneapolis Fed President Neel Kashkari, not disappointing his dovish fans.
    • "These premature rate hikes that we are embarking on, they’re not free, and I think we need to remind ourselves of that.”
    • A voter on the FOMC this year, Kashkari dissented against the March and June rate hikes.
    • He suggests the Fed is potentially overestimating the tightness of the labor market, and may have allowed inflation expectations to turn lower.
    • Previously: Fed's Brainard not on board with another rate hike (Sept. 5)
    • Airline stocks fall as the approach of Hurricane Irma prompts flight cancellations to cities in the Caribbean. A large number of cancellations for flights to Florida is anticipated for later in the week.
    • Decliners include Alaska Air Group (ALK -2.9%), JetBlue (JBLU -2.3%), Southwest Airlines (LUV-2.1%), Delta Airlines (DAL -3.1%), American Airlines Group (AAL -2.6%) and United Continental (UAL -1.7%).
    • Spirit Airlines (SAVE -4.2%) is also down sharply after lowering Q3 unit revenue guidance.
    • Previously: Hurricane Irma a major threat to U.S. (Sept. 5)

    Former President Barack Obama issued a statement Tuesday calling President Donald Trump’s decision to rescind DACA “contrary to our spirit, and to common sense.”

    “We all want safe, secure borders and a dynamic economy, and people of goodwill can have legitimate disagreements about how to fix our immigration system so that everybody plays by the rules,” Obama wrote. “But that’s not what the action that the White House took today is about."

    Obama signed the executive order creating the program in June 2012 and sees it as a major achievement. He promised after the election that any move to get rid of it would prompt him to speak out against his successor. 

     

    Immigration can be a controversial topic. We all want safe, secure borders and a dynamic economy, and people of goodwill can have legitimate disagreements about how to fix our immigration system so that everybody plays by the rules.

    But that’s not what the action that the White House took today is about. This is about young people who grew up in America – kids who study in our schools, young adults who are starting careers, patriots who pledge allegiance to our flag. These Dreamers are Americans in their hearts, in their minds, in every single way but one: on paper. They were brought to this country by their parents, sometimes even as infants. They may not know a country besides ours. They may not even know a language besides English. They often have no idea they’re undocumented until they apply for a job, or college, or a driver’s license.

    Over the years, politicians of both parties have worked together to write legislation that would have told these young people – our young people – that if your parents brought you here as a child, if you’ve been here a certain number of years, and if you’re willing to go to college or serve in our military, then you’ll get a chance to stay and earn your citizenship. And for years while I was President, I asked Congress to send me such a bill.

    That bill never came. And because it made no sense to expel talented, driven, patriotic young people from the only country they know solely because of the actions of their parents, my administration acted to lift the shadow of deportation from these young people, so that they could continue to contribute to our communities and our country. We did so based on the well-established legal principle of prosecutorial discretion, deployed by Democratic and Republican presidents alike, because our immigration enforcement agencies have limited resources, and it makes sense to focus those resources on those who come illegally to this country to do us harm. Deportations of criminals went up. Some 800,000 young people stepped forward, met rigorous requirements, and went through background checks. And America grew stronger as a result.

    But today, that shadow has been cast over some of our best and brightest young people once again. To target these young people is wrong – because they have done nothing wrong. It is self-defeating – because they want to start new businesses, staff our labs, serve in our military, and otherwise contribute to the country we love. And it is cruel. What if our kid’s science teacher, or our friendly neighbor turns out to be a Dreamer? Where are we supposed to send her? To a country she doesn’t know or remember, with a language she may not even speak?

    Let’s be clear: the action taken today isn’t required legally. It’s a political decision, and a moral question. Whatever concerns or complaints Americans may have about immigration in general, we shouldn’t threaten the future of this group of young people who are here through no fault of their own, who pose no threat, who are not taking away anything from the rest of us. They are that pitcher on our kid’s softball team, that first responder who helps out his community after a disaster, that cadet in ROTC who wants nothing more than to wear the uniform of the country that gave him a chance. Kicking them out won’t lower the unemployment rate, or lighten anyone’s taxes, or raise anybody’s wages.

    It is precisely because this action is contrary to our spirit, and to common sense, that business leaders, faith leaders, economists, and Americans of all political stripes called on the administration not to do what it did today. And now that the White House has shifted its responsibility for these young people to Congress, it’s up to Members of Congress to protect these young people and our future. I’m heartened by those who’ve suggested that they should. And I join my voice with the majority of Americans who hope they step up and do it with a sense of moral urgency that matches the urgency these young people feel.

    Ultimately, this is about basic decency. This is about whether we are a people who kick hopeful young strivers out of America, or whether we treat them the way we’d want our own kids to be treated. It’s about who we are as a people – and who we want to be.

    What makes us American is not a question of what we look like, or where our names come from, or the way we pray. What makes us American is our fidelity to a set of ideals – that all of us are created equal; that all of us deserve the chance to make of our lives what we will; that all of us share an obligation to stand up, speak out, and secure our most cherished values for the next generation. That’s how America has traveled this far. That’s how, if we keep at it, we will ultimately reach that more perfect union.

    Now Trump is going to have a complete tantrum over this one!  


  65. to be clear, you are saying you saw what was coming with crypto from "a thousand miles away"?


  66. TBT breaking down to new low for the year… but who will short an ultrashort on bonds today!?


  67. When  you read the statement Obama put out and compare that to any speech or tweet Donald Trump has written or given in 8 months and it makes you very sad to see how low that bar has fallen for President of the United States.


  68. Crypto/BDC – I didn't see it going up 10,000% but I did see that, if it became big, it would be regulated which is why I didn't have the interest in playing with it.  Yes, lots of short-term money was made and maybe more down the road but the uncertainty of regulation made it something I didn't want to gamble on – other than small, loseable amounts like with GreenCoin – which is still a long way from annoying any governments.  

    Irma keeps drifting south, towards the Gulf.


  69. Obama – "What makes us American is not a question of what we look like, or where our names come from, or the way we pray."

    It's not where you come from, it's what your made of and Out.


  70. Even with the index drops today, still a goodly number of new yearly highs.. those with highest "sizzle" in my screen: FUL, TSM, GLPI, PHG, ORBK, FIZZ, HUM, UMC, QLYS, ILMN, CI…


  71. Frogs, snails and puppy dog tails… what I'm made of, or so my mother told me…


  72. bitcoin was never "ICO"-ed and there is a big difference between actors, that is purveyors, soliciting raising funds for example, who need to be regulated (probably via the SEC), and the software protocol itself, which does not be (and honestly can't be without outlawing computers and the internet outright). I guess it could be outlawed in north korea effectively. So maybe that is a free-standing point on its own one should consider.

    Speaking of actors, "GRNBF" comes to mind here. These guys pump out press releases about having a crypto without actually having a crypto… (this is only IMO, so please don't retaliate).

    And let's not forget the IRS already considers all cryptos to be assets subject to capital gains tax rules. So that is in effect a "regulation." And the feds sequestered 30,000 bitcoins from the drug dealer at silk road, which personally I was very glad to see get shut down and threw that animal in jail, and then they sold them to the highest bidder. So if the feds can sell bitcoin to the general public, that looks like an asset that can sure be turned back into dollars to pay public debts, so there goes that argument. I can;t say this any more clearly: people can CHOOSE NOT TO BUY INTO A COIN ICO's. I am one of those people by the way. I don't know, that seems pretty relevant to me, that individuals can make choices on their own without the warm papa bear government directing their every move and deciding for them? You recommended buying GRNBF. I have no interest, but I don't think that should stop you from acting on it yourself and talking about it. It's pretty simple how that works. It is also worth noting that zero American ICO's have occurred. They are all overseas. Only organic mineable issues have come from US soil, specifically because SEC laws forbid raising money outside of their rules.

    Another aspect of the article that is much more important is the nature of money itself. There's a pervasive fear of "something's changing" and the conservative mentality is to resist change and not embrace it. This is how I am able to point out the irony that conservatives talk about "freedom" but really hate it. The first thing you need to ask yourself once crypto comes along is: what is money? When you've spent your entire life working like a slave for 30 years and saving and obsessing and scrapping and fighting over your little piece of the pie, and especially among older conservatives, have your little piece of the pie guarded with both arms wrapped around it, you don't want to see an article pop up somewhere saying, "hey that thing you dedicated your whole life to, so what is that thing actually consist of?"

    "Well it's money issued by the federal government damn it! And that's it! And it never changes!" For some of us this is whistling past the graveyard, because money, and economics in general, unlike science (like gravity), is not a hard science. Money is completely a figment of the human brain and imagination: if there were no people, there would be no money (but there would still be gravity). That's why economics is called a "social science" which, to scientists, is another word for "sociology." I think it's absolutely fascinating to discuss and debate the history of money (e.g., bartering, gold, fiat), it's evolution ot nation-state fiat debt instruments and now, and now possibly early transitioning to a self-socially-engineering, digitally enabled asset. Afterall, fiats are mostly global and digital now, what's so different about an asset that cuts out the middleman who is no longer needed?

    I don't think it's a particularly good investment at current (I certainly did in 2012), but that doesn't mean it is uninteresting, and it is very interesting to see where this whole space goes over the next few years, especially as the debt game plays out toward inevitability. 

    I like PSW because I'm not talking to a bunch of financial noobs like my family. They have stock experience, bonds, options and futures trading, sometimes many years of experience. Certainly a pedigree for discussing such concepts as cryptocurrencies and what they might mean and in the context of stuff like this


  73. Going to be the lowest close in decades for TEVA.

    What a POS!


  74. My 1,000-mile view on Bitcoin:

    Image result for bitcoin 5-year chart

    Bitcoin/BDC – I think it's interesting.  It essentially proves what I've said for ages – anything we invent, as long as it is certifiably rare – is literally as good as, or better than, gold.  Other than proving a concept, however, I don't see this as anything other than another form of currency speculation.  Any hacker worth a damn can come up with a reasonable encryption protocol and call the limited amount of keys "valuable".  Right now what you have is a rare collectible and plenty of rich suckers to go around to buy the "coins" but it's not a currency until it becomes a widely-accepted means of exchange and I doubt that will ever happen.  So Bitcoin is, to that extent, just another Ponzi scheme, working on the greater fool theory as more and more people buy it simply because the last guys made money.  Call me when NetJets accepts 10,000 BitCoins in lieu of cash for a $100K NetJets card or when I can drop some BitCoins on a craps table in Vegas without being arrested.  I don't care how much computer power it takes them to secure their system, that's not what I'm buying – if they can't get that right they have nothing.  In fact – if there ever is a glitch in the system – you will literally have nothing.  Not too many currencies have the ability to completely wipe you out overnight – THAT is innovative!  

    Bitcoin/BDC – That's the thing, no moat around the fake currency.  Eventually has to compete with other fake currencies for market share (until the storm troopers come and shut the whole thing down). 

    Bitcoin/BDC – As a first mover in a ridiculous and unsustainable Ponzi scheme they do have a huge advantage.  As you note though – it's an algorithm and that means it can be done over and over and over again until there are thousands of Bitcoin currencies sucking up Trillions of Dollars – does that make any sense?  I guess we could invalidate Dollars, Euros and Yen and keep inventing currencies instead and then we could create exchanges for all the virtual currencies and then we'll have a ZitCoin currency crisis when it's discovered the Zitcoin corporation is 120% of it's GDP in debt, etc…  

    Does it not occur to you that some of these anonymous guys could be nothing more than criminals who produce coins for themselves and their friends and their families whenever they feel like it?  How would you know?  They whole point of thing is that you can't know and would have no way of even suspecting until and unless they get greedy or when the scheme finally falls apart – like Madoff.  

    Rather than tell me it was a lot of time for a get rich quick scheme, imagine that the people created coins at $0, sold them at $33 and dumped the price (because there aren't many actual idiots who would give someone $33 of actual cash for a virtual currency) and then waited for the next wave, did it again and now, 2 years later, they're into the 3rd cycle where they've reeled in enough suckers to dump it again – this time for a big score.  

    I do know it's a revolutionary idea – which is why I think it will be shut down by the established authority.  I'm also not saying it's not fun to play with – there's nothing wrong with a good ponzi or pyramid scheme if you get in early and even better if you're not the one who goes to jail in the end.  People who started with Madoff got 20% for 30 years – if they weren't so dumb that they reinvested it all, what's the big deal that they didn't get their last 100% off the table after a 1,000% run?  I'm only warning people about what a speculative play it is (and you as well) so you never fool yourself into thinking this is something to bank your future on.  

    By the way – if any of you clever programmers out there want to create an algorithm for Philcoins – we can begin "mining" them and pushing them to my hundreds of thousands of readers.  I really would love to do that – it would be great to document the stupidity from the inside but I'm pretty sure I'd end up in jail, which would take all the fun out of it.  So, make a new currency, don't involve me, but send me some mining equipment early on and, once I have a few thousand of my own coins – THEN I'll start documenting my adventures with the new currency and we can chart it's progress etc (make sure you give some to StJ as well!).  

    Bitcoins (again)/BDC – Again, I'm not trying to win an argument here.  Maybe the anonymous Bitcoin inventors are truly virtuous types who never made any for themselves and maybe they aren't the ones selling ASIC mining packages to "investors" and maybe they have perfected virtual currency on their first attempt (or maybe it's their 100th attempt – no resumes means we can imagine anything we want to about them) and maybe the system is foolproof and, even though it took just 4 years to make the first 10M coins, it will now take 30 more to make the next 11M (because computer technology is bound to stand still for the next 30 years).  I pointed out that Bitcoin is no less real than Fiats and in fact, Bitcoin has printed right on it "Vires in Numeris" (strength in numbers) which is a perfect geek, anti-establishment battle cry.  

    Also, unless I'm mistaken, Bitcoin transactions rely on that same number-crunching for transaction verification so what, about 10-15 minutes to verify the coins?  That's completely useless for point of sale but OK for web transactions that don't need to be immediately verified.  Of course, how many Fiat currencies come with restrictions?  This is also interesting:

    The paper contains some truly insightful figures that help to assess the Bitcoin experiment fully. There are 1,851,544 different Bitcoin owners. Given that at the time of writing there are a total of 10.1 million BTCs in circulation, this would give an average of 5.5 BTCs per each user, which does not seem to encourage an active economy.

    But some of the real interesting information comes from the data about centrality. From the data collected, it seems clear that there is some large accumulation of the bulk of Bitcoin activity, for example, one single user had 156,722 different addresses. This was identified as Mt.Gox, the largest Bitcoin exchange, which is responsible for an astounding 90% of all of the total BTC transactions recorded. This indicates that BTC is not being used as a payment system, but as a commodity where users exchange bitcoins for cash and vice-versa. This is further evidenced by the fact that the actual number of BTCs in circulation is considerably smaller than it was previously thought, with an almost 78% of the entire BTC reserve (7,019,100 BTC)  being placed in “saving” addresses. So, of all of the Bitcoins ever created, there are only 22% in circulation.

    I'm sure there are perfectly good explanations for all this and none have to do with the people who created Bitcoins running a scam and getting filthy rich off suckers who buy into the BS but, as I said, I'll stick with US currency for now as I choose to trust God over "Anonymous".  

    Submitted on 2013/04/09 at 7:25 am

    Bitcoin/BDC – I think once it collapses, it has a chance of becoming a tradeable artifact – even better if they collapse in a spectacular fashion.  Unfortunately, 21M units will never be truly "rare" but there are a lot of geeks in the world who think nothing of paying $500 for 1/10,000 auto-signed pictures of Spider Man so I doubt it will be hard to find 21M people who would be proud, permanent owners of a single BitCoin – assuming the market isn't completely flooded with me-too currencies and it's not lost in a sea of competitors until the entire fad fades away.   

    Roman soldiers were once paid in salt.  The problem was that the salt would get ruined in rains so the Romans began making coins to pay soldiers with but the coins weren't "backed" by the state, the state merely stamped the coins to indicate they had been weighed and had an exact amount of metal in them and they were round because it was harder to alter a circle by shaving off a bit and cheating the guy you were giving your metal to.  Spartans made coins of iron because they didn't want them used for exchange outside of Sparta – their philosophy was that they TAKE what they want from foreigners so didn't want to facilitate trade with them by making their coins readily exchangeable.  Very anti-BitCoin…

    BitCoin/BDC – ROFL!  

    $500/BDC – I called $500 as a max possible at which point I would short.  As I tried to say on Monday:

     I'm only warning people about what a speculative play it is (and you as well) so you never fool yourself into thinking this is something to bank your future on.  

    If all you got out of that day's conversation was "Bitcoin could hit $500" then I really failed to communicate my position effectively.  

    Submitted on 2013/04/11 at 1:06 pm

    BitCoin/BDC – Now we can test my $100 theory for a viable floor (but doesn't mean it can't go lower first before settling there).  I still see plenty of suckers who are saying "well I might buy one just for kicks," which is what I expected would happen under $100.  

    Submitted on 2013/04/23 at 12:57 pm

    BitCoin/BDC – I have given it some thought and I have decided that you are, in fact, paying for a piece of electronic art.  It's a numbered, limited edition and you know there will be no more made after a point and there are certainly enough people who admire the elegance of such a thing as to impute value to it.  That was my premise for a $100 floor settling out and I think that's reasonable (the average geek has $100 laying around to buy one of 11M coins) and, if they become "collectable" and "tradeable" they will eventually have a real value – much as I can tell my neighbor that I'd trade him my Fantastic Four #3 for his moped.  We both know what our stuff is "worth" and we're as happy to make that trade (assuming we both want the other thing) rather than deal with money.  The more people who are willing to own a BitCoin, the more like money it behaves but that doesn't make it money – just a very good simulation.  

    Submitted on 2013/11/17 at 8:39 am

    Bitcoin/BDC – Apparently China is just jumping into it so it's a whole new round of people to sucker in, though they are also making surprising progress towards legitimacy:

    1. On Friday, the New York State Department of Financial Services announced it will be holding a public hearing on virtual currency regulation, 

    Submitted on 2013/11/19 at 7:33 am

    Bitcoin/BDC – If they break $1,000, I'd play the upside if it were possible to keep tight stops.  China has put this thing out of control.  

    Bitcoin/BDC – We should open up a Bitcoin Options Exchange – that would make a fortune. 

    Submitted on 2014/03/03 at 1:44 pm

    Bitcoin/BDC – If we assume it is a real and viable long-term currency, then the MtGox thing should be an isolated incident and the reaction was too severe, so now it's correcting.  A lot of assumptions to get there, though.  

    Bitcoin/BDC – Even at $460, it's way more resilient than I would have thought given the troubles.

    Submitted on 2015/01/20 at 7:55 am

    Bitcoin/BDC – Good points except I do agree that it's not really a currency, just a collectible – something I maintained from way back when it was $10 and I said they are worth about $100 simply because there are enough geeks in the World who will pay $100 just to own one (as well as $100 for a Captain Kirk doll).  Over time, I think that's where it will settle range-wise.  Once it does settle down, it may actually be able to gain traction as a usable currency, since all a currency is is a proxy for trading things of equal value anyway – it's a thin distinction. 

    Submitted on 2015/01/22 at 8:00 am

    Bitcoin/BDC – A lot of guys talking them up in Davos.  I'd wait to see if it lasts once this round of hype is over.

    So I don't know why you think I was some kind of naysayer on Bitcoin – I simply don't take it that seriously and it did pretty much what I expected after the first bubble – it found a floor and then gained value at a more reasonable rate but now it's again out of control and, even worse, getting the attention of regulators – something I said would happen the first time we talked about it.  

    GRNBF/BDC – Hey, there's a reason I declined to help them promote their coins – lack of trust. But I sill liked their stock as a gamble.

    TEVA/Jabob – Crackdown on painkillers was not good for anyone in that Biz and TEVA is a leader.  

    Well that finish was pretty ugly! 


  75. AMC/Hanj – also, gap above to fill…


  76. A week of terror about Irma is not going to be good for market sentiment… I see oil as cheap since it would be 50 now if we get back to a normal spread with brent. $49 was a good futures short, you're spoiling us you know, sold some of my longs for a very nice gain but holding on looking at Sept 29 expiration… squiggly lines look pretty bullish to me and I think we could see 50 soon. Like I said, I also follow a cycle service and they have been pounding the table for weeks looking for a turn up. When I saw that drop on Wednesday I also saw a bottoming candle… so I took a stab and bought up a bunch of very cheap USO calls…


  77. That is painful. I remember now how much you eviscerated me in those comments. It felt terrible then, I really hated it, and I still do now. I apologize for discussing new ideas I thought were interesting.

    I will never do it again.


  78. rexx et al/NoKo – yes, diplomacy is certainly part of the package – except we're sort of short on diplomats – in the Republic of Korea, we do not even have an ambassador. The charge' is a good guy, and competent, but he's not the ambassador. There's a rumor that scholar Victor Cha will be appointed, and he's pretty conservative but at least articulate and a scholar. The previous ambassador to Japan, Caroline Kennedy, was gone quickly under Trump, and very recently replaced by William F. Hagerty, a private equity investor guy.

    Phil's suggestion that The Kid is playing a blackmail game is spot on, although he may up the stakes if he thinks he can hit something belonging to the US with a nuke – to wit, he may demand the US forces leave the peninsula, giving him a free field to pursue the ultimate NoKo dream of reunification, something they've repeatedly said is their national goal.


  79. Irma – I have family in the Ft Lauderdale area in FL. They cannot find water and batteries anywhere around them. long lines for gas and home Depot. Even through Amazon, nothing is delivered before Friday.


  80. Oh, one final thought – anyone – anyone – who claims to know what the Democratic Peoples' Republic of Korea is going to do or what its leaders are planning or even what living conditions are like there – is speculating. We simply do not know.


  81. if a Category 6 designation existed on the Saffir Simpson scale, Irma would currently be one.


  82. We're in Fort Myers, and getting out of Dodge tomorrow morning.  Traffic is going to be horrific ! !

    Was able to buy some gas early afternoon.  By now, most stations are empty.  No bottled water for the last two days. No batteries, generators, bread, toilet paper, etc. 

    Hopefully, our house will still be standing when we return.  If not, we'll rebuild.


  83. be safe and godspeed. There is still quite a bit of time so that's good. Hopefully the storm hits some upper level wind sheer and weakens substantially. This is not uncommon.


  84. Irma – inlaws have a place in Turks & Caicos… whole Cay is locked down, buttoned-up, and evacuated. Oh, and crossing fingers.

    this shows a direct hit:  https://twitter.com/RyanMaue/status/905227712708702208

    but opinions differ: https://twitter.com/coley716/status/903348646254698498

    and what BDC said!
    So much hype and focus on this one, I hope will just --collapse-- early.


  85. Phil.  What are you currently holding in futures?  


  86. Good morning!  

    No recovery or anything so far but the VIX is calming down (12.23) and EU futures not a huge dip (0.4%), so it doesn't look like any kind of major panic.

    Dollar long (/DX) at 92.25 is a good play, /KC long, of course, at $1.31, /NG long at $3.185 and with /TF, we can go long at 1,400 with tight stops above and that will be confirmed by /YM over 21,750, /ES over 2,460 and /NQ over 5,950 so those are the watch lines.

    Irma threading the needle between Cuba and Florida so far.  Keys will be trashed and Miami in big trouble.  Haiti, as usual, will be a disaster.  Anyway, if it keeps on this track, still a chance to knock out a lot of oil production in the Gulf:

    Reports: Hurricane Irma May Be The Strongest Hurricane EVER Many Major Cities Could Be Hit Hard via

    Should have thought of going long OJ!

    Image result for trading places animated gif

    Painful/BDC – I don't think I "evicerated" you.  We were having discussions and you were more enthusiastic than I was and you were right to be enthusiastic as it's up 500x from when we first discussed it.  You actually won me over over time and, once we got the sell-off I expected, I had little negative to say about Bitcoin again (we even added a cryptocurrency section to PSW) - until now, which is the time at which the price of BitCoin ($5,000) and the timing (regulation) lead me to once again urge extreme caution/avoidance until this stage shakes itself out and we get a bit of clarity as to what the Governments will actually do about cryptocurrencies that threaten their sovereign right to print money – which is pretty much the main reason to form a country in the first place…

    To a Central Bank, cryptocurrencies are like meteors that threaten their existence.  It was fine when they were hail-sized but now those chunks falling from the sky are getting seriously large.  It's hard to imagine they won't try to defend themselves.

    Hagerty/Snow – Yes, nothing like replacing a skilled diplomat in a sensitive region with a person who has zero experience, right?  

    Florida/Bulls – My Mom and Brother are down in Boca.  Mom couldn't even get a flight for the funeral – stuck down there.  

    Good idea Albo, stay safe.

    Futures/Latch – Currently just my oil shorts but looking to add per above.


  87. Sorry, that's /NGZ7 and /KCH8 I'm watching.


  88. GNRC – Should have thought of them for a hurricane play!   We did good on them last time.

    Speaking of disasters…  As usual, Republican policies destroy jobs:

    Citron updates We explain should be $500 most with todays bitcoin price http://www.citronresearch.com Potential for total loss!!!

    ROBERT SHILLER: Bitcoin is the 'best example right now' of a bubble

    Kashkari says the Fed may have harmed the U.S. economy with rate hikes

    Paul Ryan praises Trump for repealing DACA, 4 days after urging him not to repeal it

    Trump adviser says DACA recipients ‘are not children,’ advocates mass deportations

    U.S. analysts now believe North Korea has up to 60 nuclear bombs, and the ability to put them on missiles

    Proof positive of evolution:

    Imagine 50% thinnner in 10 more years – you'll be able to open letters with your phone (if letters still exist).  

      Germany factory orders unexp fall for 1st time since Apr. Manufacturing orders slipped 0.7% MoM, when mkt had exp them to grow by 0.2%

    Rural Americans and people without a four-year college degree are notably more pessimistic about the economy

    This is interesting, is FB inflating their potential by gassing population numbers?

    China’s banks are risky, but investors love them. China Merchants is the most loved, and the most dangerous.

    Undercover In North Korea: "All Paths Lead To Catastrophe"

    The Insanity of Pushing Inflation Higher When Wages Can't Rise

    Singapore faces a grim labor future as population ages

    Two right-wing judges reinstate Republican-backed voter suppression law

    Hong Kong property is so expensive that even bankers are sleeping in upmarket dorms

    On Fox News, Tucker Carlson promotes white nationalist social media site

    Europe’s biggest energy company, Shell, is investing in projects to boost global gas demand


  89. Phil , just reading today your sept.5  post,  Sorry about your uncle, still living to 92 is more of what most males can expect… ( speaking of myself of course).

    BDC/ NK, great comments, like reading The Economist!.

    CC, The strong point of CC, is that central banks can not falsified the value, when U.S Treasury decided to cheat the world retiring dollar from gold standard ( after Charles DeGaulle claiming to convert  France dollar holdings into gold) we have been in a process of continuous robbery of the value of our money.

    The value of bitcoin is because the algorithm can not be manipulated and reflects the true erosion of currencies, in my opinion regulation ( value) can't be effective , perhaps declaring them illegal but CC s will be reflecting the central banks abuse.


  90. Thanks Advill.

    So Futures longs aren't working which means we're still very weak so game off (per our levels) until unless we get over those lines again – then we can go long the laggard.  

    I won't be around today and the funeral is at noon so I doubt I'll have a chance to touch base in the afternoon and then I have BNN at 7 (Money Talk) so I think I'll stay in the city rather than try to get home and leave again.

    So, sorry but today is going to be completely burned – I have to leave at 10. 


  91. Irma La Douce - Latest from NOAA, 5AM EST.

    Phil/BDC – to err is human, but forgiveness is divine. 

    Phil – Funeral – Condolences. Celebrate Marty's long life at the wake. As my late brother in law Jerry said, "don't waste flowers at my funeral. Every chance you can, throw them at the living", and Out.


  92. Here's my agenda for Money Talk (BNN 7pm) tonight:

    Apple (AAPL) was our Stock of the Year in 2013 ($55), 2014 ($75) and 2015 ($105) but we hit our $130 target so we moved on (WPM is our current Stock of the Year) but we do like Apple again as they are coming into another up cycle in sales, which should take them up over $180 by next year.  

    Apple (AAPL), who usually give conservative guidance, indicated that they expect $52Bn in sales in Q3 (July, Aug, Sept – which is their Q4), presumably indicating a sales boost of the IPhone 8.  AAPL is very secretive but there is an event on Sept 12th and, generally, devices go on sale a week after they announce so Sept 17th makes sense, especially as the 5, 6 and 7 were all released in the 3rd week of September as well.  

    This will end Apple's fiscal year with about $228Bn in sales and about $49Bn in profits and on track to hit $250Bn next year with $55Bn in profits which puts a $1Tn valuation ($195/share) firmly in reach as the p/e would be only 18 and, don't forget, AAPL is sitting on $250Bn in cash which, thanks to Trump, it's likely they will be able to bring home from overseas at a very low tax rate, which could lead to a massive dividend distribution or stock buyback.  

    That being the case, we could play AAPL to certainly stay over $160 with the following spread:

    • Sell 10 AAPL 2019 $140 calls for $9.10 ($9,100) 
    • Buy 20 AAPL 2019 $150 calls for $25.30 ($50,600) 
    • Sell 20 AAPL 2019 $165 calls for $17.70 ($35,400) 

    Your net cash outlay on the spread is $6,100 and the potential upside on the spread is $30,000 if AAPL is just over $165 on expiration day (Jan 18th, 2019) for a gain of $23,900 (392%).   Selling 10 puts obligates you to buy 1,000 shares of AAPL at $140 ($140,000) plus the $6,100 cash so $146.10 per share is a $16 discount (10%) to the current price as a worst case.  Ordinary margin on the puts is just $10,361 since it's far out of the money so the return on margin is excellent as well.

    We are expecting a short-term pullback in Apple and the overall market of perhaps 10% so, it may pay to be patient on this trade.  In the very least – it's a good idea to keep hedges in your portfolio.

    The second trade we like today is Limited Brands (LB) who own Victoria Secret, Pink and Bath and Body Works.  Aside from the general fear of Amazon that has been hitting the entire retail sector, LB has been putting up weak comps all year but that's because they cut their swimwear line in Q3 last year as it was not profitable – as well as seasonal and the company chose to streamline their offerings.  They also stopped sending out a paper catalog, which also impacted some sales.

    So the damage is self-inflicted and, going forward, the comps should be much stronger but, at $36.68, the Market Cap has dropped to $10.4Bn for a company with $12Bn in sales that's dropping over $1Bn to the bottom line for a p/e of about 10.  Strong sales, strong profits and an iconic brand at a huge discount makes LB a strong contender for our Trade of the Year for 2018 (if it stays this cheap).  

    At the moment, our trade idea would be:

    • Sell 20 LB 2019 $32.50 puts for $4.70 ($9,400) 
    • Buy 40 LB 2019 $32.50 calls for $7.50 ($30,000) 
    • Sell 40 LB 2019 $40 calls for $4.30 ($17,200) 

    The net cash outlay on this spread is just $3,400 and the margin requirement is $4,974 while the spread returns up to $30,000 at $40 or better on Jan 18th, 2019 for a net profit of $26,600 (782%).  Worst case is owning 2,000 shares of LB at $32.50 + $1.70 cash lost would be $34.20, about 5% below the current price.  

     

    IMAX is another stock that's on sale because the 2017 box office has been a huge disappointment but you can hardly blame IMAX for that.  There may be a bit of a trend away from movie-going but IMAX is multi-national and it will be many years before China and India stop going to the movies – even if this is a downward trend.  

    IMAX's market cap has fallen to $1.25Bn at $19.50 and they are making about $40M this year and projecting $65M next year so we are looking for growth going forward but that's indicated by how many new theaters they have signed up.  

    IMAX doesn't have 2019 options, they only go out to March so our trade idea for IMAX is:

    • Sell 10 IMAX March $20 puts for $2.35 ($2,350) 
    • Buy 20 IMAX March $18 calls for $3.10 ($6,200) 
    • Sell 20 IMAX March $22 calls for $1.30 ($2,600) 

    Here our cash outlay is $1,250 on the $8,000 spread that's $3,000 in the money to start.   The margin is a steep $2,200 because we're selling aggressive puts but the turnaround time is just 6 months if all goes well and we stand to make a potential $6,750 (540%) return on cash if IMAX is over $22 on March 18th.

    We will be tracking our trade ideas in a special Money Talk Portfolio which we're starting with $50,000, giving us $100,000 in ordinary margin to play with.  We will update it monthly and post a link for our viewers to follow and we'll do live progress reports along the way:

    Our current Trade of the Year, WPM, still has a year to run and, although the spread is already net $9,100, up $7,100 (355%) from our net $2,000 entry – the maximum payoff at $22 is $25,000 so this trade can still make another $17,900, close to a 200% return on $9,100 – so we still like this trade, even as a new one!  


  93. Enjoy the memories of your uncle, today, and the family and friends that have gathered.

    .

    AAPL, LB, IMAX, WPM/Phil – nice set for BNN..! 

    Greece – good review of Varofakis' book, now on my "must read" list: https://www.theautomaticearth.com/2017/09/varoufakis-the-book/


  94. BNN Trades/Phil – not trying to nit pick as everyone on here can read between the lines & I know you have a busy day but just want to make sure your slides for BNN are correct so I noticed the AAPL trade above and in your direct email are all CALLS no puts!!! Looking forward to seeing you on Money Talk!