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FU Friday – Team Trump Gives Themselves Billions in Tax Cuts, Gives You $1,182

Related imageF**k the poor.  

F**k the middle class.  After failing to take away your health care, Team Trump has unveiled its latest scheme to destroy the bottom 90% of Americans by rolling out a tax plan that is so ridiculously unfair that they are trying to get it voted on before it can be scored – like they did with their health care bill – because this monstrosity would never stand up to scrutiny over time

Corporate tax rates are dropping from 35% to 20% but, on top of that companies can now deduct ALL the costs of purchasing new equipment and money made overseas is now taxed at just 12%.  By the way, PSW is officially moving to the Bahamas, which have no Corporate Taxes and we'll be bringing the money back to the US at the 12% rate so screw you 20% – that's too much for us!  Gosh that was hard to avoid, wasn't it.  Because we're moving to the Bahamas, I will need a private jet to fly back and forth – good thing that's fully deductible too – guess I won't start paying that 8% until the Government is done paying for my plane and, by "the Government" – I mean you suckers who think Trump is trying to help you – GOD you people are dumb!  

Image result for trump cabinet billionairesTrump's cabinet includes Billionaires Betsy DeVos and, of course, Jared Kushner, who is currently curing cancer on his way to broker a peace treaty in the Middle East and Wilbur Ross and Gary Cohn are also Billionaires while Cordish, Mnuchin, Tillerson and Liddle are all in the $100-300M range.  Even Keelyane Conway, for some reason, has $45M and James Mattis has $10.5M, Jeff Sessions $10M…  General John Kelly is the poorest guy in the room with only half a million to his name – no wonder he is so angry!

The President and his cabinet have $17Bn, which is more money than the bottom 100M Americans have, combined.  They earn roughly $1.3Bn a year, mostly through corporate entities and partnerships and these tax cuts will save them over $200M a year but the real bonus is eliminating the Estate Tax, which will save them about $7Bn and, when I say "save them" I mean it will cost you – sucker!  According to Trump:

“To protect millions of small businesses and the American farmer, we are finally ending the crushing, the horrible, the unfair estate tax, or as it is often referred to, the death tax.”

Image result for estate taxThe president’s suggestion that “Millions” of small businesses and farms are affected by the estate tax is absurd.  According to the nonpartisan Tax Policy Center, only about 5,500 estates in 2017 — out of nearly 3 million estates — would have to pay any taxes. About half of estates subject to the tax would pay an average tax of about 9 percent. That’s because for a married couple, about $11 million is exempt from taxation.  Only 80 - that’s right, 80 - taxable estates would be farms and small businesses.

The super rich will be keeping ALL of their charitable deductions while your mortage deduction is being taken away and they will also no longer have to pay the Alternative Minimum Tax (AMT), which is the only tax Trump actually did pay on his tax returns because the rule is meant to keep people with clever accountants from avoiding taxes entirely.  That change alone would have saved Trump $31M on his 2005 Tax Return (the only one that's been disclosed). 

The Trump Tax Bill, of course, doesn't stop at just making the rich much, much richer.  It also goes out of it's way to screw the rest of our citizens.  Upper Middle Class homeowners with mortgages over $500,000 will no longer be able to deduct interest payments and, while that also hurts to super-rich in theory – they generally pay cash for their homes and their homes, even when they are $20M homes – do not generally represent a significant part of their assets.  This will crush luxury builders like Toll Brothers (TOL), who make Million Dollar homes that their clients generally have to finance.  

Image result for estate taxIn places like Del Ray Beach in Florida, where my Brother is a Realtor or ski resorts or even cities, this stops the almost rich from encroaching on the land the very rich want to keep.  For example, there's a prime lot in Del Ray we've been looking to develop by selling 24 $2M condos on a $5M lot and that makes sense so we bid on the lot but now we can't be sure our target clients will be able to afford the mortgages so we withdraw our bid on behalf of 24 homeowners and the lot is subsequently purchased for a lower price by one rich guy (a Member of Mar A Largo), who is going to build a single home there – all cash.  That's one of the subtle ways this bill favors the super-rich above all others.  

Not even the National Federation of Independent Business, who are the supposed beneficiaries of Trump's Tax Bill, are willing to support it, saying it would not support the GOP bill, because it “leaves too many small businesses behind.”  Another devastating blow to the average American taxpayer is the elimination of State and Local Tax Deductions – including property taxes – yet another way to drive the kind-of-rich people off the land the super-rich want to build on.

The SALT Deductions are mostly applicable to Blue States, who tend to have higher state and local taxes – a clear swipe at Trump's enemies that will backfire if people move out of the Blue States to Red States and tip the vote.  No one said he was smart – just vindictive… 

Image result for you get nothing wonka animated gifAs for the bottom 100M (33%) of our country, the ones who's combined wealth is less than the wealth of Trump's Cabinet – they get NOTHING!  Less than nothing actually as charitable deductions will be decreases – making it harder for well-meaning people to donate.  By increasing the standard deduction from $12,700 to $24,000 for married couples, the itemized charitable contributions lose their value, making it much more expensive to give to charity, which is OK, because America is going to be so GREAT that those poor people can all go work in the coal mines.

Team Trump is REPEALING the deduction for Medical Expenses, REPEALING the deduction for alimony payments (rich people don't pay alimonly, they settle on a split of assets one-time), REPEALING deductions for moving expenses, REPEALING deductions for contributions to Medical Savings Accounts, REPEALING deductions for interest on Student Loans, REPEALING deductions for Dependent Care… have you actualy read this thing – your taxes will go UP, not down! 

As to the "Average American" in the middle class, Paul Ryan said $1,182 over and over again in yesterday's speech as that's the figure the GOP claims to be saving the average American.  Forgetting the fact that that is 1/170,000th as much as Trump's Cabinet Members will get every year (even though that, by itself is reason enough for an immediate revolution), consider that EVEN THE GOP calculates that this plan will add $150Bn to the Deficit and, if we divide $150Bn by 160M taxpayers, that's $937 per citizen more debt so, just in case you are a Republican Voter and can't do math:  That's them borrowing $937 on your behalf to give themselves $11M per year for each Cabinet Member (though most of it goes to Trump, of course) while you net $245.  

Wait, I'm sorry, that's not fair, I didn't deduct the $937 from their windfall.  Trump's cabinet only makes an average of $10,999,963 for each $245 you get.  Did I mention what a sucker you are lately?  

And that's only if you believe their BS numbers.  Independent analysis has noted that these cuts could add as much as $6Tn to the deficit over 10 years and $600Bn a year is putting you $3,750 in debt each year.  Keep in mind we're already $20Tn in debt, which is $125,000 per taxpayer and while Trump, Mnuchin, DeVos and company can find that change behind their couch – for you and your children it represents a lifetime of debt burden which the GOP is not only completely ignoring, but adding to – even in a time of supposed prosperity.  

8:30 Update: Non-Farm Payroll came in a bit light, at 266,000 vs 310,000 expected.  The high expectation was based on a bounce back from last month's horriffic 33,000 job loss – which was blamed on the storms.  Nonetheless, unemployment ticked down to 4.1% due to a lower Participation Rate (people not even bothering to try to work) and that keeps the Fed in tightening mode as 3.5% unemployment has historically led to rapid wage increases, which leads to inflation, which the Fed fears more than anything else (see "Inflation Nation").  

That's dropping the Dollar, which is supporting the Indexes and commodities but I already put out a note to our Members in our Live Chat Room this morning, saying:

/ES 2,580 and /YM 23,500 are both good shorting lines, lined up with /NQ 6,260 and /TF 1,495 – short the laggard with tight stops if any of them go over!  

We're also short Gasoline (/RB), which is at $1.788 and /NG we're still long on at $2.90 – one of our usual favorites.  Andl, of course, we're very happy this morning (not that you can tell from the above post) about our Apple (AAPL) plays, as AAPL is the single largest holding in our Long-Term Portfolio (LTP) as well as our Options Opportunity Portfolio AND even our Butterfly Portfolio (we REALLY like AAPL!).  Our OOP trade, by itself, stands to make us $144,000, which would be 144% of the entire portfolio's $100,000 basis and we're already in the money – a year ahead of schedule!  

Although you missed our $36,000 net entry back in June, the net of this spread, as of yesterday, was only $48,900 so there's still a very long way to go towars our $180,000 goal though, as a new trade on AAPL, in yesterday's live Member Chat Room, we went with the following simple bull call spread:

  • Buy 10 AAPL 2020 $160 calls at $30 ($30,000) 
  • Sell 10 AAPL 2020 $200 calls at $15.50 ($15,500) 

The spread uses no margin at all and just $14,500 in cash aginst a $40,000 potential pay-off at $200 for a $25,500 (175%) gain in two years.  If AAPL had gone down, we'd have sold puts and rolled the calls lower but it went up so now we'll look to sell 5 of the Jan $180 calls for about $8 ($4,000) to begin recouping some of our $14,500.  A few sales like that and we'll have a free spread and, though you won't get the same price our Members got – it should still be a good spread at the open this morning.

Speaking of good spreads, in Tuesday Morning's PSW Report, our pre-earnings play on Tesla (TSLA) was:

  • Sell 6 TSLA April $350 calls for $23 ($13,800)
  • Buy 6 TSLA April $370 puts for $65 ($39,000)
  • Sell 6 TSLA April $320 puts for $34 ($20,400) 

That nets you into the $30,000 short position for $4,800 with a $25,200 (525%) upside potential if TSLA is below the current price of $320 in April.  It's a lot of margin ($15,465 ordinary margin) and a lot of risk – if TSLA gets back to $380, you will have to pay the short caller $18,000 but we'd roll them along to higher, longer months.

We knew this would be a huge winner yesterday but now we have the numbers and already the short $350 calls have fallen to $16 ($9,600) and the $370 puts are $82 ($49,200) while the $320 puts are $45 ($27,000) for net $12,600, which is up a quick 162.5% (you're welcome) but the spread's potential is $30,000 so still another $17,400 (138%) left to gain if TSLA stays below $320 into April expirations.  Not bad for a leftover trade. 

Since we can pick up $8,200 per $370 short and the max on the spread is $5,000, we can sell one of our puts and collect the bonus money and put a stop on another one at $7,500 to lock in some of our gains if TSLA begins to bounce.  There's pretty much no way they get back to $350 after that report so we're not too worried about the short calls at the moment.  

Apple should give the indexes a lift this morning but, if our Futures lines begin to fail, we'll be picking up those shorts and looking for a nice drop next week as Apple earnings were the last big market-catalyst we anticipated on the bull side.  

Have a great weekend, 

- Phil

 


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  1. Phil

     Do think that UNG will hit 7 by jan 18  ?

    Thanks


  2. I am guessing that this tax plan doesn't pass in the Senate once all the details are explained! Or it will pass but with all the supposed savings stripped and it will double the potential deficit which will then make House members unhappy. The AMT and the estate tax elimination are really the most egregious part of that plan. This is really the gift to the Trump family. Let's recall that Trump said that he would pay more taxes so that the middle class could get more money. It's on YouTube somewhere. I am sure that Sarah Sanders will spin that one nicely with lies! It's truly disgusting…


  3. Good Morning.


  4. Everybody go open their windows and yell: “ i’m mad as hell and won’t take it anymore.”


  5. And one more part of the bill that should create problems:

    http://talkingpointsmemo.com/fivepoints/the-5-most-controversial-provisions-in-the-gop-tax-bill

    Buried in the final two pages of the 429-page legislation is a provision repealing the so-called “Johnson Amendment”—a 50-year-old policy that churches and other houses of worship can’t remain tax exempt if they endorse candidates or engage in partisan politicking from the pulpit.


  6. Phil/Stj/Suckers,

    I think the issue here is that there is no strong opposition from the democrats per say. I mean they should be all over the TV criticizing this. I am not sure if they are doing this. Why don't people(having some influence or power) criticize Mr. Orange like he does to others? The media play the most important part of showing lies and brain washing people.

    People who understand all this shit are not voting for him but that is not helping….

    regards


  7. As of now, the tax plan has no chance of passing since you need 60 votes in the Senate to pass a tax plan that adds to the deficit.  So team Trump will have to the entire mortgage deduction and maybe do away with child credits.


  8. Taxes / Rustle – They don't need 60 votes anymore because of the budget resolution they passed last week that allows them to add to the deficit. They can now pass that tax plan using reconciliation so only 50 votes needed.


  9. Phil/TWTR, nice call on twtr not being able to hold in the 20+ range the week after earnings.  thanks!


  10. SBUX doing well after all…


  11. Good morning!  

    Donald Trump's day so far: – Russian colluder vanishes – Sam Clovis nomination withdrawn – Robert Mercer resigns – Both could be indicted – Proof Russia hacked DNC – Breitbart has been sold – Rick Perry is awful – Tax plan is a joke – Michael Flynn arrest coming

     

    Friday update:

     

    - Paul Manafort gag order

    - Sam Clovis running scared

    - Robert Mercer goes berserk

    - Russia hacked DNC

    - Rick Perry is a drooling monster

    - Fed Chair nominee a disaster

    - Carter Page testifies for hours

    - Mueller targeting Jared Kushner

    And this is a blast from the past – my 2013 aggressive trade on AAPL (our Stock of the Year at the time):

    Monday Musing – Our AAPL Trade Idea is Up $6Bn – Should we Let it Ride into Earnings?

    $5,937,500,000 to be exact.

    That's the gain on my Sept 18th trade idea for Apple, Inc. to utilize some of the cash they have sitting on the sidelines:

    How about they (AAPL) sell 2.5M 2016 $400 puts for $65 ($16.25Bn) and, worst case is they have a buy-back of 250M shares for net $335 ($83.75Bn), which is about what they are planning anyway over 2+ years (and they have $180Bn of cash and are making $40Bn more per year!).  If the stock is over that price, they can bonus their 75,000 employees $216,667 each and, if not, they were going to do a buyback anyway and this saves them money!  

    Those puts are now $41.25.  It's too bad for AAPL's 75,000 employees that they didn't listen to me, they would have been getting $79,166 each already – just 40 days later.  Even if you didn't have the margin to promise to buy 250M shares of AAPL at net $335 ($41.875Bn), any portion you did have would have returned 36% in 40 days. 

    Making 1% a day selling risk to others is the cornerstone of PhilStockWorld's BE THE HOUSE, Not the Gambler strategy that we're emphasizing in Q4 and you can see it in action in Part 2 of our September Trade Review, where we sold tons of premium on trade ideas that made tons of money in very short order.  The margin on the short puts is "just" $40 per contract, so it's a very margin-efficient trade as well, that has, so far, returned 59% on that margin in a month + 10 days. 

    Obviously, unless you really, Really, REALLY want to own AAPL for net $335, you should take your 59% return on margin and run at this point – it's not nice to risk $79,177 bonuses on earnings, no matter how much of a fan you are of a company!  We reluctantly had to place some covers on AAPL positions in our virtual portfolios because, as you can see from the chart above, we already got a 15% move in the underlying stock from our bottom call in September.  

    Speaking of memories, my cousin just posted this on FB:

    Image may contain: 4 people, people smiling, people standing, child and outdoor

    That's my Grandma Lucy – she was so cool!  

    Here's the grandchildren today:

    Image may contain: 3 people, people smiling, people sitting and indoor

    Nobu, of course!   


  12. wrote calls on TSLA for next week when it was up but missed opportunity to buy cheap puts for today.  The 297.50 you could've easily got around 1.10 and they are now 3.35.  Nice return for 20 minutes.


  13. Trade idea.  BGS reported two days ago solid beat over expectations, jumped 10% then pulled back yesterday. Pays almost 6% interest.  Buy shares at $33.50, sell FEb $30 put and $35 call for $2.25 toal, collect .46 div, for 8% in 105 days, or 28% annual.


  14. Phil / RRD – When you have some time can you let me know your thoughts on RRD post earnings.  They declared a dividend but I don't think earnings / guidance overall looked that good.  Thank you


  15. rustle, where do you think they pin TSLA today?


  16. Phil/SKT- hi- got assigned 5 30Put this week. What can I do other than take the 4k loss?


  17. Great pics Phil!


  18. tsla/lunar

    If you follow the option action either 295 or 300.  Almost impossible to tell, never know if an institution wants to manipulate it higher to get some shorts to take profits and squeeze it a bit, it is oversold on RSI right now.  On the other hand, momentum is horrible and it's breaking down on all technicals and if this tax plan goes through, they are done.  So I don't see this rebounding in any serious way.  Might get some idiots that buy in before the electric semi reveal but safe bet is write calls on TSLA short term over 310.  Gives you flexibility to roll up for next week or two if they do rebound but most likely, easy money.


  19. Is there an ultra short etf for gasoline (tracking /rb)?  Like the way SCO tracks /cl.  Anyone know the best one if I want to play /rb short but not mess with the futures contract.  I can't take the stress of /rb.


  20. bitcoin original 8000. You know the US tax code doesn't just affect us americans given the global reserve nature of the currency. If we are destined to float away our nation in debt long term to serve the whims and greed of the 0.01% short term; I think you are beginning to see the consequences of this starting to show up elsewhere.


  21. nice memory lane pic phil!


  22. FTR wtf?



  23. The snow is falling
    Softly, quietly it drops
    Like my FU stocks


  24. Nice little dip and consider AAPL is adding 35 points to the Dow, though rejected at $175 for the moment.  

    UNG/QC – I wouldn't bet on it!   No major catalysts other than the start of winter and I went to dinner in shorts and a tee shirt last night. 

    Taxes/StJ – I can't believe angry mobs aren't taking to the streets – what is wrong with people these days that they let themselves be screwed like this? 

    And what Jomp said!  

    Remember when movies used to have social messages?   Where does society get ideas from these days – who discusses morality?   This is why we are lost – no one even knows what's right anymore.  

    Johnson/StJ – Gosh, wasn't "Separation of Church and State" one of those Founding Father things they supposedly hold sacred?  Only when things are in their interests, apparently.  

    Dems/Pat – I think they are floundering as they can't get a handle on all the crap that's going on and that's part of Trump's strategy – just keep doing stuff and overwhelm the defense.   He also sucks up all the media's attention – who would know if the Democrats are responding with all this other stuff to talk about?

    60 votes/Rustle – Oh that's so cute, you think we still have a Democracy!  angel

    You're welcome Lunar.  

    SBUX/StJ – Wow, very schitzo reaction 

    BGS/Baron – Not terrible, making $2 per $34 share but that's about right for that space so, rather than go aggressive, I'd sell the May $30 calls for $5 against the $33.55 stock and then your basis is just $28.55 and sell the $30 puts for $1.80, that's double what you'd collect in dividend so your outcome is making $1.45 at $30 + $1.80 for the short puts + 0.465 in Dec, and March (0.93) so that's $4.18 back on $26.75 laid out and your worst case is (assuming the dividend is paid) is having another 1x assigned at $30 to avg $27.91.  The return there is 15.6%, so a bit better and a lower net if assigned and a lower target to be called away with your profit.

    RRD/EMike – I haven't had a chance to look at what's going on with them yet.  Here's what I said to Baron last week:

    RRD/Baron – Old favorite of ours but they split into 3 companies and we lost interest.  I don't have a good handle on the value of the new RRD or the stability of the dividend so I'd go in with a small amount at least until after earnings (tomorrow).  Remind me after they report and we can see what they look like.  

    It's such a nightmare with the 1:3 stock split and the discontinued operations, etc – It's going to be very hard to figure out what RRD actually does now.  They did NOT separate the financials completely of the spin-offs, adding to the nightmare, so it's a stay-away for me. 

    R.R. Donnelley & Sons Company (RRD) (“RRD”) today reported financial results for the third quarter 2017. Unless otherwise noted, today’s results represent RRD following the October 1, 2016 spinoffs of LSC Communications, Inc. (“LSC”) and Donnelley Financial Solutions, Inc. (“Donnelley Financial”) which are presented as discontinued operations for periods prior to October 1, 2016. Further, all references to the number of shares and per share amounts have been retroactively adjusted to give effect to the one-for-three reverse stock split which took place October 1, 2016 immediately following the spinoffs.

    Key financial highlights include:

                 
        Q3 2017   Q3 2016   % Change
    Net sales   $1.73 billion   $1.73 billion   0.5%
    Income from operations   $35.9 million   $84.0 million   (57.3%)
    Net earnings (loss) attributable to common stockholders – continuing operations   $(8.0) million   $22.0 million   nm
    Diluted earnings (loss) per share   $(0.11)   $0.31   nm
    Income from operations – Non-GAAP(1)   $69.7 million   $76.4 million   (8.8%)
    Net earnings attributable to common stockholders – continuing operations – Non-GAAP(1)   $21.1 million   $12.8 million   64.8%
    Diluted earnings per share – Non-GAAP(1)   $0.30   $0.18   66.7%
    (1)   Non-GAAP income from operations, net earnings (loss) attributable to common stockholders – continuing operations and diluted earnings (loss) per share exclude restructuring, impairment, acquisition related expenses, net gain on investments, pension settlement charges, loss on debt extinguishments, OPEB curtailment gains, net loss on disposal of businesses and other charges, as applicable. See pages 9 and 10 for a complete listing of items excluded and a reconciliation of GAAP income from operations, net earnings (loss) attributable to common stockholders – continuing operations and diluted earnings (loss) per share to non-GAAP income from operations, net earnings (loss) attributable to common stockholders – continuing operations and diluted earnings (loss) per share.

    SKT/Ravi – Damn, they got hit hard and earnings aren't even until next week.  We sold the $25 puts for $3, not the $30s but if you sold the $30s, I assume your net is $23 so not sure how you lost $4K as they are still at $22, so down more like $500.  Either way, you can simply flip and sell the June $22.50 puts for $2.55 or the June $25 puts for $4.05 – both of those give nice entries.  

    /RB pulling back a bit finally.  

    I'm back to 2 short now with an average of right about $1.77

    Gasoline/Jeff – It's very violent.  Only UGA but you can play it with options to leverage but then it's just as volatile and you pay huge fees for entries and exits as the while point is to take advantage of quick moves.  If you don't enjoy trading it – DON'T – it's not worth stressing over something like that.

    FTR/Jabob – Moody's downgrade.

    Frontier Communications Corporation — Moody's downgrades Frontier to B3, outlook remains negative

     

    New York, November 02, 2017 — Moody's Investors Service, (Moody's) has downgraded the corporate family rating (CFR) of Frontier Communications Corp. (Frontier) to B3 from B2 based on its continued weak operating trends. Frontier continues to face revenue and EBITDA pressure, although subscriber trends have improved sequentially within its acquired California, Texas and Florida (CTF) markets. Yet, the legacy Frontier business has remained weak over the past five quarters with sharp broadband subscriber losses in each period. Although the business is starting to show signs of stabilization, the trends remain negative. Moody's expects Frontier's EBITDA and cash flow to continue to decline into 2018. Moody's has also downgraded Frontier's probability of default rating (PDR) to B3-PD from B2-PD, its secured rating to B2 from B1 and its unsecured rating to B3 from B2. Frontier's speculative grade liquidity (SGL) remains at SGL-2. The outlook remains negative.

     

    Moody's believes that Frontier's declining subscriber base will continue to result in revenue and EBITDA weakness into 2018. Although the company's liquidity remains good, the company faces considerable refinancing risk from future bond maturities that ramp in 2020 and beyond. Moody's views Frontier's dividend policy to be a negative credit factor that increases, albeit modestly, the company's refinance risk. Moody's expects Frontier to build cash in 2018 and 2019 to repay maturities in those years. Additionally, the company has secured debt capacity and revolver capacity which can be used to address its near term maturities prior to 2020.

     

    As Moody's has previously signaled, Frontier's narrow equity cushion suggests the company has low leverage tolerance, which in turn pressures its credit rating. Moody's believes that management is taking action to reverse the company's negative trajectory as evidenced in the improvement in the CTF assets, but the timeframe for tangible results is beyond the horizon to maintain the B2 CFR

    Sounds fine to me but I'm patient about these things.  

    ROFL Scott!  


  25. FTR – It looks like institutional sales. Look at the 1 minute volume chart for the last two days and you'll see large drops with large volume pops….


  26. Phil/ABX

    Struggling with a good roll.  I have (14) 2019 $13 calls long ($5.06/$2.33) covered by (4) 2019 $20 short calls ($1.98/$.47) with (10) 2019 sold $15 puts ($1.46/$2.30).  This is a long holding that has been fully covered until July of this year.  In hindsight, I should have covered in September.  Regardless, this is where I am.  Thx.


  27. I still love AAPL.  And I'm buying FNSR options out the wazoo…

    VG is an interesting TWLO proxy — they bought Nexmo a few years back and their Nexmo revenue will surpass their VoIP revenue in the next year or so.  And, for the most part, the market hasn't realized that they're re-inventing VG on the fly without anyone noticing.

    I'd be hard-pressed to buy more BTC at this point, but it's become one of my largest holdings and I'm not selling it for the foreseeable future.

    reinharden


  28. Phil / RRD – Agreed, no trade here.  Thanks!


  29. Phil/SKT, FNSR

    FYI.  You have (20) FNSR Jan 2019 23 calls uncovered and (20) SKT March $22.5 calls uncovered both in the LTP.  You have sold puts on each position as well.  Aggressive positions that went the wrong way.


  30. Reinharden – Nice to hear from you. I remember discussing FNSR with you several years ago.  It's been a good trading stock, altho I'm underwater in my present position.  Glad to hear you're still favorable on the name.


  31. Phil/RB- plan to hold short over weekend?

    Thx reg SKT, will check my avg price for Put sale 


  32. climate change = chinese hoax


  33. Phil/BGS  Thanks

    1020/FTR  Today is the first day I've seen large lot selling on FTR in over two weeks; they had actually been buying a little before today.


  34. These companies love the free market unless it provides competition:

    https://arstechnica.com/tech-policy/2017/11/comcast-has-a-lot-to-lose-if-municipal-broadband-takes-off/

    If Comcast faced more competition, the lost revenues wouldn’t just disappear. It would remain in the pockets of subscribers in the form of lower monthly rates and in the salaries of people working for the new competitor. Money that today ?ows to Comcast executives and shareholders far outside these cities would be more likely to stay in the local and regional economies.


  35. Phil,

    General question.  Do you have general rules for rolling?  Lets say stock is at the top of upward sloping channel; and assuming you expect the channel to be maintained, so stock would be coming down, but you have profit to  collect and want to roll  up, would you roll calls up then, at top of channel, or wait until it drops?  To try and answer my own question, if you roll up  at the top of the channel, and it drops,  doesn't that have a bigger negative impact on the way down?


  36. What a week for the FU stocks (FTR TEVA M GE).. Looks like ABX will join the FU ranks too.

    Wish I would have been short the dogs.


  37. Phil – NTES is up big today.  Trading at the 200dMA. 

    CBI – With a nice day also.


  38. crypto going to $1Q IMO


  39. ABX extremely oversold here.


  40. This graphic is interesting – all of the global currency ($7.6T) is very closely equal to global above-ground gold ($7.7T), and global gov't debt ($215T) is closely matched with global real estate value ($217T). I feel like neither of these are coincidences.


  41. 1020/FTR

    Sorry, I take that back, must have been looking at something else; very busy here lately.

    Last three days have shown large lot selling, that's dumping, with the three days before that showing buying.  Institutional selling since end of August with buying earlier in August even as it went down.  There, that's accurate. Sorry again.


  42. biodieselchris – the link on your name is dead. I was trying to get to the crypto corner and got page cannot be found


  43. M

    I'm  going to Macy's later and get myself a birthday present using the five finger discount, because they just don't want to get in the game.


  44. in the beginning you had gold and currency backed in gold then that morphed into real estate which backs gov't debt, which is now the current gov't fiat system of currency run by nation-states. But the global derivatives market cannot make logical sense at $1.2Q, it is LARGER than the universe of existing fiat currency which means it is not represented by the construct of this system. So when I say (predict) that blockchain is the construct of that larger system that's the justification for claiming it could have $1.2Q in valuation (note that bitcoin itself is a subset of blockchain).

    It also helps articles like scott make some sense: bitcoin isn't a transaction system, it's a trust system. You wouldn't look at bitcoin and say "hey this is a lousy transportation system, I cannot get from A to B!" to which one might reply "well, it's not a transportation system." These are equivalent in my mind.


  45. FNSR is weirdly cyclical at times, hit by datacenter spend on one side and telecom spend on the other.  With the added leg of VCSEL, it'll also be subject to the whims of smartphones and eventually self-driving vehicles.

    At the end of the day, they make some of the world's best micro components for generating light and receiving light (usually in laser form).  In my worldview, everything else is just a kind of packaging and vertical market segment.

    If you can find your way through the noise, then it's definitely an interesting trading stock and, long term, there's just going to be more applications.

    DASAN Zhone Solutions Inc (DZSI) (formerly ZHNE) just reported and they’ve good exposure to the telecom markets outside the US, especially Japan, Korea, and South America, and they came in well ahead of expectations.  In fact, they tricked me as I didn’t expect them to return to profitability until calendar Q4.

     

    So while datacenter spend has been cyclically down, it looks like that’s being countered by a return to spending by telecom as they prep for 5G backhaul.

     

    I think over the next 2 to 3 years, barring macroeconomic horribleness, we'll see FNSR, LITE, and, to a lesser extent, II-VI (and the rest of the optio-electronic sector) benefit from a coordinated up cycle.

     

     

    Hardly ever have time for stock stuff nowadays (still running a startup and prepping to raise Series B Q2 2018), but AAPL reported yesterday and you know how I am about AAPL. ;-)

     

    reinharden


  46. ABX/DC – Well the $15 puts are fine so I wouldn't change them while they are 50% premium.  As to the spread, your problem is you were greedy to be unbalanced if it was 14/4 as you'd be in for net $3 otherwise and the 2019 $13s are still $2.35.  Nothing you can do about that though so best move is probably rolling out to the 2020 $13 ($3.20)/$20 ($1.10) bull call spreads at $1.10 and, if you have 14 of those and 4 short 2019 $20 calls, you can still sell 4-5 Jan $15s (0.28) to pick up $150 here and there while you wait.  Do that 8 times and you get $1,200 back.  In hindsight, we are in the business of SELLING PREMIUM so we ALWAYS SELL PREMIUM, we DON'T BUY PREMIUM because that is what suckers do and you are not a sucker, right?  

    Seriously, if you can't sell premium, then it's not a good trade and move along and play something else – end of story! 

    It's like buying an apartment and then not renting it out – that's not an investment, is it?

    Hola Rein!  You still like FNSR, that's good.  What are people freaking out about?  

    How Finisar Corporation (FNSR) Delivered A Better ROE Than Its Industry

    As to VG, haven't given them a though in years.  Good that they are re-inventing as the old biz is dead.  

    TWLO is another huge cloud-based success, not surprising VG wants some of that action.

    People are worried because TWLO has heavily depended on UBER and, of course AMZN could ad services to their message system (which uses TWLO's tech) and put them out of business but that's every industy's fear of AMZN.  Meanwhile, revenues are up 50% and, more importantly, the customer base grew 41% to over 43,000 accounts – that's going to give them stability.  

    Hard for me to want to pay $3Bn for them with just $400M in revenues but certainly worth watching. 

    SKT, FNSR/DC – See, here's where we seem to have a disconnect.  We have 20 FNSR March $22.50 calls we bought for $2.70 on 8/21 (now $1.40) and we have 10 short March $25 puts we sold for $3 (now $3.45) so our net loss is about $3,000 in a $50,000 allocation block.  That is NOT aggressive, it was a poke ahead of earnings in case the stock took off and we weren't able to add more cheaply.  

    Now that it's cheaper, we want to roll 20 March $22.50 ($2,800) calls to 20 June $20 ($3.25)/$25 (0.85) bull call spreads at $2.40 ($4,800) and we can roll the 10 March $25 puts ($3,450) to 20 March $22.50 puts at $2.40 ($4,800) so the net cost of the roll is $650 + the original net $2,400 so $3,050 and now we have:  

    20 June $20/25 bull call spreads and 20 short $22.50 puts.

    So our upside potential is $10,000 for a $6,950 profit and we get $5,000 if they just hold $22.50 for a $1,950 profit and our worst case is owning $45,000 worth of SKT.  This is exactly how we're supposed to scale into positions and this is the reason we take these small, initial entries.  

    It's not an official roll yet because I still have to decide whether they are good now that we have the earnings or whether we should take our $3,000 loss and move on but the fact that the stock dropped instead of going up has little to do with the decision as to whether or not we think it's worth playing for the longer haul.

    As to FNSR, same deal as we have the same small 20 2019 $23 calls at $9 and 10 $25 puts at $4.90 and we had sold 20 2019 $30 calls for $5.90, which we bought back for $2.20 so that was +$3.70 so our net entry was $9-$2.45(1/2)-$3.70 was net $2.85 and the 2019 $23 calls are $3.07 so, when 2020s come out, we'll do a roll to an even lower spread than we started with with little or no damage but a far better position than we would have had if we over-committed from the start.  

    T/Pstas – As a rule of thumb, I like them at $30.  The 2020 $30 puts can be sold for $3, that's a nice way to stake a claim on them and, if you want to make an income from it, if you pick up the 2020 $33 ($2.65)/37 ($1.35) bull call spread at $1.30 you could do 40 of those against 20 of the puts for a net credit of 0.40 per put so net $29.60 is the worst case and you have a $16,000 spread and you can sell 10 (1/4) Jan $34 calls for $0.80 ($800) while you wait.  In fact, that's a good one to add to the Butterfly Portfolio!  

    While it's not much for monthly selling now, even $800 in 77 out of 805 days means we can get a 2-year return of $8,000 just doing 1/4 sales but, of course, we assume T will recover and allow us to do more aggressive sales over time.

    /RB/Ravi – I'm back to 2 even at $1.77 so I'm going to let them ride. 

    Bitcoin/Scott – LOL, it's funny that it may end up destroying the World.  

    Rolling/Baron – I'm not a big fan or repositioning for no reason.  If I think something is toppy, I'd rather sell short-term calls against my in-the-money position, than take my perfectly good call with low premiums and pay more premium for a worse position.  Using AAPL as an example, let's say I had the 2019 $120/150 bull call spread for $14 and now it's $55.50/32.50 ($23) so up $9 with $7 more to go.  I don't for a second think AAPL will fail $150 so it's essentially a guaranteed gain of $7 on $23 (30%) in a year and the only reason I'd change it is if I think $150 will fail or if I can find something better to do with $23 than wait patiently for a 30% gain.  

    So now what comes into play is how I feel about AAPL into 2020 and I'm pretty sure they will be at $200 and the 2020 $160s are $33.50 and the $200s are $17 so net $16.50 means I can take 1/2 my $23 off the table and STILL have my $7 gain but now at $167 vs $150 but I'm fairly positive AAPL can add 10% in another year so that's attractive. 

    What makes it even more attractive is I can pretty much get the rest of my $30 ($13.50) by Jan 2019 by selling 1/2 the Jan $175s ar $5.75, that right there is more than 1/3 of my max 2019 gains and I have 4 more quarters to sell and the only way I have to give that guy his $5.75 back is if my new spread is more than $20 in the money.  

    In that case – I'd do the roll!  

    How's that for a rule of thumb? 

    Speaking of rules, the guy running the Impeach Trump commercial makes a very good point.  Bill Clinton was impeached on 2 counts, Perjury (he lied about getting a BJ) and Obstruction of Justice, which was made up and, despite spending $70M on the investigation, the GOP came up with nothing at all to substantiate it.  Trump has done 1,000 times worse already – and that's just the stuff that's easy to prove and obvious.  He has absolutely lied – over 1,000 times since taking office.  He certainly seems to have obstructed justice with Comey's firing – it should at least warrant a proper investigation and God knows what other shenanigans he's been up to.  Things can turn very ugly for him very quickly.  

    NTES/Albo – Don't mean a thing until we clear earnings (15th).  

    ABX/Rustle – No, Jabob says it's now a dog because it's down, therefore we should sell it while it's low, right?  blush

    Coincidences/BDC – That is interesting, worth tracking over time.  How do you explain derivatives though?

    M/Baron – If you get caught, just tell them you're a shareholder…


  47. I'm out of here about 2:30 by the way.  Going to see Jethro Tull in NYC and having a nice dinner first. 


  48. biodieselchris -- Weirdly I find myself involved in a project that involves a Russian oligarch with 300 megawatts of no longer user electrical generation capability…he wanted to build data centers and go compete with AWS.

    We suggested that since the entire world is only spending 340 megawatts of power on digital currencies, that we also build a compute facility with the ability to mine half of all future digital currencies.  Be interesting to see if that goes forward. ;-)

    reinharden


  49. FNSR — I think the freakout yesterday is totally misguided.

    I accept some concerns that FNSR was late to the table having their VCSEL approved by AAPL, but they should have gone into production this quarter for volume shipment with AAPL and that promises to add $200M+ in revenue for the 2019 cycle (when FaceID assumedly makes it into the entire iPhone line).

    There will be other players chasing on VCSEL and LITE probably took the lion's share of the iPhone X launch quarter revenue there.  But FNSR just bought another fab and is seemingly refurbishing it just to have another fab dedicated to VCSEL. 

    Maybe there's some black swan I've not seen yet, but this recent weakness is just brain dead, so as long as folks are wiling to sell me long term options with FNSR at a PE of <10, I'm taking as much as I can afford.

    reinharden


  50. reinharden - he/she could also make renewable ethane: gridthinkenergy.com

    I would advise against mining because it could become obsolete so quickly


  51. If you read the last to VG quarterly reports, Nexmo is the CPaaS business.  It plus the UCaaS business is the new business.  The VoIP business is still trending down, but the rate of descent has slowed greatly over the last year.

    CPaaS is growing quickly, UCaaS is growing well.  The new business will swamp the old business in the next year or so.

    The fun fact about Nexmo is 90% of their business is outside the US which is basically the opposite of TWLO.

    reinharden


  52. I NEVER said to sell ABX Phil. Geez.

    Maybe, you should tell me how horrible I was for saying FTR and TEVA were POS stocks and that I might scare people off for being frustrated that they have been dropping every week? 

    If it really did keep someone from buying them I would think they would be very happy considering they could NOW get into them for MUCH MUCH better prices then us? 

    Sorry, but these FU stocks have been falling knives. Maybe, they will recover. Maybe not. 


  53. biodieselchris -- Russia has a particularly interest in moving to digital currencies for the pricing and trading of their commodities.  They dearly want to get out of pricing them in dollars.  So much so that Russia may create a sovereign digital currency.

    If they do, the digital mining thing would likely become the leading service provider for maintaining that currency.

    It's a ludicrous play, but it's other people's money with a ridiculous potential return (literally half of all BTC mined over the next decade -> on the order of $14 billion over the next decade for less than $100m investment with the return being front-loaded).

    Probably not how I would spend my money, but I don't have 300 megawatts of power generation sitting idle and have all my money stuck inside Russia. ;-)

    Off to do startup things!

    reinharden


  54. TEVA-S&P goes to negative outlook.  Kind of expected given that TEVA reduced the projected debt reduction over the next year.  Lot of dislocation and repositioning, but this would trade strong in HY.  Stock still trades like the company is going bankrupt so I think a downgrade is baked in.


  55. seer-- I hope you are right. So far, no bad news has been baked in unfortunately. 

    Only thing worse is FTR. It is almost below 8. WTF?


  56. Phil – yeah I put it all together in a post immediately before yours. Bitcoin is pioneering in being first but the technology has really evolved beyond it (including proof-of-stake nodal trust, which doesn't use electrical power based proof-of-work algos). So it'll fluctuate up and down but probably not be the big winner in the end. You've got Ethereum which is already a contract-based system (which is what derivatives actually are), so it's all right there in front us already: a construct for trust and trading, global in nature, and free from the expensive requirements of the gov't-debt based currency system that no longer efficiently distributes resources into a derivative system that is 5 times larger than the current one!

    This is what most people don't currently get about it: you cannot have a universe be $215T in size representing a market $1Q in size! It doesn't work that way. Its like saying what's beyond our physical universe, like trying to travel to the edge and stick you hand out and grad what's beyond it, there's no such thing!

    I have a PhD thesis in my mind of what "money actually is," since no one knows, or rather, no one can explain it to me (granted, it might just be I'm an idiot). But my theory is the current gov't-debt fiat system boils down to this: The fear of jail. The gov't debt based system currency is a system of trust, it has rules and laws in order to construct that trust, and there's some slippage of course but you cannot create money out of thin air; let it be a fraudulent entry on a bank balance ledger (which creates fractional reserve currency) or a counterfeit $100-bull printing machine, and if you break these rules you get charged, tried and sentenced and that's how the system works. And these rules only apply with the individual nation-state to some extent, so we have these imaginary lines drawn on maps that determine who's system your corrupting and who is obligated to enforce the trust. So essentially, it's the rule of law, this is what creates the trust that operates a gov't-debt based system.

    Crypto created a new mechanism that eliminates this need. It's an entirely new system of trust. It is instantaneously global and eliminates that functions of the nation-state and perfectly matches the new global asset valuation system (derivatives) that cannot be addressed by the real-estate backed fiat-debt system. So you had gold and then gold-backed currency which morphed into real-state backed gov't debt, and, given it's massive size, could easily encapsulate the old gold-based system which is now a wholly owned subsidiary of the new system. And so I think that's what we are seeing play out with this new system.

    Reinharden – creating a sovereign digital currency is the equivalent to creating a car pulled by horses – that is too funny. Being an American I personally like to watch Russia fail but they don't get it – it's freedom that wins because it represents the will of the individual most closely.


  57. Phil, with Apple surging, I'm wondering if I should be adjusting my position.  Right now I hold the following:

    Short 10 2018 $145 Puts (basis 4.35), now 0.49

    Short 20 2018 $150 Calls (basis 12.89), now 23.97

    Short 20 2019 $130 Puts (Basis 8.55), now 3.72

    Long 20 2019 140/170 spreads (basis $14.3),now $18.77

    Long 30 2019 150/180 Spreads (basis $12.7), now $16.15

    I'm showing a YTD profit of only $8k. 

    I can roll my 20 short Jan $150 calls to 20 $160 April calls, for about $5 ($10,000), or to 25 April $165 calls for similar money, or I can do the same roll to June, to reduce some of the rolling cost.  My long spreads are aggressive, so I definitely see the advantage in keeping them well protected.  Thoughts?


  58. reinharden – that is the fallacy of mining – that you work harder and create more, it's simply not true, that would be a colossal waste of money.


  59. Phil/CMG- HAVE 1 400 Jan PUT and 2 350 Jan Put, I know should have gotten out, didn't. What are my options. LTP bcs is already in the book. Thx. 


  60. Phil/Labor Force Particiption-over 55 remains elevated while 25-54 remains depressed.  Older people continuing to work  out of necessity resulting in  fewer opening for the younger people?  Seems like fewer jobs overall due to producitivity, outsourcing and robotics.  The depressed wages suggest there still exists a pool of unemployed available to keep wages down.  I have seen and heard that many companies are having trouble recruiting and are looking to tap that pool (like programs to recruit women who have been out of the workforce for years to care for children and, GASP, recruiting older workers). Any guess on when that pool gets employed and wages rise?

    https://fred.stlouisfed.org/series/LNS11324230

    https://fred.stlouisfed.org/series/LNU01300060&nbsp;


  61. !!! Aqualung 


  62. Jabo-high yield indices are skewed because they only have what is available in that credit category as opposed to equity indices which have a wider variety of companies available.  There is little of the size of TEVA in the important healthcare sector and the ratios are very strong.  You can also make a killing on something that has the potential to crossover to investment grade.  I feel your pain especially since this is likely to be a long one, but the fundamentals are there IMHO.


  63. Phil et al - USD/JPY cleared both 1 year resistance lines and is now tapping on a multi-year R, if it stays above 114.5 the next R is 116 which would make JPY a good short, IMO, but a chart expert I am not..,


  64. AVGO looking to buy QCOM!?


  65. That just screwed me.


  66. FNSR/Rein – I agree, seems like a deal to me too.  The project sounds like fun but better off getting a Quantum Computer running than throwing brute force at mining.  Don't forget, the 340 megawatts is fairly well-distributed now by people who are already invested in the game so if your guy goes to all the trouble to make it twice as hard to mine a coin (by doubling the pool of miners) then I'm pretty sure a large portion of your competition will simply double up their capacity to get back to where they were until, as BDC points out – the whole thing collapses on all of them (or the coins are worth a Quintillion Dollar but much more than that as Dollars would be worthless if that happened).  

    That's the hidden trouble with Crypto that no one is addressing.  Whoever starts a currency and the early adopters of the currency quickly take 20% of the currency for themselves.  You can't have a legitimate currency base that makes the founders Billionaires just because they came up with a catchy name or found a niche.  So far, they've been lucky that no one has been obviously greedy (mostly because they are scared of government retribution) but one day soon there will be a huge scandal and then we'll see how well things bounce back.

    VG/Rein – Worth watching but still speculative to me.  

    ABX/Jabob – So when you say "Looks like ABX will join the FU ranks too" followed by "Wish I would have been short the dogs." that's not saying to sell something?  Well, I guess I haven't cracked your code yet.  Do we buy things on the FU list or sell them?  What exactly is on the FU list for future reference?  If you are trying to keep people out of stocks, please be clear about which stocks they should avoid because you have said FU to as many winners as losers and if I'm confused and have no idea what you mean – I can't believe others will have better luck.

    Oil blasting higher as rig count drops by 8 – shale drilling is dead, I guess – even though we still have 200 more rigs than last year and, of course, the hurricane slowed some deployments.  

    Stuck/Rein – That's a great point.  Hard to think of other good things to do with all that power.  

    Image result for unlimited power animated gif

    Hey, how about this idea.  Assuming the power is near free to generate then how about stacking 33,000 Teslas end to end in two columns (66,000) with the wheels facing in towards each other and using them to run a space elevator?  You could synchronize them to move a platform up and down 62 miles into space and own the commercial space industry!  Hmm, come to think of it you may need to have 4 columns of Teslas for better structural integrity but we can work on those details after they pay me a huge fee to consult!  I'm sure Elon Musk would be happy to promote the venture!  cool

    BDC link/Bulls – That's due to something that changed when Ilene moved the post, he had it right originally.  

    Money/BDC – Very true, money is, in the end, backed by a gun and nothing more.  I think either the Government(s) shut down (or incorporate) crypto or crypto will end up shutting down Governments.  If they can no longer coin money, they would have to actually balance their budgets and that ship has sailed long ago.  Also though, there's this assumption that crypto is what people want but that's not really true – our own currency is essentially digital – there are not thousands of $100 bills in my bank with my name on them – that ship also sailed long ago.  Our payments are digital and fairly incorruptible in a tried and tested system that is used by Billions of people world-wide.  Crypto is still in the fad stage – it's a big hump to get over.

    Image result for beanie baby history chart

    Image result for bitcoin history chart

    AAPL/Palotay – It's never good to make knee-jerk decision based on one-day action.  You have 50 $30 spreads and 30 short puts and the 2018s will go worthless so really 20.  The spreads still have close to 100% left to gain so what would you change?  The short calls are the big issue but no big deal as you are down 20 x $11 while you stand to make 50 x 17ish on the spreads.  I'd look to roll the 20 Jan $150s at $24 ($48,000) to 30 of the April $175s at $10.60 ($31,800) so you are spending $16K but pushing the short calls to 100% premium (and you sold them for $26K anyway, so $10K still in pocket).  Once they expire worthless, you can then worry about selling more calls for profits and, of course, if AAPL fails to hold $160, then you can sell 20 April $160 calls (now $19) and put a tight stop on the $170 calls, which should be down to $6 by then, which would leave you with a $13,000 gain and back to 20/50 covered.  Simple enough plan? 

    AVGO buying QCOM! 


  67. Thanks Phil.  Makes complete sense.  


  68. QCOM / Phil – I guess AVGO doesn't seem to care that much about AAPL looking elsewhere for their chips!  Heck, AVGO might be that somewhere else… These guys would be in a position of strength in some markets and that could raise some questions from the DOJ except for the fact that it's a Trump DOJ so no one cares about details like monopolies I guess. 


  69. No. It's not saying to sell something.

    Just that it is another one that is making new 52 week lows.

    At some point I am sure they will be great buys. 


  70. Comment content omitted because it is too long.


  71. Wow, QCOM is $90Bn – That makes it nearly impossible to be bearish on anything when that can happen to you!  

    • Qualcomm (NASDAQ:QCOM) shares are up 5.58% after rumors that Broadcom (NASDAQ:AVGO) is exploring a deal to purchase the chipmaker.
    • Source: Bloomberg First Word
    • Broadcom shares are up 3.17%.
    • Will update with more details if and when available.
    • Update: NXP Semiconductors (NXPI -3.1%) drops on the news. Qualcomm is in the process of acquiring NXP, a process held up by legal snags and activist investor pushes for a higher bid.
    • Previously: WSJ: Activist investor's new push for higher NXP Semi price (Nov. 2)

    Submitted on 2017/10/20 at 3:47 pm

    • QCOM – What a bargain down here.  I'm happy with our spread and it's not cheaper so we shouldn't buy more but I like it as a new trade as it pays $15,000 at $55 and just net $7,000 – even though the stock is already at $52.  Aren't options fun?  

    CMG/Ravi – No worries.  There's no 2020 yet but your puts look like $125 and 2x $75 so $275 and the 2019 $310 puts are $60 so 4 of those is close to even and you've dropped your strike 20%.  I'd wait until 2020 comes out though, probably can go below $270.

    Non-Retirees/Seer – That is becoming a problem.  Corporations love this – workers fighting over a shrinking job pool, keeping wages down.  It's skilled labor they have trouble getting but we're still a long way away from average worker wages rising in a meaningful way.  

    Ha, Pelosi says the GOP is playing the American people for suckers with this tax plan – another well-connected reader!  

    Yen/MrM – I don't see why the Yen would get stronger as they continue to run the most accommodative policies but I don't see any multi-year resistance as it's held 0.80 , which is 10% down from here but the only clear support I see.  

    • "An extraordinary calm in markets has choked the trades that typically funnel through banks’ derivatives desks," writes Gunjan Banerji at the WSJ.
    • In what used to be profitable moneymaker for Wall Street, revenue in an equity derivatives business focusing on options has plunged 41% this year in the U.S., and 28% globally, according to data firm Coalition. The number of employees manning those desks has shrunk by 10% since 2012.
    • At issue, of course, is vanishing volatility, and stocks that only move higher. Who needs the insurance provided by options in a one-way market?
    • Goldman Sachs (NYSE:GS) yesterday became the latest to pull back from market-making in options on U.S. exchanges. At Barclays (NYSE:BCS), 2017 H1 revenue from the business dove to less than half of the $200M from the same period a year earlier.
    • "I had a good run making money,” says one big bank trader who got out this year to launch a tech business. "A lot of the derivatives business is in survival mode right now.”
    • The "bullish outlook" for the names is reflected in their stock prices after big runs higher over the past few months, says analyst Phil Stefano, downgrading Essent Group (ESNT -4.7%), MGIC Investment (MTG -4.9%), Radian Group (RDN -5%), and NMI Holdings (NMIH -4.8%) to Hold from Buy.
    • Year-to-date gains range from around 50% for NMIH to 15% for Radian.
    • Source: Bloomberg's Joshua Fineman
    • via Bloomberg
    • BAML's Jay Cohen throws in the towel, downgrading to Neutral from Buy. The $836M reserve charge "left us with limited confidence" in the company's ability to "accurately price its commercial insurance business."
    • Another challenging quarter reminds of AIG's "long road to recovery," says Barclays' Jay Gelb. He continues to rate the stock Overweight, but cuts his PT to $68 from $71.
    • While the $3B catastrophe loss may have been expected, the $853M reserve build for prior year losses disproves his thesis that previous management left  the P&C business in better shape than they found it, says Credit Suisse's Ryan Tunis. If this was the last reserve charge, consensus estimates will prove to be conservative, but markets are in"show me" mode now. He rates the stock Outperform with $72 price target.
    • Buy the dip, says Wells Fargo bull Elyse Greenspan, as the reserve charge shows the company as working to improve its underwriting culture. New management, she says, will be successful in the turnaround, but it needs time. Her price target is $75.
    • Earnings call presentation slides
    • Shares opened sharply lower and have stayed there, now down 4.7%.
    • Previously: AIG lower by 2.3% after posting big loss (Nov. 2)
    • The cut in the corporate tax rate to 20% should more than offset a cap on interest deductions, says Ares Management (ARES +0.8%) President Mike Arougheti, speaking on his company's earnings call.
    • CFO Mike McFerran, meanwhile, says that cut in the corporate rate makes the idea of conversion from partnership to corporation "really attractive."
    • Source: Bloomberg's Melissa Mittelman
    • Blackstone (BX +1.5%), KKR (KKR -0.2%), Apollo Global (APO +0.5%), Oaktree (OAK -0.2%), Carlyle Group (CG +1.8%)
    • Previously: Private equity names are tumbling as tax plan details are digested (Nov. 2)
    • The already badly-bruised market cap of CBL & Associates (NYSE:CBL) has seen another 25% wiped away today following a Q3 miss, and a cut in guidance and the dividend alongside.
    • It's clear discussions between retailers and landlords have become more challenged for "B/C" malls, says BAML's Craig Schmidt, downgrading CBL to Underperform. He notes that while portfolio occupancy fell Y/Y, it rose sharply sequentially, suggesting to him that the company offered significant concessions.
    • Sluggish results and the dividend cut should "scare investors," says Boenning's Floris van Dijkum, downgrading to Underperform. He does upgrade Tanger Factor (NYSE:SKT) to Neutral from Underperform. No help, Tanger is down 5.8%.
    • Analyst comments via Bloomberg
    • Other players: Taubman Centers (TCO -5.1%), DDR (DDR -4%), PREIT (PEI -5.7%), Washington Prime (WPG -9.5%), Wheeler Real Estate (WHLR -2.9%), Kite Realty (KRG -1.8%), Federal Realty (FRT -1.2%), Kimco (KIM -1.2%).
    • "A" malls are no place to hide today: Simon Property (SPG -2.3%), GGP (GGP -2.6%), Macerich (MAC -4.2%)

    • Total (TOT -1.1%opens a new office in Washington, hoping to strengthen relations with the Trump administration as the French energy firm prepares to invest billions in Iran.
    • The new office reportedly would help coordinate relations with the U.S. Treasury and State Departments to make sure TOT remains in compliance with any changes to U.S. sanctions.
    • CEO Patrick Pouyanne says he not giving up on plans to develop the first phase of the South Pars gas field but would comply with any U.S. sanctions preventing it from operating in Iran, adding that Iran's government knows "if we can not go ahead, it is because of a decision by the U.S."
    • Exxon Mobil (XOM -0.3%) is spending more than $1B/year on research into alternative forms of energy from algae engineered to bloom into biofuels and cells that turn emissions into electricity, Bloomberg reports.
    • VP of R&D Vijay Swarup says the funds are for more than 100 research projects on environmentally friendly technologies in 5-10 key areas, while cautioning that any commercial breakthroughs are at least a decade away.
    • While XOM has discussed some of its work before and runs advertisements about its work in algae, Swarup's remarks are the first indication of the breadth of the company’s interests in alternative energies.
    • WTI crude oil is on track for its highest settlement price since early July 2015+0.5% at $54.80/bbl, as buyers rely on expectations of an extension to OPEC's global supply agreement, and supplemented by geopolitical uncertainties.
    • Brent crude, which last Friday climbed above $60/bbl for the first time in more than two years, now +0.4% at $60.91.
    • "Wednesday's EIA report was bullish so the longs took profit then but now the uptrend is reasserting itself. Roll-over of the OPEC/non-OPEC deal looks certain and is also supportive," says Tamas Varga of London brokerage PVM Oil Associates.
    • Geopolitical risk is back in the picture in a very clear way,” says Energy Aspects analyst Richard Mallinson, citing ongoing conflict in northern Iraq and Venezuelan financial instability.
    • Also helping is an uptick in global economic growth that has sparked stronger demand;  “It’s not just faster growth, it’s faster growth in areas that happen to be oil consuming,” says Carlyle research director Jason Thomas.

    • The total U.S. rig count fell by 11 to 898 following last week's decline of four, the eighth drop in the count in the past nine weeks, according to the latest Baker Hughes survey.
    • The active oil rig count fell by eight to 729, resuming its steady decline after gaining a rig a week ago, while gas rigs dropped by three to 169.

    • BMW (OTCPK:BMWYY) says it's recalling 1.4M vehicles in North America in two separate actions.
    • The first recall covers 670K 3-series vehicles in the U.S. from the model years 2006 to 2011. The automaker needs to address a wiring issue with the heating and air conditioning system that could create a fire risk.
    • The second recall is for 740K vehicles (3-series, 5-series, Z4, X3, X5) for a valve problem.
    • BMW discloses that it received three injury reports tied to the recall issues.
    • The yield on the company's well-subscribed August $1.8B 8-year bond offering spiked up by about 50 basis points over the last week, writes Liam Denning at Bloomberg.
    • To review, this paper was initially priced at a very fancy premium to its single-B peers – its yield at offering time about 75 basis points less than the benchmark index. That gap has steadily narrowed since, and this week the flip was complete – the Tesla bonds at 6.12% now yield a modest premium to the single-B index.
    • Makes sense, writes Denning, as Tesla – trying and failing to ramp up mass production of the Model 3 – has burned through 80% of the cash raised in public markets since March.
    • CreditSights' Hitin Anand notes Navistar priced $1.1B of bonds this week to yield 6.625%. While Navistar at CCC+ is rated lower than Tesla (NASDAQ:TSLA), it actually has positive cash flow from operations. Anand: There's "no way" Tesla's paper should be yielding less than Navistar.
    • Denning reminds that Tesla has a big backstop in its stock. With a market cap of $50B, the company can always raise equity in a pinch. If a stock price plunge took that option away, acquirers would likely be the next backstop.
    • General Electric (GE +1.8%) CEO John Flannery likely will take even more drastic action than previously indicated, Melius Research's Scott Davis believes, including a "spinoff its troubled Power unit and refocus that unit away from growth and more towards annuitized cash generation."
    • Davis thinks GE's renewable business could find a home elsewhere, GECAS will be spun off, and smaller and non-core pieces also will be sold off, including Transportation (locomotives) and the Healthcare IT business.
    • "Essentially what would remain of GE then would be a world-class healthcare asset, which Flannery knows very well, a majority equity stake in BakerHughes, and a world-class aerospace business," Davis writes.
    • Even so, Davis is optimistic about GE in the long term, reiterating an Accumulate rating and $35 price target on the stock.
    • GE is trading in the green this afternoon, looking to break a losing streak of nine consecutive sessions.
    • Shares in Vestas Wind (OTCPK:VWDRY -8.5%) and other European wind turbine makers are tumbling today in reaction to proposed cuts to renewable energy that are part of the proposed Republican tax bill, threatening the group's expansion in the U.S. market.
    • Shares in Vestas, Siemens (OTCPK:SIEGY -1.1%), Siemens Gamesa (OTCPK:GCTAF -3.7%) and Germany's Nordex (OTCPK:NRDXF) all are lower in European trading.
    • "The proposed House tax bill could have detrimental effects on market volumes and prices if passed; at best Wind stocks face increased near-term uncertainty," according to Barclays analysts, adding Vestas and Siemens Gamesa shares should be most affected.
    • Fitch Ratings downgrades Starbucks (SBUX +2.5%) to A-/F2 from A/F1 to reflect changes in the company's financial policy and commitment to return $15B to shareholders vis dividends and buybacks over three years. The rating outlook on Starbucks is Stable.
    • Fitch on SBUX: "The ratings consider the recent slowdown in Starbucks' comparable store sales (comps) growth but balanced this against growing global coffee consumption and favourable consumer trends towards snacking. Fitch expects that comp growth of 3% and a 5% contribution from net new stores over the next 24-36 months will enable the company to drive market share."
    • More from Fitch: "Starbucks has committed to returning $15 billion to shareholders through dividends and share repurchases over the three-year period ending fiscal 2020, an approximate 65% increase versus the approximate $9 billion returned during the prior three-years. Fitch expects this to be funded with a combination of internally generated cash flow and incremental debt of $5 billion-$6 billion, given Fitch's projection of FCF before dividends in the $9 billion range over the next three years. FCF after dividends is projected to approximate $3 billion or more, assuming dividends grow with earnings. Total adjusted debt/EBITDAR is projected to increase from 2.1x at the end of fiscal 2017 to the mid-2.0x range due to increased debt but strong EBITDA growth."
    • Previously: Starbucks execs talk up U.S. performance (Nov. 3)
    • Wynn Resorts (WYNN +0.1%) says it plans to spend about $90M on real estate acquisitions around its casino resort in Massachusetts that is under construction.
    • Steve Wynn says the acquired properties have nothing to do with casino development.
    • "It’s property that we’re buying so that we can turn Everett into a great example of America, of how a business can change a neighbourhood," he told the Greater Boston Chamber of Commerce.
    • Carnival (CCL +0.3%) says it began returning this month to Grand Turk, St. Thomas and San Juan, Puerto Rico.
    • "The Caribbean covers a far-reaching region of more than one million square miles, so it is important to know the vast majority of its islands realized little or no impact from the September storms," reminds Carnival Chief Communications Officer Roger Frizzell.
    • 90% of the Caribbean's nearly 100 destinations are said to be up and running fully.
    • Source: Press Release

    Sears Holdings to close 63 more stores

    • Sears Holdings (SHLD -2.9%) is lower after announcing that it plans to close 45 Kmart and 18 Sears stores that are unprofitable.
    • The closings are expected to begin at the end of January.
    • "Sears Holdings continues its strategic assessment of the productivity of our Kmart and Sears store base and will continue to right size our store footprint in number and size," reads a statement from the department store operator.
    • Sears Holdings list of store closings (.pdf)
    • Overstock.com (OSTK +0.1%) is the target of a new short attack from TheStreetSweeper.
    • The firm says the stock is overvalued due to the buzzwords "blockchain" and "alt-coins" being thrown around by Overstock management.
    • "After grabbing onto the bitcoin trend, Overstock is super risky and massively overvalued. The short squeeze should be over and the stock price should settle in between here and $30," warns TheStreetSweeper's Sonya Colberg.

    I like this new direction for BB:  WSJ: BlackBerry in software talks with Jaguar Land Rover

    • BlackBerry (BB +2.2%) is in advanced talks with Jaguar Land Rover (TTM +1.5%) to provide its software for next-generation vehicles, The Wall Street Journal reports.
    • The automaker would use the QNX software suite in building secure autonomous and electric vehicles, in an arrangement similar to the deal that BlackBerry has with Ford Motor.
    • It wouldn't result in immediate sales but generate revenue when the next-gen cars with QNX embedded go on sale, at a potential royalty of $25 per car depending on how many QNX modules are implemented.

    Moody's gives Uniti Group negative outlook on Windstream ties

    • Moody's has changed its outlook on Uniti Group (UNIT -0.5%) to negative, after downgrading Windstream Services (WIN -1.4%) to B2 with a negative outlook.
    • Windstream's facing weak operating trends (and along with that weak EBITDA and cash flow), and it's the largest tenant and main source of revenue for Uniti (about 70% of pro forma revenues).
    • The probability of default at Uniti is approximately equivalent to that of Windstream, Moody's says, though there are some circumstances where Uniti could avoid a default if Windstream defaults.
    • Moody's may raise Uniti's ratings if leverage could be sustained under 4x, and the ratings could evolve if Uniti diversifies its revenue base to where the master lease makes up less than 50% of revenue.
    • After an earnings report where revenues disappointed and advertising was flat, Pandora Media (P -26.9%) has shed a quarter of its market value today, hitting an all-time low of $5.37.
    • Bullish analysts have downgraded to Hold on the report. Stifel Nicolaus downgraded to Hold and trimmed its price target to $8 from $12, saying investors won't come back in until ad tech is better and audience trends normalize.
    • JPMorgan went to Neutral and a $9 price target. Needham's target is $8, and Cowen's is down to $6.
    • SunTrust cut to Hold and an $8 target (down from $10.50) after a "sobering" outlook from the company, noting its deficiencies in ad tech are more severe than thought. The company faces pressure in listener hours and in key brand advertising.
    • Morgan Stanley is a notable exception today, as its Benjamin Swinburne maintained an Overweight rating and $12 price target. Outlook was "light" and ad trends are poor, he notes, but the company has new management in CEO Roger Lynch, and a heavier hand from Sirius XM (NASDAQ:SIRI) execs on the board.
    • "We expect that these improvements will take time, that there is no silver bullet and that investors will likely have to wait until [the second half of 2018] to see initial fruits of new management's initiatives and investments," Swinburne writes.

  72. LQMT – WTF? Down big this week


  73. And INTC is down on the news – no surprising. INTC is not that in mobile but AVGO and QCOM would be tough to beat.


  74. You're welcome Palotay.  

    AVGO/StJ – Ah, but that's the trick, I bet they have a deal with AAPL, who can't "save face" and keep doing business with QCOM after that ugly dispute but now they can buy their chips from Broadcom, which is totally different.  Also, on the conspiracy front, please note AVGO CEO met with Trump yesterday and promised to move offices back to US (giving Trump some much-needed positive press for the week) and now he's doing a deal that should certainly be kicked as monopolizing a vital sector but won't be – because it has all been back-doored in advance.  'Merica!  

    Well, I'm late – gotta head off to NYC.

    I have to be on TV at the Nasdaq Monday, will be staying in NY Sunday night so not too much of a gap.

    Have a great weekend, 

    - Phil


  75. #MAGA, one corporate fat cat at a time! 


  76. One must admit believers in TSLA do not give up chacing dreams.Up 5.80 again. un real


  77. T + Comcast is a no go.  Broadcom + QCOm is ok then?  


  78. Well, trying to link in the Biotech sheet….so I will figure it out this weekend and put it up.  Have some older positions and will start the updating soon.  Have a good weekend all.

    Date Ticker Shares/Options Cost Total
             
    16-Oct-2016 PETX 500 $7.81 $3,905
    11-Apr-2017 BLCM 200 $12.75 $2,550
    2-Oct-2017 PFE      
      2019 Jan 32 C BTO 2 $4.75 $950
      2019 Jan 40 C STO 2 $0.96 $192
    11-Oct-2017 CRMD 2000 $0.72 $1,447
     

  79. FU FTR!!!!!!


  80. Pharm/excel sheet

    This is great!! thank for sharing your expertise. looking forward to it.

    Regards


  81. That will work for now.  PETX and BLCM costs are lower due to sold puts and calls.  Once I get a few more things worked out, I will start to put it in the chat on occasion.


  82. VIX is at 9.13. Wowza!


  83. PETX- just noted a big move on this one. Pharm?


  84. PETX….sales of their lead is starting.  That's all I can see.


  85. Phil/CMG- thx


  86. Phil – Enjoy the Tull.

    StJL – Johnson Amendment – we Nattered about this long ago. Pence wrote it up, but they don't have the balls to effect it with an EO.  Already put into effect by the robed eunuch's in SCOTUS, but NOT enforceable without an EO or legislation tearing down the Johnson Amendment restrictions…

    if an employer doesn't like your music, politics, religion, sexual preferences, habits or lifestyle viz. atheistic, Muslim, premarital sex, birth control, abortion, LBGT etc. they can legally discriminate in employment decisions, hiring and firing, due to their religious convictions under the 1st Amendment.

    This sack of shit passes, the founding father's, every dead President, especially Johnson and Jefferson, and every solider that gave their life for this country, will be collectively rolling over in their graves. You can start pledging allegiance to the emblem and rising for the corporate anthem. It will no longer be America The Great, just Amerika The Fake. Time for an extra strong IV. Out.


  87. I have the feeling that the way all these Trump guys are treating that Papadopoulos guy is not going well with many lower rank people in the WH. What's the incentive for anyone to protect the boss when his goons will backstab you in a minute. One day you are an excellent guy, the next, the coffee boy. Dumb… But then again, the entire team is like the Keystone cops.


  88. Indeed Naybob, indeed…. And yet this guys drape themselves in the Stars and Stripes all the time, heel spurs nonwithstanding.


  89. Speaking of sack of shit – that Manafort lawyer going around talking about his client trying to help democracy and helping Ukraine get into Europe. Manafort was working for the guy in Putin's pocket for crying out loud. He was not helping democracy in Ukraine, quite the opposite. But of course, the Trump base would not even know where Ukraine is located on a map so who cares!


  90. Trump administration releases report finding ‘no convincing alternative explanation’ for climate change
    The Washington Post

    The White House did not seek to prevent the release of the government’s National Climate Assessment, which is mandated by law, despite the fact that its findings sharply contradict the administration’s policies. Read the full story

    Shared from Apple News

    Sent from my iPhone


  91. FNSR --> Looks to have been largely coming in reaction to OCLR revenue forecast 

    https://www.investors.com/news/technology/oclaro-revenue-outlook-misses-by-a-mile-on-china-stock-crumbles/

    OCLR has a data center inventory overhang problem with their customers, isn't yet forecasting Chinese telecom spending increases, and doesn't have VCSEL to help counter those problems.

    reinharden


  92. Crypto currencies — To me, at the end of the day, it's just a speculative asset class.

    I happen to run a company that provides easy to use cryptographic software building blocks to software developers around the world, but we've not publicly released our Blockchain specific SDKs or our ICO enabling toolkits because I can't help but think of tulip mania.

    But, at the end of the day, my company exists to sell shovels to miners.  Most of our "miners" are normal folks who want to builds things like authentication, encryption, or cryptographic verification of data, devices, and identities into their connected products.

    But Russia's situation is more interesting.  They have a predominately extraction based economy dependent upon commodities priced primarily in the currency of a hostile nationstate that limits their ability to transact in that nationstate's currency.  This creates an interesting incentive for Russia to explore new approaches to pricing their baskets of commodities.

    I think having coins / tokens / currencies backed by physical commodities might make sense even if that is predominately really just a kind of derivative / variation of a futures contract (or a 21st century replacement of the gold standard).

    If Russia succeeds in that move, in the long term, it has an interesting impact on the dollar.

    Russia has additional incentives here because their commodity-based wealth is stranded inside Russia, their currency-based wealth is stranded around the world due to hostile acts by foreign actors, and the oligarchs are starting to worry about generational wealth transfer.  So they also view digital currencies as a potential source of liquidity and low-friction wealth "movement".

    So, like I said, if it were my money, I'd probably look at doing something else with it.  But, at the end of the day, I'm selling shovels and it doesn't matter to me whether or not the folks heading off to mine are insane.  Just that they buy shovels from me on the way. ;-)

     

    To go back to a specific complaint, yes, they don't create more digital currency because they work harder, but if they have half the compute / power, then they take, on average, half that which is created.  The other folks can spend more money on additional compute / power, but if you imagine a data center built in Siberia on top of a piece of ground strip mined to the granite underlayer with the datacenter heat exchanging into the foundational underlay and you combine that with free power, that data center will have an enduring cost advantage.

    If you controlled Gazprom with it's $90b 2016 revenue, you might throw the equivalent of $100m at something like this just as an experiment in breaking the dollar pricing structure re oil.  If a collection of folks who each controlled similar entities banded together to participate in such an experiment, $100m is just a rounding error.

    reinharden

    PS: The real problem with anyone bringing half the compute to a digital currency is the very act assaults the integrity of the Blockchain-based protocols.  The authenticity and integrity that is ensured by the distributed agreement is undermined if too much power is under the control of a single entity which can, potentially, write fraudulent data to the chain.  At least "in theory"…


  93. Phil — Vonage (VG) — Definitely still speculative, but that's why I went to the trouble of pointing out the CPaaS / UCaaS versus VoIP (aka consumer) sides of their business.  So you know what to look at going forward (seeing as how I disappear for quarters at a time nowadays).

    Weirdly they didn't start reporting those separately until just a quarter or two back and I might have played a small role in that decision as I complained at them about it.  The founder of VG is also the founder of the VC firm that led my startup's A round and Nexmo (now part of Vonage) and Twilio are both customers / partners of my startup.

    I don't have any inside information on any of these companies, but I've looked very hard at their economics and market success when deciding with whom to partner.

    reinharden


  94. Reinhard – "But Russia's situation is more interesting.  They have a predominately extraction based economy dependent upon commodities priced primarily in the currency of a hostile nationstate that limits their ability to transact in that nationstate's currency. "

    As opposed to value added, the value extraction strategy went global several decades ago. The only thing standing between this nation joining the 3rd world is our hegemony.  Dollars and debt are our number one national product and export.

    BTW – messaging, crypto, certs, paradigm shift -  more than twenty orbits around the sun have passed since I handed a certain quasi government agency the KEYS to the kingdom, and in typical fashion, they couldn't get out of their own way, much less hit water if they fell out of a boat. The more things change, the more they stay the same. Digital Currency Paradigm Shift  Out.


  95. reinharden – do you have an email you could send? i am biodieselchris at gmail


  96. Climate change is killing coffee
    The Washington Post

    America’s favorite beverage is under attack from climate change and other woes. Science may offer a solution. Read the full story

    Shared from Apple News

    Sent from my iPhone




  97. Obamacare vs. the Saboteurs





  98. What Would Happen If You Became Dark Matter?





  99. Pruitt names more industry insiders to EPA science boards





  100. The Puerto Rico Power Scandal Expands



  101. The Republican Tax Plan Is Political Suicide


  102. Robert Mueller is targeting the Trump-Russia guy who could flip on Ivanka Trump and Donald Trump Jr




  103. Now we know Robert Mueller is going after Donald Trump’s Pee Pee Tape





  104. Saudi Arabia intercepts ballistic missile over capital




  105. Donald Trump’s allies reveal they know he’s finished


  106. Donald Trump’s tweet plunges Saudi Arabian government into regime-changing chaos


  107. As Robert Mueller closes in, Donald Trump announces one last desperate move involving Vladimir Putin






  108. New York Fed President Dudley to Announce Early Retirement



  109. Commerce Secretary’s Offshore Ties to Putin ‘Cronies’





  110. The Top Reasons Startups Fail [Infographic]





  111. Good morning!

    Saudi turmoil is keeping oil at $56 this morning, /RB 1.795.

    Saudi Prince's Corruption Sweep Reaches AramcoA Saudi Aramco director and a member of the royal council overseeing the world’s biggest oil exporter were arrested along with other top officials as Crown Prince Mohammed bin Salman seeks to strengthen his hand amid a reform push that includes a stake sale in the company next year. The board member, Ibrahim Al-Assaf, a former finance minister, was among at least 17 princes, current and former government ministers and businessmen taken into custody, according to an infographic published by Al-Eqtisadiah newspaper. Adel Fakeih, the minister of economy and planning and a member of Saudi Arabia’s oversight council, was relieved of his post and replaced by his deputy, according to the state-run Saudi Press Agency. 

     

    Shakeup Stuns Analysts Who Say It Shows Saudis Mean Business. Saudi Arabia’s unprecedented decision to arrest senior princes and billionaires shocked analysts across the region, but to some it’s a sign the kingdom is serious about change. A newly formed anti-corruption committee, headed by Crown Prince Mohammed bin Salman, instructed police to arrest 11 princes, four ministers and dozens of former ministers, the Saudi-owned Al Arabiya television said. The decision comes about two weeks after the kingdom announced a series of projects, including a $500 billion city, as part of a plan to overhaul an economy that has been almost entirely dependent on oil revenue for decades. The Tadawul All Share Index closed 0.3 percent higher on Sunday, erasing losses of as much as 2.2 percent.

    And, "coincidentally":Saudi Helicopter Carrying 8 High-Ranking Officials & Prince Bin-Muqrin Crashed Near Yemen Border – All Dead

    Oil Jumps To $56, Highest Since July 2015 On Saudi Turmoil, Venezuela Default

    It finally got a bit cold so /NG popped. 

    Futures are pretty much flat and it's Monday, so it doesn't matter.  

    Trump Slams Unfair Trade With Japan, Defends TPP Pullout

    China's Shadow Banking Halts as Regulation Bites, Moody's SaysChina’s shadow banking sector, estimated by some analysts to be worth 122.8 trillion yuan ($18.5 trillion), stopped growing in the first half of the year as issuance of wealth management products declined, according to Moody’s Investors Service. For the first time since 2012, China’s gross domestic product grew faster than shadow banking assets in the six-month period, Moody’s said in a statement Monday. Following last month’s Communist Party Congress, further regulation will continue to rein in shadow banking and address some of the key systemic imbalances, Moody’s said.

    PBOC's Zhou Warns Of "Sudden, Complex, Hidden, Contagious, Hazardous" Risks In Global Markets

    Asia Stocks Drop, Yen Slides to Lowest Since March. (video) The yen tumbled to the weakest since March after Bank of Japan Governor Haruhiko Kuroda said it’s crucial for inflation to exceed the 2 percent target. Asian stocks slipped after China’s central bank chief warned again about excessive leverage and President Donald Trump brought up trade grievances on a trip to the region. Hong Kong’s Hang Seng dropped the most in more than two weeks in the wake of People’s Bank of China Governor Zhou Xiaochuan’s latest salvo on the continuing accumulation of financial risks. Japan’s stocks outperformed as the yen’s decline offered support. Kuroda underscored in a speech Monday that the BOJ is committed to overshooting its inflation goal, auguring no appetite for tapering stimulus. Oil extended an advance above $55 a barrel, with traders keeping an eye on the surprise power shakeup in Saudi Arabia over the weekend. The Topix index was down 0.1 percent percent and the Nikkei 225 Stock Average was little changes as of the midday break. Australia’s S&P/ASX 200 Index fell 0.2 percent, while South Korea’s Kospi index fell 1 percent. Hong Kong’s Hang Seng Index fell 1.4 percent.

    Iran-Saudi Cold War Intensifies as Militant Threat Fades. Riyadh, Tehran and proxies vie for regional dominance; a return to the Middle East’s ‘great game’.

    Saudis Call Missile Attack "Blatant Act Of Aggression" By Iran, "Could Be Considered Act Of War"

    Preparing For EU Collapse

     

    Good sign:  Why Companies Are Betting Big on GrowthFor the first time in years, investors are encouraging companies to spend cash on capex and R&D.

    Right wingers are loonies!  Is Roger Goodell Deliberately Pushing the NFL LeftwardA year ago he hired a Democratic operative, Joe Lockhart, as his top communication exec.

    Another Mueller Leak Suggests Charges Loom For Michael Flynn & Son


  112. Phil,

    What is your thought on /CL with Saudi turmoil vs stuffed front month contract? Where does it go from here?