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Federally Funded Thursday

How low can rates go?

We've been living large off the Fed's largess since 2002, half a decade of easy government money that started out as 9/11 disaster relief but turned into a multi-Trillion dollar entitlement program for corporations and the wealthy that has been fueling our economic boom.

This program has been so successful that last year the world's top .15% (all 9.5M of them) added a staggering $4 Trillion to their assets, THAT IS THE GDP OF JAPAN, the world's second largest economy!  Wake up people – this is not you, you may think you are included in this priviledged group because you have assets of $1-10M but the vast majority of that $37Bn is actually in the hands of less than 1,000 people.

If you want to check your actual standing in the global pecking order, you can enter your salary here, but it breaks at the top 100,000.

Why do I say that low rates are an entitlement program?  In simple terms, because the government does not make a profit lending money at these ratesTherefore they are running a charity at a deficit, which is a burden placed on current and future generations as other services (including defense) have to suffer in order for the Fed to keep making below market loans.  Don't all citizens benefit from this?  Perhaps but you have to imagine that the benefit derived by 48M home renters who's biggest loan is perhaps a $25,000 auto may be getting somewhat less than the benefit Steve Wynn (one of the 1,000) gets when he borrows $1.5Bn at 5.36% to build a casino that those other 48M people can't afford to buy lunch in.

So it's the easy money that's fueling the Dooh Nibor Economy and the question is – how long can they keep it up?  Maybe it's easy to funnel the entire GDP of Japan into the pockets of 1,000 lucky people (it's gone well so far) but let's keep in mind that this year they'd like to do better.  At 11% growth per year on $37T it's only a matter of time before it will take the ENTIRE US economy, currently $13T, just to fuel the growth needs of the 1,000.  That means they will need EVERY dollar, not just the ones you "waste" on discretionary purchases.  They will need your rent money, your medical money, your food money, your retirement savings, the equity of your home….

Luckily for us (and I use luckily in a very loose sense) half of the 1,000 live right here in the US so $2T of that increased wealth was added to our own GDP.  Now a pessimist may say that means that the GDP for the other 329,999,500 of us is just $11T (and don't even get me started on corporate wealth!) but as an optimist, I like to say that they may be dangerous, wealth sucking black economic holes but they are OUR dangerous, wealth sucking black economic holes and we are just lucky enough to be inside their event horizons!  For now anyway…

So — Fed Day, party time, excellent, woo woo!

Let's get this party started!  Hopefully the Fed will continue to see that inflation is nothing to worry about and will see their way clear to keeping those low, low rates so we can all go out and borrow more and more money to buy stuff that was made in China.

Speaking of China, the Shanghai composite was off 5% on both sides of the market this morning as the Bank of China indicated that they may be raising rates but Hong Kong shook it off and the Hang Seng rose 232 points (1%).  The rest of Asia was up over half a point, all very excited by yesterday's US rally.  Europe is also in a chipper mood, up half a point across the board as Gordon Brown officially takes over in the UK.

Lukoil reported profits down 23%, but not too far below expectations.  Production increased 7.4% to 1.8Mbd but prices were lower (boo hoo) so they only made 4.7% more against rising costs.  A very interesting concept – when prices go down they make more oil, not less as OPEC would have us believe!

KBH continues to lose money "hand over fist" reporting a loss of $2.26 a share vs expectations of a profit of .07 per share that was the consensus of the 10 professional analysts who are paid to follow the company's every move.  "Our second-quarter results reflect the current oversupply of new and resale housing inventory, a difficult situation compounded by aggressive competition and continued weak demand," said a statement from CEO Jeffrey Mezger. "Housing affordability challenges and tighter credit conditions in the subprime and near-prime mortgage market have also exacerbated current market dynamics, keeping prospective buyers out of the market, slowing the absorption of excess supply and further delaying a housing market recovery."

Despite the $2T contributed by the US branch of the 1,000 last year, our Q1 GDP came in at a 4-year low so it will be interesting to see how the markets hold up ahead of the Fed:

US Markets

The Nasdaq needs to hold 2,600 and give us some new leadership but I do maintain that oil must let go or there is no way the rest of the market can keep going.  Transports should get a bit of a boost as M&A rumors sweep through the airline industry but, as we said yesterday, we will not be led into temptation until we get confirmations from all of our majors.

Happy Trading and I will be keeping a close watch on the SOX to see if the tech rally is real.  If we can make it through the day we have IPhone fever to look forward to for a whole week but we also have a holiday next Wednesday:


The non-stop Apple bashing is amazing on CNBC and we continue to play T as a safer proxy as we already have plenty of Apple positions.

crude-stocks-062707.jpgZMan sees crude stocks at a 9-year high with over 350M barrels in private storage.  It was a drop in imports that gave us a negative inventory report yesterday.  I'm not sure I want to get too short on oil into the holiday but I do think that a Wednesday July 4th is going to be a bust for driving and consumption.

We get the natural gas inventories today and it may give us a good chance to short some of this week's high fliers so stay tuned in comments for our selections.

Meanwhile nothing matters but the Fed or, more accurately, the markets reaction to the 200 word statement which is unlikely to hold too many surprises.  I'm expecting a more hawkish tone as I still believe they must bring their rates just a little more in line with reality.

Let's not take the morning's trading too seriously and please, please, please – be careful out there!


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  1. Phil, play on TASR?


  2. Morning all, Rally cap on, but puts in place and 60% in cash.

    It’s not that I don’t trust these guys, but…


  3. Oil- $69.80 on Iran riots

  4. morning all
    Phil thoughts on DIA JUL puts 135.-and QQQQ PUTS JUN 47.- this morning? Thanks Henk

  5. out of BBBY 37.5 puts for around 100% overnight

  6. Rocket
    Great trade, should have followed you.

  7. T – up nicely +$0.77 to $40.79

  8. Anybody else not seeing any B/A’s for T options this morning?

  9. BBD


    I should have followed every oil trade you have made. Use a post-it, this will work for the next few quarters.

  10. T halted ….

  11. T – halted why?

  12. Why is T halted and where did you get that info? Is it only on the options?

  13. VOD might get iphone europe, any plays?

  14. TASR – too dangerous here. I’ll be doing something with my leaps soon though.

    T had a nice jump today.

    DIA – answered in prev post.

  15. The options for T on Fidelity have not traded today.

  16. T is halted on TD Waterhouse…

  17. T isn’t displaying change on thinkorswim either

  18. AMEX exchange down due to technical difficulties according to Think or Swim broker. Expects to open at 10:00 AM. Probably explains lack of options quotes.

  19. T – no options today, anyone know why?

  20. T 40.88 +.90 on scottrade streaming

  21. VOD are a good play on fundamentals alone.
    iPhone will be a much tougher sell in Europe.

  22. Option quotes for several issues are still frozen from yesterday or not dispalying. I don’t know but it might have something to do with the AMEX, which is having problems and will not open until 10AM.

  23. T b/a – I’ve got them but I’m very disappointed with the prices so maybe something is wrong. It doesn’t look halted but they just got a rate hike rejection in Ohio – can’t see that rocking the stock though…

  24. nice pop for BIDU
    feisty Erin happy about oil

  25. VOD is a very good company. I’ve been hoping they would come down but no such luck.

  26. I talked to live help on optionsxpress and they said that the NYSE is not yet opened, and they don’t know why. Until it opens, the options won’t be trading. This is for ATT (T)

  27. DD on VLO puts. Any long oil service plays to balance short refiners?

  28. BIDU- flying on Windowdressing?

  29. Bidu- FXI looking to break ATH. GOOG -iPhone launch sympathy

  30. Last night on bloomberg I saw a segment where the guest postulated that MER or MS who be a nice buyout target for HSBC, because the are the only one stop shop for instant US penetration. I buy the argument but I am not sure I trust MS not to have a hedge fund surprise. Any thoughts from those wiser than me.

  31. phil,
    what’s the best strategy regarding the RIG july 100 puts bought yesterday @ $1.40?

    also, GM ???


  32. bidu breakout looks solid

  33. Phil: I have BBY Jan 50′s wbyaj uncovered at a slim profit. Is this a place to cover or sell, or roll to 09?

  34. To the AMEX about T options: Thanks for the $1 in lost premium, jackasses.

  35. why is AUY running opposite direction of GLD & gold miners this a.m.?

  36. BIDU- 19 million share float, short squeeze time , Bought the July 170 calls for $2

  37. BillBigD- window dressing is factor

  38. amex has technical issues and only opens at 10 am this morning

  39. Merrill upgrades CSCO.

    AAPL again being pulled down.

    TSO might get back into the 60s soon.

    SHLD finally seeing some green.

  40. AKAM-good pop following yesterdays upside move.

  41. Phil:

    When you buy your index puts for insurance near end of day, do you sell those early the next day if it looks like the index is moving up? When/how do you make the sell decision as the index moves away from your puts?



  42. PRAA liftoff. My sept 55′s are very happy.

  43. RL- took some off
    GME- bought some
    VLO- 75′s looking nice. Although I have the Aug. Nice play Dr. ZZZ & Phil

  44. Phil,

    I want to thank you again for the title insurance plays. my holdings are up 240%, 64% and 62% (would be higher on all but thinly traded so i won’t quote bid/ask only last)). You are indeed the man. Take a bow.

  45. Oil puts – I’m hoping for a nice run into inventory to start VERY SMALL positions which I will intend to DD, roll, DD, roll, DD, DD and roll. We could go a very long time without a pullback if they get oil over $70.

    MS/MER – my thoughts are how ridiculous it is to think that $100Bn companies are “nice buyout targets.” We have really lost touch with reality in this market.

    RIG – my basis is $1.24 right now so I’m certainly going to DD (just 15 contracts ATM). We still have 15 trading days to go and those puts were $1.80 yesterday so we don’t have to get that lucky with a .90 basis. XXX

    DIA – if you’re in the June calls from yesterday you should be looking to get out – don’t forget they expire tomorrow!

    Long oil – I just can’t do it. They are so massively overpriced I just can’t find any I want for a long…

  46. bbd – what are you buying on gme?

  47. Phil:

    What would be the risk you see in the following trade:

    sell BOL Jul 65P
    buy BOL Oct 60P

    BOL got an buy-out offer at $65 and has been trading above that. The traded volume is pretty thin though.

    Thx, Edgar

  48. Timing is everything in a shameless upgrade pump.

    Today RBC upgrades AMZN to 75 target from 45. Just in time for end of Qtr window dressing.

    Must … Buy … Amzn.

    Nothing put an end of Q short covering pump.

    But its working.

  49. Whats with the oil craziness today ?

    End of Qtr ?

    Gas Riots in Iran ?

  50. PCU-Sweet buy yesterday.
    GME- bought 7 OCT 40′s if it breaks $40.50ish will add.

  51. no qtr dressing boost for GOOG???

  52. Looks like Legg Mason is hard at work to mark up AMZN. You can bet Bill Miller’s been selling shares, so now he can use some cash to BUY BUY BUY and keep that price high.

  53. MER is $74B, MS $90B and HSBC is $215B, C is $250B, it could be a status buy to make them #1, especially with what is going on in Europe with ABN, Barclays, BAC etc.

  54. Index puts – I don’t buy them every day but I tinker with them a lot. I just play them as great big momentum trades and, as insurance, what I do with them generally depends on how much I think my other positions need protecting. Don’t be misled by how well I’m doing with these – it’s just an accident of the volatile market, not a plan.

    What happens is I will establish a position that protects about 1/3 of my anticipated losses on a 200 point dip, in this case that’s 350 DIA July puts. As a rule of thumb I find whatever contract is around $2 is usually the best mover.

    Once I establish it I follow mattress play rules but I’ll usually spend .30 per 100-point down gain to roll them up to the next level but then follow the usual half out rules on a pullback. If the Dow goes up 300 points from where I buy the $135s for $2 I end up owning the $138s for about $3, when the Dow corrects 150 points I get half of that off the table even and I would have layered the play by then so I have tight stops on the remainder so I end up even for all my trouble but that’s great as the idea was to insure my longs for 300 points up, which I’ve hopefully cashed out by then.

    That’s the plan but what’s been happening lately is we’ve had a lot of rapid pullbacks that have paid me a bonus followed by rises that came faster than I scaled in so I end up buying low and selling high by accident.

  55. LithiumBR – I picked HAL yesterday in comments. I’d wait for inventories now.

    If the gas number is bearish ( 51 to 45 in the last 2 weeks. I’ll be looking at the 45 and 50 Junes upon the gas number but not before.

    EOG over $2. Gotta say bye,bye there if the injection is > 85.

  56. HOKU and SNDA and AGU moving up strong

    XHB CFC usual suspects down

  57. Huge early volume on Bidu this morning. Playing the PCU July 95 calls this morning too.
    Watching JCI, FSLR (OMG), AMZN

  58. CFC down again, I guess people realized the CEO hates his own companies stock.

  59. Phil--

    RIG – Just for us remedial readers, you are DD-ing but at the higher ATM strike price rather than on the 100 puts?


  60. 99 bcf – sell, sell, sell

  61. Thanks Lith! I took none of them myself 8-(

    BOL – your risk is that the deal falls through because of undisclosed issues relating to recalls and lawsuits that turn up in due diligence sending the stock to $50 again where you owe your putter $15 (and he can make you eat that stock any time) followed by a white knight who comes in with a matching offer anyway wiping out your gains. It’s a good game but one I rarely play unless I see some really good numbers.

    Gas build 99Bcf – much higher than expected. Now I’m loving my RIG puts (.94 basis) VLO $75 puts are a down momentum play and EOG $70 puts make a fun play XXX Tight stops, very risky!

  62. bought CHK 35 puts.

  63. Hadn’t realised how much the contango in crude had dissipated. Infuriating because it was certain to happen and I was going to start buying front month futures and selling the Dec09 futures…but never found the time grrrrrrr – The spread out to Dec09 is now a mere 20c.

  64. took new position in SWN 45 PUTS for $1.10. Stock is still unched, chart looks on a cliff and if you look at a daily of the UNG it’s in look out below territory.

  65. RIG – very important lesson in scaling. I bought 5 at $1.60, 5 at $1.20 and 5 at .80 yesterday for a grand total of $1,000. Just because I can afford more doesn’t mean I buy like an idiot. That becomes my base position (20%) of the $5K I was willing to commit. Today it opened way higher and I could have taken a 50% loss which would have cost me $500 of my $5K budget but I decided to risk another $1,000 since it seemed pretty cheap (.60) to buy 15 more shares. Now I half out at .90+ and I now have 15 shares for .90 or less when my original intention was to spend $1.60 for 15 for $2,500 just yesterday.

  66. finally GOOG going green

  67. phil,
    thanks for suggesting a DD on the RIG puts, bought a tiny bit more and was very hesitant to do so, but am very glad.

    FXI – holding july 124 puts, should i roll into another position?

    thanks in advance.

  68. T, Wyethh, etc. Pisani claiming “erroneous orders” held up trading.

    Complete BS.

  69. BZH – I wonder what that guy was cleaning up.

  70. P – Nice moves on the RIG!

  71. Phil, thanks for the index puts explaination. I really appreciate how helpful you are in explaining this stuff to us newbies. I am just about flat and am going to spend the time between now and 2:15 reading the education section again.


  72. did they stop T?

  73. LOL – C just cut BZH to hold from buy (kinda late).

  74. Our DIS calls were hammered quickly and never recovered, so we lost our money it our current ones. ( July 37.5′s -HFWGU ). You recently talked of still liking the company. Being that it got killed, do you think another play in this ( not the July 37.5′s ) is worthly.

  75. FXI – I ran away from those. Ahead of the Fed you could be throwing good money after bad but if I were down $2 on the position I’d spend $2.25 to roll to the Aug $125 puts and sell the July $127 puts, now $3 if they break above $130 but otherwise give it a chance to fail at $130.

    Erroneous orders – the BS is that they were random errors!

    I love how that gas report is an excuse to take oil over $70…

  76. Any idea what’s up with GM?

    Phil, I sold GM 37.5 Jul calls with 40 Jul calls as cover. Any idea how to save this trade?

  77. VLO red

  78. DIA entries and moves:
    thanks for the excellent piece of communication above!

  79. Why is TSO still up 2%?

  80. DNA bottom? I would like to buy LEAPS again.

  81. Phil:

    How about the upside trade for BOL:

    sell BOL Jul 70C
    buy BOL Oct 75C

    Even if Advanced Medical (or someone else) offers a higher bid, will it top $70?

    Thx again, Edgar

  82. phil, r u still in the BG 75 puts …. got in at 2.05…now 1.45

  83. DIS – the selling is RELENTLESS and the p/e of the company has been hammered down to 16 for no reason I see (and Smart Money recently agreed with me: ) so yes, I still like them a lot but I don’t trust the short game anymore (although I still have my $35 and $37 calls) so I’m going with Jan ’09 $35s, now $4.65 and if they fail to move this month, I will make up my short losses with sales over time.

  84. OPtrader

    The guy on Bloomberg last night also pointed out that there is like $100B under control of people who simply buy stocks that have gone up (end of criteria). They also want to give me time to scale into more nov puts.

  85. OIH coming back up again?

  86. TSO-Do they sell Nat Gas?
    WNR-keeps on pumping

  87. DIS might get a Ratatouille bounce if PIXAR magic holds up. June 29th release I think.

  88. POT is now up $7 from the low yesterday. Amazing.

  89. LM just sold me AMZN calls

  90. Careful about shorting oil stocks – most likely they will go up anywayz with the market

  91. TIE: holder bought over 40k shares at the close yesterday, may be turning the stock around. bumped its head on the 200-day MA this morning, as theres been someone else trying to whittle away 36k shares or so on the ask starting at 31.93 and moving down as the price faded.

    AKAM: Finally ! – I wish I trusted the move and the market though

    OIH: La Nina not developing eh ? We are in severe drought conditions in Atlanta(13″ rainfall deficit !). We skipped spring this year, and would like nothing better than a good tropical low to move over us at this point. FL needed one last month and got it.

    WOW.. NYSE WYETH/AT&T explanation is amazing… or is that disconcerting ?

    Phil: Thanks for the explanation on the index puts. I assume you layer them because they lose effectiveness quickly when they go OTM ?

  92. EQIX
    above 90!

    new high!

  93. GM -got a labor agreement. It won’t save them but it brings in enough suckers to shoot them through the roof. Your situation is exactly why I never do those silly bear call spreads. You can wait and hope this thing only costs you $1, buying this guy out for a $1 premium is madness just because you’re worried about a spike as the most you can lose is $2.50 anyway.

    TSO has nothing to do with reality.

    DNA – I think they’re a good deal here. Now THIS is a $100Bn company I can see someone buying. If a major picked them up it would solve their pipeline issues for 5 years.

    BOL – much safer but make sure the deal isn’t going to close on you because the second it does you get 0.

    BG – yeah I forgot about them and they took my head off. I’m willing to watch and wait on these rather than chase. I’ve got a lot of things to dump if the Fed comes in happy.

  94. ZMan ok I’m in with you on the SWN 45 puts i paid 1.20 me bad for waiting

  95. Call me crazy, but aren’t there other stories in the world besides the iPhone?

  96. DNA

    Phil your pick for a LEAP? I tend to hate to pay for premium, so I always got too deep ITM.

  97. OTM Index Puts – yeah, not muh point in having protective puts that kick in after the Dow drops 200 points!

  98. WFR
    cashed out the rest at +100% (still might be too soon); but, we can always go back in.

  99. CMI
    gaining momentum

    getting ready to go again?

    still has room

  100. YO,
    NO That’s all CNBC wants to talk about. 2 days ago that was us here on Phil’s site. Iphone and more Iphone.
    TSO-I bet if I told you last week oil would be over $70. You would have thought TSO would be $62 -$63

  101. Good ideas for fed play (up and down) ?

  102. saw an apple billboard in nyc yesterday that said:
    i’m watching too much phone

  103. DNA – I have no pick now, I’m still wanting to confirm an break over $77 but the ’09 $80s would be my choice, now $9.85. I understand what you are saying about the premuim but that is like a landlord saying he only buys buildings for cash because he doesn’t like to have a mortgage. All that matters is that you have a positive rate of return – how you get there is not important. You can buy the $60s for $22.20 and have $20 less premium but you will get the same $.97 from the Aug $80 caller and that woulld eliminate 10% of your capital at risk in month 1/18 vs just 4% against the $60s.

    Also you are locking up $12 that you could be using to diversify your portfolio AND a $10 drop in the stock tomorrow would cost you $7 on the $70s and $4.20 on the $80s while you get no additional benefit from a $10 move up since you sold calls against and have capped your upside.

    For this position, when it gets to $77 I expect to be able to sell the same Aug $80s for $1.50 against the $80s for perhaps $11.25 but at least I’ll be comfortable knowing my calls have support at $10.

  104. Phil and Cap, I totally agree with you guys(I’m sure many do) that the orders were not random after all its now a good example of how important it is to have a specialist to catch these error orders, a computer would have processed those orders and messed things up. I know big portfolio managers who have always known that specialists manipulate prices and they simply don’t trade NYSE stocks because of that reason. Point blank.
    Bob Pisani needs his job.

  105. TM moving

  106. TRR in at 14.04 ahead of earnings Mon.

    infrastructure/construction hope to get a FWLT or MDR type pop

    boy it just exploded as I was writing this!!!!!

  107. Fed – I’ve already got my puts so I’ll be taking the DIA $134s for .60 to cover with a .30 stop. Last Fed meeting there was no head fake, it just went straight up 100 points in 15 minutes.

    Wow CEOs of 75% of Fortune 200 get $20M minimum (for being fired) golden parachutes on top of median pay of $8M – maybe I should go back to that side of the table!

  108. CEOs: I find it interesting that Carly Fiorina is still known as ‘the former CEO of HP’. She got paid so handsomely to exit (under bad circumstances) that she hasnt needed to get a job since — either that or no one will give her one.

    Get a new title Carly.

  109. from last Friday to now:
    RBOB: down 3.4 cents
    August Crude: up ~ $1
    This means after a one week respite, cracks will have fallen 7 out of the last 8 weeks.

    TSO: 61 > 57 : that makes sense
    VLO: 76 > 74.50: also makes sense as it’s the preeminent player with a lower valuation.
    FTO: 45.50 > 44.30: expensive stock, still just pennies off its all time high.

    The FTO and WNRs and HOCs of the world a WAY over-valued. Gasoline demand is peaking now through the next 2 to 3 weeks. What then? It’s like when CNBC was hyping hurricanes and natural gas was holding $8 even though the YoY deficit kept shrinking. The fundamentals didn’t sink NG. It was the statement from NOAA that LA Nina was going to be late and that therefore that hurricane activity would be reduced that killed gas. I was out of the country. My bad. When pump prices start to fall…by the way they have a lot, the refiner stocks will run out of steam. When was the last time CNBC mentioned $4 gasoline? They’re such “what up will go up” investors and vice versa.

  110. Phil , Happy , Cap , Opt , dragon , rocket , others

    What key indicators and targets will you giys be watching at 2:15 today to read the direction of the markets next move ?


  111. DIA – Phil, please clarify which DIA $134s in your 11:37am post above. Neither Calls/Puts of DIA July 134 are anywhere near 0.60!

  112. phil,
    DIA 134 for .60? don’t see anything like that. please clarify.
    thank you.

  113. end of June June 134s are 60/70

  114. DIA JUNE 134

  115. T is UP

  116. The market leading indicators should be bonds and interest rates-10 year, TLT also financials-XLF. Watching pivot points and levels on all indexes.

  117. Helicopter Ben to the rescue!!!

  118. Carly – well since 475 of the fortune 500 have always been run by men, I think it might be a while before she becomes better know for something else.

    TSO – make that $59 Z! Hitting the 5% rule today.

    Key indicators – I’ll be watching the Dow, the Nasdaq, the S&P and the NYSE. Perhaps the RUT the SOX and the Transports too (shocking revelations, I know!).

    DIA June $134 calls, currently .68

  119. TSO up 5%; up $5 from yesterday’s low.

    Yeah that makes sense.

  120. WFR-moving higher

  121. can GM go any higher???
    should i buy some calls to offset my massive losses in this?

  122. WFR crankin’ – thanks Happy for getting me to buy back those covers!

    Fast food is flying. YUM, BK, SONC… good a time as any to pick up some MCD Aug $52.50s for $1.05 XXX

    Oil not holding $70.

  123. trying to scoop some TSO 60s Puts here. going for my initial 20%. Other than my two strikes on FTO I’m away from the sector right now. Enough is enough.

  124. GM should not go any higher becase they are still a disaster and this boost today is because they Carlyle Group bought a division from them for $5.6Bn, which is 1/4 of the entire market cap of GM. I’m actually looking to short GM here (I already have long puts) at Allison generated $2Bn in high-quality revenues with 3,400 people making truck transmissions while GM’s other 260,000 employees generate $205Bn of revenues at a loss.

    On a bad Fed note, I like the Jan $35 puts, now $2.65. XXX

  125. Damn do you need to be nimble w/ these oil crooks.

    TSO now down $1 since noon after running up $3

  126. phil,
    thanks for the GM comments.

  127. Interesting Cheney reading

    The people of China waking up.
    Welcome to Web 2.0

  128. AKAM
    picking up steam!

  129. SPY 150′s were 1.95/2.00 at 1:45 pm yesterday. 2.85/2.90 now.
    Just saying …

  130. NEWS ALERT from The Wall Street Journal June 28, 2007

    The Supreme Court rejected public-school assignment plans that take account of students’ race. The 5-4 decision could imperil diversity plans in hundreds of districts nationwide. In another 5-4 decision, the high court abandoned a 96-year-old ban on manufacturers and retailers setting minimum prices for products. Separately, justices blocked the execution of a mentally ill Texas murderer. The first full term with Justices Roberts and Alito was marked by a string of split decisions that showed a marked tilt toward conservatism.

    Ah, just like old times!


  131. Phil: Maybe its more about her record than her gener – before planning to save HP by laying off people and selling ipod skins, she had come from Lucent… Maybe Lucent wasnt all her fault – but a sunk ship is always the captains fault isnt it ? I guess my problem with Carly is that shes a marketing person. It dint work well having her trying to steer a technical company – no one, from the BOD on down to the rank-n-file liked her. She does deserve some credit for the HP turnaround – how much credit is a matter of debate.

  132. What’s up with this lunchtime bump? 9 of the top 10 DIA stocks (MO being the exception) have suddenly gained momentum. Anyone think it’s a pump so that the big dogs can buy some puts?

  133. Guys I’ll be using in about a month after funding it, everything looks legit. The guys there are very knowledgeable and I was told if anyone has questions call Jaime Just at Optionhouse and he will give you the red carpet. You can download a demo and use the interface to check it out so go ahead.
    The way I’m doing it is keeping my Real Tick and executing on optionhouse platform.
    I’ll update as it goes along.

  134. CCJ

    would this be a good candidate for eventual 09 LEAP spread with 09′s @ 11.4 and Jul 50′s @ 2.0? It’s down ~10% this month.

  135. “diversity” = government BS.

  136. UNG should replace the ticker with DUNG. Same bagholders who bought the USO are getting creamed on that one since inception in April. Of course, the gassy stocks of the XNG are positive today. Go figure.

    I’m both ways now with a remaining long piece on EOG and shorts on SWN.

    Thinking about re entering a long on HK as it’s looking very resilient after a small downdraft which followed good news.

  137. optiondragon … what is the “red carpet” treatment. Are they just nice, or is there some special deal ?

  138. wow, TSO is becoming more and more predictable :-)

    Glad I got out of some of my puts yesterday and bought 57.5 calls.

    As others mentioned, I thought there was a sector rotation from energy to tech and yesterday energy stocks were too strong. And continue to be strong today.

    I screwed up on my SU trade, wanted to buy calls or roll my short 85 puts to 90 puts. SU up $2 today.

  139. dragon
    have you had a chance to use any of the trading tools (call/put spread investigators) at optionhouse? If so, what did you think?

  140. Cap no special deal but they can give you free tools and things like portfolio margining, where hedged positions require less capital to cover.

  141. CCJ – you really don’t want to go selling calls on something you think is due for a bounce but you can begin to establish your longer positiion and patiently wait for a move up.

  142. No I haven’t used their investigators and I’m not very familiar with those tools so difficult to compare them for me. I will be using them but I have the best call/put spread investigator called Phil’s Stock World. Phil is a computer!!LOL

    Reminds me of a Warren Buffet story about how a reporter came to do an interview at his office and questioned why Buffet didn’t have a computer in this office. His reply, ” I am the computer”.

  143. CROX-day 2 of selling

  144. CROX getting killed.

    Too many people think the Fed is going to go soft – not a good sign but they were shockingly easy on us last time.

  145. Phil,
    RIMM earnings evening, how does buying 165 puts and selling 155 puts look?
    the stock usually drops about 10 or more after earnings and then after 2 days come roaring back

  146. Looking at the XLF Jul option cahins shows: $36 calls = 1510 volume today and $36 puts = 26,545 volume today (approx 10% of open interest). This seem extreemly heavily weighted to the put side. Does someone know something that we don’t know? What could this tell us and is it actionable?


  147. Greg, I would have to say if that is true that someone is writing those puts not buying them. Checking the trades only 3 trades went off all day. Shouldn’t read too much into it.

  148. RIMM – ask Windy how those things work out… That one is a no way to me as you are risking $6.1 against a max gain of $3.90 on what is essentially a purely bullish play because any drop in the stock immediately costs you money.

    Very dull today, markets are frozen in uncertainty.

  149. Thanks Option Dragon: I certainly have a lot to learn. I feel like I am looking at all the wrong things. It would be great if someone could write a piece for the education section about what and where to monitor the BASIC info that one needs to follow before and during the session.

    Thanks again


  150. Playing RIMM after the numbers and after the PCE will be much more rewarding while limiting risk.
    My plan with RIMM is to trade the gap and watch premarket for price levels and strikes.
    First analyze the report and then analyze the stock, game plan for drops or pops with strikes, watch the gap trading patterns- dip,pop,pop or pop,pop
    Try to catch the IV crush on the strike options close to the opening price.

  151. FXI is just chilling out at $130

  152. RIMM Play

    Buy Aug $175s for $5.70
    Sell Jul $165s for $7.10
    Buy Aug $155 puts for $4.50
    Sell Jul $165 puts for $6.30

    You pocket $3.20 and there is $11 in premiums on the Julys and the most you will owe your caller/putter is about $10 so any value your 2 Aug positions hold over $6.80 is profit. I’m tossing a few into Complex Spreads just to see how it shakes out. XXX

  153. OIH has put its brakes on too.

    I smell a bounce in it. (especially if oil holds). Bought back the 180s right at 20% gain.

    AKAM, TM doing very nicely.

    TIE trying to spin its way outa the mud. Any thoughts on carbon fiber and other composites eating into titanium demand ?

  154. Good news on the decisive defeat of the Idiotic Kennedy/McCain immigration bill. Passage would have been a scandalous fiasco. Kudos to those Senators who finally broke out of their stupors and the illusions of their own self importance and listened to the voices of the people beyond the Beltway instead of the special interests and lobbyists.

    Hopefully we can now move on to having the laws enforced in this country, and then ultimately to a more sensible solution beyond the mess that this bill would have created, created by a decidely undemocratic process.

    And no, it wasn’t better than doing nothing at all. Some things are worse.

  155. BTW McCain sunk whatever remaining hopes he had of being a Republican nominee by sponsoring that bill.

    Maybe he can run w/ Bloomy. or the Dems as a unity ticket. Hilary/McCain. That would be amusing.

  156. sold some HOV July 17.5 puts against my 08 17 puts. I think the homies are way oversold here. Stops in place.

  157. Cap: Did you hear the Hannity interview with Sen George “Play Misty for Me” Voinovich last night? What a dumb schmuck! I’m embarrased that he is a Republican.


  158. That’s the same guy who cried, literally cried, over John Bolton’s nomination.

    I didn’t hear the Hannity interview, I did hear about it.

    Voinovich is an embarrassment to the Senate, forget party lines. And there are lots of others. What a waste.

  159. Fed time.

    I have no bet on. I think there is a fair chance we may sell off today on the announcement (yes I am changing my tune, partially based on the run up in advance of the announcement).

  160. NIHD
    ready to jump in the market runs!

  161. SPY got over its 50 day and took off

  162. market wants to explode higher!

  163. I heard the voinovich interview. How pathetic. He is yet another reason why we need term limits for congress. As a side note, the republican party in ohio is in a total shambles. It is only slightly more corrupt and useless than our republican party here in pennsylvania.

  164. Hey! Who spiked the market’s coffee? It’s just running up like it doesn’t care what’s coming out in 20 minutes. Could it be *gasp* the last party push before the cops show up?

    (No, I’m not a party pooper but I’m annoyed I sold my T $40′s a few days ago, for a profit, but forgot to get back in)

  165. Wouldn’t it be crazy if we broke out to new All Time Highs on the indexes! What are the odds of that?

  166. Phil or others – While waiting on the Fed, anything we should have teed up should there be any surprise in the Fed statement. Anything we should tee up if the market starts running up fast? Any quick mo plays?

    Happy, thanks for your suggestion.


  167. To anyone who considers him/herself lucky…Do we rally or fall after 2:15? Please respond (unless none of us considers ourselves lucky).

  168. twitch

  169. whistle :-)

  170. twitch whistle and then rally !!!!!

  171. BSC – should we be believing in its runup ?

  172. I think we juke around a bit and then run higher, Helicopter Ben HAS to help support the market. Its a gamble. Technically overbought on the hourly for the S&P.

  173. I could really use a hawkish statement… or a surface to air missile on Ben’s Helicopter. :P

  174. Erin’s big yellow collar looks dumb. Iphone free hour on CNBC

  175. I’m not sure which way we go after the Fed but beware of headfakes

  176. FED – with the market up it is time pick up some $134 puts for .43 if you are looking to collar. XXX If you are looking to “tee something up” there is nothing better than the index options and you might want to just jot down plays that are just out of the money in either direction if you are looking to play momentum. Oddly no one has their money on nothing so that may happen too!

    I smell a crash myself but I have to fight that as it may just be my rational thought process imposing itself on the economy.

  177. Erin is counting rails from NJ sitting in NY or is it the other way

  178. KFST

    It looks on the surface that BSC got away with a $1.6B instead of $3.2B bailout and claim it is contained.

  179. I think the rally was a headfake and we are down unless Big Ben drops rates. But who really knows

  180. Were leaving together,
    But still its farewell
    And maybe well come back,
    To earth, who can tell?
    I guess there is no one to blame
    Were leaving ground
    Will things ever be the same again?

    Its the final countdown…

    (ok, no more spam from me)

  181. RIG – dropping

  182. BSC still down $10 since earnings, this is a 50% retrace of that drop and if they can’t break $147 they are likely to retest $135.

    I don’t think the Fed can afford to support the markets at the cost of Int’l confidence as THEIR ability to borrow money is in peril. This is why I have my gold stocks (coming back now) as the only way for the Fed to prop up the market without selling notes is to drive the value of our currencly down another 10% – plus and that boarders on hyperinflation. While I think they would do it, I can’t believe it’s their first choice when the market is still strong enough to support a tighter statement.

    Ah – ha – there it is! Hawkish on inflation as advertised!

  183. Sold my T calls 40 $1.2 (better safe than sorry). Thanks Phil for the tips.. learn a lot from U.

  184. Wasn’t it less hawkish than before

  185. Hawkish on inflation but stays the course (I feel some deja vu). Guess the road is clear to continue…

  186. markets exploding, hope it is not a head fake!

  187. GOOG finally wake up….

  188. I think they left the punch bowl out and maybe spiked it.

  189. Think Brian Hunter is up to his old tricks again? Nat. Gas sure smells like forced liquidation these days…

  190. AAPL certainly liked the Fed statement.

    I’m out of DIA calls here, that was enough of a rally for me!

  191. RIG-bought back from morning sale
    DECK-breaks $100

  192. No collapse means we go higher

  193. If XLF and XOM like it.

  194. The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent.

    Economic growth appears to have been moderate during the first half of this year, despite the ongoing adjustment in the housing sector. The economy seems likely to continue to expand at a moderate pace over coming quarters.

    Readings on core inflation have improved modestly in recent months. However, a sustained moderation in inflation pressures has yet to be convincingly demonstrated. Moreover, the high level of resource utilization has the potential to sustain those pressures.

    In these circumstances, the Committee’s predominant policy concern remains the risk that inflation will fail to moderate as expected. Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.

    Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Cathy E. Minehan; Frederic S. Mishkin; Michael H. Moskow; William Poole; and Kevin M. Warsh.

    Such a fuss about nothing! Bulls are engaged in wishful thinking as the last paragraph effectively says “Cut this commodity rally crap out or we’ll choke it out!”

  195. GRMN – does anybody see life in this ?

  196. TSO now down $2 since noon.
    will SU follow ?

  197. OIH making new lows for the day!

  198. Housing – nothing on it from Fed…is that correct ?

  199. You would literally think the Fed wrote a book the way these guys analyze it and I swear that the people commenting on this right now haven’t even taken the 12 seconds it takes to read the damn statement directly!

    Holy crap are these analysts idiots!!!

  200. Damn. It was a headfake.

  201. TLT slowly inching higher

  202. well yes, SU is now following; went short at 89.53

  203. BigBoys sold into rally i guess!!

  204. thank you Phil, for not making me press the BuyBuyBuy switch

  205. QQQQ could be the first to go negative

  206. ECA coming down nicely. EOG diving. Even might CHK going down. BTU amazingly still up and that won’t last. BTU Aug $45 puts are $1.23 and make a nice play here XXX

  207. Bill Gross!

  208. I bought 10 DIA $133 puts at 2:15 exactly, that head fake nearly got to me but I hung on (thank you xanax). I think I held my breath for 10 minutes straight.


  209. ZMAN you are the Bomb!!!

    SWN put play is awesome

    1/3 out at 1.85 on purchases this morning at 1.20

  210. I still think this is a head fake down.

  211. May be; key level to watch up is 1513; needs to break above convincingly (S&P).

    Also need to watch for convincing, sustained downside.

    May have to wait until tomorrow.

  212. Lithium:

    Is that the double secret headfake down? :)

  213. hey just got back to even on RIG!!

  214. Phil--

    I have a little problem (one of myriad). If I sell the RIG puts I added to, I won’t be able to make a trade for the next three days or so. If I hold overnight, do you think it’s likely they’ll still be somewhat profitable?


  215. I swear if all you did was listen to CNBC you would be bankrupt in no time! I don’t see how they can keep viewers with such absolute crap coverage. It’s not that they are just wrong, they are relentlessly wrong – they get on the wrong side of things and beat the point into you until you start to question your own rational decisions!

    Oh well, what can you do. Very nice for our puts now so it’s always good to be able to cash out both ends of those plays!

    Bill Gross expects the economy to weaken (correct) but expects the Fed to cut rates to stimulate (wrong) and he is disappointed that there is no cut evident in this statement. Now imagine how many people he has on the wrong side of a trade! He’s got Greenspan on call and he missed this one so we could look for some massive unwinding of rate sensitive deals here…

  216. Zmann … good call.

    Although almost any plays selling the pump of this sector would now look fantastic.

    Look at TSO, has given back almost all of a $ 3 intraday gain !!

  217. Hmm is it a double head fake – does that make it a head bangers ball?

  218. It is like the good old days bonce in a couple of direction and then shoot off one way. I think up.

  219. Looks like oils led the indexes up, and now down. Everything else more or less ok.

  220. Phil:

    I have to turn off CNBC several times a day because of the inane drivel that spews endlessly from the talking heads. I put them in a “time out”.

  221. Stop watching CNBC (or do it with no sound) it is noise not signal. Bloomberg is better, at least after hours.

  222. I thought Gross already admitted he was wrong that rate cuts were in the offing. NO CHANCE BILL. Economics 101 says so. I don’t get how such a a successful guy is persevering with this line.

  223. RIG – holy cow those trade restrictions suck don’t they! I cannot for the life of me imagine who that rule protects. I guess the answer is that RIG wasn’t a Fed play or a day trade but it’s an incredible shame not to be able to take the money and run when it’s offered.

    I’d say buy OIH calls to cover or DO calls or even BHI calls to balance out your puts if you get worried or for overnight protection.

  224. Phil, sold small amount of FXI 134 for 2.25 (naked). willing to be short at 136.25.

  225. Thanks, Phil.

  226. TLT going down a little, and markets going up.

  227. oh boy, big fat pinko scum Michael Moore on cnbc coming up soon.

    what will they think of next ?

    anyone interested should read movie review in NY Post last week that just eviscerated this latest POS film.

  228. Zman: I also need to thank you for the SWN tip this morning. I accidently bought double what I intended and so I just now sold half for 70+% gain.

    PS I dumped my DIA 133 puts for a small loss after all that nerve wracking excitement. As Paul Harvey once said: “Gonads are useful for their purpose, but they are no substitute for brains”


  229. Back in DIA $134 puts for .35 (was .55 about 90 seconds ago!)

  230. Market looks okay now, but don’t tell anyone that bonds are on their lows!

  231. Bill Gross clearly has a big bet on, and is relentlessly talking his book. He knows Greenie can move the market, that’s why he has him on the payroll. Just cause the guy manages a huge fund doesn’t make him right.

    If he was so brilliant, he would be Buffet, and as rich as Buffet. But he’s not. He is smart, and has a huge platform however.

  232. Hey Draz: those day trading restrictions requiring sales to clear, actually helped me to keep my position sizes small and probably saved me from blowing myself up a couple of times when I lcould have ost my mind and wanted to load up the truck.


  233. Phil, Michael Moore on CNBC today reinforces your point on not listening to their crap.
    Just like they were way wrong on their promotion of the immigration bill fiasco. Nothing but proponents of amnesty on that show. And their political guy is almost always wrong.

  234. TLT is headed south on my minute chart

  235. FXI – I did that with the $129s last week, almost had a heart attack when they attacked $130 but it worked out well. I decided to make 1 split to 2x the $133s if it kept going but I got lucky and it pulled back.

    The post didn’t like Michael Moore’s movie??? Shocking!!! Ah well, maybe the Journal will start doing movie reviews and gossip next quarter…

    LOL Greg – that’s a good one.

    At this point I’d say it’s likely they will do their best to hold this level (13,400-13,500) into tomorrow’s close so they can book their gains for the Q (and the first half), rustle up some new investors over the summer and then blame a hurricane for a collapse in the fall.

  236. CROX printing another hammer today.

  237. Good to know, Greg. Actually, partly because of them, I was completely annhilated on DNDN. The day before the collapse, I was going to write a bunch of calls with that heavy premium….but I had to wait one more day before I could make a new trade…and voila!

  238. Putting a .20 tstop on my remaining SWN as I have to sit in on a meeting until session ends. Thanks agaain Zman, This was my best trade all month.

    I need some kind of mobil device to monitor the action while sitting in meetings. Any suggestions?


  239. One last question, why doesn’t big gas build hurt LNG like the other gassy players? I’ve got Jan 08 35 puts that are still under water.

    Got to go to this boring meeting now, working for a living is so damn inconvenient. Pleasae mind the store for me while I am out.


  240. Greg – Erhmm… an iPhone?!

    (Sorry… :) )

  241. Phil,

    do you ever play the insurers / reinsurers during the hurricane season? eg (ber, axs xl,mkl,..)

  242. yeah, what motivation would Bill Gross have to get thousands of people on the wrong side of a bond trade. Especially now that it has turned into a bear market for bonds and they hold a little position in all of them.

  243. just sell it Greg, take the profit

  244. PS – the bond report on CNBC is sponsored by Pimco. I’m reading Gross as hugely disappointed. He was scheduled to be on there expecting to crow about Fed easing over the horizon and got slammed with the opposite.

    IPhone free hour is over.

    LOL, the DIA is like playing pong!

    APC diving.

    LEN breaking $37

    Pisani is right – this shifts the burden of proof to earnings.

    HOC Aug $70s for $1.82 make a nice play.

    RYL getting clobbered.

    MTH breaking down.

  245. EDU-flying once again
    BUCY- Didn’t get our $72 -$73 Happy
    Rick S- has been saying for months NO RATE CUT. So someone agrees

  246. The Post liked “You Kill Me” .. I think I will see that.

    This review was, IMO, a fantastic evisceration of that scam artist Moore:

    “Botched Operation” “Crazy Moore offers wrong prescription”

    Rating: 1 star
    June 19, 2007 — MICHAEL Moore’s latest documentary, “Sicko,” is an urgent bipartisan plea. Liberals and conservatives, Democrats and Republicans, Yankees and Red Sox can surely all agree, says Moore, that our health-care system ought to be run by Fidel Castro.

    The silliness of Moore’s oeuvre is so self-evident that being able to spot it is not liberal or conservative, either; it’s a basic intelligence test, like the ability to match square peg with square hole. His documentaries are political slapstick that could have been made by a third Farrelly brother or a fourth Stooge. I will pay him the honor of treating him with his own meds. (How else to deal with a film that calls Hillary Clinton “sexy”?)

    The film doesn’t open until June 29, but already has been leaked on the Internet, free, with Moore’s blessing. The central pleasure offered by Marxism is observing the way it is programmed to destroy itself.

    The bulk of “Sicko” is given over to the stories of Americans who got the run-around from health insurers, being told they didn’t qualify for benefits because the requested procedures were too experimental or because of pre-existing conditions. Perhaps the most absurd example is that of the woman who says that after she received benefits, the check was stopped because she had previously suffered an undisclosed yeast infection.

    No one doubts that lots of insured and uninsured Americans face health-care crises. So far, Moore is master of the obvious. Where do we go from here? To France, Britain and Canada, says Moore.

    But lots of people in those countries have health-care nightmares of their own. Checking out France’s free, universal health system, Moore gets blissed out by French happiness. But this phrase is as close to an oxymoron as French rock. In a poll, 85 percent of the French recently said their country is heading in the wrong direction. Right direction? Nine percent. In France in 2003, 15,000 mostly elderly hospital patients died in an August heat wave – because hospitals lack air conditioning and doctors (who, like everyone in France, sometimes go on strike) were on vacation.

    Moore also marvels at the free health care in Britain, but he knows the Brits have a two-tier health system: The smart set carries private insurance, which Moore wants to outlaw in the United States. The cliché in London is that the well-shod go to the same doctor as the suckers on the National Health Service. The difference is that private clients get treated right away, while the NHS losers wait two years to get their strep throat looked at.

    Moore hopes his audience is too stupid to know about wait times. He asks a handful of Canadian patients how long they had to wait to see the doctor. Oh, 20 minutes, 45 minutes, everyone says. So if Moore finds five people who didn’t have to wait, there’s no waiting for anybody! Check out the Canadian movie “The Barbarian Invasions” (which is, like “Sicko,” a fiction film) for a view of how Canadians view their system: agonizing waits, trips across the border to Vermont to get access to modern technology and fetid facilities modeled, seemingly, on an American one – the Confederate field hospital in “Gone With the Wind.”

    What about stats? Moore emphasizes life-expectancy figures in which the U.S. slightly lags some other countries. But life expectancy involves many factors; two that Moore is especially knowledgeable about, obesity and firearms homicide, are special American plagues. Here’s a stat: The percentage of patients having to wait more than four months for non-emergency surgery is about five times higher in Canada and seven times higher in Britain than it is here.

    In Entertainment Weekly, Moore tacitly admitted that “Sicko” lies about wait times, saying, “Well, OK, let’s set up a system where we don’t have the Canadian wait.” Er, what Canadian wait? “Sicko” says there isn’t one. “Let’s set up a system,” Moore says, “where we take what they do right and don’t do the things that we do wrong.” And let’s make it so every girl is the prettiest one in town. Deciding who gets what and when involves rationing, either by price or by waiting or some combination of both. The law of supply and demand can no more be repealed than the law that all documentary films must be left-wing.

    Moore is outwardly a genial buffoon, but inwardly he is an authoritarian buffoon, as he shows in two long episodes: a straight-faced interview with the United Kingdom’s house Commie, Tony Benn, and the famous-before-anyone-saw-it sequence, first reported in The Post, in which Moore takes some 9/11 rescue workers with lingering health problems to Cuba.

    Moore, at a Havana hospital, says he requested that his group receive exactly the same care as any Cuban – “and that’s exactly what they got.” As comedy, this statement is on a par with the sex scene in “Knocked Up,” the chest waxing in “The 40-Year-Old Virgin” and the moment in “An Inconvenient Truth” when Al Gore tells us that the ecology’s No. 1 threat, China, is in fact “on the cutting edge” of environmentalism.

    In the Cuba section of “Sicko,” so many guys in white coats scurry around Moore’s patients listening to symptoms, peering at X-rays and firing up high-tech medical equipment that the scene might have been co-written by Groucho and Karl Marx. If Fidel himself gets this level of care, it’s no wonder the guy has outlasted nine presidents.

    I expected Moore to protect himself with a thin coat of disclaimer, just a line to say, “Look, I know Cuba is actually a Caribbean Alcatraz where nobody’s gotten a new car since Fredo betrayed Michael, but I’m just using this as an extreme example for ironic purposes.” Instead, his irony runs the other way: He plays scare music over an image of Castro and expects you to giggle along. Cuban health care, Moore declares, is among the best in the world. Actually, Cuba is short on everything from clean drinking water to aspirin and on up.

    Despite Moore’s apparent belief that he can seem moderate by narrating in a sing-song, I’m-talking-to-a-child-or-moron tone, the man can no more hide his Marxism than his belly. He presents not only Tony Benn but Che Guevara’s daughter as voices of sanity. Through a French doctor, Moore sneaks in the Marxist slogan “from each according to his ability, to each according to his needs.” Moore also runs lots of old Soviet propaganda footage with comical music on the soundtrack as if to suggest that Stalin was just another campy, overhyped entertainment figure – Martin Short with a mustache.

    Let’s not give too much credit to Moore for his gift to the guy running an anti-Moore Web site who was going to be forced to shut it down – because of a health crisis he couldn’t afford. When Moore found out, he anonymously sent a $12,000 check, or .0005 percent of the money he was paid to make this movie. An anonymous check is not actually anonymous if you announce it in a movie; then, it becomes simply a bargain method for buying press accounts of you as a nice guy.

    Moore, of course, has a Castro-ish history of suppressing dissent. But he is free to disprove me by anecdote. He can send my check care of The Post.

    For more on “Sicko,” see Kyle’s expanded commentary at

    Running time: 123 minutes. Rated PG-13 (profanity). Opens June 29 nationwide.

  247. Greg – yeah get in line at an AT$T store! Pick me up one while you’re at it 8-)

    Insurers – I did an article titled Portfolio Insurance back in Jan when I listed out my favorites at the time. I was going to get back into them after a storm or two panicked people out of the stocks.

    Big sell-off into the close is my guess, finish at 13,400. Small comeback tomorrow.

  248. Anybody want to start a bubble pool. Tulips, internet, biotech, nanotech, real estate, energy, comodities, housing, emerging markets, exchanges. Next is…

    my bet carbon credits and other alt energy maybe water also risk manag

  249. OPtrader,

    Crox double hammer-is that bullish or bearish in the short term?

  250. I was actually living in France during the ’03 heatwave. It was incredible [i]at least[/i] 20,000 people died directly because of the heat and yet every single paper’s headline, every news-reel, was about Iraq and how [i]awful[/i] the UK & US are. It was utterly bizarre, head-in-the-sand stuff.

  251. risk management derivatives as predicted in Schiller’s last book. Housing futures, employment futures who knows. Just trying not to trade this mess for a while.

  252. Apologies for the long movie review post; I thought some might enjoy it and contrast it to the upcoming puff piece on CNBC masquerading as hard news. Might save you $10 too !

    Market: Looks like today may end up inconclusive. Let’s see what last 1/2 hour brings.

  253. I imagine France’s own coverage of the Muslim car burning riots was pretty much the same. All GWB’s fault of course.

  254. No more trades for me today … decent day overall … time to observe now.

  255. AKAM
    cashed out, +29% (might go higher in the next couple of sessions, though)

    BBD, yeah, it’s still think; may need a few more days.

  256. Marc, it is usually bullish but when the second one makes a higher high. Right now it is in a downtrend, with lower lows and lower highs. This kind of action is usually a strong sign of short covering: daytraders short heavily in the morning and then get squeezed from bottom feeders.

  257. Now I remember why I don’t read the post. That is a juvenile hack job totally absent of any facts. It has the editorial tone of a ranting blog no one reads, not a professional newspaper and the publishers of that paper (soon to be the publishers of the journal) should be ashamed of themselves. I could care less about Moore’s film, I haven’t seen it, I have no opinion but if that guy was giving that kind of review of anyone’s film it would disgust me as to the level of unprofessionalism. What a total load of crap that is. Are the readers of the Post really so immunized to psychotic attack dog style journalism that they have to have this even in their movie reviews or is Michael Moore some sort of special tartget for them?

  258. XAL – strange its up 2.4% with oil spiking up to $70, though now $69.xx

    -summer travel anticipation ?

  259. Phil I understand the strategic bearishness, but why the tactical. Lack of bounce, continued hawkish position of the Fed, tired market, technical, following your book. I am trying to learn. I am still net neutral.

  260. I think he protest too much ?

  261. Greg – you’re welcome on the SWN. Been out for lunch. Pleasantly surprised with SWN and TSO on my return.

    If I missed any other comments please let me know.

  262. NKE
    still going up!

    starting to look interesting again.

  263. MU – anyone have a good option play into earnings after close today? I am slightly positive on it over the short run (unlike those that have it down 2% to 4.38 from a high of 12.90 earlier today).

    Reports about them announcing cost-cuts/job-cuts and not give a gloomy forecast. If cost-cuts/OK forecast, it could easily go above 13 tomorrow (with downside of 11.75 or so)

  264. XAL – I mentioned this morning there’s a lot of M&A chatter supporting the airlines despite the oil cost.

    These little attempted rallies are running into a lot of sellers at 13,470.

    T really getting up there now.

    BOOM is exploding. That’s my cue to get back in TIE Sept $35s for $1.67. XXX

  265. MA
    coming back?! Interesting…

  266. Who made Steve Rattner a Shrillary Treasury frontrunner ? Steve Rattner ?

  267. Post – You should see Murdoch empire movie ‘OutFoxed’ to appreciate why Post hates Moore and all he says or tries to say. Only they are allowed to slant the truth – no one (especially to left of them) should be allowed to…

  268. Phil, re: TIE, I have the Sept $40 @ $1, now .7. You think it would be a good bet to pay $1.10 to roll up to the $35s?

  269. “juvenile hack job totally absent of any facts”…….were you referring to Michael Moore’s movie or the Post review?

  270. A whole lotta DNDN July 10s moved today, but nothing for the stock.

  271. OPtrader,

    Thanks again.. when Crox lines up I hope you will post the trade.

  272. Does anyone else find Dylan Rattigan extremely annoying ? Or is it just me ?

    The guy yells and shrieks; gives me a headache.

  273. FMCN again

  274. Bearish – hmmm. I think the book that is being played is that everyone was planning to jack this market up on the Fed release but it came in worse than expected, leading to confusion which is now beign resolved as people with their fingers on the button of the buy programs have decided to take the markets up but not to overdo it. I think the writing is on the wall for a big problem and I feel very right about staying bearish through July 5th at this point.

    If I see the run up as BS then I short into it for the most part but now I will cover the upside but where are the real players – GOOG, AAPL, MSFT, the SOX? What exactly are we rallying about here that is crushing the builders? I’m 70% cash and I need to make a decision so my decision is to wait, leave my puts in place and wait to be proven wrong but I guess my “bearishness” is more of a reaction to others’ bullishness as I’m overcompensating somewhat.

    BZH making new lows…

    MU – I think the $12 put/$13 call spread looks like fun.

  275. Anybody got a read on LNG (the company) and the psycho move today???!!!

  276. BOOM
    nice, might get another jump tomorrow!

  277. AMZN giving up much of its gains.

  278. NY Post- good sports page
    COH= sold calls bought yesterday for .4 gain. Didn’t really play well at all
    Did you see Maria almost fall on the street. She really needs to stop eating

  279. Michael Moore is “getting situated” with Maria as we speak.

    That’s a scary picture, isn’t it !

  280. Outfoxed – great movie!

    TIE – pay $1.10 to gain $5 in position? Sure!

    Juvenile – the review, I haven’t seen the movie but the guy comes across like an ameture book reviewer who has no facts of his own but trashes someone elses life’s work for sport. I think MSqare is dead on, no one else is allowed to slant the truth. Unlike conservatives, who think everything they see on Fox came down from Mt. Sinai, liberals take Moore’s films at tounge-in-cheek, as they are intended. If they can be used to spark real discourse, all the better but how health care has become a polarizing issue in this country is beyond me. How on earth does the health care industry get people to support the mess we’ve got here as if it were the intelligent design theory?

  281. Yeah, leave it to Congress to come up with a plan that’s “great for everyone”.

    That always works, doesn’t it ?

    You go Maria ! Calling out Moore on where to be — here or elsewhere if you get sick.

    I wonder where Moore goes when he gets sick. Not to France, Canada or Cuba I guarantee you that.

    Oh, a WSJ editorial today also blasts moore … is Rupert controlling them already ?

    And by no means am I suggesting that our system doesn’t have problems; it does. The insurance companies and cost of health insurance impact many people. Moore’s solution isn’t a fix, however.

  282. See, there’s the whole point. Maria says she likes here health care and Moore says “sure you do, I like mine too because we have great plans but 47M people have none.” That is the point that seems to escape the anti-Moore crowd, this is about caring about AVERAGE people. The rich will always get better care and will never wait in lines but I’m pretty sure 47M uninsured people in this country would love to be able to wait for a doctor in an office that wasn’t decorated by an interior decorator.

  283. He’s ridiculous … “the government is more efficient about many things ”

    Clearly, someone who has never dealt with the efficiency of the government.

  284. Cap

    You bet, Rattigan gives me a headache. I again advocate the mute button.

  285. Phil, more government and more entitlements is simply not the answer. Once you start, it grows like a fungus and still doesn’t work. I agree that many of those people deserve better. The private sector needs to solve the problem IMO. Maybe you can solve it, do a great mitzvah and get rich in the process … or not get rich if you so choose. I would place my bet with you before betting on the government being able to do it.

    The government basically can do 2 things. Provide defense and collect taxes. Everything else, forget it.

  286. Sadly I was right about the sell-off into the bell…

  287. An almost flat close.

  288. Phil

    Speaking of movies -What did you think of “Enron: smartest guys in the room”. If you didn’t see it you should.

  289. Where does this pessimism about Uncle Sam’s ability come from? I thought this was the U! S! A!

  290. Cap, under what circumstances do you see the private sector taking care of 47M people that don’t pay them? That is uttter BS. It’s a dire problem, children are dying every single day right here, in this country and they are legal proper citizens that share the world with us. There shouldn’t even be a debate – if we could come up with $20Bn in 9/11 emergency funds because people died then we should come up with $20Bn in Medicare cards for these people so at least they have something while you bubbleheads debate the most cost-effective way to pretend you care.

  291. What, and using Cuba is a good example of what “average” people should have? Please. I’ve been to Cuba, away from the theme-park like tourist towns: It’s a shit-hole. Depressingly void of hope, ambition or freedom.
    Moore’s an egomaniac-pseudo-intellectual-clown.

  292. RIMM seems to be flying.

  293. Smartest guys – yeah I saw it, very sickening.

    USA – apparently we should give them $600Bn a year to fight wars because it’s the only thing the government should be doing yet somehow they keep trying to get involved in other aspects of our lives where we’d rather they not be. Should Bush have been given the right to distribute $3.5T in tax breaks? I’m sure the private sector could have handed out money much more effiently…

  294. Dylan was stuttering alot but I like him.

  295. RIMM split 3 for 1

  296. RIMM 3:1 stock split announcement.

    Palm a beat but lower guidance.

  297. Um, what just happened to RIMM and what does that mean for the calendar-diagonal…?!!

  298. RIMM up 10

  299. oh a split…

  300. I’m with you Phil. If I say more, I’ll get too p****d.

  301. RIMM going totally nuts – $180!

  302. RIMM up 20 now

  303. Phil,

    How often do you add positions to the LTP? For newbies who want to track that, is the best way for us to just add positions as you add them to the portfolio? Do you make your LTP moves in the same place (i.e., here) as where you do the STP and 10KP moves?

  304. RIMM strangle overweight long 3 to 1 would’ve hit jackpot.

  305. Phil --

    Did you actually do the RIMM play you mentioned earlier? If so, WOW!

  306. RIMM with a nice beat too. $1.17 vs. $1.06 expected. 1.2M new subscribers very nice too and guidance up 30%. Calendar spread will be ugly tomorrow, nothing to do but see where we are. The split is good news for the Aug positions though as we may get a prolonged run up. The best move, if you have the margins for it, is often to sell your calls into the excitement and buy out your putter leaving you with the longer puts and his calls, which should drop off a big in value when things settle down but its a tough carry with an expensive stock.

  307. RIMM-Now don’t say anything to mess it up. Yippee

  308. LTP – haven’t had much cause to change it last couple of weeks but I post them right here and once a month we do a review of the folder. Market’s been a little stretched for new posiitons lately but I’m thinking the RIMM ’09 $200s might look good in the morning. I do kind of wonder if they goosed this Q though to give them the chance to make the split on a high note and then they can blame Apple for their troubles next quarter.

    Now sure if I would say WOW about that play, we owe the caller $20 but our Aug $175s are $10 in the money (puts are toast) so we’ll just have to see.

  309. How glad am I that I ditched the $165 puts this week!

    Apple should have gone with a service plan model, that’s the key to RIMM’s success.

  310. Healthcare

    - always thought it interesting that the “2 classes” guaranteed healthcare for life are US Congress (present & retired) and those in Jail ‘doing life’ terms – birds of a feather ?

    -for my money, any system needs “everyone” to pay into it. That means, the ‘poor’ (often referred, rarely defined) need to “pay in” and “if necessary” pare back on HBO, knock $50 bux off their car payment, get a cheaper cell plan, and back down on some bling-bling for some. Sorry, but the poor in the US that are not paying into the health system (typically the “bullet-proof young) need to be better defined for any meaningful discussion
    - the “indigent are a different matter.

  311. Phil: We already take care of all the uninsured in this country – in emergency rooms. Not the most cost effective way to do it, is it?

    How about private medicare accounts, like private social security accounts. Then just provide them with catostrophic care insurance. Much cheaper and eventually makes Medicare solvent again.


  312. Of all the areas of my life i dont want the govt involved, it is healthcare.

  313. Cuba Healthcare – don’t catch AIDs there – they put you away into a colony – think medeival leper colonies — there’s a tender touch !

  314. I think there is a “prevention” aspect that could save m(bi)illions by requiring 2 annual checkups for the uninsured.. especially for children. This would reduce the emergency room as the primary care where you are treating them at the highest prices, as you noted Greg.

  315. I knew of a man who would get himself arrested every six months or so (mostly drunken disorderly) in order to get his dental and medical work done.

  316. Goverment Social Security – put iou’s in a shoebox and then say everything is ok – no problem, and you want these clowns to run health care.

  317. Phil, quick question on spreads you post. Is the intent to enter the positions simultaneously, or do one leg at a time? I’ve spent the first 4 weeks on this site paper trading and learning, but my actual trades over the last 2 weeks have mostly been directional bets. My two attempts at calendar spreads lost money on both legs. I’d like to start a spread on my existing TSL position. I had TSL July $40s at 3.7 avg., got half out at 6.2 and another 1/2 at 11.9 today, leaving me with 5. I also have 10 TSL Dec $50 at 2.85 avg, now 7.5. To “rent out” my Dec 50s, do you think I should sell Aug 50s? I’m still a bit fuzzy on the notion of “collecting premium”.

  318. Contributions – I had a company once that employed lots of young people and we tried a contributory system and we found that more than half of them would opt to have no insurance rather than have $50 a week taken out of their checks. My solution was very simple – pay for the health care and offer slightly lower salaries but under no circumstances would I allow someone who works for me to have no health care. It’s a basic human right – Health! Not emergency care only but health…

    The top 1% of the earners in this country added $2T to their personal assets last year. Corporations earned another $3T a .004% tax on that would put $20Bn to work, about $4K for every uninsured person in this country. Give the money to me and I’m pretty sure that buy July 15th I’ll be able to negotiate a pretty good health plan for those people using the existing private system. How?

    Step 1 – pick up the phone and tell Horizon I’m interested in adding 47M subscribers to their plan – “Do you offer volume discounts?”

    Arrange a cardless program for all uninsured people. Anyone can now go to a designated medical center for care and say – I’m covered by PhilCare. We agree to monitor costs for year one and make necessary adjustments in year 2 under a 5 year trial plan. Members get comparable service to basic HMO.

    Step 2 – pick up the phone and call RAD, WMT, CVS and ask who wants to be the official drug store for PhilCare. See who gives us the lowest bid. Work with the winner to negotiate with major drugs cos for bulk discounts.

    Step 3 – open 2,000 student teaching college. Doctors and nurses will get full scholarships in exchange for putting in 10 years of work at a “normal” salary working for us. In 4 years we will open 10 teaching hospitals. By year 5 we should be able to have 2 colleges and turn out 4,000 doctors and nurses per year who will be able to take care of the basic needs of 400,000 people. If we double that program every 5 years, after 15 more years we will be able to care for 14M people “in-system” and will be adding 3.2M people’s worth of care per year.

    Maybe I need $25Bn a year for this…

  319. Spreads. I enter one leg at a time, trying to guess the momentum but I once I lock down one end I will quickly by the cover if it reverses on me.

    TSL – nice one! Premiums are outrageous. If you don’t want to catch up but are worried about a pullback then perhaps sell the Aug $50s for $5.35. That takes all but $2 of your money off the table and leaves you with a 4 month time advantage over your caller. He’s paying $3.65 in premium to “rent” your space (50% of your postions value) for 50 days – that’s a pretty nice return. You can sell the Aug $55s for $2 less if you really feel the stock isn’t going down again from here but I tend to go conservative if I have a huge gain to protect.

  320. That’s excellent! That recipe sound like one of your complex spreads .. and those work!

    Phil, you should be the next Health Care “Czar” (we gotta have a Czar for everything). Not sure if you fit in though .. your ability for being logical/analytical to achieve a working solution may not fly in Washington.

  321. Phil:

    I’ll bet we could generate and SUSTAIN that $25bl you need, by reducing taxes on investment gains than by raising taxes on the rich. Look at the facts about how much tax revenues have increased since the Bush tax cuts, same with the Reagan tax cuts.

    Why don’t the DEMs get that fiscal policy that reduces the tax burden to more optimal levels actually raises more tax revenue?

    It doesn’t matter if the deficit rises for a few years while the lower tax rates kick up the economic activity that will eventually bring in the new tax revenue. It will work, we can have our cake and eat it too!


  322. phil
    that is an amazing approach to a national health care system, i’m really impressed!

    next challenge: how do you actualize something like that with the current / upcoming leadership? (now a reply to that would REALLY impress me!)

    the most damning fact to where we stand as a nation is that no one in government is capable of strategizing along similar lines, let alone actualizing. government and politics have been reduced to (very bad) theatre.

  323. RIMM
    up $64 since the day after the last earnings announcement.. wow!!!

  324. LOL Greg – tax cuts solve everything! Congrats, we’ll be sending you one of our classic Newt for President bumper stickers! I say let’s go all the way – cut all taxes and shut government down.

    Then people can band together and form their own governments and decide how much of your stuff they want to take. I suppose you can hire your own private guards to take care of you and watch your stuff but then you’ll need staff to watch them and someone to watch the staff… Ah, the burdens of wealth! Oh but no matter how many guards you have, who’s going to make sure Al-Queda doesn’t come over and kill them all and take your stuff. Don’t worry, I’m sure all the poor people in town will lay down their lives for you and your investment gains.

    So now you can go out and keep 100% of the money you make but be careful on those roads as I’m not sure who’s maintaining them but you can fill your bath with perrier so you won’t have to worry about the water supply and I’m sure the unregulated utility companies will charge you a fair price to light up the mansion. Will you get tutors or send your kids to a private school (they would need their own guards of course)?

    This is something rich people learned a long time ago but seem to have forgotten. Poor people don’t need you or your government but you need them to play your game within the system or you are due for a life of pain and misery. The reason most people toe the line in society is because they expect the government to provide them with basic needs in exchange for them agreeing not to kidnap your children or key your Jaguar while they rob you in the parking lot. Even that breaks down when you shatter the myth of upward mobility which, for some reason, the neocons are working really hard to do away with that as well.

    It all goes back to the same thing. If you are one of the 1,000 – then none of that matters because you can afford a private army and you can live so far above the masses that their actions don’t affect you. But if you are part of the lower 9,499,000 richest people on the planet – you should have a little appreciation for what it really takes to sustain a functioning society because we are getting closer and closer to the breaking point every day.

  325. Thx for the recommendation, Phil. Two more questions. First, when looking to sell against a position, do you try to find similar deltas? TSL Dec 50s delta is pretty much the same as Aug 50s, so if it keeps going up, whatever I lose to my caller I make up for in the Dec calls, at least for now. Plus I still have my 5 July 40s left over. Second, the concept of “renting” only applies if the stock stalls or goes down, correct? If it flies, you would normally just buy out your caller, just like you did for WFR earlier this week.

  326. How to actualize it? Replace them – it’s still almost like a democracy here. That’s why the conservatives are freaking out – they certainly don’t want health care to be an election issue when the Dems already have partial control but now the candidates won’t be able to avoid talking about it. You can see them all hitting their talking points about “the lines” but here is Moores film segment about a man who lost 2 fingers in an accident – went to the emergency room and was told by the hospital that one finger was going to cost him $12,000 to reconnect and the other would cost $60,000 so the guy was actually forced to sign a form allowing them to throw out his finger – WHICH COULD HAVE BEEN REATTACHED!!! If Saddam did that to someone in Iraq that would have been one of our reasons to invade!

    I really don’t understand how we can consider ourselves a civilized society and let this happpen to anyone in it…

  327. Interesting proposal Phil – big changes are needed becuse the system is broken

    On the matter of principle though, I believe it is important that everyone ‘pay in’, and that it not be treated as a ‘right’. Although there is a moral imperative to ‘look after our own’, there’s an equal (if not more important) moral obligation for each to take personal responsibility. -If perceived as a right, “The Bill of Rights” needs to be updated – sincerely, not meant to sound like a bumper sticker. Short of that, there is a social obligation to make an honest effort to ‘look out for the other, provided they are looking out for themselves. — despite the obscene riches of the top x% – IMO

    From a pragmatic standpoint, healthcare needs to be more cost-rationale, which requires a whole new culture of actually thinking about what things cost (from inside & outside the industry) – and until ‘we the customer’ care about the cost of delivery, because we pay into it, the system will be a runaway cost disaster – imo

    Awesome approach to your former employees

  328. Phil, while you are to be commended for your approach to your employees, it is clear that among the estimated 47 million there are a number, perhaps a gargantuan number, that simply choose not to have health care coverage.

    By creating an entitlement program, one that the government is almost assured to botch anyway, you create disincentive for people to do what they should be doing on their own anyway.

    Whatever happened to personal responsibility ?

    As someone pointed out, the truly indigent are one thing, but everyone is quite another.

    And it is not a “human right” for governments to provide free health care to all.

    Surely with all their billions, folks like Gates, Buffet and Bloomberg can subsidize health care for the poor if they so choose. So while Warren pontificates about raising taxes on the common folk, perhaps you can convince him to spend his fortune on providing free health care for a couple of million poor people. Not to disparage Buffet’s charity, I am sure he gives a good deal to charities, but clearly he can do more, instead of telling us that we should be taxed more.

  329. Deltas – not at all. I’m going based on where I think the stock will be on expiration day (or between if I’m expecting some event). I decide how sure I am and take the appropriate risk. It is very important that people understand that selling calls or puts against any old postiion at random times is VERY dangerous and can often lead to disaster. I do it for select stocks at select times for specific reasons but applying it to any stock at the wrong time or volatile stocks at any time is a recipe for disaster if you aren’t a fantastic market timer who is very quick on your feet.

    I rent when I’m not expecting the appreciation to exceed the strike price (or at least not by much). Otherwise I’d rather wait for it to top out (as I take it you did with TSL) and then I go for protection. I thought you were selling the $40s. If you’re not, then you should really sell the more expensive calls as you are well protected to the upside anyway but you should consider rolling the $40s up anyway as they are so deep in the money you will lose penny for penny on the way down.

  330. Speaking of films, I’m hoping those of us still with DIS calls get a little love from this new french rat movie:

    It looks clever enough – DIS needs a positive catalyst, hoping this might be it between now and July 20!

  331. Wang’s World
    “3″ new posts up!! inspired by RIMM’s “3″-for-1 stock split!!

    Excellent!! Party on!! =)

  332. Yes, I plan on selling the 40s tomorrow. Tried to get rid of them all today but was only half filled. Thx for the feedback

  333. The issue with any government ‘welfare’ program is abuse — especially since the government never seems to be able to oversee the program.

    Im sure theres a way to regulate free healthcare so every tom dick and mary isnt in the emergency room for every hangnail, hopelessly clogging up the system.

    Oversight of the program — oversight of /both/ the administrators and the users of the program is essential — but is most often overlooked, and the program (including the Iraq war) ends up being inefficient to the point of embarassment – and to the point where the taxpayers are spending buzillions of dollars, just to have congress come in down the road and propose a buzillion dollar bailout of that very same program.

    In a perfect world everyone would have healthcare, and those who couldnt afford it would have it for free. If everyone was honorable there wouldnt need to be a tangle of laws and oversight to prevent the rampant abuse that would most certainly take place. Ah honor. Something they just dont teach anymore.

    It kind of reminds me of the well-meaning person who goes into the inner city to bring some help to the indogent – touch a soul that needs to be touched at least — only to get robbed and killed. It reminds me of the humanitarian program we had under clinton to feed the starving N. Koreans — only to have the food commandeered by Kim Jung (psychologically) Il, and sold on the black market. Look what happens to free housing – or even rental housing. Theres no incentive for its upkeep, and certainly we’ve ‘evolved’ away from the values of courtesey and honor that would drive someone to ‘do the right thing’.

    Its all very well meaning and laudible — but we have to be real in our expectations of what it would take to administer such a system effectively. It would turn into a tangle of rules and laws (mostly unenforced, Ill bet) and would topple under its own administrative weight.

    I dont think its a question of whether there should be healthcare for all – I think its more of a question of how such a system could be maintained without turning into a disaster. You show me a program that wont waste half the money I put into it, and im game to give.

  334. I tell you what Cap, when we establish universal health care I will personally make sure you and your family will be specifically exluded so you can feel good about paying your own way. You cannot possibly be unaware that Buffet has pledged his ENTIRE fortune to charity already so I think he pretty much has the right to tell you to do whatever the hell he wants because his moral high ground makes you look like a germ on the ass of an ant when he looks down at you!

    Buffett is not only the king of Richistan but he also helped populate it over the years and he sees the same things I’ve been writing about. The rich give less, far, far less as a percentage to society than any other members in it. On CNBC today they were going on about the $285Bn given to charities by the rich in ’06. 10% of that money came from Buffett himself and another $15Bn came from Gates but even if we count that it’s still out of $4T earned. 7% to charity from a group that doesn’t have to worry about mortgage bills, health care, food clothing or pretty much anything.

    Of course the rich people are in the highest brackets so they write $100Bn of that money right off their tax bills so now we’re down to 5.2% of real charity. And by the way – when I give $5,000 to the Rainforest Concert so I can have dinner with Sting, does that make me charitable or just a fan?

    So after 60 years of trying to cajole people into giving of themselves and getting nowhere, Buffett has decided to speak out and come down on the side of taxing it out of people before they figure out how to take it to their graves.

    If I can raise $400Bn a year by taxing the top 1% 10% more than they’re paying now why shouldn’t I? We could pay off out debts, heal the sick, house the poor, educate our children and probably even have some money left over to plant some trees and what harm do I cause? Someone earning $1M per year will have $100K less in take-home pay? Personally, I’ll survive.

    And then there’s the trickle up theory that you will never hear about from conservatives because they think less of the people we would like to help than that germ on the ass of the ant but when you give 43M unproductive people the ability to improve their lot in life you can turn 4M of them into productive citizens who earn the $48K median income which will put $200Bn BACK into the system annually. That in turn relieves pressure on the system and lowers our “charity” cost and allows us to concentrate more effort on the remaining 39M so perhaps next year we get 3M more and 2M the year after that into mainstream society at which point the program is now almost self sustaining as it would generate $450Bn in brand new GDP.

    The problem certain wealthy people have with plans like this is it creates potential competitors. A well educated population with true upward mobility is a serious threat to a third generation trust fund brat who wouldn’t even know how to fill out the form for an HMO, yet alone compete for wealth on a truly level playing field. If you actually loved this country you would love the people in it and want to do the best that you can for them, like a family. Since you and KFat assume that the uninsured are simply “lazy” and undeserving of love it’s very easy for you to perpetuate the “us and them” mentality that is destroying our nation.

    It’s not a human right to be helped when you are sick? In a survival of the fittest contest you’d better be sure you’re going to win then because I’m sure there’s plenty of fight left in the downtrodden masses who may decide to question the rights you think you have.

    Speaking of rights KFat, article 4 says:

    “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”

    Well we tossed that one out didn’t we – so there’s room for another!

    How about article 5, this one was a victim of GIMO:

    “No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”

    Oops, looks like we have a spot open in article 6:

    “In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the Assistance of Counsel for his defense.”

    There’s a lot of other shakey ones but these 3 are definately gone already so we could use any of them but article 9 already says: “The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.” and the Declaration of Independence did specifically say that: “We hold these truths to be self-evident, that all men are created equal, that they are endowed, by their Creator, with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness.”

    I suppose you can say that our right to life doesn’t mean we have the right to a healthy life but the right to a happy life would pretty much indicate our founding fathers didn’t think you would spend that life hacking your lungs out with a cough or walking around with one leg because your mom couldn’t afford a tetanus shot when you were a kid.

    This country spends $6,000 per citizen on health care yet 17% of them are uninsured (great more for us right?) and you expect the kid at the 7-11 who makes $400 a week to take about half of it and spend it on health care – or is he one of the expendable ones? Who else is expendable? Certainly the guys who wash your car, the guys who cut your lawn, the people cleaning the streets, day care workers, almost everyone who works in the back of every restaurant you visit and pretty much everyone who harvests and delivers everything you eat – they are all too poor to pay $6K a year for health insurance so screw them right?

    Where does it stop?

  335. Phil: After the guy gets one of his fingers back, he sues the hospital because he doesnt have any feeling in that finger.
    Lawyer takes the case on a contingency, and wins as the jury feels horrible for the poor man.

    That makes the next guy have to pay $80k for the second finger, and $40k for the first, and he has to sign a paper saying they can throw /both/ of them away.

  336. I have no idea why you guys are debating about universal health care. There should not even be a debate here and it is a shame that this country is not providing correct health care to all its citizens with all the money being wasted everywhere, especially fighting stupid wars.
    Also, I am French, but have lived in the US for more than 15 years now. I obviously love this country in many ways, or I would live somewhere else, I consider myself an American now. But, without hesitation, I would rather be sick in France than in US. Anyone saying otherwise has never experienced the French’s health system. Hospitals have the latest technologies and education is one of the best in the world, with many scientists/doctors being on top of their game in many domains, especially research. Even if the system is not perfect, as it is abused by many, and is somewhat inefficient, I am very proud that my native country makes it a priority to take care of all its citizens, whatever their social rank.

  337. Looks like we’re thinking along the same lines, Phil…

    Bill Gates is showing you a system that doesn’t waste money. He manages it so well that Warren Buffett (who is purported to know a thing or two about spotting quality management) decided to give him a few tens of billions of dollars. Buffett’s explanation was basically -I believe that the rich should give back to the society that made them rich, and Bill Gates’ operation is so good that it’s a no brainer to put my money there.
    Pragmatism is the absolute key to a successful health care program; so let’s find smart people who can run a program worth tens of billions of dollars so well that our premiere value expert would invest in it.
    Did anyone happen to catch the New Yorker article in January entitled “Mr. Green”?
    It profiles Amory Lovins.
    “Take, for example, the electrical system of an average building. ‘If we were to dig into the ceiling of most offices where the wiring is for the lighting, we’d probably find that the wire size was specced by the low-bid electrician to meet the National Electrical Code,’ Lovings told me. ‘The code says you need wire so fat for so much current. Well, it turns out that wire-size code is meant to prevent fires. What would be economically optimal in terms of resistance losses would be wire twice as fat, which means four times as much copper. Now, the electrician isn’t going to pay your electric bills, right? If you had such an altruistic electrician that they were willing to put in four times as many pounds of copper to get you a one-year payback on your electric bills, they wouldn’t get the job, because they wouldn’t be the low-bid electrician anymore.’ The problem here is what’s known as a split incentive, but might better be called a mis-incentive. If the parties figured out how to divvy up the savings, they could both make money, but, because of ingrained habits, or a lack of creativity, these savings are never realized.”
    It isn’t in our interests to pay a whole lot of money for oil and to use a whole lot of it. It’s bad for the environment, supports our enemies, costs us billions of dollars -and yet the private sector hasn’t solved this problem. Had the government instituted an oil tax thirty years ago and subsidized energy efficiency with the proceeds, we wouldn’t have this problem. We would all live in a cleaner, safer country. Want to solve the Iran issue? Take away their oil money. They’d have to either a) modernize into a globally competitive economy (which is 1:1 correlated with education, transparency, democracy, welfare, etc.) or b) topple the tyrants -it’s hard to hold power over people when you don’t control the wealth of the country.
    So instead we spend billions for their oil, which in turn requires us to spend billions more in order to contain them (aircraft carriers on patrol, spies, regime-change slosh fund, buying diplomatic allies -oh, and war).
    But we didn’t want to pay more taxes, the oil companies didn’t want to lose profits, the presidents didn’t want to lose campaign contributions…
    How is healthcare different than, say, drunk-driving laws? If we left the problem of drunk driving to the private sector, would we all get together and agree upon a set of regulations, enforcement, etc? No. As Phil keeps pointing out, the rich would buy imperviously massive cars and the poor would just make do and try not to drive late at night. Then someone would have to pay for all the wrecked cars and lives…
    Not a basic right! That’s the “life” part of “life, liberty, and the pursuit of happiness”! That’s from a piece of paper somewhere, but I can’t remember the name…but looks like Phil can.
    From the article: ” ‘In a room of ten people talking about why it can’t be done, Amory is the one working on the five ways to get there,’ Andy Ruben, Wal-Mart’s vice-president for corporate strategy and sustainability, told me. ‘I don’t do problems’ is how Lovins once put it to me. ‘I do solutions.’”
    The problem isn’t the problem -it’s the fact that everyone is standing around talking about why it can’t be done. We’re busy formulating theoretical/political arguments about what the extent of the role of the thing in the thing is -which is the crap they feed you to keep you from rocking the boat. (Best quote of article? Lovins, when asked about thinking outside the box: “There is no box.” )
    It can’t be done is another way of saying status quo. Guess who that helps?
    It is a problem, if we don’t solve it our nation and world will be worse off -so we have to solve it. Start proposing solutions, it’s worth more than lamenting the imperfect nature of democratic government.

  338. Also, Phil, your last post was the best I’ve read on this board. And it has nothing to do with stocks…

  339. Some great points there. Quite interesting reading….

    Although I’m pretty sure that paying $5k to have dinner with Sting makes you a tasteless moron……

  340. “Since you and KFat assume that the uninsured are simply “lazy” and undeserving of love it’s very easy for you to perpetuate the “us and them” mentality that is destroying our nation.”

    Am not an expert on healthcare, nor insurance. However, I conducted a project a while back interviewing why insurance prospects did not purchase coverage, and continued without. It was a sales consultancy project, covering approximately 75 interviews, so certainly not an exhaustive study, but probably more research than most.

    You would be stunned how purely juvenile and lacking in any sense of persoanl responsibility or consequence most of these folks were. They had flat screen TV’s, nice cars, all living the American Dream – that is, “living beyond their means” with full expectation that “everything would work out”. It was a very disturbing experience –

    Its not a matter of laziness, in my opinion. Its more a matter of responsibility, the lack of. My point, is that any health policy should require the consumers’ ‘skin in the game’, for both financial and in my opinion moral success.

    The system needs a lot of work, but individual responsibility has to be part of the solution, IMO – which was my main intended point.

  341. Right on Phil. We are all in this together, and so many of the “haves” in our society seem to think that they are insulated from the consequences of the disenfranchisement of the “have nots.” It won’t be pretty when this situation reaches critical mass in this country.

  342. Heres’s a quick analysis of the iPhone suppliers on Jan 12 and Jun 28. Conclusion: iPhone effect is non-existant (currently).

    Apple iPhone suppliers
    Stock on original 1-12-07 List

    1/12/2007 6/20/2007 Change % Chg

    MRVL 20.39 17.21 -3.18 -15.6%
    BRCM 32.41 29.6 -2.81 -8.7%
    SNCR 16.4 29.03 12.63 77.0%
    MU 14.23 12.41 -1.82 -12.8%
    SYNA 31.17 35.3 4.13 13.2%
    SWKS 7.48 7.31 -0.17 -2.3%
    GLW 20.03 25.7 5.67 28.3%

  343. Well that posted nothing like the post before hitting the “Post Comment” button!! The last two numbers are the most meaningful = change and % change from Jan 12 to Jun 28

  344. Am I reading the RIMM numbers wrong? Seems to me like they just said “There are a lot of people buying smartphones these days” -in which case AAPL should trade up?
    I’m not tech expert, but what I read about the iPhone is good. Not only is it several pieces in one, but the screen is fantastic and doesn’t scratch, battery life is great, texting on the touchpad isn’t a problem -but AAPL also seems to have left in place a lot of ways to improve the device, suggesting that the second generation will be even better.

  345. Healthcare – I find it an aberration there can even be discussions about healthcare coverage for all. Being stupid and irresponsible is never a good enough excuse to pass on coverage, even if it makes for Darwin Awards fun, and as a consequence should be a de facto inalienable right in any society.

    I have to say Phil, you are quite a human being! I feel privileged to have met you, if only electronically.

  346. Yeah, like Kfat, my basic point was also one of personal responsibility. Too many people abdicate that in our society, and providing everything for them is harmful for society. No incentive to work, learn, be productive, contribute to society, etc.

    What to do about people with destructive habits / addicitions … food, drugs, smoking, alcohol, reckless driving, drunk driving, etc. They should sleep easy knowing at least their health insurance is covered for there self inflicted excesses ? We taxpayers should foot the bill for that too (beyond the extent that we already do) ?

  347. And yes, I think companies should provide employees with good health insurance.

    Including Wal-Mart.

    And that insurance companies shouldn’t rape employers w/ out of control costs.

    Let the market speak. If you want health insurance and Wal Mart doesn’t provide it … then DONT WORK THERE !

  348. Phil,
    I don’t see “Government shall provide universal health care for all it’s citizens” in the US constitution. I suppose it’s just one of those interpretive things. All I know is I am currently paying to much in taxes and struggling to provide for my family right now. Paying more taxes for universal health care, adding yet another huge entitlement program, is not something I want. I see so many problems with Medicare (my dad is 79 and has a lot of health problems, so I have some experience) that I have reservations over giving the Gov yet more responsibility over yet more lives. Regarding Buffet’s giving, well, Buffet is an old man who is trying to get into heaven now (I love that Cosby line). If I had his money I’d be giving it away too. I just need the opportunity ;) . “I think he pretty much has the right to tell you to do whatever the hell he wants because his moral high ground makes you look like a germ on the ass of an ant when he looks down at you!”. Wow! I can’t believe you actually said that. Stick to stocks my friend. Soros has a ton of money too but sure as hell don’t share his values or want him telling me how I should live my life. The problem with government often is that is doesn’t deal with root causes. It just knows how to throw money at problems. And it doesn’t do that well. We need to deal with the root cause of our health problems and then try to educate our citizens about them. We have become a lazy and entitlement minded culture that too often looks to government for solutions.


  349. RIMM:
    2 puts Aug 165, sold 1 of July 165

    2 calls Aug 170, sold 1 of july 170

    will I end +ve tomorrow? how much i it is around 195

  350. Karm i totally forgot, thanks for the heads up.

    Posted June 28, 2007 at 9:42 pm | Permalink
    Heres’s a quick analysis of the iPhone suppliers on Jan 12 and Jun 28. Conclusion: iPhone effect is non-existant (currently).

    Apple iPhone suppliers
    Stock on original 1-12-07 List

    1/12/2007 6/20/2007 Change % Chg

    MRVL 20.39 17.21 -3.18 -15.6%
    BRCM 32.41 29.6 -2.81 -8.7%
    SNCR 16.4 29.03 12.63 77.0%
    MU 14.23 12.41 -1.82 -12.8%
    SYNA 31.17 35.3 4.13 13.2%
    SWKS 7.48 7.31 -0.17 -2.3%
    GLW 20.03 25.7 5.67 28.3%

    Brian Mr.Buffet and Mr.Soros are not to be compared. Germ on the ass line made me laugh, mission accomplished. Phil shouldn’t stick to stocks, his depth of thought and insight is amazing, truly an intellect. Not many people have the ability to reason on such a high level. That’s why its called Philstockworld. Everyone made good points, very educational so my thanks.

  351. Capitalism with Compassion?

    Why not? Universal healthcare can work,is expensive but also worth paying for.The problem in the US is the strong individual resistance against any movement towards socialism.We have relatives in the US who have to pay “all kinds of money for health insurance before they can even think about their mortage payment” and yet will tell us that we’re all a bunch of “communists” up here in Canada, hmmm.
    I think that it’s this attitude that you’re running up against Phil, not that the healthcare here could’nt be better. As for myself,I would be willing to pay more tax to impove the system we have here…

    have a good night,mike

  352. I hear the point about personal responsibility, but the trickle up effect that Phil mentioned above isn’t only a point about economics. It also applies to individual mores. If you give an opportunity to someone who doesn’t have an opportunity, they’ll respect both you and gift. There will always be people who are in fact lazy, and who do in fact manipulate the system -but if 4M of the 43M recognize that you are there to pay for their kid’s braces or tetanus shot or diabetes, then that’s 4M people committed to the country, 4M willing to help the society that helped them, etc. You can’t expect people who are trying to scrape out a couple of dollars for dinner to respect you for making four times as much as they do by showing up and yelling at them now and then and attending business lunches. Ask Google if the business model of pre-emptively giving to your employees works, and google the Googleplex.
    More importantly -so what about those people? They are American citizens and America should provide for them. There isn’t a clause after “life, liberty…” that says “if you pay for it” or “if your contribution to society is deemed worthwhile”. Yes, we should foot the bill. And if you’re talking about people who destroy value in this country, why focus on the small guys who eke out an unearned few hundred here and there? How do you go about arguing that the problem is lazy poor people when your United States Congressman are shelling out billions of dollars to the most ridiculous of pork-barrel projects and funneling money into a desert from which it will never return -in return for which they receive enough contributions to live on the Hill for another four years while you pay their salary?
    If we have been looking to the government for solutions all of this time than we’re in worse trouble than I thought. Want to deal with root causes? Stop giving people reasons to hate you, and stop cheating them, and they’ll stop hating you and feeling cheated. Problems with giving the government more responsibility over our lives? Then should we stick to leaving that responsibility to the oil companies, who are clearly helping us out at the pump?
    Yeah this is a great site. I’m not sure I wouldn’t pay simply to read the non-stock related posts.

  353. I just watched another excellent piece of work by Ken Burns on PBS. He did the Lewis and Clarke expedition which I saw a few years ago-- and being somewhat an explorer in spirit myself, I found it rivetting. The Jefferson story done by Burns was equal in quality. Jefferson was niehter democrat or republican really, but a man of the intellect. He is this country’s true founding father as his words embody the spirit of what this country was founded to be. Indeed, his words transcend the prison of the reality in which we live to express the ideal that all americans should aspire to.
    Our government needs the revolution of spirit that Jefferson hoped would continue after he left office.

    Dont get me wrong – i am a patriot and would go fight for this country (yes, even in Iraq) if called — but I would do it for Jeffersonian ideal before id do it for these crooks and idiots in Washington.

    Ive worked my butt off all my life and now have 2 kids in college. Ive paid alot into social security and medicare – and because of the crooks and liars and self-dealing twits this money is strangely nowhere to be found. Even if I do get the ‘privelage’ of getting back even a portion – or indeed if anyone gets the privelage of getting my portion itll still be at pennies on the dollar. They stole it. Bush, for all his bumbling idiocy tried to reform the system in what would have been a painful and sacrificial action that woulda still left us short, but at least he tried. For the democrats’ part it just couldnt happen – because it was too hard on their constituency for one, and because it was their political football to carry for another, and there was no desire at all to see bush succeed at anything at all. Ughh…

    Ill give them what I need to under the law – and grudgingly — but I laugh at the prospect of giving these crooks more of my hard-earned buck and trusting them to institute an effective public health system. That thought makes me laugh and cry at the same time.

    For some reason the movie ‘The American President’ always comes to mind – Michael Douglas’s stirring speech --

    Part of it goes some thing like ‘america has serious problems – and we need serious people’ — and another part ‘Freedom is hard – you really have to want it bad’
    We need people working for this country again. We need Jeffersons on the hill, and we need a Jefferson in the white house.

    Heres one of my favorite Jefferson quotes:

    If we can prevent the government from wasting the labors of the people under the pretext of taking care of them, then they must be happy

    My personal favorite: The man who fears no truths has nothing to fear from lies


    As far as Michael Moore, I pretty much despise the guy. I have to admit, though, that I agree with him in the sense that a health system that /must/ cater to public shareholders /cannot/ operate in the best interests of the health consumer. Ahh the MCR (medical cost ratio again).

    I also have to say that Mr. Moore might save our health system some strain if he ever discovers the scientific breakthrough of the glycemic advantage.

    The bottom line is that I believe in the goodness of what Phil is saying – but the devils in the details, and the true devil will have us by the balls (AGAIN) if we let the government manage the program.
    Oh crap – one more note — When the immigration bill got nixed today Bush came on the air and said something to the effect of ‘The American people understand that the status quo in the immigration problem is not acceptable’

    We understand that ?? We yelled and screamed and put citizens on the border with rifles before he even acknowledged ANYTHING. It took him MONTHS to even address the issue by word, and im convinced that even simple action to just CONTROL THE INFLUX will never happen. Dont be a coward GWB, tell us the /real/ reason why millions are still allowed to stream over the border even now, months after your boss (us) started yelling about it. Also tell us that we’re fighting terrorism ‘over there’ so we can afford to leave our butts wide open over here.

    Theres one thing I can think of thats worse than a dishonorable man – and thats a dishonorable man who girds himself up to be a man of God. I guess I shoulda known something was amiss when he said he looked into Vladdy Putin’s soul and saw that he was a good man.

    For some reason I can never get to past threads on the blog – im forbidden permission to do so — I can only get to the current ongoing thread – so if you want to deride me, berate me or ridicule me, alas – I probly wont be able to see it unless you post it in tomorrows thread.

    Sorry … Ill stifle now. Thanks for allowing me to vent.

  354. GPS applications in handsets to see explosive growth: Q&A with SiRF founder Kanwar Chadha

  355. Asia Markets : Friday, June 29, 2007



    Hong Kong*


    DJ Shanghai*






    * at close

    Sources: Dow Jones, Reuters

  356. Thomas Jefferson – I agree. A brilliant man whose intellect has benefited not just the USA but many other nations which chose the path of democracy. Sage of Monticello is a very apt description of the man.

  357. ARMHY – An AAPL related stock up in AH….cant locate any news

  358. RIMM up 30.. 1999 party time again

  359. At first I thought this was just a Murdoch “I wanna know” type of a statement, but with some tweaking I think it could work. I wouldn’t make it 100% free, but a $19.95/yr subscription rate + the advertising revenue might be a better proposition. Of course, I don’t know the numbers to give a valid conclusion, but I know I, personally, would subscribe to the electronic version if it was a nominal amount (of course I would also read it was free, but something tells me the ads would be intrusive and annoying even with pop up blockers).

    Rupert Murdoch: Close All The Newspapers

    At the end of a recent interview with Time Magazine, Rupert Murdoch suggested that the way to turn The Wall Street Journal into a huge global brand was to hire more top-notch journalists, and perhaps, just perhaps, put the entire enterprise online for free.

    In his own words: And then you make it free, online only. No printing plants, no paper, no trucks. How long would it take for the advertising to come? It would be successful, it would work and you’d make … a little bit of money. Then again, the Journal and the Times make very little money now.”

    The notion may seem insane, but it is not. Last year, the consumer media group at Dow Jones (DJ), made up mostly of the WSJ, had a profit of $33 million on over $1.2 billion. Almost none of that money came from overseas. Several securities analysts have said that The New York Times (NYT) newspaper breaks-even at best.

    Putting an entire newspaper online means dumping the huge costs of printing and distribution. At a newspaper with a circulation of 1 million, this can certainly be $1 a paper, depending on where it is printed as where it has to go to be sold.

    A non-print newspaper would have to rely on advertising as its sole source of revenue. currently fetches $99 a year. The charges for premium content.

    But, a free global edition of the Journal would probably have substantially more readers that the 800,000 that it has now. And, that could make it a platform that could pay for itself through advertising. Murdoch may be right. Perhaps that could make “a little bit of money”. Or better.