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Thoughtful Thursday Morning

Maybe I am being too bearish on the economy.

Maybe there is a shining city on the hill with 1,000 points of light and if I simply close my eyes and believe in it, I will be transported there and everything will be wonderful and China will expand and Europe will expand and the US markets will rise and rise as the 18M unemployed people line up in the streets to cheer us as we all drive past them in our new cars as we head over to the gas station to pay $4 for gas, honking joyfully as we pass by each empty storefront and each abandoned home

It was good to take quick bearish profits, as I warned in yesterday's post because quick profits are all the bears get these days as it was indeed a "Whipsaw Wednesday," and Buffett's warning went in one ear and out the other of investors so quickly that clearly there was no gray matter slowing it down along the way!  I was very proud of our short plays on COF, HPQ, RTP, SRS, RTH and our DUG long but all had a half-life on their success so short you could have run an atomic clock with it.  Fortunately, we had our bounce levels to guide us and our 3 of 5 rule to get out of bearish positions so the damage was more to our pride than our virtual portfolios.

Although I could see the turn in my 9:45 Alert to Members, I didn't have the heart to make any bullish calls as it just seemed like such nonsense.  By 10:12 we were even more concerned that something was up and I said: "Don’t get too excited bears.  As I said in the post, profits need to come quickly off the table – this is not a market for riding 20% profits too far."  Sadly, I then proceeded to make a short play on OIH at 10:26 that stopped out at 10:34 and an incredibly poorly timed idea to get the DIA $93 puts at 11:22, just minutes before the market went flying and stopped that one out too as we flew through our bounce zone of Dow 9,200, S&P 986, Nas 1,946, NYSE 6,400 and RUT 555.   Now that they've held up so well, those levels now become our watch levels to the downside and it makes the previous support levels of Dow 9,100, S&P 980, Nasdaq 1,950, NYSE 6,400 and Russell 550 even less likely to be broken. 

Amazingly, right about 11:30, the markets began a 100-point "parabolic" run for no particular reason (see David Fry's chart) on not even any significant volume and that accounted for 100% of the day's gains.  Of course, the energy sector led the charge with oil up 5% on the day but oil was already up 2.5% ahead of the energy report and that was at 10:30, not 11:30.  While we have real issues with the energy numbers, there wasn't much we could do about it so we looked at bullish plays on UNG and UYG, looking to cash in on the insanity.   The most bullish items I saw yesterday were:

I’d have to say that last one, which hit the wires at 11:57 but was certainly known earlier by the big boys (who sit at the table with the Fed govs) so effectively this was a money dump coupled with the 5% jump in crude for the day – all nonsense that doesn’t change the overall fundamentals but we also have to know when we're beat and go with the flow, even as we look for the exits at all times.  We went into the close still a little bearish overall, with 1/2 covers on our long DIA puts as we now fear the pre-market action but we essentially stuck to our game plan for the week, where we expected a flat Wednesday and a drop on Thursday as we got retail earnings reports and jobless claims.  If we don't get a turndown today, it may be time to throw in the bearish towel…

[Continuing claims for unemployment benefits]8:30 Update:  We have the jobs numbers and 576,000 jobs were lost, right in line with the 4-week moving average (so 2.3M people a month losing their jobs) and up 15,000 from last week and much higher than the estimates of 550,000 jobs lost.  This by iteself shouldn't be enough to tank the markets because, if we didn't care about the 9.3M people that were already on unemployment last week (and we are totally ignoring the other 9M people whose benefits have run out and are considered "out of the workforce"), we sure aren't going to get too worked up about an extra 26,000 people getting pink slips.  After all, look how good it's been for corporate profits to fire all these people!  Heck, we should have done this years ago – what a great economy we would have if we could get rid of all the blood-sucking workers and just sell stuff!

Retail earnings, on the other hand, may actually matter as GYMB, HOTT, PETM and FLWS all lowered guidance since yesterday.  SHLD also had a big miss and none of the reporting companies raised guidance and even companies that beat low estimates, did so on poor revenues overall.  Congress is stepping in to save SHLD and appliance manufacturers with a new "cash for clunkers" program aimed at consumer durables.  $300M has been authorized for the fall for rebates on high-efficiency household appliances, furnaces and air-conditioning systems.  WHR and GE are going to be the big US winners.  We already like GE since they control the media anyway but SHLD is going to be the bargain baby of the group after that terrible earnings report and we'll be looking to dip our toes in on that one as they sell off, looking like $64.44 pre-market (9am).  If the economy is really bottoming, Sears is a bargain.  If the rebate program works, Sears is a bargain.  If commercial real estate comes back, Sears, with 3,900 of the best retail locations in America, is a bargain with a market cap of $8Bn or about $2M per store.  Most likely we'll initiate a play by selling naked puts, perhaps the Sept $65 puts for about $6. 

Asia hadn't seen our jobs numbers or retail sales (after all, those are their manufactured goods we're not buying) as they keyed off our happy, happy markets yesterday and the Shanghai Composite shot up 4.5% this morning, erasing all of Wednesday's loss PLUS 1 point (just for emphasis).  That was such happy news that the Nikkei rose 1.8% but still just under the 10,400 line it needs to prove a rebound and the Hang Seng gained 1.8% (374 points) but not one penny more than the opening gap up that also, almost to the penny, erased all of Wednesday's losses.  This is a market condition the Chinese refer to as: ??????, which means "Manipulated pile of dung," or an "MPD Day" for short

EU markets are up about a point ahead of the US open but off their highs after hearing our jobs numbers.  They too are shaking off news that would worry more rational markets as the UK and German budget gaps widened by huge margins with the UK needing to borrow net $13.2Bn vs $320M projected by "economists," who we've already learned not to listen to but WOW, that's off by a lot!  The recession has left even deeper scars in Germany, where the government forecasts gross domestic product contracting by 6% in 2009.  "Even though economic data as a whole are pointing to a stabilization of the economy, the situation however is still fragile," Deputy Finance Minister Joerg Asmussen wrote in the ministry's August fiscal update. "The crisis and its consequences are far from overcome."

Tax intake has shriveled. During the first seven months of the year, German tax receipts were 5.2% lower than the year-earlier period, while federal government tax receipts were 2% lower during the same period. One of the hardest-hit categories has been the intake from corporate taxes, tumbling 57.9% during the first seven months from a year earlier, while income-tax revenue was down 4.4% in the January-July period on a yearly basis.

We'll see if all this negative news actually matters today.  RTP is a good short at the bell as their earnings were awful and they will only improve if you believe in the commodity fairy and the Sept $160 calls can still be sold naked for $9, which makes an interesting play.  We're not going to do much today, other than watch our levels and see what sticks.  We had really hoped for a bigger sell-off into expiration day as it will be tough to make buys for next period at these elevated prices. 


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  1. Good Morning everyone.
    At the risk of making a bearish comment :-) those job numbers looked pretty bad to me. Market seems abit indifferent. (But the all at GS have jobs)
    Initial claims for state unemployment benefits rose by 15,000 to 576,000 in the week ending Aug. 15, the Labor Department reported Thursday. It was the highest level since July 25. The four-week average of initial claims also rose, by 4,250 to 570,000, and continuing claims climbed as well. For the week ending Aug. 8, continuing claims rose by 2,000 to 6.24 million. It was also the highest since July 25.

  2. DB – I don’t think this will have that much effect today.  Maybe it’ll keep a lid on the upward pressure, but I see the news from yesterday about margins for banks as a much bigger mover even though it will never get much airtime.  All I want is a little sanity…please!

  3. Where - I think you are right about little effect. Interesting to see what the data brings.

  4. Average Detroit house falls to $11,596 - thats amazing – Anyone know what you get for the money ? Couldn’t even buy a shed to put in my garden for that money.

  5. DB- If you do a real estate search, you can buy 6 bedroom 3 bath Victorian mansionsbin certain Detroit neighborhood for under $1.000

  6. uh oh…. S&P 1050 is coming, is coming… (cue the Darth Vader music for the benefit of Da Bearz)
    The tricky dicky about it is:  
    will that level arrive in a crazy jiffy by Friday’s OE day? (bullish gamblers will be partying like it’s 1999 if that happens)
    or will it be a slow grueling climb during most of  September to get there?
    I’ve got S&P minor resistance at 1050, but the MAJOR resistance is located at 1095.

  7. They’re really running the tech leaders up hard in pre-market. GOOG up almost $9 on no news I can find. Actual buying interest? Or pumpers trying to avert a breakdown?

  8. I would have thought the jobs report was fairly neutral and we got a fair reaction.
    It was out by 26K on 550K consensus, at average salary it represents $1.3 billion error which is 0.5% of a $14 trillion economy.
    On my screen S&P futures fell 0.4% on the news or "about right".

  9. oops 0.1% of the economy so the futures "overreacted" 4x.

  10. DB – we luv UR teddy bear posts!!!  :-P

  11. Heh, just got notification from TOS of a single call options sold for Jan ’10 on TNK was exercised.  Dunno why someone would do that, but I’ll go ahead and book that premium no problem.

  12. EricL, GS upgraded Goog to buy. 
    Don’t let the smoke and mirrors fool you.  The jobs data is enough for them to run her down.  Although, they may not want to do that because it sets a bad precedent.  And if we go down everytime we get a miss on jobs data we’d be at zero in no time.
    A Victorian mansion for under $2000?  Wow.  What’s even crazier is I can’t even see spending that on a place in Detroit!  Icky!!  Though they do have a thing for making great music..

  13. skasiah   On your detroit victorian, do you have to pay extra for Doors and Windows?

  14. Thanks Matt, wasn’t showing it yet.

  15. Those bastards had a serious squeeze going up until jobs came out.  Of course absolutely no volume behind it.

  16. DB – we luv UR teddy bear posts!!!  :-P

  17. GOOG added to GS "convicted" buy list to goose the Qs.

  18. SHLD with big gap down.

  19. GOOG up huge this morning!…
    Aug 450 calls from yesterday are amost a 10 bagger !!!

  20. Oh for crying out loud.  Just prepsosterous.  So are we to believe two down days is supposed to constitute a pullback in the market these days?  So now we’re back to the races?  No way, they are just squeezing again before the 10 oclock data comes out.

  21. Phil – What are the levels to watch today? Looks like we are gettin a nice jammin

  22. Matt – There cant be any shorts left to squeeze.
    Pharm – glad to be of use. How can the markets keep ignoring the jobs carnage ? Its not as though the rate is really slowing down.

  23. Phil: What is the 3 of 5 rule?

  24. Good morning!

    Looking to hold our bounce levels today of: Dow 9,200, S&P 986, Nas 1,946, NYSE 6,400 and RUT 555.  None of them look like they are in any particular danger at the moment as there is virtually no selling in the first 10 minutes of trading.  

    Below those, we’d be looking back to the bottoms that have already been rock-solid at Dow 9,100, S&P 980, Nasdaq 1,950, NYSE 6,400 and Russell 550.

    Obviously, breaking new highs is the goal and that would be way up at the 2.5% rule from here (see daily chart in this post) and that’s not very likely at all. 

    Let’s give SHLD time to find a bottom but I do like an entry here by selling puts.  The Sept $65 puts are only $5 and I’d like to sell them for $6+.

    RTP is being nicely insane at $158 and I will want the Aug $160 puts, now $4.30 if they come down to $2 but, otherwise, selling the Sept $160 calls naked is the best play. 

    If you don’t have any bull plays – GET SOME – as we could break higher here.  DIA $92 calls have virtually no premium at $1.45 and you can use 9,300 as a stop line for a day trade, looking for a quick $1.75+ if we go higher from here.

    XLF holding 14 is bullish, Qs over 39.50 (Nas 1,975) is bullish, GS over $160, AAPL over $165, GOOG got a conviction buy from GS and is over the 2.5% mark already so the plates just keep on spinning!  Of course S&P 1,000 is still the most important single indicator for the market. 

    Oil held $73 just now and is pushing back to $74.  The dollar is up a bit but gold is holding $940. 

  25. Detroit- The crazy thing is that a lot of the mansions for sale under 5k (and there are a lot of them) look like they’re in great shape, the problem is that every single other house on the block is vacant so, as you said, who would want to live there? I wrote a paper on the situation last semester… the interesting part is that, not only has such rapid price erosion for real estate often happened other time in history, but that there’s nothing saying it couldn’t happen almost anywhere. Housing prices cab ALWAYS fall more is what I gleam from Detroit’s story.

  26. Assignments- I got called away on GE yesterday. That is the 4th assignment I have had in about 6 weeks. I received no assignments over the prior 3-4 months. Called my broker and they said "it is a completely random process". Yeah, right.

  27. AIG up 10% to to 29.25?   Seems crazy to me or have they somehow come with a way to make all the insurance on toxic assets look profitable.   Of course, there are zero shares available to short.   I was killed by shorting calls that got assigned and then liquidated so I think the only thing to do is to buy puts, much as I hate to in a rising VIX environment.  

  28. If each one of us here bought a house on the same block in Detroit, we could make it a gated community, put high speed internet (FIOS?) in them, a call tower on the corner (generate $$) and form a trading union to counteract the evil empire!  B-)

  29. GS goosing GOOG on options expiration week Thursday to keep market goosed up …. beautiful and no scrutiny.  Its just one of those random occurences.

  30. TRIN = 0.28

  31. DIA- when to look at taking out the Sept 93 covers?

  32. Playing the CHSI 30s today for some quick nickles.

  33. Jobs/DB – Look it’s all just a few more bodies on the sidewalk to step over on the way to meet with our wealth management brokers – how can this affect us?  8-)

    Sanity/Where – One pill makes you larger and one pill makes you small, and the ones that mother gives you don’t do anything at all….

    Detroit/DB – You can get a pretty normal 2-3Br home but you need a very large broom to sweep out the crack dealers and junkies

    Philly Fed up 4.2, a big surprise to experts but a yawner for us as we expected this after the NY Fed was so good (they are 90 miles away from each other).  This should give us the best possible boost for the morning so let’s see what tops out .

    Also seeing that 13.6% of US homes are delinquent or in foreclosure

  34. I’m taking a stand here.  DD on FAZ and SRS.  If it doesn’t work will cover completely and go away until this afternoon.  I fully expect a reversal sometime today.

  35. Looks like SIRI has been on a tear in the last few days. Broken over .6 after a really long time. Does anyone know why?

  36. Pharmboy
    CERS down to 2.25. is this nibbling time?

  37. Market – so far – rising on rising weekly jobless claims, so what’s new,
    well, it probably will reverse, after all its OPEX.

  38. Phil – wont be long before you have to walk on them rather than step over, there wont be any room to leave spaces between them and you’ll have to pay a "walkers tax" so they let go your ankles.

  39. CPF looks like it wants to lift off its ground.  Gonna try to get them at 3.03 and out at 2.95 or 3.15-20.  Very risky.

  40. And of course playing BAC 17s today at the open, like every day this week.

  41. Drum – offering more stock at 2.2.  Nibble is good!

  42. GS computers on maintenance for the last 30 minutes, most stocks I’m watching are pinned at their 9:42 price right now…

  43. Foreclosures on prime mortgages spiking now.  Subprimes are flickering out.  They’re done.  Multi unit buildings are over 9%!!  So yay!  Let’s buy up all the banks and REITs!!
    The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted rate of 9.24 percent of all loans outstanding as of the end of the second quarter of 2009, up 12 basis points from the first quarter of 2009, and up 283 basis points from one year ago, the MBA said in its National Delinquency Survey.

  44. Hi folks I have the DBC Leap longs from the $100KP covered with Aug 22′s that I took in $.85 for (now $1).
    Really can’t decide where to roll these to, I feel pretty neutral on this fund and the premiums are extremely low.
    Also don’t know what the recent CFTC ruling, reapplying futurues position limits, willl do to this fund.
    Am wondering if I should scrap DBC and look for a decent buy/write candidate on a commods stock, what do you think please?

  45. Matt — don’t trade angry … we are not big enough to influence direction … even though you are right they are showing they can keep this held up on low volume.  We need real sellers.

  46. Assignments
    TNK dividend date is 8/20 and GE was 8/18 so if you’ve got less than the dividend left in premium there’s a pretty good chance of getting assigned on the dividend date.  That way the caller gets to be owner of record for the dividend payment.  I got several assignments last week and they all worked out for the better as all of the assigned stocks dropped during the course of the day.  Unfortunately its a 401k so I can’t simply hold short stock positions beyond the day of assignment.  Other than the hassle of having to deal with the assignment, I’ve come to the conclusion they’re just a sharp and brief ramp up in the position’s negative delta which these days isn’t always a bad thing.  Buy it out and reload it with another caller that best fits the need.

  47. Phil/DDM – To update I wa able to get out of that DDM spread yesterday at a 10% loss, which would be much much much higher if I’d have held on to til today. I thank your strategy section for that. Also, thanks for helping me get out!

  48. Cap: there are no real sellers, there are lots of buyers with plenty of money waiting to buy at every dip despite not really any good news about the economy.
    They all do not want to miss an upturn.
    This is going on for months .

  49. S&P 1,050 music for Merk.  I am wondering if a quick drop to jack up the VIX, then a run up as high as they can get it into expirations, allows "THEM" to sell deep calls to suckers all week long after which they can dump out of all their shares and ditch the markets, allowing them to cash out and reset for the next round of pumping. 

    GOOG/Eric – Went on GS conviction buy list the day before expiration.  Just a coincidence I’m sure!

    Jobs/Steve – It’s not about the 26K, it’s about the not getting better at all.  At $50,000 you need to look at the 574,000 jobs lost ($28.7Bn) and mulitply that by 12 ($344Bn) and then consider that that’s money out of the GDP 3.5x as it’s not delivered to the employee and then doesn’t get spent along the chain etc…  Also, this economy needs to CREATE 150,000 jobs a month just to keep even with population growth – that’s something they don’t even bother talking about as another 2M people are born into unemployment this year.  Also factor in the bills that the 6M newly unemployed can no longer pay and that’s an average of $100,000 per wage-earner in debt for American families so a potential of $600Bn in defaluts as well. 

    If we were able to say 6M jobs lost and done, that would be one thing but there is no doubt we lost 12M in the past 2 years and I find the 18M figure to be more reliable.  Also, there’s also the factor that the 140M people who do have jobs are making almost 10% less in salaries and benefits than they did last year and that’s like another 14M unemployed although, on the bright side, we can assume those people will struggle to keep paying thier debts so – yay!

    TNK/Smasher – They took your stock away from you?  That’s great, especially on a down day…

    Volume just a touch over 30M in first hour.  Low, low, low.

    BIDU/Cap – That’s an old story but well told.

    3 of 5/Dflam – "Rule" that if we are above 3 of our 5 watch levels we can’t be bearish.  We’re miles over on the bounces so we really can’t do much to add bearish positions until we see 3 of 5 fail to the downside.   The next levels we’re going to look for are retaking the non-spike highs, which are:  Dow 9,400, S&P 1,010, Nas 2,015, NYSE 6,600 and Russell 575.  So we have a long way to go to make new highs but I’m more concerned about firmly establishing the bottom of our range (if the new range is higher) at Dow 9,100 et al – then we would have a new place to buy in with some conviction.

  50. $ behaving itself so far today and oil stable for now.  We be in cruise control settings unless someone upsets the apple cart (GS…looking in your direction)

  51. COF – Got in Sep COF 34′s 2 days ago at 2.25, at the 20% rule (2.00) now. Should I bail or sell something to tide me over? Maybe the Aug 33′s?

  52. COF – I meant puts for all of those

  53. when one intends to exit a stock on it’s x date, do you just get what you can get at the opening? Do youu have to own it for any specific amt of time during that day to qualify for the dividend?

  54. Hey Folks,

    I’m sure some of you may have seen this on CNBC. Contrary to popular belief, one expert was saying that he doesn’t think the market will tank until the "big dogs" become more active. He thinks a lot of smaller joes and jeffs are continuing to rally this market, and that the experts are on the sidelines until after Labor Day when they get full staffing back and start to get short on the market. Nothing is trading on fundamentals he said, which makes him believe that the ordinary person actually controls it all right now.

    I thought it was interesting. Until Labor Day, perhaps we are range bound to slightly bullish?

    Just a thought…

  55.  I bet there are some people short GOOG who are pissed and want to carpet bomb GS!  LIke you say, the game is rigged but it’s important to play it accordingly.

  56. MTXX in a bit of a slight pull back for those interested.

  57. Dave- Thats some great analysis, thanks for sharing that. If that’s the case, would that explain why so much of most trading days have been sideways? Ordinary Joe is living moment to moment and thinking this next entrane wil be his last while GS scalps him off?

  58. David … I don’t think ordinary folks trade a billion shares of C or BAC a day, or all the ETF volume associated with that.  Its mostly HFT algo’s with day traders and swing traders playing along.
    Yes, there may be some stupid mutual funds chasing after the market, but they are ultimately the bagholders here.

  59. I don’t see any news that is driving this, but I’ve got some bearish positions screaming to be covered.

  60. Cap – Sure I agree that HFT algos and daytraders are on the market, but they always are. No one turns their computers off, but you are becoming a bit too influenced by the common argument that computers rule the stock market. Hedge funds and money managers do, and if they aren’t trading, then the market is going to be out of whack. You watch CNBC or Bloomberg, the experts have no idea what is going on. I mean I don’t think it can mean everything, but it could be a contributing factor.

  61. Lets start to consider some pinning action:
    AAPL – 165 ?
    OIH … making a run at 105.
    EOG … making a run at 75
    SPG … making a run at 60
    WFC … 27.50
    AXP … 32 ?
    COF … 34 or 35
    USO … 38
    UNG … 12
    AMZN…. trying to get to 85 ?   sell those calls !
    I am sure there are plenty o fothers to look at … let’s look for some opportunities !

  62. Phil,
    Is buying Aug 450 puts on goog worth it ?? Hopefully, big guys would want to shake some of the call holders by tomorrow.

  63. Nat gas build of 52Bcf is low but still a build into record inventories.  At these nat gas prices ($3.08), we should concentrate more on cars that run on nat gas! 

    Detriot/Skasiah – Yep, I’ve seen a new round of real estate ideas every year for the last 5 in Detriot as it’s always "bound to come back from these historic lows" and every year it goes lower.  Now it’s free and no one wants them.  This was once a vibrant American city but it began decaying in the 70s really as the infrastructure collapsed due to effectively a very wide wealth gap that just increased more and more every year until the wealthy finally found the place unlivable (surprise) and left the city with nothing but poor people who were unable to leave even if there was a better place for them to go. 

    What’s scary about Detroit is that the American people seem to have learned nothing from watching it happen.  Job losses and benefit cuts cost Michigan 10% of its jobs in the first half of this decade and that spiraled out of control the last couple of years and now unemployment is near 20%.  You’ll notice CEO pay at the Big 3 didn’t suffer and neither did the pay for top management but they just didn’t trickle down enough money into the community to support it the way millions of auto workers did when they had better wages and benefits.  Now the median income in Detroit is around $25K, compared to $45K for the average US family.  At $25K, you have to choose between food, clothing and housing – you simply can’t "have it all" and forget medical care – there are 10 bankruptcies a day in Detroit listing "medical bills" as the reason.

    1.5M people in Michigan now get food stamps and that’s only about half who qualify because the state program is over the limit.  With close to 10% of the population on food stamps, that becomes a nightmare for food sellers as people come in once a month and buy what they can, then don’t go shopping again until the next check comes.  The soup kitchens have the opposite problem as lines grow and grow towards the end of the month as government subsidies run out.  The whole thing is just spiraling out of control as more and more stores close and more and more people lose jobs every day and

    Detroit’s economy looked EXACTLY like the US economy does now just 2 years ago and it only took one more thing to push them right off a cliff.  And that’s WITH a functional US government to bail them out.  If the entire US takes a hit like that – who’s going to be able to do anything to stop it?  Ignoring unemployment, debt and foreclosures as if it doesn’t matter is market insanity.  That’s all I have to say about it – now let’s see what stocks look cheap!   8-)

  64. David/Cap, interesting. Presumably the HFT algo’s rely on being able to convince other people’s money to move to generate returns. They need other people to buy their run up so that they can sell into it, and other people to panic sell so that they can reload at the end of it. If other people aren’t in it then presumably there are more losers in HFT algo’s as they are just trading with each other and the best algo wins. If this is true then some of the HFT shops may eventually have to give up driving volumes even lower. I doubt even GS can make money if it ends up trading primarily with itself….

  65. David … the low volume speaks volumes here.   The marginal buyer has undue influence; whether its the algos or the institutions is open to debate.  However, the volume to the upside is certainly not impressive, and to use a Seinfeld reference, its Fake, Fake, Fake, Fake.
    All IMO, of course.

  66. C’mon BAC, pin at 18 for me!

  67. Stevenparker, you touch on a good point.  What the volume is telling me, and from many people I speak to I think its true, is that people (retail, hedge funds, and by extension mutual funds) have left the market and aren’t coming back any time soon.
    There is much less participation, and convincing folks that they need to get in NOW, after a 50% move disconnected from a FUBAR economy, isn’t gonna happen.

  68. David, we are the retail investor to a certain extent.  We all read the same stuff and they (Joe/Jeff) must be reading it, too.  The agrressive rise in the market on the backs of what could be described as conflicting at best data today does NOT suggest, imo, that retail is behind this.  But whatever.  A fact is a fact.  And it’s a fact we are up sharply from Monday.  I’m flumoxed.  Once again.  And covered.  Albeit underwater.

  69. SRS getting a beatdown today.  
    Must … buy …. real estate…..

  70. LOL PHil…..Vader music…. chuckle… my son ran downstairs when he heard the theme song play on my ‘puter… he’s a leggo building guru for 7 yrs old… a lil engineer in the making
    I saw S&P had flat lined on my chart around 1000 within plus or minus 1.5% since July expiration…. last few months OE weeks have been boring bad, so I figured this week was gonna have a good chance to be a different kind of ending.
    When 985 didn’t break down I guessed the play was for an upside mad dash…. I made a comment about the quick drop on Monday down to 985 was a setup for a nice run up….  so far so good on the "bullish gamblers win this OE week" theory…
    GOOG sure got a perfectly timed golden goosey from GS…. gotta luv when a 10 bagger happens just right…
    If GOOG doesn’t close over 462 today, then I would love to see GOOG gap over 462 tomorrow and make a bear squeeze towards 470+… a run to 500 by Friday’s close would just make me slobber all over myself… LOL

  71. By the way, if I’ve been a little liberal this week it’s because I am going back and forth with fellow Dems on the health care program as there’s a big meeting this afternoon and I’m just hearing the most tragic stuff from around the country, which both pisses me off and worries me…

    Assignments/Pstas – They do seem to be increasing but brokers also pick on people who don’t complain about it (think of it from their cost/benefit point of view).

    AIG/LV – I made a case last week for how they could be viewed as having value but I sure woudn’t want to have my money in them but enough people are willing to risk it that it’s not worth fighting other than maybe quick put plays.   Today they are up because the new CEO says that he expects to be able to repay taxpayers on his first week on the job.  He can say that today because he can later claim ignorance of the books but this will likely be the last time you ever hear him say that.  Benmosche by the way was on the board of directors of market manipulators, CS, not market manipulators GS as some people think….  Right this moment, the Sept $32 puts at $4.50 are a good deal and you can stop out at $4 as a break over $35 here would be too crazy to ride out.

    Detroit/Farm – OK, I’ll give you my $10K for a mansion as soon as you have the fence up and the FIOS installed!  8-)

    DIA/Pstas – if you have the 1/2 cover on the Sept $93 puts then no change as we’re right on target and we’re drifting between our targets.

    Volume at 11 42M.

  72. Another little RE squeeze today.  IYR up 2.6%

  73. DIA again- look to take out the Sept 93 putters here or wait?

  74. DIA- sorry- posted at the same time as answered.

  75. If we are more red than green, it would seem "they" (whomever they are) read us better than we are reading them.

  76. Yes, Phil, just a wee bit liberal … :wink: ,
    I want to come and infiltrate that big Dem meeting ! 

  77. Uh oh…dollar heading south.

  78. REIT’s must be sold here.
    buy SRS; short SLG , VNO, SPG … if you can

  79. Cap – lol, reminds of when the simpsons resurrected Zombie Lenin “Must… crush… Capitalism”, only the opposite I suppose. What type of zombie are WE dealing with?

  80. do the dems make you ck yr guns at the door?

  81. I still love SRS on the basis that you can’t keep faking CRE data.  Sept $12 puts are back to naked sells at $1 and if you plan on rolling them to 2x the $10s at $1 then this is a good entry.  Also, the Aug $12s are very tempting if they get to .50, now .60.  Keep in mind that this trade has been a killer all month.  One day it may pay but so far, those days have been few and far between so small, small bets on these.

    Walkers tax/DB – That’s the key.  Things have not turned violent yet.  Crime is still surprisingly tame because people do believe things will get better but that may not last past Christmas if we don’t get the kind of improvements that people on the bottom (that bottom 140M that have just 5% of the wealth) can actually feel.

    BAC/Mr. M – Still hogging that broken slot machine?

    DBC/Steve – The premiums are dead on those calls, hardly worth selling other than as coverage so maybe roll them to 1/2 the Sept $21s, now $1.95 so you have all the money coverage plus some flexibility.  I’m very concerned (from the perspective of this play) of a commodity pullback.  UNG is collapsing and we already know oil is BS and, if the dollar bounces, it’s a bad trade.  On the whole, this trade has lost it’s appeal to me and I won’t be carrying it forward to the new $100KP.

    Good point Keyser!

    DDM/Skasiah – That’s great, so glad you were able to work out of it.

  82. Skasiah … lol.

  83. Phil, the only flaw in the liberal argument is that after we have all made some sacrifice to meet "needs", the needs remain. Nothing is ever fixed. Sadly, it just doesnt work – although the liberals feel better.
    I can reduce my economic activity to pay more taxes, thus taking my contribution away from people working for a living in order to give it somebody who is not. Hard to see the net gain there.

  84. HK pre-saging a selloff? 

  85. Phil, All I’ve got to say is that this afternoon, please don’t ask for the stick to appear!

  86. Phil – Sept. extention of Peter D’s TNA decay idea:
    Buy Sept 36/37 PUT vertical for .35 and sell Sept 49 CALL for .35

  87. Phil: shorted DKS, LOW, JCP, closed with all gains.

  88. Phil – would you think for those interested in establishing a DIA Dec 96 protection play that this would be a good time to do it?

  89. COF/Skasiah – Consumers are maxed out and out of money – that’s not good for COF who massively expanded their lending base in ’07 and ’08.  You can sell the Aug $35 puts for .55 and those can be rolled to Sept $30s even so, if you don’t mind sticking out a spread, that’s not a bad plan.  Of course you could also, if lucky, sell the Sept $33 puts for $1.50 or so after the Aug puts burn out and then you have a pretty free ride on a $1 spread.

    Labor day/David – That’s a very long time to keep this thing afloat.  Also, I agree the big boys aren’t trading except for, as proven by Tyler’s endless charts and graphs, GS and CS, who are making almost 70% of the trades between them.  They can’t fight the tide once the other funds come back to the table but right now they are the only two giants in the sandbox and we are just ants in the sand. 

    Pinning/Cap – Very attractive but I wouldn’t want to rule out a massive move tomorrow.  Perhaps things you have conviction in no matter what happens like selling naked OIH $105 calls for $1 or the naked SPG $60s for $1 but, whatever it is, make sure you are willing to roll ‘em up to September and grit your teeth in case they "go for it" tomorrow and try to close at the highs for one last big squeeze.

    GOOG/HP – I wouldn’t touch them.  GS buy list is a powerful thing and GOOG is a slow builder due to the high price.  Also, I think they are worth $500 myself so hard to get behind a short play….

    HFT/Steve – You are dead right, it’s pointless if they can’t get others to play.

    GOOG/Merk – Make sure you have a bib on!  I hope you got that Leggo Star Wars game for your kid (it’s on every platform) – my kids love that (there’s also an Indiana Jones one). 

    Oops, here we go, someone found the down button on the market elevator! 

  90. Hey DB,

    Do you run the Facebook group: I make more money in the stock market in one day than you do in a year?

    Just wondering haha.

  91. Phil, you goin to lunch today?

  92. Hi, All,
    I am seriously thinking about moving my portfolio from ETrade to TOS.  I’ve virtually stopped trading in my ETrade account, and am waiting for several OTM short option positions to expire.  Otherwise, I have stocks and LEAPs that I don’t have to worry about if I can’t trade for a few days.  (I understand that I won’t be able to trade while the transfer is going on.)
    As far as the process of transfer, is there something I should worry about?
    I’d appreciate it if you can share your experiences.  I’ve never done a broker-to-broker transfer before.

  93. OOPS.. Dems threatening a colonoscopy on normal senate proceedure – simple majority vote on their health care bill.( 51 votes to carry ) This will kill all health insurance carriers. Closing out all my calls on UNH – too risky at this juncture.

  94. DIA – If you are into trainding in and out (and watch your trading costs!) then it isn’t a bad idea to buy back all DIA puts you sold and wait to see what happens next.  We’re testing that 9,300 mark again and, if we hold it, then back on with the Sept $93 puts (now $2.22).  If we fail, maybe we can sell 1/2 the Sept $92 puts for $2.50 (now $1.80).

    Meeting/Cap – Yes we would love to get your unique viewpoint!   Good timing on REITs, I guess we’re watching the same formations (funny how that’s one thing we can agree on…).

    Zombies/Skas – Well we’ve been dealing with zombie banks for quite some time and CNBC has been working for 10 years to turn retail investors into mindless zombies and I’m pretty sure zomby Ayn Rand has control of the government…

    Guns/Morx – When it comes to gun rights, I’ll have you know that Republicans are wimps compared to the Dems – here’s video evidence!

    Speaking of guns, it was Ayn Rand who said: "A government is the most dangerous threat to man’s rights: it holds a legal monopoly on the use of physical force against legally disarmed victims."

  95. Speaking of guns, anyone likes SWHC?

  96. Uncovered, locked, loaded, looking for bulls!

  97. FOH at a 52wk high!!!  Buy Buy Buy…..LOL

  98. Phil do you have a lunch meeting today? i need to get ready for the market launch?

  99. Its setting itself for another computer inspired burst up.

  100. Phil. What do you think on BKS? They report a -20 rev but was not as bad… they pay a 5% div. I mean what do you think of their business on the long term? – TY

  101. Harley’s on Hydrogen! If Hog can do it, maybe F can…Article on today

  102. Hello Freddie!  FRE in for 1.54

  103. Copper looking weak again — futures bounced off support around 2.72 a little while ago, but now heading back down. So Phil’s RTP trade looks promising here.

  104. Pharm you still watching CRES

  105. Oil below 72 a barrel.


  106. Karl’s on a roll today -4 articles to make you mad

  107. Watching FRE closely for the pop up to 1.65…..CERS is moving to their offer price as I noted earlier.  Still on my radar though.

  108. X that Pharm symbol is CERS

  109.  Phil, at some point Apple is going to release the tablet and probably announce a deal with VZ.  This will probably be like the AT&T iphone play from a few years back.  Any ideas or plays on this one?  

  110. Is there an auction today – do I have to expect the 1.00 spike ?

  111. chucke… Leggo… yup I hear ya Phil…. for my boy, it’s all he ever asks for his biggest holiday present each year….
    Over the years my boy has collected those sets and some others… he sleeps in a red race car bed and the storage area under the car bed’s "hood" is jammed full of his socks and briefs?… nope… it’s full of all his Leggo pieces… LOL
    He used to follow the Leggo directions to build the sets like on the box cover, but now he is into making his own Leggo designs… at first they were really small and simple hand size things, but now he comes up with some big and amazing stuff and really likes to show to his mom since she reacts with "oooo-ahhhh" big amazement every time he brings his latest contraption downstairs.
    I’m really glad to see him creating his own stuff and developing his brain for visualizing and putting his mental designs together. Maybe one day he’ll be creatively and seriously designing his own inventions that change the world for the better. We’re raising him to speak fluently both english and mandarin, and he is testing out two grade years ahead of his peers in school, so I have a lot of hope he will grow up a better and more capable man than me.
    SPY getting stopped at 100.8 and GOOG hitting a wall around 458… Not looking so good yet for the exciting August OE week grand finale upwards eh?…. maybe all we get is back to where things were last Friday.

  112. UNG vs GAZ – has anyone checked out GAZ (another Nat Gas ETF)?

  113. Hello Phil;
    Rand is too self centered though, no compation.
    what is this group of dems to hang out with up in NY ? which foundation ?

  114. Pharm or Phil – did you have an exit stradigy for SPWRA? my survival of the fittest side wishes i had bought more (so i could pay more taxes, of course)

  115. Nat gas futures at a multi-year low. UNG not far behind.

  116.  ahhh… I spoke too soon… GOOG over 459 !!… giddy up lil pony… chuckle

  117. Morx – I am keeping the puts for now on SPWRA.

  118. Phil…..Sold (covered) August 170 calls on AAPL last month.  They look to expire worthless tomorrow.  I’ve a strong sense that tomorrow will be a down day.  Do you think market makers would try to push AAPL below 165 before tomorrow’s close?  If this was thought likely, would it be reasonable to sell 165′s today?  Or too risky.  Remember, they are covered. 

  119. Taxes/Barf – It’s a big picture discussion I’d be happy to have on the weeekend.  As I said in last nights rantings, it’s not about you per se but about the 3,000 people who lock up 40% of this country’s wealth.  That is dysfunctional and that share has gone from 28% to 40% in the past decade (up 42%), where is the next 16% going to come from?  The bottom 40% don’t have it, they only have 5% of the wealth and the next 20% only have about 5% of the wealth and the next 20% have about 15% of the weath but then "THEY" get to you and you need to give up some of yours in order for TBoone and company to get more of theirs. 

    Some of the biggest dupes in the class warfare game aren’t the poor or the working class, who expect to get screwed anyway so they aren’t surprised.  It’s the middle and upper middle class who vote and sacrifice their own upward mobility to protect the rights of people who spend all day trying to figure out new ways to rob them and pass every law and regulation they can to keep the upper middle class from crossing that very sacred line that guards the 3,000.   The "death tax" is the very last straw as it would insure that these few families will rule America forevermore but their PR firms spin it so that some poor schmuck who owns a farm in Iowa writes his Congressman to make sure that when Bill Gates dies, his kid gets all $50Bn and not a penny goes back to the country it all came from which, in turn, can’t afford to bail out that farmer when there are floods or droughts or when his property is foreclosed by the same bankers whose wealth he is fighting to protect.  There’s a reason they don’t teach economics in grade school – those people would be pissed!

    CAT/Kustomz – That’s not too surprising after what DE had to say.

    TNA/Where – I’m not in that trade, are you talking about doing it from scratch?  That’s a bearish play as you don’t make a dime if you’re over $37, which is where we are now so nothing but trouble on the way up (but very doubtful we go that high in a month).  Why not just sell $46 calls for .75 and $30 calls (because there is support from the 50 dma at $32) for $1.20?   That’s a pretty wide margin and an easy roll either way.

    Shorts/RMM – Nice selection!

    DIA/Morx – At the moment you want to be in the Dec $95 puts at $6.15 and selling 1/2 the Sept $93s for $2.15.  You can then offer .50 to roll up to the Dec $96 puts and that is 1/2 of what you sold spent and then, if you have the opportunity to take out the $93 puts with a .50 gain, that will have paid for 1/2 your roll up.   As to lunch, if the bulls take up a collection I could be convinced to go out for sushi so the market can jump another 100 points….  8-)

    Transfer/Cwan – It’s pretty easy and TOS should be helping you through it all the way (it’s in their interest of course).  If you are mainly in cash though, it’s easier to cash out and do the wires than to wait for them to "transfer" positions.  You can move the cash and then wait for the positions to catch up I think – less downtime that way or, of course, you can take a week off, do something fun and not worry about the markets at all for 7 days…

    Health care/Gel – Better safe than sorry I guess but who didn’t expect the Dems to tell the Republicans to shove it in the end?  The Senate was never in question and I’m pretty sure the House will line up before the elections. Reid just said the other day that "patience is not unlimited and we are determined to get something done this year by any legislative means necessary."  I think the Republicans are so used to the Dems in the minority that they forget how much ass they can kick when they are in power – every major social reform in this country was done over the dead bodies of Republicans and their lobbyists.  Will it be different this time?  Not likely…

    Even when the Dems lost the Senate in 1995, the Repulicans never had more than 55 votes and they managed to completely dismantle the constitution and roll back decades of social progress in just 10 years and they never had anything like the House majority the Dems now have, with a max of 231 in 2006 and the Dems have 262 now.  Endless possiblities with this kind of majority and, oh yes, the Presidency!

    BKS/Spider – I think I saw way too many people with Kindles recently and probably 25% of the books are sold to 5% of the readers and those are the people that are rapidly being lost to Kindle.  Next year there will be a Sony reader and an Apple reader and there will be a push for awareness too.  BKS is such a big box retailer I’d be very concerned about what the hell would happen to them if they had to cut back on stores (800 of them) if they had to cut down in a pinch.   Excluding an insurance settlement, the profit was just .14 per $20 share and no matter how much you think they may bounce back, you are still paying almost 20 times earnings for a low-margin retailer in a declining market. 

    Hydro Hogs/Colberg – Now that sound pretty cool but link went nowhere.

    FRE/Pharm – Chasing is not good….

    AIG ran into reality at $35.

    RTP/Eric – Off nicely now.

    Denninger/DB – You have to stop reading that guy, he’s warping your perspective.  8-)

    AAPL/Jo – Of the group, I like the long VZ play best because they don’t NEED AAPL to make money while T can only lose if AAPL leaves or shares and AAPL will only be splitting revenues becasue it’s not like there are people who can’t find an IPhone when they want one.  That tablet computer will be bigger than big I think – going back to the Kindle competition and looking at how great the IPhone screen is, if they put a phone in that thing with decent wireless connections, it will be a massive winner but will also somewhat cannibalize notebook sales for AAPL so VZ is the way to go.  Probably a good one for the new $100KP with a 6% dividend.

  120. Not chasing Phil, just momentum trading….out now with a small profit…now I am gonna short sell….

  121. GAZ (options unavailable though) – ramping again, despite Nat Gas dropping 5%.  Must be the UNG crowd shifting over.

  122. This market is testing my sanity, thank the lord i have beautiful scenery to calm the senses otherwise i would throw my notebook into the pool start a bonfire and dance naked while chanting in tongues

    TOKYO -(Dow Jones)- Fanuc Ltd. (6954.TO) said Tuesday it and General Electric Co. (GE) will terminate their 50-50 joint venture operations in the U.S. due to changes in market conditions.
    The two companies have agreed to dissolve GE Fanuc Automation Corp., the holding company for their production line hardware and software operations, by the end of this year, Fanuc said in a statement.
    The holding company, located in Charlottesville, Virginia, has total assets of $1.73 billion, Fanuc said

  123.  Phil, i think that amazon figured that out, that’s why they are offering the kindle/reader on the iphone.  they have decided to be relatively agnostic about the reader itself – mostly because they realize that apple will always have superioe technology.  so, they are better off with the nespresso model – selling the capsules for 70 cents.

  124. Crackdown/Steve – Oh I hope that I was a help in calling attention to all this!  I will be so happy just to see something accomplished here.  The damage these people have done to the global economy with this BS is staggering.  Also, the CFTC and SEC now plan a joint public meeting Sept. 2-3 to discuss coordinating on OTC derivatives regulation. At issue is jurisdiction: Are the instruments financial products the SEC should watch, or futures contracts the CFTC should oversee? And what’s falling through the crack between the agencies?  The wheels of justice grind slowly but grind they do!

    Auction/DB – Not a significant one that I know of. 

    Leggo/Merk – Yeah the new Leggo stuff is great, kind of like a combination of old Leggo and Erector Sets. Dual language is a great way to expand the brain, also helps them to think about things from various perspectives (as you have to think about the subtle shades of meanings of words).  My 7-year old is way past her grade, even the advanced classes, but we’re not too keen on skipping her as that’s a little rough at here age.  Her sister is 9 and we actively encourage her to "tag along" and get in with the older kids for the inevitable transition she’ll have to make one day. 

    GAZ/Fab – What a 1-year disaster that one has been!  I am still bullish on gas long-term but these ETFs will chew you up and spit you out as they churn contracts every month.

    Dems/Micro – I don’t "hang out."  I have friends who are active in NYC and they drag me into things but today’s event is national with Organizing for America, who are an outgrowth of (and the DNC) that the President has made the centerpiece for his "grass roots" communtiy involvement agenda.  Obama’s actually on-line for today’s conference so it’s a pretty big deal – I’m sure you can watch off the web site..

    SPWRA/Morx – LOL, yes it’s always nice to pay those taxes.  I see SWPRA as a very long-term hold.  We just got a new buy-in opportunity and last time we bailed at $31 after the last jump, we regretted it (although we were right as they crashed from $34. 

    Something is wrong with the financials!  SKF Sept $31s at $1.35 are a fun way to play if it hits the fan

  125. Cap, you still like SRS?  I’ve been away all day and just catching up on posts.  I let SLG get called away (I closed the position rather than paying TOS’s $15 assignment fee) and waiting to get back in via a put sell.  Sell 22.5 puts when the stock hits 25?

  126. Cap, you still like SRS?  I’ve been away all day and just catching up on posts.  I let SLG get called away (I closed the position rather than paying TOS’s $15 assignment fee) and waiting to get back in via a put sell.  Sell 22.5 puts when the stock hits 25?

  127. BKS – Thanks. I know they are great but maybe will be impossible to compete with e-books, unless they do something related. Still, even if the e-books are great (mostly because you have in one minute)  I do believe paper books will not disappear and probably there is a fair value on BKS stores. But the point in not what i think, its what people do, and maybe they will be killed as you suggest.
    (technology change: as same the message pagers  where killed with the cellphones. I remember one in 90′s … Arch communications.)

  128. SRS  Sorry for the double post.  $1 for the Oct 11 puts seems like a wimpily safe way to play overvalued REITs.

  129. Phil – UNG buy/write – Long at 12.50, Short $12 AUG Put and Short AUG $13 Call (1/2). Plan to let options expire and write new Sept puts and calls (same ratio) – what strikes would you suggest. thx

  130. Sorry, selling the put

  131. "Something is wrong with financials" - yeah the whole lotta of em – I read Karl :-)

  132. Speaking of auctions…
    Commerzbank expects euro zone bond sales in 2010 to be 1.1 trillion euros, compared with 875 billion in 2009, and for governments to shield taxpayers from rising debt servicing costs by issuing bonds rather than refinancing short-maturity bills, while locking in investors for a longer period of time

    I would be shocked if the S&P doesn’t make it to 1010 today, i would think an afternoon stick into the close will be in order

  133. UNG is more or less flat so far today while GAZ is up 3%.  GAZ trades at a lower premium to Nat Gas than UNG.  Its volume ramped the past few days (even higher today).  But I am staying away from both given their ridiculous premiums.

  134. Colonoscopy/Phil
    Yep… your assessment is probably accurate. I only hope that they include a provision in the final bill that all congresspeople are required to undergo an annual colonoscopy, in order for these arrogant potentates to get relief from their common chronic condition …. rectal-cranial inversion

  135. Auctions:  Today 30B 70 day bill.  id to cover 4.75 but  more than 75%  was allocated to primary dealers. Check the link and click on next auctions. (i will try to paste here)
    Problem comes next week:  197 Bn more!!


    13 wk Bill

    26 wk Bill

    52 wk Bill

    2 yr Note

    5 yr Note

    7 yr Note


  136.  gel – they would only get a colonoscopy if it was gold plated.
    Selling VZ 30 2011 puts for 5$.  Kind of like parking some cash.  Everything looks a little to short term overvalued except for perhaps WMT, PG, KFT.  These are good leaps imho.

  137. Since this rally began I have been completely frustrated by trades that seem to go in the opposite direction from my original thought.  In retrospect, I can pin my frustration to underestimating several things.  1) The Govt. to throw anything and everything at the market prop job irrespective of the future consequences  2)  The willingness of GS et al and the main stream media (read CNBC) to go along with #1.
    As such, I have completely overestimated the willingness of the average citizen to let this occur.  In fact, I believe most do not even know what is happening or care.  They are busy with daily life (jobs, kids, soccer games, etc.) and only look at their quarterly statements when they come in the mail.  The recent townhall meetings have proven that it is easier to take away their money than it is their healthcare.
    The only thing that I have done correctly thus far is buy/writes and selling premiums.  Almost every daytrade, swing trade I have entered has lost.  Until things return to normal (if ever) I will only sell premium and not buy it.

  138. The Russel just came unhinged from the SPX and Dow.  Someone hit the sell button and they brought them all back up but the Russel.  The control they exert is agonizing.
    What do you mean something is wrong with the financials?  FAS is up over 6% today.  Everything is great!

  139. That should be "underestimated" the willingness of the average citizen to let this occur.

  140. Any opinions on CAT for a short position? I’m looking at the article kustomz linked to, and at the fact that they seem to stalling just below the uptrend line on the daily chart. I’m thinking maybe of calendars, buying January and selling Sept. puts in the low 40s.

  141. chuckle… is anything looking like reality about AIG?
    It has suddenly spiked over $40 back in March and again in May, and I have to wonder if there is another spike to $40+ before August expiration day tomorrow. It is one of the most shorted stocks in the market, and I’ve got a feeling the MMs trading AIG’s stock have got the bears by the balls and intends to squeeze until each bear squeels like a pig !!
    There is intraday "bounce" support at 30.6 from a line I’ve got drawn on my chart since 6/19/2009.
    I’ll drop a small gamble on Aug 35 calls just to see if there is another 10 bagger to be had tomorrow if AIG rips up to 40. Can lighting strike twice?… LOL

  142. AAPL/Iflan – Why not cover with Sept $165s, which at least have a $5.30 premium, rather than risk getting killed by the Augs, which have a .70 upside delta and offer just $2 of protection?  You can also, if you want more protection, go for a 3/4 cover of the Sept $160s and that gives you the flexibliity to roll 1/4 up to 1/2 the $170s and then you can just spend $3 to roll the other half up to Sept $165s if things look better. 

    HOG/Colberg – It would really, really suck if something went wrong with a hydrogen converter that’s sitting between your legs!

    Bonfire, naked, chanting/Kustomz – Sounds like a party! 

    Kindle/Jo – That will work if AAPL doesn’t decide to go another way with their reading software.  I doubt Jobs is going to want to give up his cut of publishing money – that’s where AAPL cleans up with ITunes.

    BKS/Spider – Oh I just realized you may not know what I’m talking about re. their stores.  BKS went crazy for the past 5 years building MASSIVE bookstores all around the country.  They are fantastic places with multi-levels and every book ever written and couches to read them on and coffee shops inside (mostly SBUX) and they do very well but you need to sell A LOT of books to pay for staff and air conditioning and lights and any fall in sales is just not at all good for them.  The issue is they’ve raised their operating costs to a level that may be unsustainable and they’ve done it in an environment where all that real estate they purchased can act like a lead weight on the company.   Lindsay made a comment about the 4 Seasons Hotel that was abandoned in Exuma.  No buyers and not even any bidders for the stuff inside – they just burned it!  You don’t want to be on the wrong side of a failed expansion in this economy…. 

    Long-term, hard-copy books make about as little sense as Newspapers – they are things that will be clung to by our generation but will fade over time.  Look at encyclopedias – my kids only know what one is because they were shown it in school wheras, when I was a kid, you’d be considered a bad parent not to buy some for your kids.  I’ll tell you an even stranger one – the video arcade in our busy, middle class mall closed down – they just don’t have enough kids who want to keep pumping quarters into games they can totally replicate at home. 

    UNG/Concreata – Good if you plan on sticking with them on the way down (could happen).  Looks like you’re hitting it on the nose and you can do the same in Sept.  My real fear is that you’ll miss the fun on a hurricane more so than the downside.  Maybe a 1/2 cover on the calls or none at all looking for a move back up?

    Financials – I’m not seeing anything in particular but I’m seeing a lot of strange block sells going by – Kind of like the first class passengers launching the lifeboats on the Titanic while the people in second class say "I wonder where they’re going?"

    Volume is a joke at 75M at 1:45 but be aware this is very stickable and they can jam us right back to 9,400 (and 1,010) into the close

    70-Day/Spider – Thanks.  That’s a BS auction of course as is anything under 2 years so 8/25-27 is going to be our concern with $109Bn going on the block.

    VZ/Jo – It’s a long way until payday unfortunately but a mellow way to go. 

    Selling/SS – Well if you learn that one lesson from this market then it is worth it.  It’s what I have been trying to demonstrate in the Buy Lists and the $100KP for many months – while we may have fun trying to beat the market, it often beats us but, on the other hand, we rarely touch the portfolios where we sell premium and they just keep making money, month after month.  Slow and steady can win the race sometimes.

    Oil holding $73, that’s keeping things afloat in that sector.  Financials holding up so far and Dow trying hard to break up

  143. Nice list of stocks that are up more than GOOG since their IPO (5 years ago today):

  144. AIG’s a great company. (said with a very high squeeky voice)

  145.  this is coming over from BB —  however little effect on the market, but this cannot be good. 

    By Caroline Hyde and Paul Armstrong
         Aug. 20 (Bloomberg) — Fitch Ratings downgraded hybrid
    securities of eight European banks on concern that regulators
    will force bailed out lenders to defer coupon payments on
    subordinated debt.
         The downgrades affect subordinated bonds issued by Lloyds
    Banking Group Plc, Royal Bank of Scotland Group Plc, ING Groep
    NV, Dexia Group, ABN Amro Holding NV, SNS Bank, Fortis Bank
    Nederland, and France’s BPCE, it said in a statement today.
         The European Commission has already told Bayerische
    Landesbank, Germany’s second-largest state-owned lender, and
    Anglo Irish Bank Corp. to defer payment on hybrid notes as a
    condition of getting government cash. The bonds, which banks
    sell to meet regulatory capital requirements, may have no
    maturity and typically have coupons that can be deferred without

  146.  GOOG hit that 461.7 line again… then got rejected…. hopefully the next try gets them up and over for good

  147. Phil- Urgent question regarding assignment.  On Wed, I sold some $37 USO calls and $27 DIG calls which are both $1+ in the money right now.  Basedo on your past experience (and I realize that wouldn’t necessarily mean the same thing would happen here), when is the buyer most likely to exercise those calls?  If the answer is "could be any second", should I buy those calls back now (or by end of day at the latest) if I don’t have the money to actually cover those calls with actual buying of shares?

    Also, if/when the buyer exercises those calls, how would it work with my TOS account?  Would TOS ask me to actually buy (at market price) and deliver (at the strike price) 4500 shares of USO and 2000 shares of DIG?  There’s a very good reason I’m not asking TOS customer service….which might be the common sense way to approach things.

  148.  (In a loud CAP voice):
    F U SRS!!!

  149.  Phil, on the kindle – i think that amazon has a good head start on establishing the standard for the ebook.  Apple may  try to undercut the price, etc but the publishers will realize that amazon is probably a better partner than jobs – look at the recording industry – jobs has got them by the nuts.  I think all of this is priced into AMZN’s stock price.

  150. This glacial pace is something. I suggest that the traders be available for trading only for ten minutes after each hour. Those trading halls look very spacious, and the gals and guys could play catch or stickball in these totally slack periods. Get Erin and Maria down there too.

  151. SIRI. The cheapo March $1 calls are cooking. Thx, PD.

  152. PharmBoy - HEB has been all downhill since we discussed (and I bought some) last month, should I bail here, DD, or just be patient?

  153.  I’m bringing the CA Angels rally monkey out of retirement… we’re cheering for Mr. Stick to hit a final hour wild bull grand slam home run … chuckle…
    rah rah Mr. Stick, rah rah Mr. Stick !!   Putting on my rally cap and getting my popcorn ready !!

  154. AMZN. If I suffer the indignity of them hitting 85 tomorrow – after pimping the Aug 85 calls, what say ye? I wrote them against Jan 80s that I want to roll out and down (paid $14.90 a while back). Anyway, after hours question on what to do if it looks like I’ll get called. Tho I think they finish under 85 still.

  155. Underestimating/SS – I believe there is an epression that goes:  "No one ever went broke underestimating the intelligence of the American public" which may apply here.  As I said when I got back from Florida, the level of complacency that people have about their finances is staggering. 

    CAT/Eric – I don’t like to short them because they are the centerpiece of so many spending programs around the world.  If a couple of countries get serious about infrastructure, they will be doing great for a few years.  As long as you’re doing a spread then they have no reason to rocket either now that earnings have passed but it’s not for me as I think they are strong and managing the downturn well (and steel prices are down too, which is a help).

    AIG/Merk – For a dime maybe but not for .50, they must be on drugs asking that for 10% out of the money with a day to go. 

    AIG/Morx – They are a great company, they can make $10Bn a year but they owe $120Bn to the government and realistic interest on that is $6Bn a year so it would take them about 20 years to pay that off so they are, as is, a stupid company to buy.  If, however, the government washes their debts and voids their potential derivative liablilities, they can go on to make $30 per $30 share again.  On the off chance that actually happens, as I said at $20 last week, they are worth a toss, especially if you sell something like the Sept $40 calls for $1.90 every month – pays  6.6% a month for calls that are 33% out of the money and VERY unlikely to ever go BK.  I don’t like them at $30 but at $20, you have a good chance of selling your way into a free ride within a year. 

    Fitch/Giblet – Thanks!  That must be what was spooking people on financials.  Hmm, too bad it was all EU banks but it does make sense that people are bailing on US banks as it’s doubful Fitch sees anything different when they look at the US.  Also, note that it came out after EU close so our banks may get hit tonight or over the weekend.   Not much affect on the banks themselves though so maybe no one does care…

    Health care – I’m on that CC now.  So far nothing much.  Tim Kaine said blah, blah and Jeremy Bird is enjoying the spotlight and rallying the troops but pretty impressive stats he’s batting around (1.5M people are actively invovled in the campaign now).    11,000 local events have been held in 90 days, 64,000 people visited congresspeople (that’s funny) and reminding us we have 19 days before congressmen come back and we can bother them in Washington!

  156. Halejulia.  Broke even on my FAZ.  Sold half.  Now.. about that SRS…

  157. Did anyone see that spike on SPY. The bid dropped to $100.69 and a gazzillion computers pounced and spent 6m shares pushing it straight back to $100.79. The stick save must be kicking in.

  158. There is a great line out of a play (Sly Fox) that goes: "Never think too little of people when less can be thought."

  159. MrM – if they move through 1.68 or so, they fall hard.  Announcement for their chronic fatigue drug is this fall.  I would not DD here.  I would step out at 1.80 or so.

  160. Phil- If you had to guess, where would say AIG closes by options expiration?

  161.  AIG just bounced off 30.6…. how about that target call made at my 2:07PM comment?!?… chuckle

    AIG… I hear ya Phil…. Aug 35 for .50 is basically gone money… hence a roultette gamble…

    but if AIG’s MMs juice the stock up to 40+ during a bear squeeze panic tomorrow, doing again as they have done twice this year, then the contract is a 10 bagger at 40.
    It’s a go or no go, all or nothing kinda play.

  162. Urgent/GS – The buyer will not very likely do anything ahead of the automatic assignment tomorrow.  There’s no incentive for them to move early, they get your USO for net $38 next week so why should they pay early?  It is very rare that a caller with even a nickel of premium calls an assignment early if divdends are not involved.  If you sold the calls naked then you will end up short the shares on Monday and you will need to buy them to close that day or whatever grace period you get from your broker.  If you sell 10 USO $37 calls for $1 and USO closes tomorrow at $37.05, you will have $37,000 depositied in your account on Monday and you will be short 1,000 shares of USO at $37 that you were forced to deliver over the weekend.  That’s all – it’s really not a big deal. 

    Oh here’s Obama, people are going nuts.  He’s stripping (taking off jacket) and seems to feel like he’s with "his people" as he’s just joking around with the room at the moment…

    Kindle/Jo – I have to respectfully disagree with that.  Other than having publishing lined up, it’s just a friggin’ display screen with a couple of buttons.  Jobs may have the recording industry by the nuts but his nuts are keeping the lights on for them and he accounts for a huge portion of industry sales now.  Book publishers have massive costs compared to record labels and they eat close to half of the books they print and they give 50% to the bookstore and 25% to the writer and they take all the risk for very little reward.  Ebooks allow them to be pure middlemen and they will be thrilled to take a risk-free cut of everything that gets sold while they shut down publishing facilities and slash distribution costs.  I think book publishers will not make the mistake the record industry made and they will embrace the new model rather than fight it.

    SIRI/Dstill – Nice progress fro month 1.  I think it was .48 when we started.

    Obama more rallying the troops than anything else so far.   He’s a GOOD community organizer, this is going to kill the opposition when he unleashes this group…

    AMZN/Dstill – $85+ I doubt.

    LOL Concreata!

    Today’s market pump action is sponsored by the bankrupt FDIC, who reportedly may relax the capital ratio rules in a vote it plans for next week that will allow private-equity firms to jump into bank buyouts

  163. DB, have you gone mad?  The stick has been at work ALL day!

  164. Hi, Pharmboy, I hope that you are not annoyed by my keeping asking.  Up until now, I’ve been ignorant to the health care space and therefore haven’t read posts on PSW related to that space.
    So, forgive me if this is already discussed: What do you think of VAR?  Looks like a market leader in their speciality (equipment for cancer radiation treatment)?

  165. Phil – Any thoughts on why SIRI is running as if on steroids? Broke through major resistance at .6 . Is it just a short covering rally?
    Side note – Just bought some UNG Oct 11 calls and then UNG decides to jump off the cliff. Already lost 10% on the calls.

  166.  Phil, i think the ebook model is the future – i just don’t think that the publisher’s will dump amazon for apple.  But it will be interesting.  
    What are your short term thoughts on BAC until earnings in OCT?

  167. Expect the push to 1010 on the S&P, could this be the kiss goodbye

  168. If you sell 10 USO $37 calls for $1 and USO closes tomorrow at $37.05, you will have $37,000 depositied in your account on Monday and you will be short 1,000 shares of USO at $37 that you were forced to deliver over the weekend.  That’s all – it’s really not a big deal.
    Did you mean I’d have to deposit $37K into the account Monday?  What if my net liquidation value is only $10K on Monday?  I was thinking they’d require me to have the money to actually buy that many shares…but if they don’t…that’d be awesome.  Thanks

  169. Phil, Folks,
    Am now staring at my Aug $5 buy/write in TASR and thinking the Sep premiums look kinda dull.
    Am minded here to roll the Puts out to Sep, and wait to try and collect perhaps .4 for the Sep calls next week.
    Any thoughts pls?

  170. MrM – cannot remember if someone here posted about CTIC, but their call volume is VERY high in the Sept, Dec and Mar contracts.  Since CTIC is in the same price range, I would possibly move over your HEB to them….I am going to buy in here at 1.67…I think the FDA gives a note on priority review on Monday or so, and that may help.  If tomorrow CTIC appears to close BELOW 1.63 or so, THEN GET OUT….

  171. GS, think about what you sold: the right to BUY the stock for $37/share. So someone has to pay you $3700 for each call option you sold, if you are assigned, before they can get your stock. So they must give you the money and then they get their shares (which the broker lends you as in a short). So you don’t have to have the cash yourself (you’re not the one buying the stock!): it will be given to you first, so as Phil said it’s more of a hassle than a big deal. 
    By the way, ToS has a $15 assignment fee, plus you must buy the stock, plus you get charged for the short position if you hold it, as usual. So what I don’t like about assignment is getting dinged with all the charges.

  172. Obama:  Medicare WILL run out of money in 8 years.   That will make 50M more people uninsured and those people are your parents so maybe their kids will decide they care about them.  It’s a good point – what kind of "tax" is it if you have to choose between providing your parents with health care (and it won’t be any $500 a month either) or letting them die next time they get sick?  This is good stuff!  Lots of good spin work will be done this month….

    "Status quo is unsustainable

    "Corporate profits that could have gone to wage increases have been going on health care"

    AIG/GS – $33.50

    "Most Americans have health insurance and this will be a series of consumer protections that provide safety and security for them."

    Big Stick!

    SIRI/Trad – They announced some IPhone thing but didn’t seem like a big deal when I read it.  Mainly I think it’s about the auto sales as SIRI/XMSR is pretty much standard in new cars.  As to UNG, this is what scaling is about.  When you are down 20%, it’s time to consider buying more and another round 20% below that.  Nat gas can go down to $2.50 (now $2.95) but a single hurricane can double it overnight if it hits production and, even if not, then it’s winter when demand ramps up.

    BAC/Jo – I think they are on the way to $25 around Jan so any buy is a good buy on them.

    Goal on DIA $92s – don’t be greedy!

  173.  Phil, i took care of a 390 pound 59 year lady yesterday who was getting a new knee.  she is on disablity of her weight and on medicare as well.  So i hope, Mr. Obama realizes that unless we bring down the costs by yes, rationing, very little will be achieved imho.  We can talk about fairness, morals,etc – but providing useless care is a problem.  These examples, too numberous to list are a total drain on the system and society.

  174.  wooo hooooo… go go go AIG !!!
    even GOOG is trying to break out than 461.7 resistance line
    forget irrationally exuberant…. this is moronically orgasmic… LOL

  175. Cwan – Varian has a broad swipe in the medical device.  I like them, but would scale in to a position, as they have moved up quite a bit in the past few months.  I don’t follow them as much due to them being a device co.

  176. DIA- so now what- take out the putters- Sept 93′s; Any cover?

  177.  AIG Aug 35 (IKGHI) is almost double at .90 bid… get off now if you don’t to puke and ride this wild and crazy bull

  178. explore Stryker and WAT if you like device companies

  179. MrM – another you could do is ARIA if you have not already.  I like them and they have a much better chance of success……

  180. VAR/Pharmboy – Thanks!  Their options are quite dull.  I’ll keep an eye on it, and wait for a pullback.

  181. Wow, at 3:35 FAZ had it’s highest 5 min volume of the day.  2 million shares traded.  Those 5 mins cost someone alot of money.

  182. Wow; what a scam !

  183. SYK & WAT / colberg – Thanks for the tips.  I’ll take a look.

  184.  GOOG just lifted over 462… check off another intraday target call (at 10:59AM)… bada-bing bada-boom
    Now if it can just hold and close above 462, I’ll be a happy camper

  185. WAT has a little to much dependence on big pharma. SYK ok.  BSX would be fine as well….the CEO just bought a boatload of shares….

  186. Obama making fun of Fox (very popular with crowd) and deconstructing attacks on plan.  Very good explanation of where "death panel" concept came from (provision for terminally ill patients that was originally from Republican bill for Pharmecutical industry). 

    $37,000/GS – Well I can’t speak for your broker but generally they just want you to use that money to buy shares to close.  Your problem is if USO opens at $45 then you are $8,000 short and must buy anyway (at some point).   You need to ask your broker what the rules are but generally the rule of thumb is DON’T let ANY caller or putter expire in the money – it is NOT worth the hassle. 

    TASR/Steve – They look pinned below $5 to me so maybe risk a naked upside for a bit.  You can sell the Dec $5 puts and calls for $1.30 and that’s nice and relaxing.  I’d sell the puts for .70 if you can get it and then wait but make sure you get at least .40 for the $5 calls (now .65). 

    Useless care/Jo – That’s what they call a slippery slope though.  No cancer treatment for smokers or heart transplants?   No damage repair for extreme athletes?  At what age are you not worth wasting an organ on?   We are, as a country, very ill-prepared to debate medical ethics and, down the road, its something we all will have to face.  Maybe they’ll start teaching it in schools so our kids will have better anwers than we do.  Of course "sin taxes" are a good way to regulate consumption of unhealthy things but people don’t like those either.

    DIA covers – At this point it’s a logical risk to buy back puts and hold the Dec puts naked as it’s not that likely we break out to new highs tomorrow (just 40 points up) so it’s a good risk/reward to stay naked

  187. GOOG/Merk – Excellent call and they sure are trying on the S&P too but doesn’t look like it.

  188. Cwan, Pharm has a good point on BSX except they play in the cardio and neuro market, this increase litigation risk, but good company long term

  189. SDS, SRS both shorted into the close.  Looking for a down day tomorrow.  We’ll see.

  190. Phil – re VZ; It’s been trading in a narrowing channel since 9/4/08…..looks like it’s going to have to do something different soon.  I had applied your buy/write/write to it, only had been timing the puts and calls to synch with the channel turns.  So far, it’s been a clock. ;-)

  191. UNG breaking down hard.

  192.  whew…. what a day…. i’m exhausted

  193. 1008.92 high on the S&P they are either waiting to goose it in the morning or  thats all they got

    GOOG volume highest in 15 days

  194. What a spectacle this market is..  Oh well.  Got rid of the FAZ.  They gave me 3 minutes to dump at my breakeven point.  Who’da thunk I should have dumped all of it instead of just half.  It was an obscene display of lockdown today in both SRS and FAZ. 
    Riding SRS naked (etf).  Time and money are on my side.

  195. There is another medical equip company to watch for: THOR.  A friend of mine works there.  He told me that they have lots of cash and low debt.  One of their products is some kind of artificial heart for the termininally ill.  You want it because your heart is dying?  Sign the release paper, no lawsuits of any kind.  Take it or leave it.
    The stock is a wild ride, though.  I keep watching it on the sideline.

  196. PharmBoy - thanks, I dumped HEB (so it’s going straight to $20 tomorrow!) and split the proceeds across ARIA and CTIC; divide and conquer!

  197. I’m still trying to wrap my head around how Nat gas is at a 5-year low but OIH is at $105 – that just does not make sense…

    Well that was fun.  It’s been a free money week looking back at the charts.  Anything you bought at Monday’s open should have done very well and now we’re back on top, where we started shorting but much more scared of Mr Stick after 4 additional day’s of beatings. 

    C was 20% of all volume on the NYSE and we are finishing this day with just 125M of Dow volume, something that used to be called "lunchtime" volume in the Spring. 

    Opps, wait, scratch that.  It just jumped to 144M at the bell, literally as the bell was ringing 20M shares flew by and jerked the indexes down the second it didn’t count.  This is such utter BS.  Oops 151M now…  Like I was saying.  So they collect buy orders and don’t fill them to keep the price up all the way to the close and then they flush whatever they have on all the idiots who place market buys (which include many mutual funds) and all the chasers right at the bell so it doesn’t move the index much…

    VZ/Java – CEO said they would be using cash to pay down debt, we’ll have to see how that plays out but as long as it doesn’t affect the dividend then this is nice to own.

    BA up 3% today on rumor the Dreamliner may fly this year.  As I keep saying, this is another stock to just own forever.

    Tomorrow could be wild (or it may be dead) – looking forward to it either way!

  198. "I’m still trying to wrap my head around how Nat gas is at a 5-year low but OIH is at $105 – that just does not make sense…"
    I know, it’s weird. Somehow the reality of supply and demand works in one case but not in the other. I think we will see USO at or near multi-year lows within the next 12 months, barring a big improvement in fundamentals.

  199. Cwan a friend at raymond james likes it, go by at different times check out the parking lot… call some of the marketing and  sales guys they love to talk ask some questions,  then you might try buy write off Oct’s p&c’s @25 check with Phil

  200. On Bloomberg right now they are talking about how demand for office space has collapsed.
    No matter, SLG up 7.5% today !

  201. You can guess my opinion – so I won’t waste your time making you read it :-)

  202. Hee hee, after all that the Aug 101 SPY calls I’m short are only up .045 on the day.

  203. Phil, i still have jan 170c and aug 150 callers… advised to DD on jans and roll augs to 2x sept 165′s..  i was thinking of assn the 150′s and go short for a limited time.  …..thoughts?  thanks..

  204. This should make for some fun cocktail conversation at that Dem meeting I am going to with Phil !
    Health care/Gel – Better safe than sorry I guess but who didn’t expect the Dems to tell the Republicans to shove it in the end?  The Senate was never in question and I’m pretty sure the House will line up before the elections. Reid just said the other day that "patience is not unlimited and we are determined to get something done this year by any legislative means necessary."  I think the Republicans are so used to the Dems in the minority that they forget how much ass they can kick when they are in power – every major social reform in this country was done over the dead bodies of Republicans and their lobbyists.  Will it be different this time?  Not likely…
    Even when the Dems lost the Senate in 1995, the Repulicans never had more than 55 votes and they managed to completely dismantle the constitution and roll back decades of social progress in just 10 years and they never had anything like the House majority the Dems now have, with a max of 231 in 2006 and the Dems have 262 now.  Endless possiblities with this kind of majority and, oh yes, the Presidency!
    Get a bunch of folks that all think like this in a room together quoting Al Franken and Michael Moore and you just know fun times are at hand !

  205. ITMN….damn, wanted to get back in under 14…..

  206. Did I say money is on my side?  Silly me!  What was I thinking.. I got time.  That’s it.

  207. Oh no, did I miss the meeting ?   Boy that sounded just exhilirating…. some nice astroturfing.
    Cash for Clunkers will end next Monday … news just out.

  208. Eph;   SRS; i don’t know.  its going to continue to deteriorate as it gyrates up and down.  Today was just silly, however.

  209. Started another small short position in SPY after hours. If expiration doesnt get it moving down (option max pain on SPY is $98.0 so worth a punt)  or they ignore the bad housing data at 10.0 (it will be bad) then no real loss.

  210. Cash for clunkers - I cant believe they are planning a "cash for clunky white goods". Can they do a "cash for crappy option positions" ? or "cash for my missus" ? Your govenment is getting desperate, things must be so bad, more than we can see.

  211. Anybody see this about SRS?
    "Leveraged-ETF manager facing suit: report"
    If somebody’s suing them because they didn’t disclose the risk of putting it into their long-term portfolio, they should instead by suing their financial adviser/broker for not telling them that it was a bad idea. Or they should just live with the loss and realize that they were stupid for playing with something they didn’t understand. I vote for the latter.

  212. Cap
    I have been inspired reading Phil’s rants on wealth redistribution and I think it is a grand idea — let’s start with his.
    My second inspiration is a result of having been deeply moved by the emotional appeal of the less fortunate among us whom have suffered at the hands of all of us knuckle dragging conservatives. In fact, I am going over to the other side. Enough with this half stepping reform movement! It’s time to declare a National Health Care Emergency!!!
    Our glorious Leader, Lord Obama, should issue such a proclamation forthwith. It should encompass the nationalization of all hospitals; doctors offices; treatment centers, etc., including confiscation of all insurance company assets and declaring all existing policies null and void. All personnel – doctors, nurses; orderlies; janitors; cafeterial workers; claims adjusters; clerks; executives, should be immediately conscripted under Selective Service into the newly created National Health Service Corp.
    This would solve all the problems. As all personnel would be subject to Military Justice, they will be directed, as Lord Obama sees fit, to render services where and when dictated. The cost savings would be monstrous. Think about it. No more useless insurance company paperwork; no more dreaded profit margins; no more lawsuits ( On second thought, we will have to make some provision for our gallant friends at the trial bar as we surely don’t want them to go wanting).
    Why this would show those evil, nasty Republicans and lobbyists who’s boss! And this will show them how genuine patriots shred the Constitution!

  213. Phil/COF – You gave me some confidence this morning! Before you had posted that I should sell the 35′s for .55 I had decided shortly after my original post to use the same strategy and got them sold at .60. Yours was some excellent reassurance, sir. I’m holding out for them to burn out, but we’ll have to see with COF closing at 35.04 today.  
    Phil/Zombies – Ha! That was a great list of zombies. I’d like to also add that we’re up against hordes of zombie computers making cold, calculated decisions in their bid to eat away others brokerage accounts.
    Cap, others/SRC – I’ve sold some 13puts as there seems to be some consensus that it’s been oversold. Small position, with my stops set and a plan to get out if it goes the wrong direction. You’ve played this one a lot, got any advice? Thanks!

  214. Cap – I meant SRS. Typo, iPhone, Sorry.

  215. LOL wow you have been taking the liberal pills the last couple days Phil.
    I don’t know if there are particularly more "slackers" under communism and I’m sure many Europeans would tell you it’s not a particular problem under socialism.
    Hey! I really can’t allow you to just dismiss this issue. It is a real practical problem in Britain and has been ever since the start of the welfare state in 1920, with the introduction of unemployment insurance. There is little question that program notably drove up unemployment, and lazy people have been fleecing and living off state benefits ever since. Governments of all parties have been vocally and repeatedly tackling this issue over the decades since.
    I don’t think any of this applies to healthcare, it’s difficult to see how people can profit without effort from coverage. And anyway I cannot support people dying because they are lazy or unlucky.
    But welfare dependency is a real moral and economic hazard that must be considered as part of any social spending program…if too many people were living off benefits there would be no wealth to analyze the distribution of….

  216. Hello Phil;

    you were kind of cautious about BA last week, so are we good now ?
    It seems BA and TASR are both buys.
    The questions for us that are sitting 90% cash, when how should we start easing in ? wait for the 9100 bottom to be confirmed ? or start easing into the real under priced stuff.
    They don’t seem to allow a slip back to floor, well not until this month is closed out anyway.
    My feeling is your waiting for something, and reading all you have, you sure as hell are uneasy, and I agree and thats why I’m waiting too. enough rambling :)

  217. Oh pstas, how dramatic!
    Many defence companies make good profits out of "socialised" military sales, and so will health companies.

  218. stevenparker, that’s why the unelected gov of NY State, David Patterson (who would have thought anyone could have been worse than Spitzer) last week decided to give welfare recipients free money under the guise of "back to school bonuses" whether or not anyone would be going back to school being a separate issue entirely.
    Patterson diverted about $180 million in federal "stimulus" "porkulus" money to do this.
    Never mind of course the state’s multi-billion and growing budget deficit; diminished tax receipts and out of control spending.
    NY had made enormous progress in reforming welfare; getting people off the roll and back to work, but being the true incompetent, socialist, unelected Democrat that he is, Patterson is in one fell swoop reinstating welfare dependency.  What he thinks he is doing is buying the votes of poor people because he fantasizes that he could possible get re-elected even though his poll numbers are abysmal as in Democratic Congress abysmal.

  219. there has been a spike in the purchase of beer, cigarettes and lottery tickets in NY. Could there be a link?

  220. Hey guys – I’m diabetic and I get fantastic service from the UKs NHS. I have to admit I’ve paid all my National Insurance stamps for 50 years but all the treatment I get is free at the point of delivery. It can be clunky and beauracratic and slow to deliver the latest drugs but its there for nearly everybody – including refugees and political assylum seekers who never paid a single National Insurance stamp. Sure you can get better faster service if you go private and pay – but you dont have too. Dont knock it – you might need it some day.

  221. stevenp., I agree with you on the healthcare and welfare stance.  I think there should be tiers of care in the public option just as there is in the private insurance plan.  Certain things are covered at different levels depending on how much you pay.
    The thing that is getting brushed under the rug and rapped around the axle at the same time is rationing.  OF COURSE THERE WILL BE RATIONING!  It’s just that no one has the balls to say it.   Once the administrative savings are realized (if any when it’s all said and done) then all you have left to save on is what care you provide.  Should terminally ill people get a procedure that extends their life by 6 months instead of 3?  Personally, I don’t think so.  But that’s what this is about.  Making hard choices.  And no one can stand the heat.  Of course your income should play a part in what kind of care you get.  The poorest will get basic care.  Everyone richer then that will get more.  And for folks out there who will cry and say that’s not fair then I’ve got one question for them.  How about no care?  Because that’s what you’ve got now (the uninsured).

  222. I got to tell ya earnings dont look too shabby, some retailers doing very well due to cost cuts ;-) CRM knocked it out of the park

  223. This whole health care thing can be summed up very simply, those rich are getting richer  the middle class and poor are getting poorer. Just a matter of time before we demand it. Who will be able to afford proper health care soon? My brothers family pays 26k a year for Oxford. Lets be serious!

  224. TASR:   "Man Catches Fire After Being Tasered By Police"

  225. DB I really feel your comment. I had employer sponsored health care in the US for the last decade.  And I never saw a doctor once. But now I am "self employed" I see no reason to inflate the insurance companies profits in order to have them deny me coverage down the road. If I fall seriously ill (and yes I have paid plenty of taxes there) I shall be back to Britain for treatment  in a heartbeat. 
    Let’s make no mistake. The current private health care system in the US is inadequate at actually delivering health care, stunningly wasteful and spectacularly socially unjust.
    But all partisan politics and rhetoric aside, there is no reason why capitalism need be destroyed in order to correct this.

  226.  No Public Option As defined now!
    Healthcare in a Gov/ public package will be a disaster, and we won’t live long enough to undo it….That’s what they, the Democratic policy makers are counting on…a coverage doctrine of a Government plan which begin chanting the mantra of deny, deny, deny, litigate which has worked for years in HMO’s and the government will follow suit with no one to appeal to, no one to come to your aide. The only way to reduce costs is to treat & diagnosis earlier or reduces cost by restricting service, period.
    The most radical approach and one that might work is develop and utilize advanced diagnostics, treating disease prior to an end stage terminal phase, then make medical school free, funded by private foundations and donations, [BTW now being done at U.C.F.]Then have all MD’s do a portion of their rotation providing care to the indigent as part of their rotation.
    We need to restore the R&D tax credit, to increase spending in the private sector, increase patent coverage for first in class novel inventions; therapeutics and diagnostics, to incent better care not placing your faith in the Government. Most certainly reducing patent protection will result in few innovations and a decline in US productivity.
    Let me point out to those calling for government plan, look at "Cash for Clunkers," here is what we have heard from the Government on this one…" we don’t know how many cars have been sold under the plan, we don’t know what we owe dealers." So, the government hasn’t paid the dealers. Oh and we are discontinuing this plan which frankly was working too well and we are going to "dollars for dishwashers," better cover the Whirlpool shorts quickly!
    The equivalent in health care will be, “ of course you need the MRI, but we can’t get you in for six weeks, then, fill out these forms and we will get back to you,” Six weeks later, sorry we are fresh out of our annual allotment of MRI’s at your local facility, you can go to a distant center, or try an X-ray to see what’s wrong with you…then, “sorry, we can’t get you into an X-Ray site for a week or so…but here is an RX for some pain pills,”  .Please, this government can’t patch pot holes and you want to believe that they can provide a lower cost health care option, one word , Delusional!
    This is the single most important piece of legislation placed before us in the last ten years. Obama tried to ram it home before the break because he knew if any one read this bill it would never get passed. It is criminal, and don’t let anyone tell you any different.  Oh and that possible AMA endorsement, the AMA represents less about 15% of the MD’s out there…don’t get suckered into a “ Hurry up offense,” on this Health Care bill you will be resenting  a rush job on this bill until you die, which will be sooner than you think at this rate!

  227. THOR/Cwan - A little high on the p/e side but it’s a great space and I love equipment companies.  The problem is they really don’t pay enough to cover the volatility but you can sell the Jan $25 puts for $2 and that’s in for net $23, which is a decent entry.  If that works out, then you can do a buy/write as you’re already up 10%. 

    Office space/Cap – I think that all that space will be filled up with homeless people so problem solved!
    ???/Oncmed – Oh I love this game!  I’m going to go with AAPL and no way would I short them straight out with someone just setting a $250 target on them.  If they announce a VZ deal or the tablet officially, they can go right back to $185. 

    Oh Cap, you missed a rousing meeting.  We’re going to ram health care through as a stealthy way to implant chips into you that let us know if you are thinking any unsocial thoughts and then we’re going to line up all the people over 62 in front of a death panel where we will determine their fate by playing a round of Yatzee with each one – very democratic!  The best part is, we’re going to pay for all this by taxing the rich into poverty so that no one will have an incentive to work again and we can turn America into a 3rd World nation before Obama’s first term is over – BECAUSE THAT’S HOW WE ROLL!

    Republicans, including Senators Lisa Murkowski of Alaska and Johnny Isakson of Georgia – who sponsored similar legislation – have said Palin’s claim was hurting the party’s attempts to influence the bill.  Isakson said it was “nuts’’ to claim the bill encourages euthanasia.  Representative Earl Blumenauer, an Oregon Democrat who wrote the provision in the House bill, called references to death panels or euthanasia “mind-numbing’’ because the bill would block funds for counseling that presents suicide or assisted suicide as an option.  “It’s a blatant lie, and everybody who has checked it agrees,’’ he said.

    Checking facts – you wouldn’t know about that would you Cap.  More fun to chant "Death Panel" over and over again. 

    U.S. Sen. Lisa Murkowski on Tuesday told an Anchorage crowd that critics of health care reform, the summer’s hottest political topic, aren’t helping the debate by throwing out highly charged assertions not based in fact.  "It does us no good to incite fear in people by saying that there’s these end-of-life provisions, these death panels," Murkowski, a Republican Senator from Palin’s Alaska, said. "Quite honestly, I’m so offended at that terminology because it absolutely isn’t (in the bill). There is no reason to gin up fear in the American public by saying things that are not included in the bill."

    Gee Cap, I guess you must have missed the memo where your party leadership is trying to reign in the wackos… 

    We’ve looked at the inflammatory claims that the health care bill encourages euthanasia. It doesn’t. There’s certainly no "death board" that determines the worthiness of individuals to receive care. Conservatives might make a case that Palin is justified in fearing that the current reform could one day morph into such a board.
    But that’s not what Palin said. She said that the Democratic plan will ration care and "my parents or my baby with Down Syndrome will have to stand in front of Obama’s ‘death panel’ so his bureaucrats can decide, based on a subjective judgment of their ‘level of productivity in society,’ whether they are worthy of health care." Palin’s statement sounds more like a science fiction movie (Soylent Green, anyone?) than part of an actual bill before Congress. We rate her statement Pants on Fire!

    Desparation/DB – Soon we’ll need a cash for cash program which is what they have in Zibabwe as they try to get people to change in the old currency for new currency with a lot more zeros on it.  8-)
    SRS/Skas – These suits happen all the time, this is the same thing that was used to bottom out SRS at the beggining  of the month – it worked then so they’ll try it again. 

    National Health Emergency/Pstas – This is a fantastic idea!  YOU should have gotten on that CC with me.  All we need is some kind of health emergency that gives Obama an excuse to shred the constitution as he hunts down WMD’s (Wealthy Medical Doctors) and ram the program through Congress (maybe he can appoint Dr. Kervorkian as special Surgeon General) and he can make a dramatic speech in which he says:  "You are either for health care, or you’re sick."  I’ll submit your plan immediately and make sure you get full credit if it’s passed! 

    COF/Skas – You just have to hope we get a pin tomorrow.  Computers may be too active to be considered zombies…  As to SRS, just roll them down to Sept, no sense in taking that loss.

    Slackers/Steve – If you actually care, here’s a very good study on the functional differences between the US an Europe in the way they view welfare.  The EU’s GDP has grown much faster than the US’s for the past 20 years so I guess those few non-slackers they have left must be some really productive sons of bitches, right?  They make a very good point that the association of poverty to laziness that is programmed into US citizens beliefs leads to less altruism than is found in the European population.   There’s also a good book you can read on-line called "Fighting Poverty in the US and Europe: A World of Difference." 

    Here is an excellent article from the NYTimes on a writer’s experience with Dutch Socialism, which happens to be my favorite country in the World

    BA/Micro – We were expecting a sell-off of the whole market last week when BA was at $46, they held $43.50 nicely but I’d rather see them test $40, which would be a great buy.  As to the cash – good man being in cash!  I’m starting a new $100K portfolio this weekend, looking to make 2.5% a month at least, there will be lots of fun ways to spend money there.

    NHS/DB – That’s what most Americans don’t get.  You get things covered for FAR less than we pay now and, if you want "deluxe" care, you simply pay an additional fee (which is very cheap) to a care provider.  So elitism lives but the fact that most people don’t find it necessary, even the well-off ones, is the most telling data of all. 

    I agree with Matt – All I ever advocate is that everyone is entitled to be healed when they are sick.  I’m not saying that your maid should get a face lift and a boob job on the government’s dime but if she needs a kidney, she should get the same one as you and she should be able to go to the same hospitals and get the same treatment as the person whose toilet she cleans and it shouldn’t cost here a thing.  If you want better "service" like private rooms and shorter waiting lines and more English speaking nurses, you can still pay a private company for deluxe medical care but, since it’s only necessary for them to insure ABOVE what you are also guaranteed to get anyway – that care is a small additional fee, like $150 a month or whatever.  

    This can all be accomplished by having working person pay an average of $500 a month per family in "tax" and your employer would also pay $500 a month per employee in "tax" and that works out to $1.7Tn dollars a year.  Thats 140M working people contributing $500 a month and having their employers contribute $500 a month for their entire family’s coverage.  If a person is earning below, for example, $35,000, then they pay $250 a month, if below $20,000, then $125 a month.  If a person is earning $75,000, then $750 a month and over $100,000, then $1,000 a month and over $150,000 $1,250 a month and up until a person earning $1M a year must pay $25,000 a year for health care as their "tax,"  That would be more than enough to cover all the non-payers and low payers FULLY.   It would save the country TRILLIONS that are and will be owed on medicare and would CREATE millions of jobs as 20% more people in this country are able to get treatment.  I know – The horror!!!

    It’s a joke to think that you aren’t already paying this tax now.  Your employer pays you less if they give you health care and if you contribute, it’s more than $500 per family per month.  You pay deductables and co-pays and people are bankrupted every day when their health care, that they paid for every month for may years "runs out."  You pay taxes that pay for the emergency rooms in hospitals and they raise their fees to you to cover the patients who run out of money and you pay by bidding for the services of specialists who are encouraged by the sytem to charge as much as the market will possibly bear.  It’s very simple, universal health care will cost less and cover more.  You can eliminate the waste in the system by just doing what Canada, Mexico, Europe and Asia do with our own drug companies in negotiating the rates they’ll pay for drugs.  Of course GE/CNBC is going crazy on this because this country is the only one on Earth where GE gets a full $2.5M for an MRI machine – the same machine is sold to hospitals in India for under $1M and that’s AFTER shipping! 

    So go out there and fight for your right to be raped by the medical establishment.  It’s the American way to make sure rich people can screw you while you say "thank you sir, may I have another."   In 1990 our national health care spending per capita was $2,814 ($10K per family), now it’s $8,160 ($32,000 per family) and it’s projected to rise to $13,100 PER PERSON in 2018.  Health insurance is up 119% in the past 10 years and wages are up 34%.  We spend 15.3% of our GDP on health care vs 10% in Canada 11% in France (best in the world), 8.1% in Japan and 8.4% in the UK.  6.9% of our GDP is $897Bn, that’s the EXCESS we pay compared to the UK as a percentage of our GDP. 

    Even with our "great" system, 53% of the people surveyed either skipped check-ups, skipped tests, didn’t fill a prescription, cut pills in half or relied on home remedies in order to save money because of the additional costs of their covered care.  This is not a very complicated issue – we have a system that’s a disaster and its getting worse.  It needs to be fixed and there are models in 100 countries that have worked for decades.  Doesn’t it make sense to at least try?

    CRM/Kustomz – That’s interesting.  My point exactly about health care – it’s ridiculous and I think the people who are against it just have no idea how many people they are pissing off.

    TASR/Cap – Cool!

  228. Colberg … good points.  And Obama is being completely disingenous in his efforts to fire up Phil and his pals, to the point of simply lying (more on this later).
    And you are 100% right, that they can’t administer this little $3 billion Clunker program illustrates how idiotic the whole idea that Obama claims the gov’t can better administer health care and achieve efficiencies, cost savings, cover more people and improve care.  The thought is so idiotic and absurd it shows how in the tank the press is for Obama that this debacle in the making even merits a serious discussion.
    Regarding Cash for Clunkers; the amusing quotes tonight from Ray Lahood patting himself on the back for completing such a fantastic and "wildly popular" program.
    Not so, say the dealers, who are not getting paid.

    Read today’s press … "Car dealers are mutinying" over the program.  Hundreds of dealers in NYC alone have pulled out says AAA.  Dealers say they have gottten paid only 2% of the millions of dollars owed to them by Washington.
    "Its an administrative nightmare" said AAA president.
    1/2 of Pennsylvania’s 950 dealerships have also pulled out.
    Under the rules, DC is supposed to reimburse w/in 10 days.
    Long Island car dealer Richard Howard quit the Cash for Clunkers program yesterday, saying he’s fed up with the government’s management of it.
    "I put the brakes on it," said Howard, general manager of Robert Chevrolet in Hicksville.
    Like hundreds of other car dealers in the New York area, he pulled out of the federal program because of the lengthy delays in trying to get reimbursed.
    Howard said "business was OK" at the dealership before the Clunkers program began four weeks ago, but he had seen a definite uptick in floor traffic and sales since then.
    His dealership sold 25 Chevys under the program’s terms and gave buyers the $3,500 to $4,500 credit Washington mandated.
    The feds are supposed to reimburse dealers within 10 days for the credits. But Howard hasn’t gotten a penny back.
    "Right from the get-go we had problems," he said, such as accessing the crash-prone Clunkers Web site. Then came problems with filing the required paperwork, "a very time-consuming process."
    "It takes about an hour to submit [each one] and they will reject it for minor reasons," Howard said. "If there’s a ‘t’ not crossed or an ‘i’ dotted, they find a way to reject a claim. And on a resubmission, it goes back to the bottom of the list.
    "The amount of money we’re talking about is cost-prohibitive," Howard said. "We can’t float hundreds of thousands of dollars in a system that’s broken."

  229. Phil, when you are not drinking the Kool-Aid w/ your Jonestown buddies, please understand the implications of health care rationing:

    Mark Steyn explains it very well:
    What matters is the concept of a government "panel." Right now, if I want a hip replacement, it’s between me and my doctor; the government does not have a seat at the table. The minute it does, my hip’s needs are subordinate to national hip policy, which in turn is subordinate to macro budgetary considerations.

    For example:

    Health trusts in Suffolk were among the first to announce that obese people would be denied hip and knee replacements on the NHS.

    The ruling was part of an attempt to save money locally.

    The operative word here is "ruling." You know, like judges. You’re accepting that the state has jurisdiction over your hip, and your knee, and your prostate and everything else. And once you accept that proposition the fellows who get to make the "ruling" are, ultimately, a death panel. Usually, they call it something nicer — literally, like Britain’s National Institute for Clinical Excellence (NICE).

    And finally I don’t think this is any time for NR to be joining the Frumsters and deploring the halfwit vulgarity of déclassé immoderates like Palin. This is a big-stakes battle: If we cross this bridge, there’s no going back. Being "moderate" is not a good strategy. It risks delivering the nation to the usual reach-across-the-aisle compromise that will get Democrats far enough across the bridge that the Big Government ratchet effect will do the rest.

    After my weekend column recounted the experience of a recent British visitor of mine, I received an e-mail from a gentleman in Glasgow who cannot get an x-ray for his back — because he has no sovereignty over his back. His back is merely part of the overall mass of Scottish backs, to which a government budget has been allocated, but alas one which does not run to x-rays.

    Government "panels" making "rulings" over your body: Acceptance of that concept is what counts.

  230. Ah Phil, you (and O) don’t take losing very well do you.
    DOA buddy.

  231. The tactic is the same and it is getting very tired.  Those who expose Obama’s lies, are simply called Liars, usually by Obama himself.  Phil, you have been doing it all day.
    They’ve Been Here Before   [Kathryn Jean Lopez]
    An e-mail:

    This particular character flaw was revealed early in the presidential campaign when Obama tried to deny he advocated defeat of the Born Alive Infants Protection Act in Illinois, then accused the NRLC of lying when they pointed it out.  (The campaign—but not the candidate—later admitted the NRLC was right, but issued no apology.).  It’s a pattern:  Those who expose Obama’s lies are branded as liars.

    The National Right to Life Committee sent this out yesterday afternoon: 

    Obama Says "Government Funding of Abortion" is "Fabrication,"
    But the White House-Backed House Bill Explicitly Authorizes It
    WASHINGTON (August 19, 2009) — In a conference call with supporters this afternoon, President Obama said that it is a "fabrication" to say that the legislation backed by the White House would result in "government funding of abortions," and that this is "untrue."  The following comment may be attributed to Douglas Johnson, legislative director for the National Right to Life Committee (NRLC), the national federation of state and local right-to-life organizations:
    Emboldened by the recently demonstrated superficiality of some organs of the news media, President Obama today brazenly misrepresented the abortion-related component of the health care legislation that his congressional allies and staff have crafted.  As amended by the House Energy and Commerce Committee on July 30 (the Capps-Waxman Amendment), the bill backed by the White House (H.R. 3200) explicitly authorizes the government plan to cover all elective abortions.  Obama apparently seeks to hide behind a technical distinction between tax funds and government-collected premiums.  But these are merely two types of public funds, collected and spent by government agencies.  The Obama-backed legislation makes it explicitly clear that no citizen would be allowed to enroll in the government plan unless he or she is willing to give the federal agency an extra amount calculated to cover the cost of all elective abortions — this would not be optional.  The abortionists would bill the federal government and would be paid by the federal government.  These are public funds, and this is government funding of abortion.
    In 2007 Obama explicitly pledged to Planned Parenthood that the public plan will cover abortions (see the video clip here).  Some journalists have reported that Obama "backed off" of this commitment in an interview with Katie Couric of CBS News, broadcast July 21, but Obama actually carefully avoided stating his intentions — instead, he simply made an artful observation that "we also have a tradition of, in this town, historically, of not financing abortions as part of government funded health care."
    It is true that there is such a tradition — which Obama has always opposed, and which the Obama-backed bill would shatter.
    On August 13, NRLC released a detailed memo explaining the provisions of the pending bills that would affect abortion policy, with citations to primary sources. Many of the "factcheck" articles that have appeared in the news media in recent weeks reflect, at best, unsophisticated understandings of the provisions they purport to be explaining, and also give evidence of a weak understanding of Obama’s history on the policy issues involved.  The memo is downloadable in PDF format here:

  232. Slackers/Steve – If you actually care, here’s a very good study on the functional differences between the US an Europe
    Of course I care. I will read it through and digest. However, arguing that the British share of world GDP has grown faster than the US since the introduction of the welfare state in 1920 is silly and redundant. It clearly hasn’t. Please note that in this context,  "Europe" does not exist. Member nations create social policy, the EU doesn’t.
    While formulating social spending policy I would encourage you to consider why Britain has a notable problem with slackers and Norway doesn’t. This may help you avoid any parallel issues here.

    AND I’M WONDERING WHAT IT IS I SHOULD DO.    (blame fox news of course).

    On the defensive, Obama is embracing a new role of fact checker-in-chief, trying to correct untrue claims such as that the proposals would provide health care for illegal immigrants, create "death panels" or pay for abortions with taxpayer dollars. Aides say the situation has left Obama exasperated.
    "Now, c’mon," a mocking Obama told a cheering crowd late Thursday at a Democratic National Committee appearance designed to re-energize activists who were instrumental in his drive to the presidency. "What we’re going to have to do is to cut through the noise and the misinformation."
    "I said during the campaign that the best offense against lies is the truth," Obama said. "And so all we can do is just keep on pushing the truth."
    Yet for all the gnashing from Republicans and fiscally conservative Democrats, he faces equally tough opposition from lawmakers and activists on the left who insist any overhaul must include a government-run insurance option.
    In fact, shortly after his comments Thursday, House Speaker Nancy Pelosi declared the Democratic-controlled House simply won’t approve the overhaul without it.
    "There’s no way I can pass a bill in the House of Representatives without a public option," Pelosi, D-Calif., said after a round-table in San Francisco.
    Obama told his DNC audience — as well as thousands watching online and listening by telephone — that health care was the toughest fight he has faced in office.
    "Winning the election is just the start," he said. "Victory in an election wasn’t the change that we sought."
    That election, though, came with his promise of the government insurance option, a provision that Obama’s team now calls "preferred" but not mandatory. During both his Thursday appearances, Obama declined to call it a deal breaker.
    "What we’ve said is that there are a number of components to health care," he told Smerconish, who is generally seen as a conservative, although he endorsed Obama last year and supports abortion rights. "I see nothing wrong with having public option as one choice."
    He said "the press got excited and some folks on the left got a little excited" when he and top administration aides last weekend made statements indicating that a publicly run health insurance option was just one of several alternatives.
    Since then, Obama has faced increasing criticism from his left flank.
    "And even though some White House advisers seem to have forgotten, the reason the public option has become central to reform is simple: We’re fed up with the insurance companies and we need real accountability for them," liberal said in a message sent to its 5 million members while the president was speaking with Smerconish. "They’ve had decades to fix the problems with our health care system, but they haven’t done it."
    One caller to Smerconish’s program said he sensed the administration was making a misstep.
    "I’m getting a little ticked off that it feels like the knees are bucklin’ a little bit," said the caller who identified himself as Joe. "You have an overwhelming majority in both the House and the Senate, and you own the whole shooting match. … It’s very frustrating to watch you try and compromise with a lot of these people who aren’t willing to compromise with you."
    Obama told his audiences he is trying to reach across the aisle to craft a bipartisan plan, even as he blamed Republicans for delay. He peppered his DNC remarks with jokes and jabs at conservatives that had the partisan crowd breaking into applause and laughter.
    In response, a spokesman for the No. 2 Republican in the House said he had a question for Obama and his team.
    "We would love to know when, exactly — time, date, place — the president or his staff reached out to Republican leaders?" said Brad Dayspring, a spokesman for Rep. Eric Cantor, R-Va.
    Republican leaders in May sent Obama a letter outlining the GOP’s principles and asking to collaborate.
    "And the president’s response?" Dayspring said. "Meeting? Nah. Work together? No thanks. Further discussion? Nope. Instead, they went with, ‘Thanks for the letter.’"
    While the White House insists Obama is still looking for Republican support for a comprehensive health care bill, Democrats privately are preparing a one-party push, which they feel is all but inevitable. Polls show slippage in support for the president’s approach, although respondents express even less confidence in Republicans’ handling of health care.
    Former Republican presidential candidate Mitt Romney said Thursday that Obama is struggling to get a health care bill because he has been too deferential to liberals. Romney, who may challenge Obama in 2012, said on CBS’ "The Early Show" that "if the president wants to get something done, he needs to put aside the extreme liberal wing of his party."
    Phil, maybe you can help out Obama and answer the question:
    "We would love to know when, exactly — time, date, place — the president or his staff reached out to Republican leaders?" said Brad Dayspring, a spokesman for Rep. Eric Cantor, R-Va.
    This seems to be the answer: bipartisanship nowhere to be found:
    From First Read:

    How serious are Democrats about pushing health care through the budget reconciliation process? Very serious. The president has signaled for MONTHS, not days, that he’s willing to go this route. In fact, he hinted at it in an interview with NBC News two weeks ago in Elkhart. The question is whether the threat of reconciliation is about keeping Republicans at the table talking, or whether it’s a serious option. We can tell you this: We know the president’s experience in the Senate has convinced him that the 60-vote threshold seems a bit absurd to him sometimes. If you can get 55 votes for something, you should be able to get your bill out of the Senate, according to those who have talked with him about this issue.

    Maybe, Obama should just chuck his and Pelosi’s idiotic plans and start over, as other Democrats are now suggesting:

    Reboot   [Kathryn Jean Lopez]
    From the Kansas City Star:

    [Democrat] Rep. Emanuel Cleaver told reporters this morning he’s willing to start from scratch on a health care reform bill, as many Republicans have suggested.
    "I’m willing to push the reset button," Cleaver said, although he appeared skeptical about the prospects for any new legislation from a restart of the process. The Missouri Democrat also said health care reform is "too important" to be passed with only Democratic votes, as White House chief of staff Rahm Emanuel has recently suggested.
    Cleaver also said if health reform isn’t passed by year’s end, it won’t happen.  That, he agreed, effectively gives the GOP veto power over any legislation for the next 90 days or so, once Congress returns after Labor Day.

  234. Cap, do you have health insurance? If so who whom is it with? What do you pay? Maybe I can get
    that great plan as well.

  235. Because mine isn’t all that good. Discuss tomorrow perhaps?

  236. Doro, yes I have health insurance; b/c I don’t know who you are and I dont discuss this type of Q on the internet, I will have to say sorry, but that’s all for now.   If everyone wants to detail their own health insurance plans, costs and so forth, it would be an interesting discussion.  But probably not where we should be going here on PSW.
    What I will say is my current insurance like that of many others is less than perfect, but the Dem plans for blowing up our healthcare system won’t make it better; but worse; while adding gobs of debt and tax increases in the process.

  237. Phil, One I have been in the health care space as CEO of Primary Care, which was taken over by Rx Care which was taken over by a large well known HMO, the horror stories on health care would truly make you cringe. This is not political this is real. Currently in the Biomed world as a CEO and company founder, I have seen plenty of hospitals and research centers here and in other countries.
    We can run trials just about anywhere in any other country and enroll patients because an experimental drug trial gives better care than is provide under any current Government sponsored program, and it does so faster. America became great by innovations and hard work. not with welfare and government subsidies. I have seen firsthand heath care in other counties, and I wouldn’t trade our broken system for one shiny new Government program anywhere even with the knowledge of how corrupt our system is, and don’t get me started on HMO’s…I would rather suffer trained medical practitioners of my choice over, mid-tier, imported MD’s and RN’s in a Government program, after all who do you think will be signing up to work as these new 50k per year health provider professionals in cost cutting programs, a Harvard or Yale grad, try again, they will be going into plastic surgery or reading radiology reports where the money is good and not impacted by insurance pay outs. Wake up, this is serious. Why do you think every time the market thinks the public option is dead it jumps up…this is not theory. Think in terms of them telling you your Mom, is going the pain pill route, and that surgery is out because she is 80, no matter how good of shape she is in. These Dictums will become the new reality.
    It is ALL about money and the last people I would trust with that is also the government.
    Slow this process down if you and your Democratic buddies have any clout start with whoooaaaa and fast!

  238. Guys, the truth of the matter lies somewhere in between. I worked 30 years in the health care industry, and I am aware of waste and abuse, if not fraud. I am aware of staggeringly offensive practices by insurers. I have had people in my office who were badly screwed by the system. I have seen how the expansion of insurance coverage transformed docs into over-treaters of almost everything, and I have seen how the rabid malpractice ambulance chasing bottom feeders have caused useless testing to expand spectacularly. Costs have risen almost exponentially, and if you don’t have insurance, you face a bill that would claim your lifetime net earnings.
    And this is better than it would be if the government ran it.

  239. Oh, and just incidentally, all of us are here because we think (hope) that we learn something that will enable us to pay our new tax bill. Maybe we should stick to that.

  240. Neil Cavuto tonite on O’Reilly … slamming ObamaCare.  Most charitable thing he had to say was this (in response to Q "is Obama then intentionally trying to deceive the American people ?)
    Obama "is placing his bets on a Government that has NEVER delivered"   (context being – never delivered on running programs efficiently or effectively).
    Incoming Canadian Health Care director Anne Dose (sp ?) … "Canadian Gov’t Run System is Imploding".
    Former head of Canadian AMA Dr. Brian Day – System is broken.  Issues are Access, Not Enough Doctors, Rationing, Exploding Costs (healthcare enormous proportion of provincial budgets and growing).  1 Million + Canadian patients are waiting for surgery (Canada population < 30 million).
    Just more informed comments …
    More liars according to Obama….

  241. g’nite … busy options expiration day manana….

  242. Cavuto and O’Reilly discussing Obamacare on FOX. I’m sure that was a positive and insiteful piece……

  243. Ciao, and good noght, Let’s focus on working with or against Mr. Stick and GS tomorrow, as that is our short term goal.

  244. Jeepers guys, can we have an NS> prefix or something for Non-Stock comments, there’s a lot of non-market chatter here to wade through tonight.  Phil, what happened to the separate political posting thread?  I can find 8,000 sites to read about healthcare on, that’s not what I’m paying for here.  I referred a friend to PSW recently and his comment to me after the first two weeks was "too political"!

  245. Good Morning Everyone
    FTSE up a little but has been pumped up yet again from the overnight lows. Ditto US futures. Bear lesson of the day …
    The Japan External Trade Organization has released its latest trade figures, which paint a grim picture for foreign trade by the world’s second largest economy. Year to date imports have dropped by 31.9% to $252.9 billion, while exports have plunged 36.8% to $252.2 billion. Most stunning is the disclosure on trade flows with the United States: exports to the US have dropped by 43.5% to $40.5 billion, resulting in Japan’s largest positive trade balance. Another development is that China has now replaced USA as Japan’s primary trade destination. However that is not saying much: trade with China has declined for the 8th consecutive month.

  246. sure had a lot of great social welfare comments today,but they did not make me any money. Seriously guys, can we keep the social & political chatter down & focus more on deal making

  247. Futures really are wonderful things. S&P now over a $1 off the overnight lows. Easy Peasy for the pumpers.

  248. They are really spreading the word that home sales for July are expected to be up 2.2% for the month.  I think they are planting the seeds for a selloff when we miss.  I sure as heck didn’t get my reversal yesterday… so that leaves only today for it to happen.  It will shock you to hear me say that I’m looking for it.

  249. DB, If one were to do it daily, how much money could be made going long at 4:10 pm and selling at 9:15 am?

  250. Matt – Well unscientifically I’d say about $0.75 on S&P futures (daily) in the last month or so. The problem is where/how do you sell if they go against you overnight ? A lot of US data is an hour before open , so if you tried it you couldn’t use options. Also there’d probably be mileage in going long during the stick because it seems that if there is a stick the futures are pumped as well. Perhaps Phil can find a strategy ?

  251. Too political – You are right, I agree that this is a waste of time. 

    Cap, this is beyond your final warning – one more posting of articles by you and ALL of your posts will be held for moderation (and I have no time to get to moderation review so that would be bad).  If you have something to say, say it on your blog and then feel free to say here: "I have a comment on health care at HopeyChangey….  " and link the interested parties.  I think it would be very educational for some to follow your links and read them in context anyway.

    So that’s that – no political discussions, back to work everyone but I guess we’d better not be investing in the health care sector as we are going to have our heads in the sand about that one and heaven forbid someone asks about the long-term outlook on PFE or MDT and the answer may have to do with the current legislation… 

    I’m sorry to those who enjoy a nice political discussion – I sure do and I find the above commentary by Colberg and Barfinger extremely valuable as we have first-hand accounts by people we know who have industry experience and can give us insight you won’t find anywhere else but, we lose the good with the bad when we have to make a rule.  I also don’t have time in my day for this partisan crap and it needs to stop.   Name calling, taking quotes out of context and wild, baseless accusations are not political rhetoric and, since some people can’t tell the difference, all of us will have to go elsewhere for political conversation.

  252.  Good morning Phil & all,
    I hope everyone has a good trading day.
    All I wanna know is what is the trend- up or down, what is the range – narrow or wide, and what are the targets for support and resistance for any given stock I look to trade during the day. 
    GOOG, AIG and SPY have my attention today, just as yesterday… looking to have one hilarious fun time on this August options expiration day !!!

  253.  I’m so glad to see the future up solidly in the green.
    I’m hoping for AIG to have a gap up open at or above 35, then a quick tear upwards above 40 as the bear short squeeze gets pressed really hard… maybe the price tops out around 42.5 resistance…
    If that plays out then ohhhh what fun when the AUG 35 calls from yesterday at .50 will be a 10 bagger !!!
    GOOG Aug 450 calls were up over 1500% yesterday and looking for more today. SPY could have a small gap up open today and hopefully spend the entire day going and going and going up and up and up.

  254. merk, for what it’s worth, using only the option activity within the last month to calculate it, the max pain number for goog is 450.  Using the current month activity is considered more indicative of the strike price then using all open interest in an option.

  255. merk, if you’re looking for more then 1500% return then you will likely wind up with less!

  256. I will be shorting goog after any silly spike up at open.

  257.  Matt… I never pay attention to max pain… its a dumb theory in my opinion
    I doubt GOOG has a silly spike up… I’m looking for a relatively small upwards open above 462…. and then I want to see a relentless steady drive to 470+
    Good luck to ya man

  258.  Matt… when i say max pain is a  "dumb theory"… I mean that I’ve used it before and got burned by it. It doesn’t work for me. So if I use something in my trading that doesn’t work, that makes me a big dummy if I keep using it.
    Trend, range and targets… thats my "KISSboy" way to trade (keep it simple silly boy)
    I like all the hard work Phil puts in to write up about fundamentals, and I use his insights and analysis to answer my three questions – trend, range and targets

  259. I missed part of the action yesterday but now I see what happened to goog as I read everyone’s comments…….option exp a day away, a well-timed GS upgrade, 450 calls up 1500%…..someone made a lot of money…….wow.