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Crashiversary Week – Friday Shakedown – Earthquake Edition

 What’s shaking?

That was a special message for our friends in Japan, who are very shaken today with an 8.9 quake which is, of course, devastating.   Here’s a picture and notice how stuff is just pulverized (before being washed away by the 30-foot Tsunami that followed (on the right of the picture):


Somehow they are saying only 29 dead but I can’t see that.  Tens of thousands of people were evacuated and 4.1M people lost power so far.  Poor New Zealand was recently hit and now they have Tsunami warnings too (as does Hawaii).  



At 3:24 p.m., a large aftershock struck, which could be felt standing on the ground outside of buildings in central Tokyo. People gasped while looking up at skyscrapers swaying gently and construction cranes shaking violently atop half-completed buildings. Glass panels on the ground floor of many newer buildings shimmied but few appeared to break.

Let’s hear it for the World’s strongest building code!  I very much doubt US buildings would fare so well.  

This will make a Japanese rate hike out of the question, probably for the rest of this year and so will be a dollar booster and EDZ will, of course, be flying.  This is not the way we like to win on our bets, unfortunately but it is a very good object lesson about why it is very foolish not to always have some kind of disaster protection in your virtual portfolio – because you never do know when a disaster is going to strike.  

Over time, it’s complacency that kills you…

Meanwhile, my kids are home today because their school is flooded – we are screwing up this planet in all kinds of crazy ways aren’t we?  I’m sure if we ignore all this stuff or call for "further research" (funded of course by the very same businesses that cause the pollution) for another few decades it will all be fine.

Oil is way down at $99.90 – so much for the "Day of Rage," which is kind of a fizzle in Saudi Arabia - If there is such a thing as a "long-squeeze" then you may be seeing it today as speculators need to get out of oil while they can.  This is another great example of why we don’t set hard stops because we had every reason to stop out of our oil shorts on yesterday’s spike except for my judgement call based on the information at hand with which I then decided to employ the "Chewbacca Defense" as what we were hearing simply "did not make sense."  

Overall, we expected Asia to sell off and we expected a bad open and the reason may have changed but the technicals didn’t although now we are below all of our Major Breakout Levels so there’s certainly nothing to be bullish about until we get them back.  

As I said in yesterday’s morning Alert to Members, the Nas 2,675 line is the one most likely to be tested after Russell 800 and we do not expect 11,600 to fail on the Dow or 1,260 on the S&P or 7,935 on the NYSE so we can hopefully  begin a little well-hedged dip buying once oil runs it’s course.  

Libya is still crazy so we’re certainly not going to short oil over the weekend and we’ll take that money and run today.  The very nice thing about being mainly in cash is that it’s so easy to get back to all cash and so easy to pick up new bargains on days like today. 

Best headline of the day so far is from the WSJ:  "The Pain in Spain is Hard to Ascertain" although kind of a late variation of my precient "The Pain in Spain will Hardly be Contained" from last April (yes, it’s been going on that long) – which was the last time I called for getting back to cash – and that move was BRILLIANT!  

We already picked up our disaster hedges on Wednesday, before it all hit the fan and it’s very rare that we get an actual, real-life disaster to cash in on but here it is -it’s going to be a crazy day with lots of decision-making but decision number one is easy – CASH IS KING!  After that, we can be calm about the rest and do a little bargain-hunting which is, as Buffett and I like to say "being greedy when others are fearful" as we are now being rewarded for "being fearful while others were greedy."  

Speaking of fear and greed.  The greedy should be fearful that SWHC (Smith and Wesson and thanks to Stockbern for the heads up) saw a 47% increase in pistol sales and that’s probably not for rich schmucks who want to settle their differences at 40 paces but rather the poor schmucks who are fed up enough with the BS in this country to begin arming up for the revolution.  While I won’t argue the merits of our most sacred right to bear arms – I will point out that people who lived in a rational society would be slightly more likely to be alarmed by a 47% increase in handgun sales during a recession than, say, we are….  Chris Rock has the best solution for this:

Unfortunately, you can reload your Glock at just $11.99 for 50 rounds (if you buy 10 boxes on special!) or about 24 cents per bullet.  Which reminds me that the tweet of the year award, so far, goes to ZeroHedge (thanks Rainman), who responded to news that Saudi Police fired on a crowd yesterday by tweeting: "Rounds used by Saudi police were 5.56; analysts expected 7.62, beat expectations. BTFD (buy the f’ing dip)."  

That, of course, reminds me of this cartoon, from January, as we discussed the very simple and very inescapable logic that inflation ultimately drives revolutionary forces and so we EXPECTED this to happen – the only surprise has been how slowly the people are to wake up and smell the gun oil.  

King Abdullah of Saudi Arabia gets this as he moves to counter protesters by handing out $36 BILLION or about $1,400 per person for each of their 25M people and that is IN ADDITION TO the $385Bn that has already been pledged in a 5-year spending plan that is aimed to "help tackle joblessness and stop young men from turning to more radical Islam."  King Abdullah also battled with clerics by blocking unauthorized religious edicts, or fatwas, and allowing supermarkets to employ females for the first time.  

Perhaps that’s the mistake made by the Wisconsin teachers – they should have threatened to go "radical Islam" and the money would have poured in!  Meanwhile, it remains to be seen how much good even $385Bn goes towards battling Saudi Arabia’s 43% unemployment rate for people between the ages of 20 and 24 – just the age where many young men might make that big "guns or butter" decision.  To keep things in perspective, Abdullah is giving his people the equivalent of $432Bn if applied to the US economy (3 times the Bush stimulus) and he’s giving it to the poorest people, not his family (the top 1%) and he’s committed the proportional equivalent of $4.5 TRILLION over the next 5 years to build the infrastructure that is required to modernize his country and make his people competitive in the global market place.  If the Saudis don’t want this guy to lead them – then send him over here – PLEASE!!!  

Global deficit spending is likely to be back in vogue next week as Japan is looking at many tens of Billions of dollars worth of damage.  This will punish the insurance industry of course but Japan is not like America with New Orleans or the World Trade Center and they WILL rebuild their damaged cities as a matter of national pride and priority so we can anticipate a weaker Yen as the BOJ cranks up the printing presses but also a lot of economic activity as that money (again, not at all like America) is put to use creating jobs and infrastructure as the nation pulls together to help those who are suffering.  

The Greek people continue their suffering despite a $153Bn bailout as 10-year bonds are already back to record highs this week.  Much like America – the Greek politicians labor under a very misguided fantasy that you can solve a fiscal crisis by cutting back government services and undermining the socials safety nets without raising taxes on the rich and, of course, it all ends in disaster – except of course for those rich people who get all their assets out of the country before the second wave of the economic tsunami comes back to wipe out the rest of the working class.  

Markets are becoming more fearful of a Greek government default and are now expecting it to happen more quickly than a few months ago,” economist Ben May said. “Greece is as far away as ever from convincing investors that it can get its public finances on a stable footing.”  “The onus is on EU officials to dissuade the market from the notion that a debt restructuring is inevitable,” said Robin Marshall, director of fixed-income at London-based Smith & Williamson Investment Management, which oversees $20 billion. “They’ve lost investor confidence in any resolution that doesn’t involve some form of restructuring.”

Meanwhile, Emerging markets face a “definitive danger” from accelerating inflation and should resist the temptation to impose capital controls to stem currency gains, said Arminio Fraga, the head of Brazil’s stock exchange and a former Central Bank President.

The Bank of Korea raised interest rates for the second time this year yesterday after inflation exceeded its target ceiling for two consecutive months, joining Thailand and Vietnam in lifting borrowing costs this week amid a surge in oil prices. Brazil boosted rates five times in the past year after annual inflation quickened to the fastest pace since November 2008. “There is a definitive danger and I think we have to watch it,” Fraga told investors at an event at JPM’s HQ in New York yesterday.

China’s February Consumer prices rose 4.9% and Producer Prices jumped 7.2% in February, indicating that the rising input costs are not being passed on fast enough to consumers not to be a drag on Q1 Corporate profits.  Don’t say I didn’t warn you – two months from now I will be linking back to this statement and you will say "I wish I would have paid attention to that back then."  

Oops – time to go to work!   See you inside.  

Have a great weekend and try to stay dry, 

- Phil

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  1. A friend of mine was in Sri Lanka when the tsunami hit there—she was washed out of her hotel room with her family but somehow survived and did cpr on people who were dying or dead--if she talks about it , it is done in a monotonous tone with no emotion whatsoever-- the emotional toll is incredible--just as a side, her nephew was missing and then suddenly he showed up with a stranger holding his cell phone high in the air letting her know that he did not loose it as his Dad would be mad at him.—
    so many horrendous stories

  2. sorry just brought back some memories

  3. Just like that they pull oil under 100.

  4. doesn’t one of our regular contributors live in Japan?

  5. aapl wil probably take a hit…japan is apple’s 3rd biggest market behind the obvious europe, then america.

    $4b in net sales for FY2010

  6. I saw this on justcoveredcalls yahoo group. A webcast training in case anyone has an interest: 

  7. My thoughts and prayers for the wonderful people of Japan…..

  8. Phil, I hope things work out for you and yours as well. You’ve had a challenging winter….

  9.  Sums up my feelings this morning…..

  10.  Phil,
    Ever mindful of your wise caution to not get greedy, would you recommend closing my long Apr $40 USO Puts this morning or do you feel that oil has a lot more to the downside during the next 5 weeks before expiration?

  11. Good morning!  Today’s PP. All data from ShadowTrader.

    The first chart represents the last bastion of support for the S&P 500 Index (SPY) before it faces further downside.

    Granted, price has broken down from the triangle formed over the previous two weeks and closed beneath the 50 day moving average (50ma, red line). But with these technical failures comes the potential of a double bottom or at least a bounce off the prior low level (blue dashed line).

    Alternatively, if price does violate and close beneath the blue dashed line, probability becomes much greater that price will trade down to the next prior swing low (orange circle) and in the process, fill the prior gap (blue oval).

    The daily chart of the EMini S&P 500 Index Futures Contract (/ES below offers additional guidance for near term price.

    We have displayed the /ES chart using the Fibonacci extension levels several times since the 01-31-11 and 02-10-11 issues of the ShadowTraderPro Swing Trader.

    From this perspective, it appears that a move back down to the 50.0% Fibonacci extension level is all but certain. This level (1277.31) corresponds neatly with the next prior swing lows circled in orange on the chart of the SPY referenced above.

  12. Hello Phil, RIO and CLF had recently significant pullbacks and have crazily low P/E (especially RIO). Do you think that RIO (and maybe CLF) is a "buy"? Do you know some intrinsic problems in RIO, CLF that make them so cheap?

  13. Great Charts Pharm

  14. Good morning.  I have been a member for the last ccouple of months, watching and learning before commenting.  I live in Hawaii so very difficult to watch market opens.  I am visiting my second home in the Dominican Republic this month and enjoy this time zone for trading but have been in the US embassy working on fiance visa for the past couple of days.  Phil has converted me to the "cash is best" strategy so went to all cash while away from the computer.  I want to say thanks to Phil and the other regular contributors for helping me to vastly improve my trading skills in short period of time.  Thinking of ways to enter today,  Phil,what do you think of UUP calls?

  15. Does the quake trigger a liquidity squeeze?  interesting article on zero hedge.  On a side note, I was working at Barings in London at time of the Kobe quake in ’95 which blew up Leeson’s short straddles on the Nikkei, collapsed the firm and resulted in its sale to ING for a pound.

  16. These images from Japan this morning were just horrible! I have been trying to connect with a vendor there and so far, no luck! I hope everybody is OK!

  17. Pharm, I have DIA already under the 50% Fib extension on a weekly chart.
    Looking at the action on the oil market yesterday, you can see what scam this guys ran with the news out of Saudi Arabia! Unreal, all these guys were long and they hype up an incident there to run up the price $3 so that the big guys can exit and then let the small guys (who obviously don’t have computer for HFT) hold the bag until this morning! 

  18.  $25KP Moves. 

    I do not have time to check prices – take money and run on FAZ short calls, USO long puts and EDZ of course.  

    More to follow.  

  19. Phil, 
    Since all the way to the end the Dow was balancing the 12K line, I never got the order in for the DXD 18′s as part of the combo sale with the short DIA 118.75 sale (which I did get unfortunately a day before yesterday). Would you enter the DXD’s today or anything better to cover those 118.75′s? Or (I guess I shoulnd’t be asking this) leave the naked Puts to hopefully expire next week?

  20. Phil / Oil – thx for your great call on oil.  i was tempted to go long earlier in week but did not.  Did not short it either but no harm, no foul.  next time! 

  21.  Phil you mean FAS calls?

  22.  That goes for all short plays that can be cashed.  The volume on the move down was low and easily reversible.  I think we’ll have dip buying in anticipation of stimulus from Japan and maybe us too.  

    I am liking the DIA March $120 calls this morning at $1.03 on a bet we hold 11,950 on the Dow so that’s our stop line and we ride it up.  Let’s get 10 in the $25KP.   

    Oil is trickier but I do like the futures off the $100 line (very tight stop below) as well as the USO TODAY $41 calls for .15, which is a fun craps roll where you can buy 10 for $150 and if oil spikes up into the close you may get a 10-bagger.  With a trade like this – I like to buy 2x and get 1/2 out when it doubles and just kill the trade at a 50% loss so you lose the same 1x anyway but have a 50/50 chance of getting a free ride.  

  23. what the heck is this the ppt

  24. GMCR – PUT UR ORDER IN NOW FOR 1.10 to SELL 1/2…..ASK is 1.11…

  25. Pharmboy
    Is that  GMCR rec.  for the 25kp

  26. Yes, 25Kp.  My recommendation…remember when we DD, we get 1/2 out.  We missed it on INTC, let’s not miss it here.

  27. Pharm: Really appreciate the reminder on GMCR.

  28. 25KP/Phil – he says "FAZ", I say "FAS", right?

  29.  We’ve been given a tsunami warning in central Calif:  3-7′wave to hit at 7.30. Maybe…

  30. we only have FAS in the 25kp

  31. $25KP Moves:

    • 10 HOV March $3.50 calls, now .30 can be rolled to the Apr $3 calls at .85 for net +.55 ($550) and we’ll hope that comes back. 
    • C is fine.  
    • UUP is fine. 
    • EGLE is not fine but not much to do but wait. 
    • On the 8 DIA May $122 puts, now $6.20, I want to roll them to 16 May 114 puts at $2 and roll the 8 short March 31st $122.75 puts, now $3.75 to 16 March (regular) short $120 puts, now $1.50.  Sorry this is complex but it’s the right move to make. 
    • FAS is fine as naked April $32s have lots of time to recover.  
    • INTC not looking good at all, let’s spend the .34 ($680) to roll them out to the Apr $21 calls.
    • FMCN we hold as is.  
    • GMCR we hold.

    There, I don’t think I missed anything…

  32. Phil
    Don’t forget the DIA 120 calls just added.

  33.  Phil, 
    USO-- not sure I follow if you enter 2x (20 @ .15= $300). If it doubles ($600) and you take out 1/2 ($300) you already have a free ride. How can you lose the same 1x? It’s already a free ride.

  34.  what is wrong with SPWRA? they are in free fall for whole week

  35.  with the market sudden downturn, if you haven’t bought the DIA 120 calls yet, would you wait?

  36. OK, that takes care of that and now, on to new business!  

    How is everyone doing?  

    By the way, great example of why it’s generally good to be balanced as there was no major urgency to do something other than simply take advantage of the opportunity on the short side.  

    Obviously I’ve decided to buy the F’ing dips again – where is a better, safer place to put money now than the US?  We could have a global meltdown over the weekend but disasters are (as the Chinese say) opportunities and this one gave us a pretty good sense that these levels are likely to hold because EVEN a massive catastrophe isn’t taking us much lower.  

    Sri Lanka/Savi – I remember that one.  Very bad. 

    Woops, there goes 11,950 on the Dow – so much for strength….  It’s all about 2,675 on the Nas but still, the volume is low and it’s to be expected that we get waves of funds deciding to cash out – if only to re-allocate for different buys later.  Volume on Dow at 10:10 is just 29M so look for a cross back up to play the bull side.  

    AAPL/Lunar – The quake, thank God, mostly hit northern farming areas – probably not much effect to AAPL and, as I said above, in a normal, compassionate nation, natural disasters are stimulative as the Government steps in to rebuild the damage and pushes money into the local economy (as opposed to giving it to bankers).  

  37. Could someone tell Income Trader that his thread is broken like Pharmboy’s the other day, and we can’t see his comments?  Today is usually the day to open April trades. Thanks

  38. PHIL / Pharmboy
    DIA 25kp… I’m lost . Would you pls tell me the positions that we are end up holding after all this moves. I made a mistake in my orders and dont know what I should have

  39.  rdn4evr - he sent an alert just now for a trade.

  40. DIA in 25KP –
    Your roll used up $9600 in margin !

  41. williex / ppt — Plunge Protection Team

  42. Something super weird happened with FXE options and others, wild, huge gyrations, now an immense bid/ask spread, I suffered large losses which were cut in half in minutes, hardly any movement in the underlying, I understand nothing so holding firm.  Can options deviate massively from the underlying during a perceived crisis?  I kinda thought they were related.

  43. AAPL/Board- Did my part for stimulus (and AAPL) by shelling out $800 for the IPAD2. Have to say I am like a kid on X-Mas Eve-can’t wait!

  44. Pharm
    re OPK
    Do you have any feel for their chances in their stage 3 trials?
    obviously their CEO believes in it

  45. 25Kp/cnar -  I will update as I can.  Traveling down the coast in a few minutes…

  46. Japan – fwiw, just saw a snippet on the news about ShelterBox. Looks like an effective disaster relief org/package. 

  47. oknoman/iPad 2, me too, will get one tomorrow. :-)

  48. Finally finished the "r u ok?" communique with the friends and fam in Japan.  Phil is right. That area is mainly farms, countryside and fishing towns who have been suffering earthquakes quite often lately.  The major metropolitan areas of Tokyo and Osaka suffered major disruptions, but minor damage.    I think a good comparison would be a hurricane ravaging Louisiana and Mississippi and flooding New Orleans — a terrible tragedy, but not something that would wreck Wall Street.
    However it sounds like the Miyagi and Iwate areas just got pulverized and the next scariest affect of earthquakes: fires -- seem to raging through some of the cities.  Its pretty terrible.  This is why the Japanese both respect and fear Mother Nature.

  49. Phil, I have 400 shares of KMP in my OptionsXpress acct with 2K in cash (only trade KMP in this acct), I just sold 12 June 67.50 puts for 1.35. I don’t have portfolio margin – did they make a mistake or with that small of an acct did they give me PM without telling me. Or am I looking at it all wrong? In my other broker accct. I doubt if they would let me make this trade. Thanks

  50.  Out of all dow short plays and looked at my 2011 trades and I’m 18 of 19 for the year with over 30% overall gain.  All from this site.  This has been an awesome last two weeks.  Thanks Phil.

  51. Oknoman – I will have to check out the iPad 2 tonight. I remain (currently) unconvinced that its worth upgrading my 1st generation.  I’m not saying that won’t change once I hold it in my hand.  That being said I bought an Apple TV this week and its well worth the $99. Highly recommended.  There was a small blib at the bottom of page 3-ish in yesterday’s Financial Times about Apple TV’s new contract to stream MLB for $65/yr.

  52.  There is a Tsunami warning at my beach (I live in Santa Cruz Ca). Arriving in 15 mins.  I just went out to walk my dog.
    200 people on the cliff watching and an extra 30-40 surfers in the water!  So much for heading to higher ground!

  53.  Phil, at what point would you go long oil?  

  54. LOL… there was a skit from Chris rock in the comments box?

    Just hope their NP stay together, I believe Japan has 19.

  55. It’s curious that Yen futures are up so much after their natural disaster. I was already short both in Forex and the mini-futures and doubled down on the spike this morning. Like you said Phil, I’m not happy about making money off of something like, but at some point their currency is going to have to be devalued a bit.
    Iphone water damage – Anyone ever have their information recovered from the Iphone after water damage? If so, how much did you pay? My daughter is potty-training and I placed my phone on the counter (a little too close to the edge)…. When I picked her up she managed to hit it and knock it into the toilet. It was underwater a couple seconds while I put her down and debated sticking my hand in  I never had synched it up to my computer or anything so I lost all my contacts and music……

  56. jromeha – put your phone in a bag of rice ASAP!

  57. Phil, FAS April 32 can be rolled to 31 for .35. Can be paid for by sale of half March 31s at .6. Makes sense to execute?

  58. Phil,
    I’m not understanding.  When the dollar drops, securities have been rising.  That hasn’t been the case lately.  Any idea what is going on?

  59. jromeha
    Rinse it well with distilled water (better) or water from the tap if you have nothing else – then put it in the bag of rice in a warm spot.

  60. Phil, in my IRA (on TOS) I am unable to make the roll from the DIAMar31 $122.75 to 2x Mar $120.  Well, i was able to buy back the short $122.75s but now I can’t sell the Mar $120s.  Its saying max loss is $47k.  Is there any other way to play this?  Could I temporarily roll the May $114s to May $120s?  Then after exp. roll them back to $114s?  At this point I am only long the May $114 puts and a little worried about a spike up

  61. Jomama/Edro – thanks for the advice, I heard that a couple of times from the AT&T guy and Apple guy when I went down to Cincinatti. Unfortunately, I did not do that after it happened and we are past the point of rice being an option. Now it is data recovery or bust…

  62. Hi Phil Dia matress i still have june 123 put, bot back all short put already, hold the long put over the weekend or take some profit thx

  63. Me and mine/1020 – Oh the only danger we have is kids getting their shoes wet!  It is getting bad in our town though as the people who live down the river have now had 5 "100-year flood events" in the 13 years I’ve lived here.  This kind of stuff is happening all over the World but it’s an "inconvenient truth" nobody wants to talk seriously about.   The Government won’t even change the flood-plain maps, which would lower the value of the real estate in flood zones (and force additional asset writedowns for banks) in huge areas around the country.  Maybe when NYC is underwater they’ll admit there might be a temporary issue… 

    USO/CSL – ALWAYS sell into the initial excitement or When in doubt, sell half.  I don’t really think we need to have a 3rd rule other than, perhaps "Go to school and learn the definition of ALWAYS."  8-)

    Good charts Pharm!  

    RIO/Alik – I’m not all that confident in commodities holding up against a rising dollar so that does not appeal to me.  CLF is more of a workhorse and I do like them long-term but also, I expect them to re-test the 200 dma at $70 on a good pullback.  Since you can sell the 2013 $75 puts for $14.50 and buy 2x the $65/80 bull call spreads for $8 each and that’s net .75 per long on the $15 spread with a $28.50 upside at $80 ($6.30 in the money now) against about $7.50 of net margin (plus the cash) and the worst case is you own 1x of CLF at net $76.50 – I would have to say that’s an entry I can live with.  

    In general, commodity plays should have p/es of 10 or less – they are volatile, unsafe investments which, traditionally, give investors a premium for taking the risk.  Markets have been insane for so long most investors seem to have forgotten this.  The same is true for IBanks and oil companies!  

    Thanks Dobe!  I do like UUP and, interestingly, it’s down today as the Dollar is being pounded down to 77.31 for no reason at all except to prop up the markets, which I find very disturbing as it may be masking some exits by the big boys.  I think the April $22 calls are certainly worth a shot at .33 as UUP is at 22.11, as if the dollar has no chance at all of coming back.  Maybe they are right but it’s pretty cheap to be a contrarian here.  

    Liquidity/Terra – With the amount of liquidity that is sloshing around right now, I kind of doubt it but a good reminder to be careful.  On the whole, I am still liking my premise that this is nothing more than a good excuse for Japan to drop another round of stimulus and there will be minimal impact on the region but, you are very right, it’s nothing to go crazy about until we see where the chips fall next week.  

    Tokyo seems fine and we have friends in Kyoto who had no effect (thank goodness – such a beautiful city) but lots of conflicting info so far as to the extent of the damages, number of injuries, etc…  

    Three reasons oil is dropping today: the Japan earthquake is a blow a major economy completely dependent on oil imports, and demand likely will slip; yen likely will be repatriated in large numbers to pay for reconstruction; the “Day of Rage” pretty much fizzled, so the Saudis should still be pumping oil. 

    Japan’s earthquake is upgraded to 8.9 magnitude. 4M buildings around Tokyo have lost power. Government media firm NHK is broadcasting live images of a tsunami hitting Miyagi prefecture in Sendai area. 

    Japanese officials declare a nuclear emergency at two power plants near Tokyo as the cooling systems are not working properly. The plants have been shut down and there has been no radiation leak. 

    Oh no!   We know what happens when the words "Japan" and "Nuclear Disaster" appear together:  


    A large police presence on the streets of Riyadh appears to have prevented any sort of protest in Saudi Arabia’s capital. Thus far, demonstrations today have been confined to the Shiite dominated eastern part of the country. Oil remains down, but off of its lows. BNO -1.0%

    No restraint is being seen in Yemen where a good portion of the country is taking part in the "Friday of no return" demonstrations. Yesterday’s offer of minor political reform by President Saleh fails to ease tensions. "We don’t want initiatives, we want him to go."

    Aflac (AFL) -3.2% premarket following the earthquake in Japan. Aflac is the leading insurance company in Japan in terms of individual policies in force, and the country accounted for 75% of its total revenues in 2010. Other shares with Japan exposure: SNE -2.4%, TM -2.4%, HMC -3.9%, BRK.A -1.4%, PRU -1.8%

    Duh!  Solar stocks are down across the board following last night’s alarming warning from Energy Conversion Devices (ENER -25.3%) that 50% of its FQ3 sales might be affected by potential European subsidy cuts. Street analysts respond with a flurry of caution on the sector. Also: SPWRA -4.5%, ESLR -10.8%, JASO -3.5%, LDK -3%, CSIQ -2%.. 

  64. Jromeha: I had a similar incident , only difference being my daughter pushed the iphone – she said ‘the iphone wanted to jump in to the water’. I didn’t hesitate to pick it up. :-)   washed it and wiped it clean. Put it in towels along with desiccant packs. Used hair dryer. It was all fine next day.

  65. Hello Phil, PWER is 7.28 now – 6% lower than yesterday (apparently on comments of John Segrich , the manager of Gabelli’s Fund that it is one of the most important short positions of the fund). Once you mentioned that you like PWER above 11$. Do you like it at 7.27, or you recommend to wait until it drops more? (The company has 2$ cash per share, so it is even cheaper than it seems).

  66. Phil / Reaction   Got to be impressed that Japan and higher oil are not shaking this mkt.  Maybe ‘ppt’, but low volume, so no panic by institutions.  I’m thinking this mkt doesn’t begin it’s correction until 2nd qtr results report the growing impact of cost inflation on margins.  Maybe I need to lift some of my broad hedges for a while, eg RWM, and hedge again closer to earnings season (or any time RUT hits 840)?  Meanwhile, I like specific industry shorts like restaurants DIN, DRI, cruise lines etc which will have trouble passing on their costs.  ZSL silver still the etf with the furthest to fall.

  67. Phil — you rcomment yesterday was to keep net short into the weekend, since not much follow through downside, are we should neutral into the weekend ?? thx 

  68.  TSO – Refiners and crack spreads are not my specialty (I’m better at wise cracks!).  Will they eventually role over here?

  69. The first person sold her spot for $900 at the 5 Ave Apple store this morning for iPad 2. 

  70. Maybe the traders watched enough volatility in the Japanese videos….certainly not much in the market today.   Even NFLX is behaving like a normal stock.

  71. Wow, really weak action given the dollars clubbing.  As I said yesterday, I trust this market even less then normal.  However, without POMO it seems pretty safe we won’t be rocketing up-

  72. tuscadog     Here  is what can happen to a stock when the ceo is truthful about rising input costs  (ZUMZ)

    March 10 (Reuters) – Specialty apparel retailer Zumiez Inc warned it could post a loss in the first quarter on rising input costs, sending its shares down as much as 8 percent in extended trade.
    "The cost pressures are real and it appears they are here to stay, at least for the foreseeable future," Chief Executive Rick Brooks said on a conference call with analysts.
    The weak forecast comes as a surprise after Zumiez, which has been outperforming peers for a long time now, posted a 12.8 percent jump in same-store sales in February, trouncing analysts’ estimates of a rise of 4.2 percent.
    Brooks added that the company, which sells clothing and equipment to skaters and snowboarders, might pass on the higher costs to its customers by raising prices of some of its products.
    "We, like every other retailer, are trying to figure out whether or not that is going to work based upon what the consumer’s reaction to those those prices," he said.

  73. Looks like Highlander is right on it that they will try to pin AAPL to 350… 

  74. amatta/AAPL, also, lines in front Apple stores and 3-5 days shipping change to 2-3 weeks shipping time on ordering online. 

  75.  Opinions about Vale, Rio, BHP?  Basic materials up, but I doubt Japanese rebuilding will change much.

  76. Great song – but that clip misses the most apropos line for this morning "History shows again and again that nature points up the folly of men".

  77. Phil,
    I just now have been able to check in. Since I missed the pop in EDZ this morning, should I hold now in the 25kp?

  78. Phil – I know that the $25kp trades are not generally day trades.  Are the DIA $120 March Calls this morning meant to be a day trade?  Just planning ahead. Thanks.

  79. DXD/Amatta – I had to just look to see if I was on the wrong day’s post.  I know we talked about this and I know we did finish below 12,000 yesterday.  Now I don’t know what to tell you as it would be chasing and starts to get ridiculous so I’ll just tell you I would note that we are NOT at 11,875 and, even if we were, the DIA $118.75 puts (now $1.02) can be rolled to the April $114 puts (now $1.10) for even or better and that is now 11,400 on the Dow, which is another 500 points down from here and if, SOME TIME, between 11,950 and 11,400, you do find it in your heart to finally grab a cover – you should be OK but, for now, I am bullish above 11,950.  

    Oil/Terra – Yeah, that was a tough call too but now I officially do not know which way it will go but the odds are slightly favorable for an up move into the weekend (the 2:30 NYMEX close). 

    PPT/Willie - Plunge Protection Team.  It’s The Great Reagan’s officially sanctioned manipulative market team (as opposed to the unofficially sanctioned team run by Lloyd and the Fed).  

    GMCR/$25KP, Pharm - Good call, we sell 5 in the $25KP at $1.10 and leave 5 at net $1.10.  

    FAS/$25KP, Snow – Sorry, yes that is FAS, not FAZ of course. 

    DIA/DC – Damn, we just got those, you don’t expect an adjustment already do you?  

    USO/Amatta – If you buy 2x at .15 and stop out at 0.7 then you lose 2x times 0.08, which is .16, which is about as much as losing 1x.  In other words, if I’m willing to lose $250 on an all or nothing, then I can put down $500 and, if it goes up to $1,000, I take 1/2 off the table and I have no risk.  If it drops to $250 – I take it all off the table and I’m no worse off than if I had let the $250 ride to the bitter end.  

    SPWRA/Tcha – See news.  

    DIA/Rustle – You mean the March ones?  Those are a gamble, they will be right or wrong so it’s the same as if you decide to play a round of blackjack or not – sometimes you feel like a risk and sometimes you don’t. 

    Income Trader/RDN – I think he fixed it - looks fine on my Chrome Browser and he does have new trades.  

  80. Phil:
    Any play on XRT?  Will it be the second QTR. that higher input costs begin to reduce margins on many of the retailers? It has been relatively stable in lieu of all the news.

  81. PHIL
    Im holding 10 TZA Apr 38/42 Call Spread as replacement hedge for the EDZ in my 25kp.  Any suggestion
    Also we or I sold 1/2  (5) GMCR  positions (puts) as per Pharmboy earlier rec.  Are you noticing that in the 25KP?, Thank you

  82. Matt,
    This is an interesting day.  You’re right by using the word "trust".  I wanted to go long at the open and chickened out.  They’re now giving all the signals that we’re going to have a bust out to the up side, but it feels like a trap for the longs.
    I’m staying cash until Monday.

  83.  $CMG daily chart w/ support, resistance, fib levels —

  84. Phil, Do you like buying DE on this pullback?

  85. Phil, on my AAPL play looks like they’ll pin 350 today and if so I will be on my Mar 355′s for around $3.00 (after the weekly 350′s I sold yesterday expire). Would you roll down to the Mar 350′s for $2 and sell the 355′s for $2.75 to be in the spread for net $2.25?

  86. Adding to JRW’s levels yesterday there is strong support at 79.27 going back 3 months.

  87. exec, prolly a good move.  Look at the floor they are trying to put under the Dow.  At least 5 touches to the 11944 area.  What’s interesting is that correlation between the indices is pretty weak.  They are all kinda doing their own things.  No idea what it means.. other then they aren’t on lockdown anymore. 

  88.  Phil
    I was out of FAS before the last drop (didn’t play the short march). Would you recommend getting back in for an April naked calls?

  89. DIA/$25KP, Cnar – We now have 16 May $114 puts and we have 16 short March $120 puts.  That’s all there is to it.  

    Margin/Edro – I know that but if we make $2,400 next week it will be worth it, right?  

    Deviation/ZZ – Yes they can.  Index options eventually adjust to reflect the movement as they are rebalanced but, in between, they are driven by sentiment, which will do whatever sentiment does.  Again, a very good reason to A) not use hard stops, B) always have dry powder to work with and C) Never be in any position you wouldn’t be happy to double down if it were cut in half.  

    IPad/Okno – On behalf of AAPL shareholders everywhere, I thank you.  And we’re back to $250 today too!  

    Coast drive/Pharm – Watch that tsunami warning!  

    Shelter Box/Scott – I don’t know that one.  I’m generally very careful about sending money to newer agencies.  The good old Red Cross puts over 90% of the funds to work.  With others, you need to know who you are dealing with.  Nothing at all against Shelter Box – I don’t know them but I see it and I wonder if I am simply overpaying for supplies so some guy can make a fortune stocking these things?

    Japan/Kinki – Some of the footage is just shocking.  Whole town washed out to sea…

    KMP/Jomp – I don’t know with Oxps but TOS says that trade will cost about $10K of ordinary margin.  I find that very strange.  The danger is that, if you only have $2K in the account and the contracts lose $1.60, that someone will wake up and liquidate the position – maybe even sooner once it goes against you.  

    Nice Rustle – Congrats!  Don’t forget it’s OK to take 10% of that money and take a little market break.  It’s always good to get away and remember what it is you are playing for (kind of like cashing out and leaving the casino for a little while).  

    Long on oil/Rustle – At $100! 

    Yen/Jrom – I agree, this is very, very strange with the Dollar down at 77.25 and the Yen just 81.85 to the dollar.  

    Damage/Jrom – Just go give it to the geniuses at the AAPL store – they are really "can do" kind of people. 

    FAS/Mampcs – Yes, that is a very good roll.  I missed it – nice job!  

    Dollar/Exec – Well it’s worrying if the dollar drops and stocks don’t rise.  It possibly indicates that the market is weaker than it looks and the weak dollar is masking what could have been a terrible day for stocks and commodities.  

    Europe closed down just 0.2 on the FTSE, Dax down 1% and CAC down 0.6% so generally calmer than we would have thought and that is keeping me optimistic for a bullish (or at least a stick close).  

  90. Just checking

  91. has no one posted for 25 min or is something amuk?

  92. PHil/Geniuses – I drove over an hour in a conditions described as a ‘wintery mix’ to the geniuses at the apple store in Cinci, they spent about 10 minutes and told me there was nothing they could do. I have been reffered to Drivesavers, a company out in Cali who quoted me anywhere from 400-1100 with no charge if they could not recover anything….

  93. Jromeha:  I have a friend who did something similar; he let it dry out for a couple days and it started working again…..

  94. CSCO making new 52-week low at $17.80.

  95. OPK – is that PSW members buying?  Let’s get it back to $5.  Also, CERS back at a nice level to get in if one missed the first time up to 3.60.

  96. ARRY moving…yeah on that DD.  CRIS, IMMU and MNTA still in the zone.

  97.  Phil/AAPL, I am short 2x AAPL 345 calls (@17.50, now 9.45), which were being protected from a large run up with 1x long Apr 370s (@8) and 1x Jul 370s (@19). With seven days to expiration, how to adjust the Mar 345s? This position is the result of many months of adjustments and trying to strangle AAPL, so taking the profits from this trade today would still have me at a loss.

  98.  Pharmboy / OPK
    do you recommend to sell some puts here? I bot shares and sold half sep.5s calls

  99. Hello all from Sabrient,
    Pharmboy, on OPK – What do you make of the $250 Million shelf offering which they took out $100 million at $4.75 last week.  Do you think they will need to fill the other $150 Million and at what price? 
    Sabrient has one employee living in Hawaii who was evacuated to 23rd floor building at 11pm last night.  Hard to put into words as we had an employee on the top floor of towers during 911.  Thoughts with anyone who has or knows anyone in Japan.
    Still shaking my head about GMCR moving 40% while the SEC has them under investigation and $6 million per month going out in legal expense to fight the class action lawsuits and handle SEC and cash balance dwindling again.  Short squeeze can create new opportunities as it had to have played a large roll in the 40% move.  CNBC "analyst" barking up $90/share on GMCR last night.  Interesting valuation metrix he must be using.
    Best to all, Scott

  100.  Pharmboy / CERS
    how you recommend to open new position here? sell calls & puts? how many?

  101. bought 20 CERS May 2.5    Calls but transaction not showing up in totals.  ??

  102. I am having trouble with my TOS executions.  I send a limit order out and my execution is not the limit order.  I called TOS and got a response that I have to click the lock button to lock in the price, otherwise it fluctuates and I usually get the worst price.  any one else have this problem

  103. Phil – i got out of your DIA 120 call trade today for about 15% gain.  would have been more if I had doubled down.  thanks. 

  104. TOS / williex – I’ve not had that problem and his explanation makes no sense. If you send a limit order it should be the limit at the price you sent, otherwise it’s a market order. I’ve never heard that you need to lock the price before sending it. The lock button kicks in when you manually move the price – it’s locked automatically so the price doesn’t shift on you with market moves. Then you need to be alert to unlock it if you decide to look at or trade a different strike, month, etc. because it will hold the price you set before.

  105. For anyone trying to follow Income Trader on the apparently still broken thread under his tab, I checked his old blog site and found that he did post the new April trade setup there.  Here’s the link;

  106. williex/TOS – i’ve also had TOS readjust my price on me a few times. I wish I could get the auto-adjustment feature to center on Mark instead of on bid/ask. I haven’t figured out how to change that setting though. It’s generally not a big deal for highly liquid instruments, but it bites hard when you get readjusted on something illiquid and pay the ask when you could’ve paid mark.

  107. PHIL
    DIA 120 Call 25kp.  I understand its a day play ….when do we take profits?

  108. Phil – ‘Gamble, blackjack’ Haha from your 11:14am post.  Sans the Vegas ambiance why would a trader play blackjack? If one can’t get their fix between the US, overnight Asian, early morning Euro zone and futures markets they had better be in a self-help group.  That being said I am going to name my first born ‘DIA.’  Great call and a great week overall!

  109. williex – One other thing. Always check the confirm pop-up that the price is what you’re expecting. What the guy probably referred to is a quick change in the price from the last time you look and when you hit Confirm and Send (if you’re buying at the Ask and haven’t moved it yourself, thus locking it). Slow down and be deliberate. For myself I want to be cautious and avoid the day when I realize too late I just sold 50 when I meant to buy 5, or whatever.

  110. CERS – I am buying stock.

    OPK – I have both the stock and sold 1/2 ept $5 P for 1.70.


    Scott, OPK – the CEO owns 1/3 of the shares outstanding.  He is formally from IVAX, and sold that to TEVA for a nice bundle.  Insiders own a ton of the company.  I am betting that they are high on the devices they own, and NVS/Alcon, or another opthomology company may want to get in on them.  This is gonna be a huge field with all the baby boomers having eye issues.  I will do a little blurb on them this weekend along with a few other updates on some things we have.  I am also thinking of BMY for another, as they have a few things in the pipe that are interesting. Off to a meeting.


    Crest of the tsunami was 1-3 ft here in San Diego.

  111. Scott – Just talked to relatives in Hawaii.  No worries.  The warning is being downgraded to alert.  So far on my island of Maui the main surge from the tsunami was only six feet.  Your employee must be on Oahu as none of the other islands have 23 story buildings.  The disaster folks always overreact to the potential problems.  Most of my friends were surfing today.

  112. Pharmboy, a few months ago you were liking DSCO so I picked up some at 3 with a DD at 2 but it’s looking pretty broken, your current opinion?

  113. Thanks dobetsill.  Very good to hear.
    Pharm – OPK, I am very high on the company as well.  I like the insider buying and history.  I was just impressed and concerned at the same time when they sold $100 million at $4.75 last week.  Good price for raising capital at this stage was the good news but the concern was the overhang of needing $150 million more and when/what price that would come in.  I was a little surprised that the bid didn’t hang around the offering price after raising the $100 million.  I will look forward to reading your piece on OPK.
    Thanks as always, Scott

  114. Craps roll on AAPL wk2 350 puts at $0.25. Current pain 345, seems to be stalling here. Even with a 350 pin, should make some money.

  115. Pharm – What is the entry on CERS? Is there a recommended spread?  Thanks

  116. Phil: Morning. Regarding your post to ZZ on Deviation ">>>>>> never be in any position you wouldn’t be happy to double down if it were cut in half" Buffett says exactly the same thing… Stocks routinely vary in price by large amounts and if you can’t stand to see a position go down by 50% then you shouldn’t be in the game.

  117.  It’s amazing. Obama starts talking and even the bots go to sleep :)

  118.  There was always a beach party in Maui on the occasion of a tsunami warning in the ’80s, and probably still are.  Good chance to see your friends.

  119. Looking at my short AAPL 350 calls expiring today hoping for that Peg. I have noticed in the past that even at the close of the day , calls that are in the money end up with premium. How can that be?  

  120.  Anybody follow Medifast (MED)?  Notice it’s down 25% to 16.44 and it wasn’t too long ago it was 24.  Wonder if it’s possibly a buy.

  121. Iron Condor by Incometrader
    Just closed out the 875 short calls at 0.05, trying to sell the long calls for a nickle.

  122.  Manimal:  Blackjack is sort of a busman’s holiday, admittedly, but if you’re with other people who want to head to a casino, counting cards can be mildly amusing.  Pro’s have it tough, but an amateur can show up once in a blue moon, bet the minimum, wait for an awesome count, throw you wallet on the table, and get out of Dodge.  I did it on Xmas break; the pit boss was not amused by the result.  +27, as I remember.

  123. Phil, 
    I haven’t been in any of the DIA mattresses on the 25K… would you recommend jumping in now? (are you up or behind on those?) See if I finally get into one of the ones I have missed where I can be at an advantage…;-0

  124. rustle123, I see that MED needs more time to complete their filings which isn’t a total negative in and of itself.  With a 25% expected earnings growth rate and with the 25% hair cut today a p/e around 10 it would seem like a good play.  The devil is in the details as always and so that is caveated with the hope that the delay doesn’t mean a restatement or miss in earnings.  They anticipate $1.42 for the current year so in general I don’t see why it wouldn’t make a good addition at these levels.

  125. The company (MED) is saying they need extra time to review expense recognition in prior years which I suppose is leading many to believe that they may have to restate.

  126. blackjack / zeroxzero – I find it amusing that the first sign someone is "cheating" at blackjack is if they win big and beat the house. While it’s not "cheating" to set the odds in favor of the house and rake in the suckers’ money, if someone comes along and outsmarts them, then the law is somehow on their side.

  127.  Pak:  You’re talking about Goldman Sachs, right?

  128. Pharmboy
    DIA 25kp  120 calls .  whats the rule on these day plays… Do we take profits at 20% or wait for Phils confirmation
    Tnank you

  129. DIA/Daveo – Did you not DD on the long puts?  You can make that roll but it’s will cost you more delta if the Dow heads higher – I would call TOS and say "what’s up with that?"   The max loss on the spread is obviously $6 x 1,600 contracts – no possible way they can come up with $47,000.  

    DIA/Gucci, ALL – The premise on the DIA’s was we are flipping bullish so we take as much profits as we can on our long puts and sell as much premium as we can to suckers who think the Dow is going down more.  

    IPhone/Etrad – From the toilet I think I’d still go pay the $99 for a new phone! 

    PWER/Alik – Down with the solars and I like them for a long-term trade.  You can buy them for $7.34 and sell the Jan $7.50 puts and calls for $3.25, which is net $4.09/5.80 – what’s not to like? 

    Reaction/Tusca  - I agree, it is surprisingly bullish but I am concerned that the dollar was blasted down (now 77.1) which defies all logic given the Global situation.  I prefer it when everything makes sense, not when most things make sense and one thing is crazy – which is what we have today with the Dollar so I would not be making any major commitments other than that silver short. 

    Weekend/Gucci – I’m totally off that now.  I think neutral to slightly bullish now.  The way I see it, our huge short-side profits, now cashed, are a cushion anyway so we can afford to go with our gut and be a little bullish and, worst case, we head lower and buy more calls or roll ‘em.  

    TSO/Rev – Tough call at this moment.  If oil goes down and gas stays sticky – that’s good for refiners.  Summer driving season is good for refiners so, if you are not in, maybe wait for July/Aug to see if there are good shorts. 

    ZUMZ/Stock – But that’s just the kind of guy I like to invest in!  

    VALE/ZZ – Of the 3, I like them best and they seem to be holding the 200 dma but I don’t think it’s necessary to jump in ahead of the weekend. 

    History/Chuck – Oh did they leave that out?  That’s shameful!  I saw "Soft White Underbelly" at Bonds in 1980 - epic show – I was at an earlier show where they blew flash powder at the end of the drum solo across the whole front of the stage and almost burned the hair off the first three rows (I was about 10 back and my hair looked like those old Maxell Tape commercials – still see spots if I close my eyes).  Needless to say the fire marshals cut that from subsequent performances… 

    EDZ/RJ – Well if you are still holding it, now I would.  It’s good weekend protection anyway and, at this price, we’re back to yesterday’s logic.  

    DIA/Manimal – Only a day trade if we make a nice profit in a day. 

    XRT/DC – They just can’t get below that 50 dma.  If they test $50 again I’ll like them short below that line.  

    GMCR/Cnar – Yes, Pharm was right and I said so above.  When in doubt – FOLLOW THE RULES!  On TZA, it’s still good protection if you need it with TZA at $41.22 and your max profit at $42 but make sure you have enough long positions to make it worthwhile.  We pretty much cashed in all short-side covers today.  

    Cash/Exec – Very good idea.  When I had to do crisis consulting I would often cut off late meetings saying something like: "Is there anyone we can call or anything we can do by staying later?  If not, let’s go home, get some sleep and come back and deal with this in the morning."  Amazingly, it doesn’t occur to people that it’s OK not to make a decision right away, especially executive types (which many of us investors are) who like to be "the decider".  

    CMG/Cap – Yep, classic squeezy thing pattern.  

    DE/Ultraman – I’d like them more at $75.  See what ags do next week but any weakness in the market and DE has room to fall.  

    AAPL/Amatta – No, I would cash out and be thrilled to be even. 

    FAS/Yshen – After the weekend maybe.  No sense in risking a naked call for no reason. 

    Amuk/Morx – Something is always amuk but yes, it looks like I have done my job properly and everyone is nice and calm.  

    Drive/Jrom – Really?  That sucks.  I guess the phones are different but when my IMac crashed, they pretty much insisted on salvaging all the data for me.   In that case I’d try those phone drying tips and then attempt a sync. 

    CSCO/Jvest – Crazy!  

    VIX down 7% today, also crazy. 

    AAPL/Ajay – That’s a very bearish play!  I’d pay $2.70 to roll the callers up $5 to the March $350s so at least you have sold SOME premium but you are losing money almost as fast on the April $370s as you will on the March callers so it’s kind of a dumb position to be in.  We talked yesterday about going with the Oct $415 calls, now $13 and selling March $355 calls, now $3.35 (all premium that is $3.50 out of the money with a week to go) as that’s a more logical spread but the short calls are down $1 and the long calls are up so not as good for a new entry now.  If you can’t afford the margins to take sensible spreads – DON’T TRADE THE STOCK – that’s a nice, simple rule, right?  

    GMCR/Scott – You can fool all of the people some of the time and all of the people some of the time and then the stock comes back down to earth…

    TOS/Willie – Even if you are choosing "Limit"?  What Pak said, the lock button (as I understand it) locks the price so it doesn’t move with the next last sale but once you place and confirm an order at limit – that’s that.  

    DIA/Terra – Hey 15% a day is still about 3,000% a year so learn to live with it.  8-)

    Income trader/Bass – Kmaus just posted a new comment.  What browser are you on?  

    DIA/Cnar – I was hoping for a stick.  

    Blackjack/Manimal – If a deck is +8, I’ll play for the same reason I’ll sell an overpriced put..

    1-3 ft/Pharm – That’s a lot for a 5,500 mile wave!  

    Buffett/Jbur – Smart guy (and his stock is down today).  

    Premium/Amatta – I can see them having it until the last minute but shouldn’t be more than a nickel on close.  

    MEX/Rustle – They have ongoing accounting issues so you don’t really know if they are "cheap" or not.  Most people seem to think "not" and are bailing but could be a good buy if they come out clean. 

    Counting/ZZ – Too boring in general.  I play poker and, when I need a break from sitting, I play craps.  

    Mattresses/Amatta – What do you mean, the May/March spread?  We were behind on it and probably about even overall given the short profits we took off but the current spread is NOT a cover – it’s an aggressive upside play on the Dow.  

    Outsmarting/Pak – Remember those guys last year who wrote a trading program that beat the bots.  They could not arrest those guys fast enough for cheating the cheating machines!  

  130. DIA looks to me like Terrapin had the right idea.

  131. Thanks for responding for TOS execution orders.   Talking with them it appears that they have this set to screw you when you don;t trade perfectly.  We should all complain to the SEC  and maybe they will have to investigate and give all our money back for limit orders that are really market orders.

  132.  Phil, I think you’ll dig this chart…
    Not surprising, but still shocking!

  133. zeroxzero – Hilarious!
    Phil – Maybe PSW’s motto could be "The Game is Rigged, But We Win Anyway. HA!"

  134. And in the face of what is happening now, this doesn’t make any sense: 

  135. Phil, 
    Out of the DIA 120′s from today (now up 10%)? How about the USO 41C’s still there on the borderline? I guess before the close of NYMEX at 2:30? 

  136.   OPEN on the move again, NFLX $203, PCLN $465, WYNN $122, CMG $253 – looks like business as usual to me.  

    At the open: Dow -0.28% to 11951. S&P -0.24% to 1292. Nasdaq -0.39% to 2691.
    Treasurys: 30-year +0.29%. 10-yr +0.17%. 5-yr +0.11%.
    Commodities: Crude -2.72% to $99.91. Gold -0.34% to $1407.70.
    Currencies: Euro -0.05% vs. dollar. Yen +1.1%. Pound -0.32%.

    10:00 AM On the hour: Dow -0.13%. 10-yr +0.12%. Euro +0.15% vs. dollar. Crude -2.14% to $100.50. Gold -0.1% to $1411.10.

    11:00 AM On the hour: Dow -0.14%. 10-yr +0.07%. Euro +0.32% vs. dollar. Crude -2.69% to $99.94. Gold +0.04% to $1413.00.

    12:00 PM On the hour: Dow +0.22%. 10-yr -0.05%. Euro +0.56% vs. dollar. Crude -1.75% to $100.90. Gold +0.64% to $1421.50.

    01:00 PM On the hour: Dow +0.21%. 10-yr -0.07%. Euro +0.61% vs. dollar. Crude -1.72% to $100.93. Gold +0.53% to $1420.00.

    Feb. Retail Sales: +1% vs. +1.2% expected, +0.7% prior (revised). Ex-auto +0.7% vs. +0.7% expected, +0.6% prior (revised).  

    March Reuters/UofM Consumer Sentiment: 68.2 preliminary vs. 76.5 expected and 77.5 in February. Expectations 58.3 vs. 71.6 in February. Current conditions 83.6 vs. 86.9 in February. 

    Jan. Business Inventories: +0.9% to $1,453.1B vs. +0.8% expected and +0.8% in Dec. Sales +2% to $1,177.8B. Inventory/sales ratio falls to 1.23 from 1.25 prior, and vs. 1.25 a year ago. 

    Whether stocks are underpriced or overpriced in general has a lot to do with whose P/E you use (Robert Shiller’s 10-year earnings average finds a different answer to that question than trailing twelve months looks). 

    Carl Weinberg, who has gotten a lot right about Japan, describes some of the issues facing the country following the earthquake. As for Japanese stocks, the quake hit just 30 minutes before close, not giving investors much time to sell. Look for more of it next week

    New York Fed chief Bill Dudley doesn’t usually face a spirited crowd, but found one in his speech to the Queens Chamber of Commerce when he tried to play down inflation. Peppered with questions about food, he noted you can buy a much more powerful iPad 2 (AAPL) for the same price as the first model. Says one respondent: "I can’t eat an iPad."

    Reuters goes back to 1995 to check market reaction in the weeks following the Kobe earthquake. The yen strengthened as it was necessary to draw capital into the country for rebuilding; the Nikkei fell because … that’s what the Nikkei does post 1989. EWJ -1.8%. FXY +1.2%.

    IPOs are off to their strongest start since 2000, with yesterday’s $3.8B offering for HCA bringing 2011 IPO volume to $12.5B. There have been more IPOs this year than in 2008, 2009 and 2010 combined. Others include DMD, NLSN, KMI, INXN and GEVO.

    Canada’s unemployment rate remains steady at 7.8% after a fewer-than-expected 15K jobs are created in February. Doug Porter at BMO says the "subdued nature of the report confirms that there is no rush for policy makers" to hike rates. The loonie is lower, buying $1.0218. 

    Speaking in Brussels ahead of an EU summit, Enda Kenny rejects Angela Merkel’s offer of a lower interest rate on the bailout loans in return for Ireland raising its corporate taxes. “(I have) a very strong mandate from the Irish people … I would not support any adoption of a common corporation tax rate.” 

    ECB member Lorenzo Bini Smaghi says the best way to take the issue of sovereign default off the table is to change the rules to forbid it. He proposes taking away the right of countries to issue debt and handing this power to a pan-European body. That was easy.

    With the interbank markets closed to them, Irish banks remain dependent on the ECB for funding, borrowing €117B in February. Ireland’s central bank also helped out, essentially "creating" €70B to lend over the past few months. Can such amounts ever be paid back? IRE -2.1%. AIB +0.6%

    The yield on Portuguese 5 year notes hits a new post-EMU high today, rising 15 basis points to 7.92%, as its finance minister asks EU leaders (currently meeting in Brussels) to understand the "seriousness" of the situation. The yield on Spanish and Italian paper falls, traders betting the "contagion" ends at Portugal. 

    Faulted for missing numerous red flags during last decade’s credit bubble, ratings agencies draw the wrath of EU leaders for leaning too far the other way. Spanish Premier Zapatero calls yesterday’s downgrade an insult, and Greece’s finance minister urges greater regulation.  

    Pacific Crest says recent selling in Netflix (NFLX) is overdone and believes the company may be preparing the first stages of a joint service to "tightly integrate Netflix into Facebook’s platform… likely to launch within the next few months." NFLX +1.6% premarket. 

    The FDA will subject J&J (JNJ) to five years of scrutiny at three factories where manufacturing problems led to massive drug recalls. Two plants will remain open and a third closed, though J&J has avoided fines. 

    Gotta love those ADR’s:  China MediaExpress Holdings (CCME), subject of a contentious battle between longs and shorts, has been halted for an hour down 4.3% pending news – about auditors, perhaps? The advertising company has been the subject of opposing reports from Muddy Waters and Global Hunter

    Three lunchtime reads:
    1) Oil Supply: What will Saudi Arabia do?
    2) Benjamin Graham’s perspective on today’s Dow

    3) Oil at $100 kills brain cells, impairs logic 

  137. TSO / Rev – Crack spread were up again around 25 this morning which is historically high. This will provide support for the TSO, VLO and other refiners in the short term.  

  138.  Thanks Phil and Scott for the Med info.  Will wait before stepping in.  Rather be cautious and possibly miss the buy then get burnt.  Tons of opportunities every day.  At least got long oil at 100.00 and that’s looking great so far.  From reading past comments, long oil into the weekend right?

  139. Income trader/Bass – Kmaus just posted a new comment.  What browser are you on?
    I’m using internet explorer. Never had any problem before – but I’m not getting any posts on IT’s latest comment thread since his post at 9:43 this morning.  I’m seeing the number of posts counter increase, but when I check the bottom of the string the posts are not there. I appear to be missing the last 6 or 7 posts.

  140. Phil / craps – since you generally play on the house side of the trading game, does that mean you are a Don’t bettor on the dice?  I switched to Wrong Way betting a few years back and have been much more successful.

  141. Global warming / stjean – Didn’t you learn in school that science has a political bias?

  142. Shiller Earnings / Phil – This looks interesting. I wonder if this could be useful as a screen as well. Although I am not sure I could find 10 years average earnings easily. Something else to check. 

  143. Global Warmin / Pak – I did expect the bias, but not inversely related to education on the right. Makes no sense! 

  144. China ADR / Phil – When I ran my screen of companies near their 52 week low, I found that 1/2 of them had China in their names. I guess there are some numbers they have not learned to manipulate well yet and still have to learn from our bankers! 

  145. DIA/$25KP, Cnar – There is never anything wrong with taking 10% or 20% off the table.  I don’t always get a chance to see everything in time and, at this point, if we blow 12,000 it’s a good place to stop but I still hope for a nice stick into the close. .  

    SEC/Willie – Yes, they will put that right on their pile…  8-)

    Good chart StJ:


    Motto/Pak – What I usually say is:  We don’t care IF the game is rigged as long as we can understand HOW the game is rigged and place our bets accordingly…

    USO/$25KP, Amatta – Yes, cashing out into the NYMEX close is the plan (2:30). Hopefully $102.50 and should be at least a double.  

    Posts/Bass – There seems to be some problem with IE 8 now.  Maybe time to upgrade?  If you have another browser, try that and see if better.  By the way, I switched to Chrome and if I sit down with IE now I want to smash the screen…

    Craps/Chuck – No, everyone hates that guy!  I actually don’t play craps to win.  I use a cash management system that keeps a large amount of money on the table with the minimal possible risk so that I get tons of comps.  I play poker for money.  

    Shiller/StJ – I just like to file little things like that in the back of my mind.  Which is probably why I think so many things I read are BS – there’s always something to contradict everything else.  All we can hope for is a preponderance of evidence.  Interesting about the ADR’s (another tidbit to file away!).  

  146. DSCO/mrm – yeah, that reverse split really helped, huh?  I am holding in here for one prayer of a thrust up…and then out of ‘em.  If they blow the 50d MA, then out as well (1.72).


    CERS – stock.  Stock…stock.  Not doing spreads on them. Options are too thinly traded, and you will be the MM on them.  They have support here, and I bought back my original 1/2 sold.  Now if they get to $2 or so, I will DD again.  Patience with this one, as they have some hurdles to clear, and they are small biotech..

  147. OPK Ceo/Pharm – the link you provided yesterday to the CEO’s holdings was very impressive, even with all the variety being "indirect" it makes the guy look like Croesus himself!

  148. Phil,
    I am sitting on FXP trade 28 call, 31 short call and 28 short put, March expiration.
    I am about even. Any suggestion?

  149. Phil, 
    AAPL premium, yes that is what I thought, the idiot at Schwab was telling me, NO NO on the contrary there is no incentive for anybody to sell those into the the close so the spread widens between stock and option. I was WTF??
    Thx. So I will hang tight… but if we do get the stick hopefully AAPL doesn’t run futher up!

  150. Pakdog
    I agree science can have a political bent but I always felt the question was asked incorrectly.   
    I do see climate change as a threat because facts do show that temps are rising and glaciers and the ice caps are melting.  Global warming is going to be a big problem.  The question is "is the rising temperature a result of mans interference?"
    When asked I have answered yes I believe the planet is getting warmer.  There has never been  a follow up question about whether I believe it is man made and billions should spent to combat it.  The earth has warmed and cooled throughout its history before man came around. 

  151.  Phil / FNSR
    do you recommend to go long from here? if yes, how?

  152. Craps/Phil
    Ha Ha I do the opposite.  I play craps for money and play poker for killing time.  I’ve done well.

  153.  Thanks Phil and StJeanLuc on TSO

  154. Bass
    May be some like me realized 325 comments a day is too much for anyone to read.

  155. Phil, 
    I am also on the AAPL play you recommended about 10 days ago (June 340/360 with Mar 360′s short). 
    I’ts right on track, but I just thought I asked to continue learning managing these calendar spreads…The Mar 360 short is 75% profit now. Not sure if worth risking that to make 25% in the next 5 trading sessions? 
    With AAPL announcing sales of iPad2 next week who knows if the stock will jump like crazy?

  156. Called local Apple store, there are way over 100 people waiting for iPad 2 according to the store worker. 

  157. Pharm/CERS – yes, another freshman mistake on my part.  Bought the calls.  But such a low amount of dollars, I’ll wait it out, another lesson for learned…. "pay better attention to the amount of options that are traded".  Brain fart

  158.  Phil – any trade for AAPL ahead of iPad 2?

  159. amatta,
    I’d take the 75% on the aapl 360 and run

  160. Well, I guess we can all be relieved that the correlation between the $ and the equity market is still in tact.  Whew.  I was really worried-  They just decided to have a little fun this am at the bears’ expense.  Nothing like lopping off a huge chunk of the $’s value during a single trading day to put a little juice back into the markets.  It’s the new normal!

  161. Speaking of AAPL, maybe someone has the answers – I am not sure what the sales of more iPad will do to their overall margins. For the longest time, they have been able to sell computers (desktop and laptop) at a sizeable premium over similarly equipped PC (sometimes over 30%). Since they use the same components (hard drive, graphic cards, processor), I have to assume that they have higher margins than say Dell or HP. But they sell the iPad around the same price as for example the Samsung tablets. And I don’t see them having a cost advantage over Samsung for example, as Samsung makes their own memory, processors and even LCD screens while Apple subcontracts most of that. And manufacturing costs have to be similar. So my guess is that they have lower margins on these iPads. They will still make tons of money, but it might be harder to grow earnings over time. Or else, Samsung is making money hand over fist and we should be looking into that!

  162. amatta—I have the same position in AAPL--I closed the mar 360 short call today

  163. There’s no volume on this stick  only the dollar going lower

  164. Phil / UUP   The new Irish premier is telling Merket to stuff it in public, prior to tomorrow’s meeting, eg no linkage of corp tax harmonization for loans.  This PIIGS thing is going to get ugly over the next 2 weeks.  Thinking this $ weakness today makes no sense.  UUP into weekend?   Also, if $ dollar reverses on Euro, can pomo, starting next Monday, prevent a mkt down on stronger $?  Given their performance with no (official) pomo today, I’m not inclined to bet against these batards.

  165. NYS lawmaker charged for accepting bribe. WTF, is he not even smart enough to not get caught?

  166. appl switch out of samsung for their ipad2 a5 dual core

  167. Stjeanluc, After the last earnings they did reduce their margins. I believe the cdma ipads/phones may have lower margins but we all said the same thing for ipods – “what next?”. I have been selling the 335 weekly or biweekly (second week puts) and buying them back. If they go to 335 i will roll to a longer put. Margin intensive but aapl is a good/growing co with juicy premiums.

  168. LFlanTheMan must be enjoying the irony of AAPL today: DIA surges, FAS surges, but the AAPL pin crowd is working extra hard to keep it flat so they can pop down to 350 pin at close…

  169. BMRN – Apr $25 C for $1.

  170. global warming / williex – I was being sarcastic about science being political. It gets politicized, but that’s the work of politicians and others not scientists.

    Your question is the obvious one. What’s sad is that the way a person votes somehow determines what they believe is the answer to the question. This tells me that something other than education and reason is influencing their decision. That’s dangerous when the stakes are so high – actually, it’s preposterous. People without having so much as read a newspaper article on the subject are "against global warming" because they heard it was bad from a  radio host or at a rally they went to. It’s become a poliltical talking point on the level of tax policy or defense spending. For years the tobacco companies influenced policy with fake science and lies. Millions of people have died and will continue to die because of their lies and political influence. It bothers me a lot that the oil and coal industries are behind so much of the push back against global warming science. There’s no conspiracy against oil and coal. No group of scientists has organized itself in opposition to big oil. In the end, I hope you’re right and it’s just a  misunderstanding. Because the opposite scenario with corrupt money and politics preventing us from taking the needed steps to limit the damage is a nightmare.

  171. FXP/Vic – I’d get out.  You have no time to recover if anything is wrong on Monday.   Actually very lucky China sold off again or they’d be a loss today. 

    Premium/Amatta – Very scary when you call a broker and realize the people who work there don’t even understand how options work.

    Warming/Willie – Well that’s pretty amazingly dumb.   Let’s put it another way.  If you are sitting in a room and the room is on fire – should you put it out or at least leave the room?  Now, what if you can’t leave the room?  Then I guess putting it out becomes a logical idea, right?  If there are other people in the room and they don’t want to put it out because "further study is needed" or "it’s a bad time to put money into water or other fire-fighting ideas" or "the fire wasn’t man-made" or "well, evidence indicates there was a fire before and everyone died so, what are you gonna do?"  - would you vote for the other people to be in charge of the room?

    FNSR/Tcha – If they hold it next week, sure.  

    Killing time/Willie – Yes, but not killing time playing craps – getting a free vacation!  Much different.  We get a free suite pretty much at any casino in the World – that’s what I play craps for!

    DIA $120 calls in $25KP should now have a stop at $1.25 and once we get over 12,050 – that’s then the stop, probably $1.35.  

    AAPL/Amatta – I’d kill it ($1.40) and sell 1/2 the $350s for $5.75 so you pick up another net $1.40 per long and plenty of time to 2x roll.  

    AAPL/Nicha – No, maybe a momentum play on Monday but it’s not like no one knows it’s happening but us.  

    Margins/StJ – I do not believe AAPL sells anything that doesn’t have a 38% gross margin.  I used to hear the same stuff about the IPod and how others had huge manufacturing advantages and they are all gone and AAPL still sells IPods and soon $49 IPhones too.  

    Dollar down to 77 now – Amazing!  There’s an earthquake in Japan and our currency becomes worthless…

    Ireland/Tusca – Good for him!  Totally Chewbacca but what can you do?  No way we bet against it, hence my flip flop this morning.  

    Bribes/Nicha  - New game with Cuomo in town.  There’s nothing scarier to the status quo than an honest Democrat.  

    Go sticky go!!!  

  172.  Cuomo had nothing to do with the latest Dems (2 of ‘em – 1 in senate, 1 in assembly) indicted for corruption.
    Cuomo had opportunity to push for ethics reforms, particularly relating disclosures of outside sources of income for these crooks that affiliate with law firms and lobbying firms that have business or other interests with the state.
    Thus far, Cuomo has declined to push for needed ethics reforms, and still has yet to work w/ the entrenched "leaders" in albany to deliver  a budget that extracts meaningful concessions from the crazies in power up there.
    To be fair, he is doing some good things, much more than Patterson, but largely they are 1/2 measures or symbolic.

  173. Ireland / Phil – The game is going to be up soon with them as their obligations between the loans from the Europe and bank obligations are 10 times their annual tax revenues. Just interest payment alone on that amount is 80% of revenues. Something is going to give especially if the don’t raise taxes! Not that it would help much anyway because I doubt that they could double revenues without crippling the economy which would cripple revenues. Germany better get used to the idea that they’ll be backstopping all these guys! And don’t forget, most of these troubled countries (PIGS) already have imposed austerity measures so not much more fat to cut… Similar to what Texas is facing come to think of it!  

  174. Can somebody please help CMG find the 40 illegal immigrant employees that they seem to have "lost" in DC ?

  175. Phil--had the same AAPL spread as amatta--had closed the Mar short 360 earlier--now sell 1/2 mar 350 at 5.75--am I right

  176. And to follow up, not surprisingly, most of these countries after imposing austerity measures still find it hard to close deficits as if it was not predictable. You withdraw money from the system, don’t be surprised that the economy contracts and revenues go down! 

  177. mrmocha.    Hello!   I’ve not been here much since Monday.  Working my %&# off at my other job!  But yes, what a ride this week!    Re AAPL, just accumulating accumulating slowly as it moved down earlier this week.  Mostly fairly deep ITM calls several months out.  That way I don’t have to watch them so closely.  Nothing too fancy.   Played the downtrend with DIA puts.  We all had good success with that, eh?   Sounds like the iPads are moving well.  And yes, it does look like they’re trying a 350 pin.  That’s fine.  Just get your long-term calls and ride the wave.  Speaking of waves, seems odd to me that a huge disaster like the Japan earthquake and Tsunami was not enought to push the markets further down today.   I read that as a bullish sign for next week.    

  178. I think they really just want everyone to report that the Dow went up 100 points today (much more impressive to have a 3-digit gain than a 2-digit gain). I just cashed out the last of my DIA March $120 calls at $1.54 in case the +100-point level doesn’t hold.
    Phil- I’ve won almost as much on DIA this week as I’ve lost on CSCO! Thanks for the great insight. I’m getting better at watching volume signals.

  179. for those of us who own AAPL  I did my part today and bought an ipad2 and i also bought my husband an ipod last month.  just waiting on iphone 5   :)

  180. Phil--Tx for the DIA trade today

  181.   z401 – I am still on the fence about buying an iPad. Like Cap, I don’t need one either.


    The scariest/saddest thing about the above cartoon is it’s from 2004!

    Cuomo/Cap – Wow, really – you are not satisfied with his first 70 days in office?  And you gave him such a good chance too! 

    Ireland/StJ – Why is default not an option?  Just default, screw the bondholders and move on.  Iceland did it.  Frankly everyone should just default and then we can all figure out who has any money left and go on from there rather than this slow, silly thing we are doing.

    LOL – Dow up 99 points!  Stop on $25KP position moves up to $1.45 (.10 trailing) until we get over 11,300, then that’s the stop.

    AAPL/Savi – Well now that they’re flying up I’d wait until close and maybe just sell the $355s.  

  183. Phil:
    I took 40% gain for the DIA calls. Do you feel bad for me? Thank you.

  184.  I knew when I read Phil’s first post on craps comps that he was essentially entering a strangle – no win, no lose, keep the comp premiums.  We would not have expected anything less!

  185. Phil / UUP   Should I dump my RUT short (one of my macro hedges) going into the weekend, since Monday usually big pomo day?

  186. oops --filled on the aapl mar 350 short

  187. PHIL
    Thanks for DIA’s puts

  188. I mean DIA CALLS

  189.  Tusca – Monday’s POMO will be 6.5 to 8.5Bn, Tuesday has no POMO, Wednesday and Thursday will both be 5.5 to 7.5Bn, and Friday will be 1-2Bn (TIPS purchase). So now you know, and this will be in the upcoming Stock World Weekly.

  190.  Phil, Ilene hasnt gotten in touch with me.  Maybe she doesnt have the correct email address.  Craig.Stevenson at gmail dot com.

  191. Bullish/Iflan – The only thing that bothers me is they used the dollar today to push up the markets.  I was hoping they were done with that trick because if the dollar goes below 77, we have a whole other set of terrible problems to deal with.  I think yesterday I said that I expected the spike down in the morning and then a BS stick and I am now thinking that this was simply what we expected and the "program" ran independent of what happened in Japan.  Therefore – I am going to call for NEUTRAL and NOT BULLISH AT ALL into the close.  

    In the $25KP, let’s buy back the 16 short March $120 puts at .96.

    In the $25KP, let’s add 10 EDZ April $21 calls at $2.


  192. Confidence down, devestating earthquake in Japan, Market up, Japanese Yen up…. Yep, makes sense to me….

  193. Pharm, you lost me on "DSCO - If they blow the 50d MA, then out as well (1.72)."  My charts show it trading well below both the 50 SMA and the 50 EMA already…

  194. Phil
    Warming is the problem, 10 years ago I told all that would listen that I felt the rising oceans would put too much preasure on the faults and earthquakes and volcanos would get more severe. Where my grandparents lived the Atlantic is 4 feet higher than when I lived there , the pacific is 3 feet higher. How much does that water weigh?

  195. Phil
    Haven’t paid for a room or a meal in 25 years.  I am the kinda gambler the casinos hate.  I win and walk and I am not greedy. 
    I understand your logic but if it is a natural warm up how much are you planning on spending to fight a natural occurance that appears that we don’t even know why it occurs.    I would like more proof that this is man made rather than natural warming because if it is natural I don’t think there is anything man can do to halt or stop the warming. 
    I would have a different answer If you were to ask me should man be responsible and clean up his own mess.  This question has nothing to do with global warming.  The questions are not mutually exclusive.   I would just like to have clarity when we spend tax money so as not to waste.  

  196.  Phil, I’m not sure how best to thank you for how much you have taught me.  Wednesday, I went with the DIA Puts which netted a big win yesterday.  Then, replaced them into the close last night just in case and unloaded them right at the open for a nice little gain, along with profiting on the EDZ long calls and the DXD calls which I hadn’t covered yet.  This flipped my portfolio to neutral so I added the DIA calls this am before I took my 3 year old to swim lessons.
    Came home and checked a little while ago and found the DIA calls up nicely so bailed on them at $1.40 and now have a relatively neutral stance into the weekend, except my balances are the same now as they were when the Dow was 200 pts higher…and I still have my core positions nicely nested away burning off their premium!!!
    It’s awesome to have learned enough to be able to do this while raising Hope.  So here’s what I did.  I took the Paypal refund from referrals you sent me, and I completed a loan for a farmer in Peru through  And I put you as the reference for introducing me to the service and a note that you inspired me to do more for him.  The loan is so he can buy tools to clear the land he’s been getting in lieu of payments for the last two years.  He likes having the extra land, but doesn’t have the money to make it grow his achioli(sp?).  
    Thanks for the inspiriation.

  197. Phil: What’s your take on this market over the weekend?  Bullish? Bearish? Neutral?

  198. Phil: Never mind.  Just saw your 3:40 comment.  Neutral it is!

  199. williex
    You can argue the cause but the results of rising ocean levels are becoming clear. The coast of Oregon has evidence of waves hitting 500 feet above present sea levels, the wolrd has had shifts that actually sloshed the pacific ocean like a bucket of water.

  200. DSCO/mrm – I guess my TOS charts are not accounting for the split.  If they fall below 1.72..then I am bailing.

  201. nicha and cap
    i didn’t need one either, but i’ve wanted one for awhile. so i’m treating myself. it will be hear in 2-3 weeks. i hope sooner.

  202. I will have the spreadsheet for the 25Kp and Pharm 2011 updated later today.  Have a nice weekend all.

  203. Nice job Jvest!  Top of the run.  Glad to see things are clicking.  The nice thing about offsetting CSCO with DIA is you can DCA the CSCO.  The stock can only go to zero but you can add DIA money every week.  

    DIA – Somebody put in a hard stop right?  They made a dive right for it and now the uptrend resumes…

    AAPL/Z4 – And we thank you!  

    You are welcome Savi, DC, Cnar… 

    RUT/Tusca – It’s not about the POMO but how low can the Dollar go?  The move down today makes no sense, below 77 makes no sense next week either AND Japan is a mess and the EU is a mess and China is now iffy – how do we go long into that?  Maybe sell some premium and get a little neutral but I would not dump coverage into the weekend.  

    Oh yeah – Also the fact that they couldn’t get anything going with oil into the close is a worry with XOM and CVX boosting the Dow today for no reason at all.  

    Thanks Elliot!  

    Water weight/Shadow – They have pills for that…  Actually, that’s a great point.  It’s ridiculous to think that raising the height of the oceans 4 feet won’t change the pressure on the planet.  Oh well, maybe the Republicans are right and now it is too late….  

    Sense/Jrom – Two for you:

  204. Well…..should have went with my premarket gut feeling and bought long.  Had two thousand shares TNA loaded at 73.88 at the open and couldn’t pull the trigger.
    Damn I hate when I don’t listen to myself.

  205. APPL has been such a well bahaved pinner lately, hard to believe they’re going for 352 today; just to flummox Lflan and I, probably.

  206. phil, great, great footwork today

  207. Phil:
    Signed up for another quarter today. Thank you for all you do. You really are a fantastic person to allow us to take part in your daily trades. I know we pay for the privilege, but I would challenge anyone here to say it is not worth every penny.
    I have learned so much over the past 6 months. I just need to put it all together and perform more consistently. Anyway, thanks again and I look forward to the next three months!

  208.  Phil / SVU
    its slide down lately to $7.5 do you like them at this level for B/W?

  209. Shadowfax:  Oceans have risen 1.8 mm/year for last century and about 3 mm/year last 2 decades.  So according to that your grandparents must have been alive about 1000 years ago.   I would propose that too many fat headed politicians are throwing the earth off its axis……

  210. Craig, I just dropped Ilene a note.  

    Man made/Willie – I doesn’t matter if it’s man made or not – what matters is that we do whatever we can to prevent EXTINCTION.  What’s the price tag for that?  That’s nice that you don’t THINK anything can be done to prevent EXTINCTION of our species – whatever you do don’t allow anyone to study it – just in case they do find a way to prevent it, right?  And if it is natural and will occur in 1,000 years anyway – what would be the sense in perhaps adding 200 more years by taking precautions?  This is not about a man cleaning up his own mess – this is a locked room with a fire from which there is no escape for you and me and all the other do-nothing idiots who sit there like a frog boiling water except a frog in boiling water – if it had the capacity – would not actively prevent other frogs from trying to find a way to turn down the heat while he waits for "clarity."  

    That is great Hoss – you could not have done me a better honor!  Thank you, that makes it all worthwhile for me.  

    SVU/Tcha – Yes, I do still like them.  Remind me next week.

    Weekend/Cwan – Neutral to little bearish.  

    Thanks Pharm! 

    Thanks Drum and DC!  

    Have a great weekend everyone!  

    - Phil

  211. Default / Phil – I agree that they should be able to default. In any case, there might not be any other solution. I think that the only people objecting to a universal default might be China since they seem to be holding the largest bag! Besides the Social Security fund that is… Although I read that when taking into account all the hidden regional debt, China’s debt is closing on 50% of GDP. Might be that we all are borrowing from each other and printing more money to pay the other suckers. First one to drop wins…. 

  212. Phil,
    Well I came out of my AAPL short leg up $44k. Could have made that yesterday but after Japan last night, the peaceful sleep was probably worth it. AAPL looking good for the weekend and todays overall market seems very bullish for Monday. Well I’ve got to go a start a fight in the local mall Apple store queue by crowding in line and see if it gets on the national feed. Lot of the news guys live here!
    Good weekend all!

  213. Phil:  of course it matters if its man made or not; if you don’t understand the cause you can’t treat the problem most effectively.  Say, for arguments sake, that its caused by solar fluctuations, its likely then that you can’t really effectively address the problem with CO2 reduction.  The Extinction talk is hysterical, I was surprised to "see you go there". 

  214. Agree shadow.  The great lakes region is slowly rising from the the last ice age.   I can remember stoms in Chicago closing lake shore drive once or twice a year as the waves rolled over the road.  Hasn’t happened in years as the area has slowly risen above the lake level.

  215. humvee
    Those stats are what the BS is about. I do remember where my Grandfathers dock was in the 50′s, He was a lobsterman. I went out many times and strung bait on that dock. It was above the water all the time. Low tide is higher than dock. Family members that died 2 years ago in California told me how it wasn’t that much there when they last returned to the east coast. Those averages are like all data, screwed up to prove THEIR point! Who do you believe? Bernank says no inflation!

  216. And to add to the defaults arguments, look at the intraday trading in Irish, Greek and Portuguese 3 year bonds. Unless I am mistaken, Greek bonds are trading at around 18%…. 

  217. BTW I have pictures that prove it or maybe the ground sunk which I doubt!

  218. I think that Ezra Klein is about right:

    With John Boehner fighting the Democrats’ offer to put entitlements and taxes on the table — "that’s what the next budget process is for," he said — it’s worth stepping back to look at what this continuing resoution fight is about.
    It’s not about reducing the deficit. If it was, then the tax deal wouldn’t have passed in December, entitlements would’ve been in the mix from the beginning, tax expenditures and defense spending would be on the table, etc. Nor is it about cutting spending. If it was, then the cuts wouldn’t be limited to 12 percent of the budget. Rather, it’s about cutting non-defense discretionary spending.
    But most Americans don’t know that. Boehner frequently says that "the American people want us to cut spending," but he never says that "the American people want us to cut non-defense discretionary spending." And that’s because they don’t: poll after poll has found Americans resistant to the sort of cuts you find in the non-defense discretionary bucket, which focus on education, worker retraining, nutrition programs, heating-oil subsidies, etc. They’d much prefer tax increases on the rich, or cuts to defense.

    But Republicans wouldn’t prefer tax increases on the rich, or cuts to defense spending. And they know that if entitlements get opened up, tax increases will immediately be on the table — one of the easiest and most popular ways to cut Social Security’s shortfall is to lift the cap on payroll taxes. But for Republicans at this moment in time, that’s unthinkable. The beauty of focusing on non-defense discretionary spending is that it’s spending they don’t really like and that’s totally disconnected from any sort of tax. And that gets to what this debate is really about: not cutting spending or reducing the deficit, but cutting spending Republicans don’t like while avoiding any and all tax increases — even if that means the country has higher deficits and the middle- and working-class bear more of the burden. The difficulty for Republicans is they’ve not wanted to clearly explain that philosophy to the American people, and so now they’re in the odd position of arguing against Democratic efforts to do more for the deficit and do more to cut spending but not really being able to say why they oppose those efforts. 

  219.  To the physics-adept on the site:  how does melting ice into water increase the weight on ground faults and trigger earthquakes?  Surely it’s not increasing the net weight of water on the planet, just moving it around, right?  I guess that could do it. 
    And thanks, Phil:  Thanks to DIA and some Apple, I traded away 85% of my rather large losses today, and went into the weekend flat, as instructed, although it hurt to let go of Apple.  But we sell into initial excitement, n’est pas?  It worked for me with Green Mountain this week, so I stick to it.

  220. stjeanluk
    Well said and for a year I have stated the solution is no more tax cuts and stop all the wars including the 40 year drug war. Cut drug inforcement and all that it creates and military in half, still over 25% of world spending on defense and no more problem, everything else is BS. Of course we could invest in body bags!

  221. Phil,
    Awesome trades on the DIA calls and GMCR puts.  I bailed on GMCR at 20% gain early this morning, think I should jump back in?  As you said in a response to someone yesterday, "they will eventually have to turn in the E in p/e."

  222. zeroxzero, a pound of water weighs the same as a pound of ice!  It’s only the volume that is different for the same mass of each.  Ice has a greater volume because it’s slightly less dense.  Chemistry 101.  As to why that might cause a fault, I don’t know and I’m not sure I buy it.

  223. matt
    Your pushing too far! A puond is a pound, RADICAL!

  224. Phil JRW
    You guys have made my best 3 weeks in a year. Up 6.49% on my trading account. The first week was tiny trades, last week at 50%. This week my limit, not all perfect but this week was 3.4%, WOW, Made traveling money and will leave for my parents this weekend. Thank You for all the help, it is working for me! I will check in when I can after Sunday. JRW you have to take over, your levels are more accurate, I have tried to cover for you while you were busy but need more practice.

  225. Default/StJ – The people objecting are the people who have bonds, who are generally people who are rich enough to A) have savings and B) have so much money that they have to stick some somewhere "safe".    Of course there are also pension funds etc but it’s the top 10% who get reamed if there are massive defaults and that’s why all the global stops are being pulled out to stop that from happening.  Whole populations (Ireland, for example) are being sacrificed to keep the bondholders whole.  Good analogy – China was the last person standing but article from earlier this week argued that, if you take into account their local government debt – they are not really in much better shape than anyone else.  It’s all just one gigantic joke – everyone should just default and start from scratch.  If the great Capitalists are as deserving as they think they are – then they will have no trouble rebuilding their fortunes, right?  

    Starting a fight/High – What a great idea.  Just bring a friend with a cell-phone camera and make sure you time it for the local news!  

    Going there/Humvee – If it’s solar fluctuations, then we should do one thing, if it’s greenhouse gasses, we should do something else but Nasa’s budget is cut, the EPA’s budget is cut and doing nothing is certainly not a "solution."   I don’t mind if your genetics give you the survivability of a frog in boiling water but please don’t try to prevent other people from caring about the planet we all live on.  Here’s a crazy idea – if the Arctic Ice Shelves are crumbling into the sea (they are) because they are MELTING from HEAT – how about we go with the wild notion that the earth is a bit too warm – just for now?  Then we can take what steps we need to do to cool it as much as possible to STOP THE DAMAGE and, hopefully, with more time and more study – we can get a better handle on the problem.  Your attitude is like having a man come into the emergency room, bleeding from a head wound – and you don’t want to do anything to stop the bleeding until you can figure out if he was hit by a rock or by a knife.  I wish it was the kind of thing where we can send you off to "your side" of the planet to do things your way but it’s not – those of us who would rather survive will have to drag your Neanderthal ass along with us…  

    18%/StJ – That can’t be good…

    Melting caps/ZZ – Good job with getting back to cash!  If you put a sandcastle on the beach at low tide and no waves hit it, it can last for a very long time.  If the water rises and begins to hit it – what happens?  Eventually, the water erodes the land and it begins to fall back into the sea.  That’s all the earth it – great big piles of dirt that have been pushed up from the sea.   The land will last until the water reclaims it.  As to earthquakes – same thing, if you build those sandcastles, don’t walls "suddenly" collapse.  Everything has a stress point.    In fact, here’s a picture of Humvee’s house:  

  226. 25Kp spreadsheet….let’s see if this works.

  227. Pharm,
    You are really making us lazy. Thanks!

  228. Physics/ZZ – On a more scientific note.  I’m not great at explaining physics but think about the world spinning, as it is wont to do, at 900 miles per hour and it has a lot of water frozen at the top and bottom, which works out well because it balances and we spin on our axis around the two frozen poles and, generally, the force of gravity is just about enough to keep the amount of water we have pretty well contained in the oceans.   Now, let the poles melt and increase the volume of water by maybe 10%.  The water is still spinning on the surface of the planet at 900 miles per hour but we DID NOT increase the mass of the planetary body.  What happens?  Gravity is no longer sufficient to keep the increased mass of water contained in the oceans.  That will cause, as Shadow notes, 500-foot waves as well as major incursions of water into the land-space until the water is once again stretched thin enough that it achieves equilibrium with gravity.  You can try this at home by filling a glass 90% to the top and walking around the house and then filling a glass 100% to the top and walking around the house.  Then consider that, from the viewpoint of the people who live at sea level – the oceans are already filled 100% to the top.  As of yet, I have seen no Conservative plans to increase the mass of the Earth so, to me, this is still a concern.  

    Did I mention that we also have no idea at all what effect diluting the salinization levels of the Ocean.  Millions of fish dropped dead in California yesterday due to a very small shift in their environment.  While this itself is probably not a "sign" of something big – it does remind us (not you Humvee) how fragile the ecosystem is.  We keep dumping crap in the ocean and polluting the air and the ground and it’s very much like playing Russian roulette with the planet – we don’t know what’s going to happen each time we pull the trigger but without "further study" people like Humvee think we should just keep firing away.  After all, the odds are only like one in six that the chamber is loaded, right?  

    THanks Jhockey!  I wouldn’t chase at a higher price but if they go up again, why not?  

    Water and Ice/Matt – The ice caps are not in the water.  If you put ice cubes in water, they do not float out of the water do they?  When the ice falls off the shelves and into the Ocean they add mass to the ocean and, of course, the water is then distributed evenly thousands of miles away – no longer confined to the poles.  This is a huge redistribution of mass in a dynamic environment – how can you possibly think it won’t have an effect on the entire system?

    Congrats Shadow – I’m very happy to hear that, especially after such a tough couple of weeks in the market!  You have done a great job giving us levels and we all thank you for that as well.  

    Wow, nice job Pharm – how the hell did you do that?  

  229. Pharm spreadsheet good start. Questions I am missing the buy or sell on the positions. It always help for clarity.

  230. Yodi – not sure what you are asking, but if it does not say STO (sell to open – sell the C or P), then it is a buy.   In addition, the sheet gives the detail of a debit or credit in the last column for cash on hand.

  231. Pharm, Thanks that explains it.

  232. Global warming / Phil – The problem right now is that there are so many factors at work that it’s becoming impossible to resolve. For example, there is a good theory that the melting ice from the Arctic icepak will actually disrupt the gulf stream and bring back lower temperatures in Europe. Even further, the entire "stream" structure of warm/cold water cycling is at risk. And we have no clue what this is going to bring about. Which is why it might be better to call it global climate change… But there are some things that we know will help like reducing human CO2 emissions (even if we cannot control natural occuring ones). So you are right, why not start there. A) It doesn’t cost that much more and might actually add jobs (like your idea of installing solar panels on every house or building large wind farms), B) it might help our economy by reducing dependence on imported fossil fuels (more fuel efficient cars and appliances). What do we have to lose? I still can’t believe that some people are even be opposed to trying! I guess they don’t have kids and don’t care what happens 25 years from now! I guess I started that discussion today by linking to that graph that showed that the more educated a conservative was, the more likely he didn’t believe that global warming was a threat.
    It could be a cynical point of view because they believe that the current system is working well for them as it is (most educated conservatives are usually doing well) and changes might be too painful.
    It seems that this board goes a long way to prove that!

  233. Phil:  physics are definitely not you’re strong suit; north polar ice cap is  floating, southern is on land mass.  What the hell are you talking about 500 foot waves?  The oceans are neither 100% full or empty, they are just the lowest points where all the liquid water can flow.
    According to your theory,  I can  toss out my kite and the 900 mph rotational speed of the earth will rip it to shreds,  something is wrong with that theory.

  234. Stjeanluc
    Speaking of solar for every house 

  235.  Son of a bitch!!!!  i just spent two hours typing up my post into wordpress and piece of crap deleted it when I clicked on "Save Draft"  What the mother F*CK.

  236.  I have to apologize for that last post.  I was just really mad that I lost all that work.

  237.  craigzooka…..go to the mall tomorrow and buy an iMac.      :)

  238.  Pharm…..really stupid question.   green, red, black are codes for…..?what?

  239.  Dennis Gartman is claiming that he warned about a "Super Moon" which may have contributed or even caused this quake.
    Dennis Gartman: Nobody’s Laughing At Me Anymore For My Warning About The "Super Moon"

  240.  Iflantheman, I have an iMac :)  thats what I was working on at the time.

  241. Warming – for the best look I’ve seen at what it might look like -other than the lovely mansions above the beaches of LaJolla – I strongly recommend " Antarctica" followed by "Forty Signs Of Rain". "Fifty Degrees Below", and "Sixty Days And Counting", by Kim Stanley Robinson. Novels, so entertaining and good reads, but really accurate predictions in my opinion. And there is some qualified optimism.

  242. Iflan – Green = winner, red = loser, black open or I did not keep track of it on the roll.   From a few days ago on the rolls, I am now keeping track of the gain/loss, even after the roll.  It should all even out in the end, but it gives a better feeling of how things are going.

  243. lol, can’t blame to Windows this time… :-)

  244. Warming/StJ – Yes that is very rational, which is why no one will do it…  

    Physics/Humvee – Well at least you have managed to prove that your mind is capable of achieving quantum levels of density in order to dogmatically stick to your beliefs.  I guess if I have to have a Bill Nye moment just for your ignorant ass I will as you are so grossly misinformed that I worry you may come in contact with children and infect them:


    The main ice covered landmass is Antarctica at the South Pole, with about 90 percent of the world’s ice (and 70 percent of its fresh water). Antarctica is covered with ice an average of 2,133 meters (7,000 feet) thick. If all of the Antarctic ice melted, sea levels around the world would rise about 61 meters (200 feet). But the average temperature in Antarctica is -37°C, so the ice there is in no danger of melting. In fact in most parts of the continent it never gets above freezing.
    At the other end of the world, the North Pole, the ice is not nearly as thick as at the South Pole. The ice floats on the Arctic Ocean. If it melted sea levels would not be affecte­d.
    There is a significant amount of ice covering Greenland, which would add another 7 meters (20 feet) to the oceans if it melted. Because Greenland is closer to the equator than Antarctica, the temperatures there are higher, so the ice is more likely to melt.
    So we have 20 feet of ocean covering Greenland and 200 in the Antarctic.  That’s quite a bit – don’t you think?  
    Contraction of the Arctic ice cap is accelerating global warming. Snow and ice usually form a protective, cooling layer over the Arctic. When that covering melts, the earth absorbs more sunlight and gets hotter. And the latest scientific data confirm the far-reaching effects of climbing global temperatures.
    Rising temperatures are already affecting Alaska, where the spruce bark beetle is breeding faster in the warmer weather. These pests now sneak in an extra generation each year. From 1993 to 2003, they chewed up 3.4 million acres of Alaskan forest.
    Melting glaciers and land-based ice sheets also contribute to rising sea levels, threatening low-lying areas around the globe with beach erosion, coastal flooding, and contamination of freshwater supplies. (Sea level is not affected when floating sea ice melts.) At particular risk are island nations like the Maldives; over half of that nation’s populated islands lie less than 6 feet above sea level. Even major cities like Shanghai and Lagos would face similar problems, as they also lie just six feet above present water levels.
    Rising seas would severely impact the United States as well. Scientists project as much as a 3-foot sea-level rise by 2100. According to a 2001 U.S. Environmental Protection Agency study, this increase would inundate some 22,400 square miles of land along the Atlantic and Gulf coasts of the United States, primarily in Louisiana, Texas, Florida and North Carolina.
    So Humvee, you are focusing your argument on the very small percentage of glacial ice in the world that floats in order to feel good about sticking your head in the sand about everything else and, as I told you – I don’t give a crap what kind of self-destructive BS you want to believe but I do care when you attempt to spread that lunacy to other people who may want to actually accomplish something for the good of the species.  Why does it bother you if other people want to help?  Do you own a coal plant?  I have never in my life seen such ridiculous behavior as I see from climate deniers – it’s totally irrational – there is no benefit to you in stopping other people from caring, is there?  
    Do you also go to fires and stop firemen from putting them out while you wait for "further evidence"?  Do you go to the beach and throw medical waste into the water because no health links have been established?  Do you stop people from building levees when there might be a flood (caused by the global warming you deny)?  Really, I just do not get it…
    Now, 500 foot waves was a note to Shadow’s observations of the coastline by him.  I’m sure you have an alternate explanation like Noah or some other one-time event.  And yes, the oceans are 100% full – if you put more water in them then they will rise and land will disappear.  If you do not understand this very simple fact, then it’s no wonder you have all these other beliefs.  The next part – I don’t even know what you are saying.  Are you not aware that the earth spins?  Do you not understand the idea of gravity holding us on it?  Do you not know that the ground, the ocean and the air are all spinning pretty much together so it only SEEMS like we’re not all moving?  
    Here’s why the people you follow are so gung- ho to put a stop to Nasa’s funding – global warming is obvious to the only people who have an outside view of the planet:

  245. Congratulations Humvee – this guy makes an excellent case for the fact that you have already won.  We may be already past the point of no return so I guess we can all not worry about it now:

  246.  Oh wait, this is even worse:

  247. Great, now I’m depressed.

    Batteries/Willie – Very nice.  I just hope they aren’t using rare earths to make them…

    SOB/Craig – Tip #1 – Title you post and save and then save every 15 mins.  #2 – Always copy your post before you try to save it.  That way, if it crashes while saving, you can just restart and hit CTRL-V.  #3 – Are you sure it’s gone?  Did you hit CTRL-Z?   #4 – Did you look in WordPress for drafts, in case it saved there?  #5 – This happens to all of us until we get burned enough times to learn to be super-careful by habit.  

    Super Moon/Cap – Shhhhh, don’t let Humvee see that.  It’s full of that "gravity" mumbo-jumbo…  8-)

  248. While y’all were deciding the physics of the globe, I was faced with a similar challenge this evening. On, I daresay, that was at the very extent of my ability to explain physics.  Hope, our 3 year old daughter, asked while flushing the toilet…"Daddy, why does my poopies dance and spin when I flush?"  While imitating the spiraling of the commode on the bathroom floor.
    So, being the ever resourceful Dad-in-the-know, I said "because of gravity and the spinning of the earth" to which she replied "you’re silly Daddy", and promptly left the room.
    So there you have it, poop spins and dances.  And if you don’t believe her, I can hook you up with a simple experiment to figure it out yourself!  :)

  249.  Check this out from March 7th ..


    Extreme Super Moon March 19 Expect Earthquakes, High Tides, Extreme Weather
    by Kit Karson on 07-03-2011

    This Super Moon will occur on March 19 when it is in its closest position to the earth this year. This one happens to be a full Moon, so it is time to prepare now. Full Moons in general can cause havoc, and this one for sure will not go unnoticed by anyone.
    Get ready for what could be moderate to severe weather patterns, increased seismic activity, tsunamis and more volcanic eruptions than normal. This phenomenon includes the days leading up to March 19 and the days after until around March 22nd.
    We experienced extreme weather conditions under the last Super Moons in 1955, 1974, 1992 and 2005. Hurricane Katrina is one example which happened in 2005 under a Super Moon’s influence. January 10, 2005 gave us the 9.0 magnitude earthquake in Indonesia, also under a Super Moon.
    The well known astrologer, Richard Nolle coined the phrase, Super Moon and he is predicting just such occurrences this March in particular and could continue into April of this year. The Moon exerts gravitational pull on the earth and the closer it is, the more influence it has. Super Moon’s have a particularly strong pull on the earth because they are much closer to the earth during these phases.
    This March may prove to be one of the worst months for severe weather and seismic activity yet this year. This may be because the Moon has not been this close to the earth in 18 years. The coastal regions should prepare for especially strong and high tides.
    This will be the second of three Super Moons this year. One occurred in February, again in March and April. These three months should mark a noticeable change in earth activity, along with natural gas leaks. Get your camera out because this particular Super Moon will appear extremely large at it rises after the sun sets, because it will be the closest one of the year.
    Just after the Super Moon, get ready for more financial concerns world-wide, an increase in oil and gas disruptions and the price of everything going up and into panic mode. Many power outages are likely to occur, especially if they hit densely populated areas. Stock markets may also be in for a wild ride.

  250. Beetles & Trees – Phil, you remarked almost in passing, "Rising temperatures are already affecting Alaska, where the spruce bark beetle is breeding faster in the warmer weather. These pests now sneak in an extra generation each year. From 1993 to 2003, they chewed up 3.4 million acres of Alaskan forest."
    It’;s been a huge problem in California as well,
    and is a major factor in the recent wildfires, which are coming more often and are larger than in the past. And which, of course, add to global warming, since it’s not just southern California that’s having wildfire problems; it’s pretty much global.

  251. Phil – I bought and read this game theory book in the Airport a year ago - "The Predictioneer’s Game:Using the logic of Brazen Self-Interest to See and Shape the Future"  Good, simple game theory book. Anyways, from what I recall the author argued that meaningful climate treaties will never happen b/c each Nation will demand exemptions ect. I cant remember what exactly the author argued but I *thought* the author stated (from a game theorist’s perspective) that we are all f#cked…. Again, I read/skimmed that book fairly quickly so I could be entirely mistaken, but that’s what I remember. That book would be a good book for your daughters when they get in 7th-9th grade (not to mathy or technical).
    ANyways, now to a stock question. I read quite a few articles comparing what happened with the Yen after the last Kobe Earthquake and how it just shot up. Many people are betting that the Yen will shoot up b/c people/businesses will be repatriating a lot of money…. Does this make sense? Im wondering Im already getting antsy about my short on futures.

  252.  Cap – Moon phase investing anyone?  I pay attention to full moons because we always have the biggest problems at the homeless shelter on full moons.  People act out more, drink and fight more.  One of my case managers lives near Woodstock and is very "new age" and his weird predictions about moon phases seem to be very often right.  I once saw a back test study that showed investing by lunar cycles was as profitable as most technical entry systems. It just goes to show that we can never have all the data to determine where a stock will go.  It is impossible to know what factors may drive the market tomorrow.  
    Crisis investing seems to be a little more certain.  I was glad to have shares in WY this week.  They shot up with anticipated demand for wood to rebuild in Japan.  This protected me better than my hedges, which weren’t bad either.  It would be interesting to put together a portfolio based on weather and disaster events (long natural gas in hurricane season, grain futures during droughts, etc.)  Then I could just watch the weather patterns to focus my investments, which would be more fun than watching CNBC.

  253. Good morning!  

    Working on $25KP at the moment.  

    Bad stuff in Japan, death toll around 1,500 now (I thought 29 was a bit low!) and an explosion at nuclear plant but seems to be under control at the moment.  There’s a whole other debate to have – is nuclear worth the risk?  Given our current capabilities – we have little choice but that’s why we should be pouring TRILLIONS of dollars into solar research.  We KNOW we can get energy from the sun – it’s a fact!  Why would we not do everything we can to perfect that process?  The only possible downside to investing WHATEVER IT TAKES in solar energy is that, for the rest of human history – we will not need to burn fossil fuels or buy power.

    Only the interest of people who want to sell fossil fuels and other forms of power could logically have an interest in mankind not getting free energy for the next million years.  Globally, we spend over $3Tn a year just on oil and another $3Tn on refined products and then there’s coal, nuclear, etc. not to mention how much of our food supply is used as fuel and then, of course, the environmental damage – however minimal you may think it is.   MADNESS!  

    Great article by David Brin on "Climate Skeptics v. Climate Deniers" with many good points, summarized by:


    While the species of sincere, conservative-but-rational AGW Skeptics does exist (I know several, and kind-of qualify as one, myself), they turn out to be rare. For the most part, those calling themselves "climate skeptics" are nothing but fully-imbibed Denialists, who wallow in anecdotes and faux-partyline talking points, participating in something that is far more insidious and devastating to our civilization than mere Energy Company Propaganda.
    As I have suggested elsewhere, the real purpose of it all may be to undermine the very notion of expertise in our civilization, leaving no strong force to challenge any ruling elite.
    But whatever the underlying purpose, one result is clear: Tens of thousands of Denialists egotistically assume that their fact-poor, pre-spun, group-rage opinion entitles them to howl "corrupt fools!" at the men and women who have actually studied and are confronting this important topic.
    Historian Arnold Toynbee — one of the greatest of all experts on the rise and fall of civilizations — when asked what critical mistake seemed most often to lead to a collapse — said it was "failure to support and believe in the society’s creative minority." In our own technological, enlightenment nation and civilization, that creative minority, to a large degree, is one of science. We do not have to worship their feet, or obey blindly. But we’ll be fools, treading the downhill slope followed by Babylon and Rome, if we despise them.

  254. Phil,
    How sad in Japan.
    Solar energy is an interesting topic.  My son’s godfather is in the business. 
    I also have a friend that does turn key hydroelectric plants.  He says there are tens of thousands of dams that can be converted to hydro and his company designs the systems then installs and manages the plants.  You talk about a lucrative business.  He was explaining to me that Hydro and Nuclear are the only realistic sources of power at the moment.  The problem with solar and wind is that they are not a consistent source of supply, that’s why most solar and wind manufacturers will not even quote a system unless it is "on grid".  Way too much liability with all the lawyers running around.  Anyway, since electricity cannot be stored efficiently, and since batteries are too costly and maintenance intense, solar and wind will not be a mainstream source of energy until the cost of nuclear and fossil generating plants becomes more expensive to operate and thus enable them to compete.
    To illustrate the cost of solar, my buddy was just telling me about a solar array that they are installing that costs about 600k and only generates 100kw.  That’s not very much power given the cost of building the system.  He was explaining that the reason some companies are installing these systems despite their high cost is because the government issues credits, that they can sell to power companies, and what power they don’t use, can be sold back to the grid.  The other downside of the system is that the footprint of the 100kw system is about the size of a football field.
    Unfortunately, without a huge government subsidy, or existing energy sources being made much more costly to operate, then solar and wind will remain a fringe energy source.

  255.  On a lighter note, condom company puts advertisements on the condom.

  256. Climate change,
    Many of the people I know who vehemently deny that Global Climate Change may be caused in part by the actions of man happen to receive monthly checks from the wells that have been pumping on their families land for decades. The biggest problem though appears to be that most people view the planet from a very limited perspective. People in my area see the entire climate debate through a 20 mile diameter lens. These people, who have no desire to venture from the center of the U.S. (the center of the world to most), have no sense of urgency when they hear the coastline may be under water or they hear about icebergs melting in far away places. After all, "twas bout dis temperature last year"!

  257. Phil/RJ_: Climate Change -   Admittedly I have not read the entire thread from beginning  but on the subject of polar ice caps and global warming, I remain unconvinced. Call me ignorant if you like but the problem I have is the numerous articles on this subject are nearly always published or funded by special interest groups that have their own unique agenda’s. I’ve seen just as many supporting articles that state the earth is cooling. For this reason, It’s really  difficult to weed through the crap to get to the real  truth.  I believe it’s plain common sense we should all be environmentally responsible and that our continued abuse of our environment, natural resources and the earths ocean’s is without doubt bad for future generations.  As for 500 foot waves and such I remain of the opinion the earth is much more powerful than "us" and it will without doubt heal itself at the expense of the men and women that have abused it. This will be accomplished via drought, floods, famine, earthquakes, fires etc.  Unfortunately, I have little confidence  there will ever be mass cooperation between leading economic governments (or the worlds emerging economies) to stop this continued abuse. That would require limiting their own growth so time will tell who was really right or wrong.

  258. There is no scientific debate about global warning or its cause. Agreement among experts in the field doing actual research on the topic is nearly unanimous (+97% by one survey). Perhaps you are, but I’m not equipped to challenge the conclusions of the leading scientists in this area. "There’s a better scientific consensus on this than on any issue I know — except maybe Newton’s second law of dynamics," D. James Baker, administrator of the U.S. National Oceanic and Atmospheric Administration. It would be interesting to hear any of you sit down and discuss your concerns with that guy or someone else equally or more knowledgeable. It’s right to be sceptical and intelligently involved, and we know that science is a dynamic process not immune to inertia, ego, etc., but you have to challenge accepted scientific facts with contending scientific evidence that meets the rigorous demands of research in that field of study, otherwise you’re just making stuff up or repeating someone elses thinking.
    So the debate is a political one masked as a scientific debate. Here’s something about that:
    1. The Public Persuasion Campaign
    In 1991 the Western Fuels Association, National Coal Association and Edison Electric Institute set up a group called the Information Council for the Environment (ICE). Its founding documents were leaked. The text has been made available online by the scientist Naomi Oreskes[1]. The strategy was spelt out in a document produced by the Western Fuels Association: to “reposition global warming as theory (not fact)”[2].
    ICE was given $510,000 to test its messages in key markets, all of which happened to be the homes of members of the Energy and Commerce or Ways and Means Committees of the US House of Representatives. The purpose was to “Demonstrate that a consumer-based media awareness program can positively change the opinions of a selected population regarding the validity of global warming.” If it worked, ICE would “implement program nationwide.”
    It identified “two possible target audiences”:
    “Target 1: Older, less educated males”.
    These people, ICE said, would be receptive to “messages describing the motivations and vested interests of people currently making pronouncements on global warming – for example, the statement that some members of the media scare the public about global warming to increase their audience and their influence….”
    “Target 2: younger, lower-income women”
    “… These women are more receptive … to factual information concerning the evidence for global warming. They are likely to be “green

  259. Jakester
    There is a large problem with your dismissing articals nearly always published or funded by special interest groups. It has to be funded by someone as does the other side with big money supporting cooling based on a bad winter in Niagra Falls this year. The people you suspect as misleading are usually underpaid and exposed to extreme dangers to conduct the research. You will never hear Exxon is funding the research although early every Sunday morning the energy companies spend millions advertising their good guy energy concerns. Has it ever occured to you how much lower drug costs were before drug companies spent billions on advertising and taking doctor offices out to lunch? I realize it makes money in ads and well paid sales jobs but the doctors don’t buy the drugs, sick people do. Is it not wrong for drug and oil companies to take such a bite out of people to fund a few high paying jobs? Drug salesmen don’t actually sell drugs and Exxon salesmen don’t sell gas. Its the pharmacy and gas station.
    As for 500 foot waves I never said that, not even close. I said that there was evidence of seawater detected 500 feet above present sea levels. There have been major shifts and continental movements since the earths beginning. The plate movements that cause earthquakes are small scale movements. There have been a few times when big moves caused bigger moves and at these times of continuous huge earthquakes, volcanos, and continental shifts caused oceans to slosh and earth to flow like water downhill. Have any of the recent 9 + earthquakes made a mountain? Forces beyond mans comprehension caused the Rocky Mountains, Everest, and multi mile deep sea canyons. This is when the sea reached 500 feet. Have you heard where most salt comes from? Not by evaporating sea water but mines under the Great lakes created by ancient oceans that were much deeper and very unfresh. The earth flowed down from the present Continental Divide covering the mid west with fertile soil that also filled the ancient oceans and left the great lakes. You may believe God snapped his fingers and started this thing but it did take hugh forces and billions of years after the snap. This may be just a cycle the earth goes through every few million years, we do know these major events once started move very quickly to equilibrium. Maybe you should contemplate how all the oil got buried and where, a major hint is mostly below mountain ranges. Shale oil and gas somtimes got trapped between mountains.

  260. jakester,
    You mentioned articles being published by special interest groups, so here is one you might want to read. There is also a chart at the bottom that I think Phil would find interesting. I know you may discount the whole article because of the source, but being from the Koch’s hometown I am very familiar with their "work".
     My whole argument is that there are few subjects that garner such overwhelming support from the scientific community. The scientists are being ignored. I actually went back to school a couple of years ago and took Environmental Geology just to learn more about the subject. There is no dispute that polar ice is melting. What some people try to argue is that it may be natural. The problem is the rate at which global warming is occurring. If you look at charts comparing the rise in global temperatures to the rise of the industrial revolution and population growth, you will notice a disturbing trend. To think that the industrialization of the world and the population growth since then has had no effect on the environment is just being in denial. Look at the charts and concentrate on the rapid change the last few decades
    If we think that the deforestation of our planet and the release of CO2 into the environment by humans could possibly have a detrimental effect, then we should do something about it. If we wait until we all have proof that our recklessness has a negative affect on our planet it may be too late. Common sense tells me that burning forests and burning fossil fuels (the release of CO2) by millions of people could be contributing to global climate change. If the rate of temperature change of the last few decades continues, we are all in trouble.

  261.  Hey guys, my post about automated forex trading is up under Phil’s Favorites.  Check it out.

  262.  Man, in more or less its present form  has been on earth for @ 200,000 years, or @ 4 ten thousandths of its existence.  "Civilized" man [writing, etc] has been here less thann 10,000 years, i.e., one two hundred thousanths of geological time.
     We are undoubtedly having an effect on the planet, probably invidious from our point of view.  But on a geological time scale, it is pretty clear that extinction events are pretty common: the last one an Indonesian volcano that took out much of the early African migration into Asia.
     The deep oceans are quite stable; land isn’t.  After all, "land" is a bunch of rock plates crashing together as they float over molten rock, not much of a solid foundation. Leaving the ocean [or living near its surface] to take advantage of photosynthesis and oxygen has tremendous advantages for life on earth, but a very distinct downside.  As a matter of fact, mankind is actual a product of the extinction event that killed off dinosaurs and enable warm-blooded little rat-things to get a foothold and evolve the line of mammals.  In respect of geological disasters, life always asks the question, "cui bono?"
    I will spare you my speculatins about giant squid evolving for millions of years near hydrothemal vents in the Marianas trench — no wonder we never catch one alive.  They’ve had a  long time to think through the problem.
    Lest this be taken as defeatist fatalism, my first job was with the EPA and I subsequently 27 years putting up wind turbines in the U.S. and Europe — $1.4 billion of them at cost.  So I’m all for saving the planet.  But we must see our position for what it is — very precarious, even if we were to entirely behave ourselves.

  263. Civics - The Tiny Dot explains how the throng obeys the miniscule little parasitic gang of control freaks.  ;-)

  264. As a change of pace, I’ll put out my first long-term investment idea. Lexmark (LXK) looks undervalued and may be a take-over target. They recently amended executive employment agreements to compensate and continue benefits if terminated as the result of a change in control. BCS for Jan  40/50 is 2.60 debit and 35 puts sell for 4.60. 24% return if the stock holds between 35-40 (and assuming we’re not all extinct by next January 21st).  The worst case is buying the shares for a 10% discount to it’s Friday close 36.61.

  265.  Amazing.   A surge from 5900 miles away arrived at Mission Bay (San Diego) early Saturday morning, causing a bait barge to become dislodged which then proceeded to slam into the 60ft yacht I keep at the Hyatt marina.   I guess I got lucky with only a 12ft gash and some other damage, other boats further up at Seaforth marina sustained more than $100k damage.   Hard to believe so much energy from halfway around the world could do this.   

  266. The quake shifted Honshu, the main island of Japan, 8 feet to the east. That’s over 100 million people so just the weight of the population would amount to several billion pounds. Preliminary estimates show the earth’s rotation moved on it’s axis about 4 inches. If Friday seemed a little more rushed than usual,consider that another effect was a shorter day as the rotation of the planet sped up by 1.6 microseconds. Tsunami waves travelled at 500 mph. Astonishing energy.

  267. Phil,
    From CNET

    While some iPad 2 buyers have been surprised to see their online orders ship early, new buyers are seeing wait times for new orders extended yet again.
    Apple today quietly pushed the ship times for iPad 2 online orders back once again, now estimating new purchases at 3 weeks to a month.
    The new shipping times, along with sellouts, and limited model availability at retail stores (including its own), are a clear sign that Apple is having a tough time meeting demand. A similar situation took place during the first launch, leading to Apple pushing back its international launch, which for the iPad 2 is less than two weeks away.
    Online sales of the iPad 2 kicked off at 1 a.m. PT yesterday, and quickly went from 3 to 5 days to 2 to 3 weeks, the latter of which had held until just a few hours ago.
    Unlike last year’s sales, Apple is not allowing users to reserve iPads from its retail stores. This process would allow users to pick an iPad model they wanted, and get an e-mail when it was available for pickup and purchase.
    Analysts like Piper Jaffray’s Gene Munster set estimates for first day sales somewhere between 400,000 to 500,000 units, some 200,000 better than the first iPad did during the same time period in its launch. Brian Marshall, an analyst at Gleacher & Co. set the bar a bit higher, at 600,000. Apple is expected to unveil preliminary unit sales on Monday, as it did on the Monday following the launch of the first iPad.

    Josh Lowensohn
    Full Profile E-mail Josh Lowensohn
    Josh Lowensohn joined CNET in 2006 and now covers Apple. Before that, Josh wrote about everything from new Web start-ups, to remote-controlled robots that watch your house.

    While some iPad 2 buyers have been surprised to see their online orders ship early, new buyers are seeing wait times for new orders extended yet again.
    Apple today quietly pushed the ship times for iPad 2 online orders back once again, now estimating new purchases at 3 weeks to a month.
    The new shipping times, along with sellouts, and limited model availability at retail stores (including its own), are a clear sign that Apple is having a tough time meeting demand. A similar situation took place during the first launch, leading to Apple pushing back its international launch, which for the iPad 2 is less than two weeks away.
    Online sales of the iPad 2 kicked off at 1 a.m. PT yesterday, and quickly went from 3 to 5 days to 2 to 3 weeks, the latter of which had held until just a few hours ago.
    Unlike last year’s sales, Apple is not allowing users to reserve iPads from its retail stores. This process would allow users to pick an iPad model they wanted, and get an e-mail when it was available for pickup and purchase.
    Analysts like Piper Jaffray’s Gene Munster set estimates for first day sales somewhere between 400,000 to 500,000 units, some 200,000 better than the first iPad did during the same time period in its launch. Brian Marshall, an analyst at Gleacher & Co. set the bar a bit higher, at 600,000. Apple is expected to unveil preliminary unit sales on Monday, as it did on the Monday following the launch of the first iPad.

    Josh Lowensohn
    Full Profile E-mail Josh Lowensohn
    Josh Lowensohn joined CNET in 2006 and now covers Apple. Before that, Josh wrote about everything from new Web start-ups, to remote-controlled robots that watch your house.

  268.  lvmoda- San Diego? I am trying to develop some contacts there- if so inclined- drop me a line –

  269.  Japan- nuclear plant- likely some short opportunities ? CCJ comes to mind. 

  270.  TOS users- my memory may be faulty but I seem to recall that TOS did not charge commission for closing option positions for $.05 or less. I don’t see anything on the website. I am preparing my tax records for 2010 and I see commissions charged for such transactions. Anyone have info on this?

  271.  They dont charge for buying back a shot option which is $.05 or less.  If you try and close it as a spread or part of some other options monster then you dont get it commission free.

  272. I failed to take into account the damaged nuclear reactors would have on Japan’s economy.  Aside from the obvious repercussions of a full meltdown, the government just announced daily scheduled 4-6 hour blackouts throughout most of the eastern end of Japan including Tokyo until May.  So thats like have daily 4-6 hour power blackouts in Northeastern U.S. (including NYC) for a month and a half.
    You can imagine the potential economic disruptions this would cause.  Refrigerators and freezers stop working. Gas stations stop pumping.  Trains stop running.  Airports stop operating. Computers turn off. etc… etc..

  273.  craigzooka- Thanks, that explains it. 

  274.  pstas – what s/w are you using for preparing the schedule D? Thanks.

  275. Phil,
    Any earning play suggestions for this week: MDVN on Wednesday and LULU on Thursday?

  276.  Nicha- have not gotten that far yet. I am using Gainskeeper from TOS. Presently occupied with resolving a number of transactions. Mostly from positions which were transferred into TOS from other accounts. 

  277. Yen/Jrom – I think that the stimulus/relief spending should knock the Yen down at first but then money comes back as they build and the markets rebound.  The only wildcard is the debt, which is already 200% of GDP – it’s not at all the same as the Kobe quake from that respect.  

    IPad/High – The Apple store at the Garden State Plaza was a total zoo yesterday.  I barely got a look at the new model – no way was I going to be able to touch it without an hour wait.  

    Solar/Exec – Of course investing in battery tech is key but the grid already has storage capability so we just make it smarter and use that to push excess down the line.  I don’t know why everything has to be in the extreme – all on or all off the grid.  Stay on the grid and use 80% less power – that works fine, doesn’t it?  Also, everyone talks about electricity from the sun but solar heaters are cheap, simple and huge savers and we already have a neat system to store heat in most homes called a "hot water heater."  

    I don’t see "the size of a football" field as a reason not to do it either.  If course we research better, denser ways to gather energy but if you plan to install 10M football fields worth over 10 years, by the time you get the last 10% done, you can probably roll back over the first 10% and put in 2x more efficient cells and just wash, rinse and repeat until we’re at 80% efficiency or so.  I believe it takes about 8 acres of corn to power a car for a year anyway and the funny thing is no one considers how many acres of prehistoric flora and fauna go into a tank as well so when you say 100Kw is a barely more than an acre football field – it doesn’t really put me off.

    We could fight global warming and produce solar energy by floating solar platforms in the sea.  The solar panels utilize the sun’s heat instead of absorbing it like the oceans and that would cool the oceans while giving us power.  Working on transmission line technology in addition to battery storage would also be a good idea.  

    Condom ads/Nicha – If you use extra-large ones they should give you a discount!  

    That is scary stuff Pak.  Sadly, though, it’s not surprising…

    Man/ZZ – Sure we haven’t been long but neither is a cancer when it attacks the body.  It can grow undetected for what, to the cancer cells, must be millennia until finally it begins to become a problem for the host.  If they can’t be killed off, then the host dies when the imbalance of the various things that keeps a body alive get thrown off to the point where it can no longer function and then, the cancer dies too – none the wiser for the path of mutual destruction it went down when it grew too much.  As you say, the Earth is a very strong host and, most likely, it will throw us off and "reboot" long before we completely destroy it.  I agree our position is precarious at best but all the more reason to tread lightly!  Meanwhile, screwing up the planet in 200,000 just years when the dinos had a 200,000,000 year run does not speak well of us!  

    Dots/Scott – Subtle ways to incite revolution?  

    LXK/Pak – Very hard to say who wins (well AAPL) and who loses the PC wars for the next couple of years.  I’d go a bit more conservative and sell the 2013 $30 puts for $4.50 and buy the $20/30 BCS for $5.50 as that’s net $1 on the $10 spread so you make $9 in two years against possibly owning them at net $31 with a b/e of $25.50 as opposed a b/e at $33 on your more aggressive spread. 

    Surge/LV – You know it just occurred to me those fish all died the day before the quake.  That’s something worth looking into as a possible predictor (although with a 5,500-mile range, it’s not that great).  

    The whole island shifted Pak?  Wow, that’s very cool.  Hard to imagine this won’t affect our plate as well.  

    CCJ/Pstas – Yes, I was thinking about that one.  Might get a knee-jerk drop but they were already way down of Friday am so I figured we just need to pay attention for a while. 

    TOS/Pstas – That is their policy but I don’t think they write it down as they don’t want people to expect it.  I believe that only goes for last trading day or so into expirations.  

    Blackouts/Kinki – Yep, will be a while before they get back to normal.  Figure they are 10% of global GDP operating at 66% for one Q so will knock off about 0.8% of global GDP this year.  But, on the other hand, they should (assuming their debt doesn’t blow up, which it might) have a good 2nd half, ahead of trend if they go down the rebuilding path (and this is the only country where it’s really possible for the Government not to rebuild something after a disaster). 

    Earnings/Ross – Not until we see tomorrow’s futures at least.  Just shooting in the dark right now.  We still can’t get a straight answer out of Japan on the nuclear thing. 

    Fun from Barry:  

    Thinking about buying a new iPad 2 or Powerbook?

    Consider this table below, via Kyle Conroy. It shows what that purchase would have been worth if you had bought AAPL instead of their product and held it to today:



    Apple Product Release Date Original Price Stock Value Today
    PowerBook G3 250 (3500) 1997-11-10 $5700 $330,563
    Mac Server G3 266 Minitower 1998-03-02 $4499 $214,141
    Mac Server G3 300 Minitower 1998-03-17 $4999 $205,444
    Power Macintosh G3 266 Minitower 1997-11-10 $3000 $173,981
    PowerBook G3 292 (Wallstreet) 1998-05-06 $4599 $164,320
    Mac Server G3 233 Minitower 1998-03-02 $3349 $159,404
    PowerBook G3 300 (PDQ – Late 1998) 1998-09-01 $4999 $158,720
    Mac Server G3 333 Minitower 1998-09-01 $4599 $146,020
    Power Macintosh G3 233 Desktop 1997-11-10 $2400 $139,185
    Power Macintosh G3 233 Minitower 1997-11-10 $2400 $139,185
    Power Macintosh G3 266 Desktop 1997-11-10 $2400 $139,185
    PowerBook G3 266 (PDQ – Late 1998) 1998-09-01 $3499 $111,094
    Mac Server G3 400 (Blue & White) 1999-01-05 $4999 $125,012
    Mac Server G3 450 (Blue & White) 1999-06-01 $4999 $120,882
    PowerBook G3 250 (Wallstreet) 1998-05-06 $2979 $106,438
    Power Macintosh G3 300 Desktop 1998-03-17 $2750 $113,017
    Power Macintosh G3 300 Minitower 1998-03-17 $2399 $98,592
    PowerBook G3 233 (PDQ – Late 1998) 1998-09-01 $2799 $88,869
    Mac Server G3 350 (Blue & White) 1999-01-05 $3299 $82,499
    PowerBook G3 233 (Wallstreet) 1998-05-06 $2299 $82,142


    That is only the first 20; a huge table is at KYLE CONROY DOT COM

  278. More wisdom from Barry’s site – Want to know where over $1Tn of our National Debt came from?

    Wanna get serious about the deficit? Consider these issues:

    1) Eliminate agricultural subsidies
    2) Slash corporate giveaways/welfare
    3) Deal with skyrocketing medical costs, Medicare/Medicaid
    4) Cancel unfunded tax cuts

    Oh, and the cold war is over for decades now — hop about we rein in wanton Pentagon spending?



  279. LXK / Phil – Sweet, that’s 47% annualized on margin vs. 28% (YMMV as I’m not using PM). Once again, hedged investing  turns traditional ideas of risk/return on their heads. Boo-yay!

  280. Let them eat iPad! When NY Fed’s Bill Dudley was pressed by a working-class audience about how he can view inflation as low when grocery prices keep rising, his response: "You can buy an iPad2 that costs the same as an iPad1, that’s twice as powerful." Grumbling ensued, as Dudley is stunned to learn that iPads are more popular at Fed offices than on the streets of Queens.

    Banks aren’t using the right models to calculate risk-weighted assets, and are thus coming up with skewed results and using them to determine their Tier 1 ratios. That’s Jamie Dimon’s (JPM) critique as he slams risk models used in the industry, and he says his bank is the noticeable exception. 

    Stay tuned for Monday, BofA bears – the online activist group Anonymous says it, not WikiLeaks, has the smoking document cache that proves Bank of America (BAC) committed fraud, and that it will release the docs after the weekend.

    A bullish call on BofA (BAC) from Barron’s, which thinks the stock could rise more than 40% in the next two years as the bank’s credit portfolio improves and as CEO Brian Moynihan works to improve earnings. Potential investors may want to see what Monday brings before jumping in. 

    The Fed could tell major banks as soon as next week whether regulators’ stress tests show they’re healthy enough to boost stock dividends, Reuters says, in a move the markets are sure to view as a signal that the financial industry has passed the crisis. Among banks most likely to be given the green light: USB, WFC, JPM, PNC

    Obama and the Democrats are "aiding and abetting" Republicans in promoting "wrongheaded and destructive" notions about the deficit, Paul Krugman writes. In dealing with America’s problems, we are saddled with "a political culture in which one side sneers at knowledge and exalts ignorance, while the other side hunkers down and pretends to halfway agree." 

    One group that’s doing just fine in the pathetic housing market: landlords. Rents are on the rise again, not because the economy is improving but because it is stagnant. They’ll continue to go up as apartment demand rises amid little new home construction and as people wait to purchase existing homes. 

    Oracle (ORCL) Co-President Safra Catz is frustrated at the cap on the number of college-educated foreign workers that companies are permitted to hire each year. "The fact that it’s gotten so much harder for educated folks to stay here is really unfortunate because it means the jobs go [elsewhere]," but "comprehensive" immigration reform isn’t going anywhere.

    Stances harden as Germany and France lead an EU effort to withhold any concession on bailout terms without Ireland agreeing to raise corporate taxes. "Sarkozy deserves a gesture — but a gesture involving two digits and no other numbers," writes a former political leader.

    MIT research scientist Dr. Josef Oehmen injects some facts into the Fukushima nuclear plant story. His bottom line: "there was and will not be any significant release of radioactivity." The main concern is an energy shortage, the result of likely inspections of Japan’s nuclear power generators. 

    Japanese markets will reopen on Monday as normal despite Friday’s massive earthquake and resulting tsunami and nuclear-power crisis. However, the going may be tough and the government will be watching out for any manipulation. 

    More ADR fun:China MediaExpress Holdings (CCME) halted trading Friday morning pending some material news – and took the weekend off, as it never resumed. Why so long, unless the news isn’t good? Of course, another Chinese company, Rino (RINO), halted trading for days last fall, and you know what happened to them.

    That’s not what Rush said!  Government regulators greenlight another deepwater drilling permit, letting BHP (BHP) get back to work on an oil and gas well off Louisiana’s coast. It’s the second deepwater drilling permit issued in the last two weeks, and the first in the Gulf of Mexico since the drilling ban was imposed. 

  281. Japan shifted 8 feet yesterday  ,  and Indonesia shifted 60 feet  during the 2005 quake--amazing

  282. That is, the island where  Banda Aceh, Indonesia is located

  283. Good list. Bringing up the high cost of our national defense, I had to revisit an old favorite.

    All kidding aside, we seem to be over prepared for an outdated war and underprepared to fight our new enemies. Hopefully, we’ve learned something from our disasterous invasion of Iraq. Time will tell.

  284.  Phil, since I am an Author now, theoretically I should be able to post pictures and stuff in my comments.  How do i edit a comment like I would a new post.  I can’t seem to find the right button to click inside of wordpress.

  285. Good classic Pak!  

    Posting pictures/Craig – On top of the comment box are little doo-hickeys.  One of them looks like a yellow box with a mountain and the sun – that’s the picture thingy.  The word thing (box with a "W") is also useful if you past stuff and want to ditch most of the formatting but that’s all we have to work with in the chat box.  

    So Japan opened down 450 but bounced 100 already (9,665) and climbing.  Dollar spiked way down to 76.50 at 6 but back to 76.83.  Gold popped up $7 to $1,427 but copper is nowhere at $4.18 (remember $4.50?) and silver is hanging tough at $36.25, which is miles up from Friday’s low of $34.05.  Oil is looking like $99.92 (very bad with a weak dollar) and gasoline is $2.97.  Our futures are off about 0.66% and that makes sense as we erase the silly stick from Friday.  

    We can’t read too much into the early futures but it’s good to have benchmarks to see what progress we make later. 

  286. That was Japan’s futures, not the Nikkei yet.

  287.  Nikkei 225 Stock Average futures expiring in June dropped 2.2 percent to 9,785 in Chicago at 8:30 a.m. Tokyo time today and Standard & Poor’s 500 Index futures retreated 0.7 percent. Lost production from the Tohoku region where the quake struck might not be enough to spur a recession, Bank of America Corp. said. Bank of Japan Governor Masaaki Shirakawa told reporters he’s ready to unleash “massive” liquidity starting this morning in Tokyo to assure financial stability.

    “The purely economic consequences will be modest: some reconstruction, some more government spending,” said Charles de Vaulx, a manager at New York-based International Value Advisers LLC, where he co-manages the $1.8 billion IVA International Fund including Japanese stock. “No major international consequences, either, except maybe helping drive long-term rates higher. We do not expect to make any significant changes to our portfolio as a result of this tragedy.”
    The yen rose to a four-month high against the dollar as Japan grapples with possible nuclear meltdowns caused by its biggest earthquake on record, prompting investors to buy the currency as a haven.
    Gains in the yen were tempered before a Bank of Japan meeting today amid speculation policy makers may sell the domestic currency to aid exporters after the 8.9-magnitude temblor and ensuing tsunami that struck March 11. The euro gained versus the greenback after the region’s leaders agreed to widen the scope of a rescue fund aimed at resolving the sovereign-debt crisis and lower the cost of loans to Greece.
    “As the scale of the Japanese earthquake has unfolded over the weekend, the market may take a more risk-averse approach,” said Imre Speizer, a market strategist in Wellington at Westpac Banking Corp., Australia’s second-largest lender. “Risk currencies may falter and come under pressure including the euro, Aussie, kiwi and pretty much everything other than the yen and Swiss franc.”

    The yen typically strengthens in times of political, financial and economic turmoil. Japan’s trade surplus makes the currency attractive because it means the nation doesn’t have to rely on overseas lenders. The currency also may strengthen insurance companies and investors bring back cash held overseas to pay for damages, according to Mansoor Mohi-uddin, the Singapore-based head of global currency strategy at UBS AG.

    The yen pared gains after Governor Masaaki Shirakawa told reporters yesterday that he’s ready to unleash “massive” liquidity as policy makers seek to assure financial stability.

    The central bank may today inject more short-term cash into the banking system, while economists said officials are likely to keep longer-term credit programs at a total of 35 trillion yen ($428 billion) when they meet today at 1 p.m. in Tokyo. The bank’s main interest rate has already been cut to almost zero.
    “A rapid appreciation of the yen may make it easier for Japan to get a consensus to intervene from other nations,” said Takashi Kudo, general manager of market?information services at NTT SmartTrade Inc. in Tokyo, a unit of Japan’s biggest phone company. “The BOJ is likely to say it will use any measures to stabilize the market. That could ease gains in the yen.”
    The government sold 2.12 trillion yen in September in its first intervention in the foreign-exchange market since 2004. The yen reached 80.22 against the dollar on Nov. 1, the strongest since April 1995, when it reached a postwar record of 79.75.


  288.  Pak: We are indeed underprepared to fight our new enemies; as I recall, the line was: "We have met the enemy, and it is us."

  289.  I-Pad 2 – AAPL – NYC store Bway / 67th.
    About 100 or so people in line Friday afternoon waiting for them to open the doors.
    Sat. morning / very small line waiting to open.
    Sat. afternoon / no lines; decent traffic / lot of tire kickers (inc. me !)
    Sunday / slow – normal traffic.  no lines. no crowds.  seemed to be mostly tire kickers.
    I would say AAPL launch did fine; but not gangbusters.

  290.  now I have no idea if the store ran out of supply or not.  did not see many people leaving w/ stuff.  plenty of display models (must be about 30 at that store).

  291. Cap
    I-Pad 2 – AAPL – NYC store Bway / 67th.
    Simple question why can you not wait a day or two to buy the I Pad 2 and not stay in a line??

  292. crap. crap. crap.  the #3 reactor in Fukushima just had a hydrogen explosion…  the #3 reactor is supposedly uses plutonium.  oh god I hope the core hasn’t melted… this is terrible… there are so many cities in the nearby vicinity… :( ((((((

  293. Larry Kudlow: We Should Be ‘Grateful’ That Human Toll From Japan Quake Is ‘Worse’ Than Economic Toll (VIDEO)
    Kudlow was listening to a report about the global stock markets doing well in the wake of the quake. "All in all, the market taking this in stride," his co-host said to him.
    "The human toll here looks to be much worse than the economic toll and we can be grateful for that," Kudlow responded. "And the human toll is a tragedy, we know that."
    I swear to god if I ever see this dirty MFer on a NYC street, I am gonna quantitatively ease my boot up his evil arse!  >:(

  294. Cap, I’d love to verify that but CNN has Peirs Morgan and BBC has some interview and MSNBC is an infomercial – there is literally no actual news being broadcast on my cable TV at 12:50!  Google says (in general) that there was a rumor of an explosion so we’ll see…  

    The Nikkei is flopping along at 9,607 (down 6.3%) yet, amzingly, the Shanghai is back to flat and the Hang Seng is off just half a point and BSE is actually up half a point!  

    Japan has already dropped the stimulus bomb, with the BOJ not even waiting for their meeting to start to announce a $184Bn injection (into the Financials, of course – because it’s the bankers who really suffer in these crises).

    OK, 1am and the BBC is back in business.  2nd explosion confirmed, same as the first, "just" the reactor building blown up by hydrogen explosion but, unfortunately, these things aren’t over until they are over.  


    SOMA, Japan (AP) — The second hydrogen explosion in three days rocked Japan’s stricken Fukushima Dai-ichi nuclear plant Monday, sending a massive column of smoke into the air and wounding 6 workers. The plant’s operator said radiation levels at the reactor were still within legal limits.
    The explosion at the plant’s Unit 3, which authorities have been frantically trying to cool following a system failure in the wake of a massive earthquake and tsunami, triggered an order for hundreds of people to stay indoors, said Chief Cabinet Secretary Yukio Edano.
    Tokyo Electric Power Co. said radiation levels at Unit 3 were 10.65 microsieverts, significantly under the 500 microsieverts at which a nuclear operator must file a report to the government.

    The reactor’s inner containment vessel holding nuclear rods was intact, Edano said, allaying some fears of the risk to the environment and public. TV footage of the building housing the reactor appeared to show similar damage to Monday’s blast, with outer walls shorn off, leaving only a skeletal frame.

    Operators have been dumping seawater into units 1 and 3 in a last-ditch measure to cool the reactors. They were getting water into the other four reactors with cooling problems without resorting to corrosive sea water, which likely makes the reactors unusable.




    Earthquakes aren’t over either.  "Experts" are saying there may be another quake by Thursday.  I like how they had no clue at all about the first one but now they suddenly know what will happen. 

    Damages are looking like $50Bn so far but no word on any actual money spent to fix problems – just giving almost 4 times that much to Banksters – amazing!  The Kobe quake hit more developed areas and cost $132Bn but, as I said, this one ain’t over ’till it’s over.  


    "For Japan, a nation that lives by the sea, food comes in by the sea, energy comes in by the sea, exports go out by the sea. Everything stops if a quarter of the coastline has been wiped out," said Weinberg who teaches at New York University.
    Toyota Motor Corp., the world’s top automaker, as well as Nissan Motor Co. and Honda suspended production at all their auto plants in Japan, starting Monday.
    When production will resume is uncertain. The area hit by the quake is a major center for car production, complete with a myriad of parts suppliers and a network of roads and ports for efficient shipments.
    "There is no way to get our products out, even if we make them, with the roads and distribution system damaged," said Honda Motor Co. spokeswoman Natsuno Asanuma.


    Our futures are improving, down 0.5%ish – erasing about 1/3 of opening losses at 1:30.  The Dollar is just under the 77 line with the Euro just under $1.40 and the Pound at $1.60 and the Yen now at 82.13, down from 80.50 at the open thanks to the stimulus announcement (up is down on the Yen as it’s how many Yen per dollar and not how many dollars per Yen).  

    Commodities are floating along at the same:  Oil $99.57, gasoline $2.97, nat gas $3.93, gold $1,423, silver $35.79 and copper $4.16.  The near-term impact of a Japan slowdown trumps the long-term fact that we are probably going to have less nuclear energy than we thought for the next decade now.  

    I would think F is a good buy in the morning as Japan’s car production is hit but they sure broke a lot of cars in that quake.  They were at $14.36, which is down nicely from where I stopped liking them at $16.50 (they topped out just under $19) so I really like the short Apr $15 puts at $1 or buying the stock and selling the 2013 $12.50 puts and calls for $5.80 for a net $8.56/10.53 entry.  

    GE will make a nice buy if they have a knee-jerk sell-off (they built the plant 40 years ago) 

    China is scheduled to build 28 new reactors over the next decade, about 1/2 the World’s total planned.  I doubt they will change their minds.  Hopefully it will cause them to focus more effort on perfecting pebble bed reactors – which promise to be safer than current designs if they work out the bugs. 

    We’ll see what happens when Europe opens.  Also, don’t forget – we’re still waiting to see of "Anonymous" really has the goods on BAC or not.  They had said they would release it this morning but the timing kind of sucks now so I hope they don’t.  

    The dollar is +0.4% to 82 yen after falling to within one yen of the all-time low (1995) of 79.7 earlier today. Overnight, the Bank of Japan offered to inject a record ¥7T ($183B) into money markets, and may further ease its ultra-loose money policy. It’s unclear how long the BOJ will be able to keep a lid on the yen. 

    The Nikkei is -5.7% at 1:00 PM Japan time, its low of the day.

    Manufacturers are being hit hard, including Toshiba (TOSBF.PK) -16.3%, Hitachi (HIT) -15%, Nissan (NSANY) -9.2%, Sony (SNE) -8.5%, Toyota (TM) -8%, Panasonic (PC) -8.2%, and Honda (HMC) -5.7%.

    Other losers include Nomura (NMR) -9.1%, Yahoo Japan -6.2%, and Nippon Telegraph and Telephone (NTT) -5.5%.

    Many firms are still trying to assess the condition of their plants and how potential power cuts might affect them. 

    Three are injured and seven missing after a second explosion rocks Fukushima’s No. 3 reactor due to a hydrogen buildup, but the plant’s core remains intact. Journalists say they felt the explosion 30 miles away. (video of explosion

  295. For that and so many other things he’s said Kinki – I totally agree with you!  

  296. HIT, NJ and KUB are good suggestions for rebuilding in Japan

    Other investment-related issues from Japan:

    A Credit Suisse report says the initial reports estimate a range from $10 billion to $50 billion. In Europe, the stocks of some of the world’s biggest reinsurance companies, including Swiss Re (SWCEY.PK), Munich Re and Hannover Re fell 4%~5% on Friday on concerns that the deadly combination of earthquake and tsunami will cost them dearly. The stock prices of Aflac Inc (AFL) and Bermuda-based reinsurer Partner Re also saw selling pressure. Investors could also lose millions in investments through seven catastrophe bond transactions totalling some $1.5 billion with exposure to Japanese earthquake.


    Because Japan produces more than 40% of the world’s NAND flash memory chips — and 15% of its DRAM — the earthquake could seriously affect worldwide semiconductor supplies, according to analysts such as Jim Handy of research firm Objective Analysis.
    Even a two-week shutdown of fabrication plants would remove from production a sizable share of wafer production, causing major price swings and short-term shortages. Not everyone agrees with the Objective Analysis view, however. Market research firm iSuppli does not believe that DRAM and NAND production will be affected by the quake. Micron (MU), Toshiba (ADR: TOSBF.PK) and Elpida Memory production facilities in the region were far enough away from the tsunamis to avoid damage. That said, many electronic manufacturer factories in region won’t be buying or shipping product until earthquake damage is repaired. This includes Sony (SNE), Murata (ADR: MRAAY.PK), Renaissance Electronics and Shin-Etsu Chemical ( ADR: SHECY.PK) factories.


    Based on the U.S. EIA data, Japan imported 4.7 million barrels a day (bpd) in 2009, with total oil refining capacity of 4.6 million bpd at 29 facilities as of January 2010. According to Reuters, the six refineries that are shut down have a total capacity of 1.40 million barrels per day (bpd). That’s about 1.6% of the 89.3 million bbl/d global 2011 product demand forecast by the International Energy Agency (IEA). 

    While Japan is the second-largest net importer of oil in the world after the United States in 2009, the estimated import disruptions due to the earthquake does not appear significant enough to sway world’s crude oil market

    On the other hand, since about 25% of Japan’s electricity is coming from nuclear, the resulted power shortage due to closures of a dozen nuclear reactors after the quake suggests Japan will likely need to increase its imports of petroleum products and other energy sources (See Chart, click to enlarge).

    The country’s power generation relies mostly on coal and natural gas, which means there will be an increase in imports of diesel (to power generators), and other petroleum products (since part of its domestic production is offline), along with natural gas/LNG, and coal, just to keep the the entire nation going in the aftermath.
    Future investments in nuclear power could be even harder to come by, and companies like NRG Energy (NRG) and Southern Company (SO) may need to scrap or write off their planned nuclear power projects, which could impact their forward earnings, and stock valuation.

  297. iPad2 / Highlander
    "Apple is expected to unveil preliminary unit sales on Monday, as it did on the Monday following the launch of the first iPad."
    This is sounding like box office numbers reported after weekend movie premiers. Is the iPad the Jaws of tech products which started the blockbuster movie phenomena (maybe XBox beat them to it, so we can call iPad Star Wars and iPad2 The Empire Strikes Back)? Will new products be announced as duds if thier first weekend sales fall short of expectations?

  298. BoA leak – Doesn’t look there’s much there but maybe it leads to more.

    "In the emails dating from November 2010, people that appear to be employees of a Balboa Insurance, a Bank of America insurance unit, discuss removing documents from loan files for a group of insured properties."
    And it’s clearly personal at this point.
    "the former employee described the bank as a "cult" and said the company is now intent on destroying his career.
    "I’m well known throughout Bank of America," the former employee said in one email. "They saw to that when they showed everyone my picture and labeled me as a terrorist."

  299. if i copy something from an email i received and want to share it with you, what’s the process? When i have done it in the past all the font stuff is displayed.