Using their first amendment shield to shout FIRE in a crowded theater, CNBC began stampeding investors out of the market at 3pm when they decided to have a temper tantrum as the Senate had the nerve to approve financial reform, which will hopefully stop CNBC’s advertisers from screwing people over quite as hard as they have in the past. Note on the video, the Dow was at 10,209 at 3pm and then just watch the market move while they speak – what power!
They say with great power comes great responsibility but what do we do when it is wielded irresponsibly? Bob Pisani reports from the floor (where he’s "in" with the traders) and tells you "The Germans are going to vote tomorrow on whether or not they even want to support the Greek package." This is total BS as Angela Merkel’s coalition controls 332 of the 622 seats in the Bundestag, their lower House of Parliament and this is considered a done deal. What the EU is worried about is the meeting of the EU finance chiefs AFTER the vote (CNBC doesn’t even give you this news) where officials will discuss proposals to better coordinate national budgets and may address unilateral German limits on government bond trading.
I will give Bob a 1 out of 10 on this one because he got the words "German" and "vote" correct but the vote is on a bill that bill allows loans of as much as $184 billion from Germany to backstop the Euro and has nothing to do with Greece, who already got their money on the 18th. Note how the moment Bob talks about an upside, Maria (who has someone whispering in her ear) cuts him off and spins things into a downward spiral talking about risk coming off the table and Roubini predicting doom (what else is new?) with, she emphasizes, "a 20% correction in the next several months from THESE levels."
Just to keep track of Dr. Doom for those of you who don’t follow him:
According to CNBC’s Steve Liesman, the SEC has evidence that contradicts its own argument that ACA was mislead on the nature of John Paulson’s intent.
Specifically, in interviewing Paulson lieutenant Paolo Pellegrini, ACA was informed that Paulson intended to go short the CDO.
Not surprisingly, this was left out of the SEC complaint.
The SEC really needs to answer for this.
Remember always, this is a PR fight. Certainly at this juncture. And in any PR fight, you want to get your story out as if it’s not from you, but channeled through some independent "news" source. CNBC could not provide a better venue. They’re naturally sympathetic to your side to begin with, and they’ll funnel any "news" you want through their mouth’s. And Clusterstock….well, judge on your own, all I’ll say is they rarely meet an attack on Goldman that they don’t seek to diminish.
Look, this might be an accurate account, the SEC is certainly not above reproach, to say the least. But it just reads like a calculated PR offensive. Paulson’s lietenent saying ACA knew? Is he exactly unimpeachable? Doesn’t he have every incentive in the world to just say this? He can easily couch that as his understanding, that ACA was informed. Perhaps Fall Guy Fab forgot to tell ACA, we don’t know, neither does Paulo.
Here’s another way to look at it. The SEC has this info, it it becomes demonstrable fact that ACA knew Paulson was shorting it, it clearly destroys their case. Whatever SEC’s motivations are here, they’re not bringing a case out that will get shot down that simply. So I suspect the "ACA Knew" defense is a "he said, she said" thing. You can’t prove a negative, i.e., you can’t prove ACA didn’t know. But you can prove they did know if there’s some evidence that shows they were informed. Perhaps that evidence is out there, but I don’t believe "Paolo Says So" is that evidence.
There was a time when every other post on Clusterstock was a synopsis of commentary from a ‘name-brand’ economist.
There was a time when we all shared links to the latest pronouncements from Ivy League econ departments.
There was a time when countdowns were chanted into each PPI or ISM release.
And in the midst of all this armchair econophilia, a short, dark and handsome NYU professor with a name like a famous magician captured our hearts.
It was 2008 – and in our certainty about the lack of certainty, America fell in love with the new breed of Rockstar Economists.
As recently as a year ago, The Great Roubini’s traveling prognostication show was pulling in 6 figures per engagement and publishers were hunting down any theorist with an oddly-colored animal to base a string of predictions on.
Economists were one-downing each other with plummeting targets on a host of surveys and measures in an effort to make Abelson’s column or even earn a trip to Englewood Cliffs for a Squawk Box appearance.
A mythical, beard-stroking wizard named Charles Nenner was regularly appearing on CNBC, making ludicrous statements about his spoon-bending predictive powers with a straight face while the enthralled anchors strained to keep themselves from rubbing his head and making wishes.
The Rockstar Economists were photographed paparazzi-style with their arms around models, chillin’ hard at ski lodges from Aspen to Davos. Their every email missive was blogged and tweeted and re-blogged and re-tweeted. Each TV appearance was dissected and harvested for meme-worthy nuggets and the prophetic visions on which their brands had been built.
The complacency in the market is now reaching a fever pitch. It always amazes me that investors can be so bearish near the bottom and then be so incredibly bullish after the market has risen so substantially. On January 28th I said the market was not forming a major market top and that the downside was “more likely a correction within the uptrend”. At S&P 1,140 I went net short for just the second time in the last 12 months. With our H1 outlook largely playing out as expected I now find myself wondering if we are in a euphoric blow-off top and on the wrong side of the trade….
Mad Money started 5 years ago on CNBC. I vividly remember seeing the show when it started because it began right around the same time when the great Louis Rukeyser got sick. My first thought was: “there is something seriously wrong with the market if its participants are willing to listen to a man banging on buttons and acting like a lunatic.” The power of Cramer over the years is undiminished and leaves me wondering exactly the same thing today. Cramer is a good investor and a GREAT salesman, but you just have to wonder after 5 years – the market is flat over the same period – have any of his viewers actually come out on top after taxes and fees? My guess is very few….Investing is not a joke. It is not entertainment. I am not sure why anyone thinks it is okay to make it seem that way.
While I continue to think the VIX is a sign of near-term complacency you just can’t help but wonder if investors are still too fearful in the long-term. The majority of investors still don’t have an ounce of faith in the recovery and this is reflected in the historically high VIX. In the past two recessions, the VIX did not reach its historical low of 10 until at least 3 years into the recovery. Perhaps most important, the market rallied this entire time.
—–Original Message—–
From: CNBC Corporate Communications [mailto: all]
Sent: Thursday, December 03, 2009 7:32 AM
To: All
Subject: Exciting Synergy Opportunities With Comcast
Greetings Gang,
By now, I’m sure you’ve all heard that our parent company’s flirtation with Comcast has moved past the necking phase and we’ve now agreed to go all the way. I wanted to reassure all CNBC staffers and on-air personalities that whatever changes may come will be minor and will be made with the sole intention of wringing out cost savings and synergies.
Here are a few preliminary ideas we’ve received from Jeff Zucker as well as Brian Roberts and our new family at Comcast Cable Systems:
- Air times for CNBC’s various programs and segments will no longer be exact. Comcast will now give viewers a 2 to 4 hour window in which to expect a show to come on.
- Some programs, such as Power Lunch, will have their broadcast studios relocated to Transmission Facility Room B in scenic Harrisburg, Pennsylvania. Personnel will be transported to and from tapings weekdays via the Comcast corporate shuttle bus.
- All employees, including on-air talent, will be required to complete the mandatory six week Comcast training program which includes a master course on coaxial cable maintenence and set top box repair.
- Jim Cramer will be expressly prohibited from recommending or endorsing the following stocks during the Lightning Round: Time Warner Cable, Dish Networks, DirecTV and Verizon.
Again, these are just some ideas that are being kicked around by our new corporate partner. Please keep all complaints and comments to yourselves for now. They are valuing NBC as a whole at $37 billion, amazingly, so let’s not screw this up.
He came, he saw, and he couldn’t believe his eyes… or ears. It is almost painful to watch David Rosenberg smack the Managing Partner of Seygem Asset Management like the puppet doll the formerly insightful anchor has become. The same goes for the balance of his CNBC colleagues as they proceed to ask highly (ir)relevant question after question.
He came, he saw, and he couldn’t believe his eyes… or ears. It is almost painful to watch David Rosenberg smack the Managing Partner of Seygem Asset Management like the puppet doll the formerly insightful anchor has become. The same goes for the balance of his CNBC colleagues as they proceed to ask highly (ir)relevant question after question.
If street thugs were to hold up a convenience store and drive off with $1 million, it would be national news. But when a venerable Boston bank rips off California’s two largest pension funds for $56 million, it’s business-as-usual — at least to the anchors of CNBC.
State Street Bank — the world’s largest servicer of pensions — systematically ripped off CalPERS and CalSTRS over a period of eight years. It did this by adding a tiny surcharge on foreign currency trades. But this adds up, especially considering that some $35 billion in 42,000 transactions were traded by these funds since 2001.
So when two whistle-blowers filed suit under seal in April 2008, attorneys from my office immediately investigated — examining hundreds of thousands of pages of documents, interviewing witnesses and subpoenaing records.
They found in the course of an 18-month investigation that State Street was contractually obligated to give CalPERS and CalSTRS the "interbank rate" at the precise time of the trade. Instead, State Street consistently charged at or near the highest rate of the day, even if the interbank rate was lower at the time of trade. And traders concealed the fraud by deliberately failing to include time stamp data in its reports, so that the pension funds could not determine the true execution costs.
When the suit was filed, we notified the media and held a press conference — to bring the fraud to light and to deter other financial traders from considering similar action. This is a routine part of prosecuting important corporate fraud cases.
But, in a commentary post today, CNBC anchor Michelle Caruso-Cabrera sneered at California’s effort to recover $200 million in damages and penalties, using a made-up quote from Elliot Spitzer to call it "quaint."
This follows an interview Tuesday that was straight out of the Daily Show. CNBC invited me on to talk about the case, and then Caruso-Cabrera asked why I would come on the air to talk about it.
Her co-anchors seemed to have no problem with the rip-off ("as long as they quoted you a dollar…
It looks like the pure fear that gripped the markets about an hour ago and dropped the Dow by 2% is subsiding. Stocks are still lower but the nosedive has subsided.
The fact that drop came so suddenly and on the back of good economic news was a striking demonstration of just how fragile the stock market is right now. It has been quite a long time since we saw the market respond that powerfully to vague rumors.
Lots of people aren’t even sure what the rumor was. Someone might default. CNBC reported that traders were talking about a "bank default."
But we have bank failures every week. Why was this one sending traders to place sell orders? Well, some were saying that "a west coast bank" was in trouble. On the message boards, which are often populated by day trading trolls hoping to move markets, there was talk that it was Wells Fargo. Commenters on blogs pointed the finger at Citigroup.
Still others said it was a European bank on the verge of failure. One trader told us that this was a misinterpretation. It was, he said, Europeans who were whispering about a US failure. Specifically, the default on a Cerberus fund. That particular version of today’s scare story got so much traction, Cerberus was actually forced to issue a formal denial.
Regardless of the substance or accuracy of the rumor, the takeaway here is that we’re once again back to rumors trumping news to move markets. The fear trade is back on.
It looks like the rumor that killed the rally today was that some Cerberus funds were on the verge of default.
And now Cerberus Capital Management LP has been forced to formally comment on the rumor. Most companies loathe commenting on rumors. Hedge funds all the more so.
The rumor was apparently gaining traction among traders in London and Frankfurt this morning.
"There is absolutely no truth to the speculation," said Tim Price, a Cerberus managing director and spokesman for the firm, told Reuters.
Losses on private equity investments in Chrysler and GMAC seem to have prompted investors pull a reported…
Doug "Dougie" Kass of Seabreeze Partners Management, on CNBC, with Larry Kudlow (H/t Barry Ritholtz) . Doug believes the stock market’s topped for the year. Economy’s "sort of like Lindsay Lohan and Britney Spears" – very cute kids, ugly as adults, neither likely to have much of a comeback. – Ilene
The S&P 500 got off to weak start and, after retracing a modest morning rally, spent most of the day in the shallow red with an intraday low of 0.63%. But in the last seven minutes of trading, the index recovered enough to a make a small gain of 0.14%. This is the fourth advance, the first was Monday's 1.60 surge, but the last three have ranged from 0.05% to 0.17% with today's close near the high of the miserly three-day series.
The index is now up 5.02% for 2012, which is 6.93% off the interim closing high.
From an intermediate perspective, the S&P 500 is 95.2% above the March 2009 closing low and 15.6% below the nominal all-time high of October 2007.
Below are two charts of the index, with and without the 50 and 200-day moving averages.
Bill Moyers continues to make astonishing television with his truly great new PBS series, Moyers and Company. It’s unmissable, the most intelligent hour of programming on American TV today, bar none.
In the latest episode, Rage Against The Machine’s Tom Morello—a man I have a lot of admiration for—joined Bill Moyers for a particularly moving and inspiring conversation. From the show’s website
Songs of social protest—music and the quest for justice—have long been intertwined, and the troubadours of troubling times—Guthrie, Seeger, Baez, Dylan, and Springsteen among them—have become famous for their dedication to both. Now we can add a name to the ranks of those who l...
And it was shaping up to be such a good year. According to the latest just released HSBC hedge fund performance update, increasingly more funds are starting to lose it, certainly for the month, but increasingly more for the year. How many LPs will be eager to keep on paying 2% management fees (forget performance) to funds who at best are long AAPL (at least 226 of them), and at worst have underperformed the S&P, for the second year in a row, by anywhere from 5 to 15%?
TIF - Tiffany & Co., Inc. – A surprise earnings miss and a reduced full-year profit and sales forecast from luxury jewelry retailer, Tiffany & Co., took some of the luster out of its shares today, with the stock trading down 8.5% at $56.55 as of 11:50 a.m. in New York. Options activity on Tiffany this morning suggests mixed sentiment on the st...
RealNetworks, Inc. (NASDAQ: RNWK) today announced that it has reached an agreement with the Washington State Attorney General over discontinued e-commerce practices. In accordance with the settlement agreement, RealNetworks has committed to:
Discontinuing the use of pre-checked boxes for purchases of RealNetworks subscription products; Spelling out more clearly the material terms of RealNetworks product offerings; Offering online cancellation of subscription offerings; Enhancing RealNetworks customer support guidelines regarding cancellation. Statement from Thomas Nielsen, President & CEO of RealNetworks:
"About two years ago, the Washington State Attorney General's Office contacted us regarding concerns they had with some of our e-commerce practices.
To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...
First we'll go to the technicals. Back in mid April I had opined a 'bear flag' formation was being created. [Apr 17, 2012: Potential Bear Flag Forming] But the market being the difficult beast it is, head faked everyone and rather than a break down from said flag it first went UP and nearly touched yearly highs. This caused everyone to think the bear flag had failed…. only to lead to a horrid May in the market. Generally a bear flag will resolve relatively quickly but the longer...
Despite the fact that U.S. equities are well-positioned and well-supported to go up, once again it is the headlines out of Europe—especially Greece—that are scaring off investors. Some are saying that it is now likely (and even desirable) that Greece will default on all its sovereign debt, withdraw from the euro, and severely devalue its domestic currency (Drachma?). This will allow them to operate a balanced budget while pumping cash into growth initiatives, rather than suffer the ravages of Germany-mandated austerity.
Some say, so what? Greece makes up only about 2% of the Eurozone’s overall economy. Nevertheless, you might say that t...
Markets died and then rallied to flat again as European leaders “prepared contingencies” for a possible Grexit
Markets died hard and fast earlier today as major indexes registered as much as 1.5% of losses after news that Euro zone officials were unofficially “preparing contingencies” for a Greek exit from the Euro. Unofficial statements were not enough to keep markets down however, as major indexes rallied back to flat levels by the end of the day.
So the world continues to wait on Europe, as the SPDR S&P 500 ETF (NYSEACA:SPY) gained .05%, the SPDR Dow Jones Industrial Average ETF (NYSEARCA:...
Reminder: OpTrader is available to chat with Members, comments are found below each post.
This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).
We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options.
Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.
To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here
NEW: Ilene is available to chat with Members regarding topics presented in SWW, comments are found below each post.
Here is this week's test version of the latest newsletter. We apologize for some formatting issues that need to be worked out. Please tell us what you think.
Reminder: Pharmboy is available to chat with Members, comments are found below each post.
In this article, please revisit an article written two years ago titled, "The Calm Before the Storm." This article focused on the patent cliff that was looming in the pharmaceutical industry, that was later picked up by the New York Times and several other bloggers! Subsequent articles were written about big pharma company's revenue streams, and the pros and cons of of their later stage pipelines. Other articles have also attempted to identify smaller biotechs with the potential to reap big reward...
My last weekend update is dated from January 30 so after a long hiatus, here is an update of our virtual portfolio. Since the last update, we have closed the AA Money portfolio due to a lack of enthusiasm (and activity) and I have stopped tracking the FAS strangle as the low VIX makes it hard to get rewarded for the risk! But we have added a small $5KP virtual portfolio which does not use any margin.
FAS Money
We have had to recover from a big move up by FAS and a low VIX which keeps option prices low. But the portfolio has gaine about 10% since the last update.
Last update P&L - $5499.00
IWM Money
Not a lot of activity in this portfolio where the main focus is on the large IWM BCS. But the portfolio has grown over 20% since the last update.
Last update P&L - $1998.00
$5KP Portfolio
This is the virtual portfolio that replaced the AA Money portfolio. It does not use margin and we will keep holdings under $5K.
AAPL $50K P...
Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
(