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Tempting Tuesday – Murdochs Testify to Parliament

NWS is down 20% of late.

Today we hear from the Murdoch family, owners of the venerated Wall Street Journal as well as Dow Jones, Inc., who will be explaining how their company allegedly broke the rules, lied, threatened and/or bribed almost everyone, engaged in cover-ups, slandered anyone who got in their way and callously ruined the lives of innocent people – all in the name of profits.  Already Sean Hoare, the reporter who blew the whistle on Murdoch has been found dead inside his London apartment.  "The death is currently being treated as unexplained, but not thought to be suspicious. Police investigations into this incident are ongoing," said a police statement.

Would that be the same British Police Department that’s had two high-level resignations over accepting bribes from Murdoch’s organization?  The Daily Mirror newspaper quoted an unnamed friend as saying Hoare "thought that someone was going to come and get him, but I didn’t know whether to believe half the stuff he was saying."  In other words, Hoare was poor and intimidated by NWS (he was refusing to testify against them) while the Murdochs are rich so every possible benefit of the doubt is being given to them just like Rebecca Nalepa was found with her hands and feet bound with a rope around he neck hung off a balcony in a San Diego mansion and the police there are thinking "suicide."

As F. Scott Fitzgerald once said: "The rich are different than you and me – they have more money."  As Bill Domhoff pointed out this weekend, when we talk about the rich, we don’t mean the top 1% – people who "only" make $1.6M a year or more.  Sure those of us in that group may have a "get out of jail free" card for when we speed and we may get our buildings approved quicker than most and we may get a local ordinance passed here or there but, when you move up to the top 0.1% ($36M or higher per year income) or the top 0.01% ($450M or higher annual income), where Mr. Murdoch lives – not only do you get both national and international laws rewritten to suit your needs (like taking over 100% of the UKs satellite broadcasts), but the other laws don’t even apply to you.

This lack of accountability leads to increasing bad behavior, as evidenced by our own financial crisis, where the Masters of our Universe screwed their own clients with "shitty deals" yet not a single arrest has been made other than finally shutting down one Ponzi scheme so that the rest of Wall Street can point to Madoff and say – "See, people were arrested" even though he had NOTHING to do with the sub-prime lending or CDS fiascos that destroyed the US economy and cost the taxpayers (so far) $9 Trillion Dollars or 180 times more than the size of Madoff’s entire fund, much of which has now been recovered.  Unlike Madoff victims, the victims of the Banksters will never have a special prosecutor on their side with the power to recover our money. 

That’s because just 10 banks, most in the famous international "Gang of 12" which includes both Murdoch and GE (both of whom control the media – especially the Financial Media) own 77% of our nation’s banking assets.  That’s 40% up from 55% back in 2002, when Bush deregulation let these banks go totally wild.  GS, MS , JPM, C, BAC and WFC are the 6 top US banks with $10Tn in assets between them.  Others in our Gang of 12 are the EU powerhouses of CS, DB, BCS and Nomura in Japan – they are the masters of the financial universe and the expression applies to any of the majors who use their assets to influence the Global Economy in pursuit of (what else?) more wealth.  

Our current tax structure does not simply allow but ENCOURAGES wealth to pool into the hands of the relatively few.  $10Tn in the hands of 6 US banks represents a 40% increase ($4Tn) over 2002.  If we work that backwards then we see that there USED to be $4Tn in the bottom 99% that has now been transferred to the top 1%.  That’s OK though, I’m sure they can afford it – after all, there’s 99 of them for each one of us and we are, after all, better (richer) than them, are we not?  

So the poor banks (and the poor people who bank there) used to have 45% of the nation’s assets just 9 years ago but hey, look on the bright side – they STILL have 23%, that’s more than half!  This is why we have to tax the bottom 99% more – otherwise we would have less to trickle on them with!

As you can see from this chart (thanks Jessie’s Cafe American), the US already taxes our Corporations and Citizens FAR less than almost any other nation on Earth and that, of course, had led us to run up TREMENDOUS deficits, to the point where we had to borrow $15 Trillion – just to keep pretending we could run our Government without collecting the taxes to pay for it.  That’s BRILLIANT though because the rich people get 99% of the tax breaks while the deficit is EVERYONE’s problem.  

In fact, for the past few years, our Federal Reserve has placed a stealth tax on ALL of the American people by devaluing our Dollar by 15%.  The cool thing about taxing the population by devaluing the currency is it’s not just a tax on one year’s earnings but a tax on everything they have worked to accumulate over their entire lives!  That’s right – through inflation, the Fed is able to reach into your bank account and under your mattress and, of course, into your home equity and take 15% of EVERYTHING you have – whether you declare it or not.  

There are no loopholes (which are now over $1Tn a year for the top 1%) to escape from inflation unless, of course, you are a Member of the investing class and you own stocks or commodities or collectibles that rise against inflation.  Then you are in such good shape that 40% of the nation’s wealth actually migrates from the bottom 99% into your bank account in less than a decade.  Come on, you’ve gotta love this country – Go Capitalism!  

At this point, as Charles Hugh Smith points out, the bottom 80% have just 7% of the Financial Wealth left and own just 8.9% of all stocks so these engineered market rallies are not helping those who need help the most and then you get these jackasses on TV telling us that we can pay off the deficit (the one we built up because the rich people didn’t pay their taxes) by gutting the retirement accounts of the bottom 80%.  

Forgetting the fact that a person who worked for 40 years and had 10% of his income (call it an inflation-adjusted $25,000 since we’re talking bottom 80%) removed every year – even at just 4% interest, should have $259,068 coming to them (10 years of full SS checks) – forgetting the great crime we are all planning on perpetrating against these people who have been counting on this money (THEIR MONEY) coming back to them in their old age – what is the actual end game planned for when we do stop giving 40M people their retirement checks?  

I know that we, the people, are trained not to examine the potential consequences of our actions so when some blowhard politician talks about cutting the post office, we don’t wonder how we will get our mail and when they talk about cutting back regulation, we don’t think about Three-Mile Island, Love Canal or any of those horrible side effects of the drugs they DO approve but what exactly will  happen to Grandma and Grandpa when the day they stop working is the day they start starving?  

Of course, if Grandma and Grandpa are rich (and, for the top 1%, the chance that they already came from wealth is 89%) – then this is not a problem.  The $2,500 monthly Social Security check is just funny money to them and they wouldn’t go to those Medicare doctors anyway, right?  But, for the bottom 99% – Mom and Dad will be moving in and that too is yet another tax that will be placed on the poor – who now have to support their parents as well.  But don’t worry, this will only go on until Mom or Dad get ill and then the family will go bankrupt very quickly.  

Fortunately, our leaders already planned for this contingency and Bush signed the "Bankruptcy Reform Bill" of 2005 to make sure there would never be an escape from debt for the working poor.  This means that, if you are foolish enough to take your Father or Mother to the doctor and put your name on hospital paperwork, you too can rack up millions of Dollars in debt once their insurance runs out (which would be IMMEDIATELY under most Republican plans).  

Of course if you are poor and you bind your sick Mother’s hands and feet and put a rope around her neck and toss her off a balcony – you probably won’t get it ruled a suicide because, well – you are poor and nobody owes you any favors, do they?  

Do I have a solution for this?  No, I do not (not one that would be politically acceptable, anyway).  All we can do is to get as rich as possible before this whole mess begins to come unglued so we can be one of "THEM" ourselves!  Along those lines, we went long on the S&P yesterday as the market bottomed out in the afternoon with aggressive bullish plays on both SSO and SPY and those should be helping us get closer to goal this morning as a combination of positive earnings reports and much improved housing starts gives the markets an early boost.  

We’ll see how our lines hold up, in Member Chat this morning we set levels to watch for at Dow 12,500 along with 1,317 on the S&P, 2,775 on the Nasdaq, 8,300 on the NYSE and 825 on the RUT – if we can make those and hold it, we may actually have a reason to make some more bullish picks but, for now, we remain cashy and cautious as we get ready to enjoy the Murdoch show!  


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  1. Phil/BTFD
    Looks like the BTFD’ers are still at it.  Are they going to be punished or rewarded today?

  2. exec / BTFD — rewarded until a non-bank screams "uncle". <insert JRW’s moon chart here>

  3. Phil / GLW – would you go long before earnings?  It’s getting close to support at $15. 

  4. Oil Lines
    R3 – 100.40
    R2 – 99.04
    R1 – 97.76
    PP – 96.40
    S1 – 95.12
    S2 – 93.76
    S3 – 92.48
    Yesterday’s move did add a lot of volatility on these lines.
    High and lows from yesterday’s session – 97.69 which held earlier and 95.05.  

  5. craigzooka
    Thanks, it looks very reasonable

  6. FAS Money – We are short the 23 Puts and have not opened any short calls yet as XLF held 14.50 yesterday.  

  7. stjeanluc--really appreciate your succinct updates

  8. Oppenheimer boosted its price target for Netflix Inc. to $360 from $280 as its international expansion helps it transform its model for global content distribution. Oppenheimer says Netflix has reached an “inflection point in its higher margin online streaming subscription business,” as strong subscriber growth is coupled with falling subscriber acquisition costs and churn rates. Shares gained 1.3% to $282.70 in pre-market trading.

  9.  stj – agreed, thanks for keeping us up to date on the FAS money. You mentioned going over your thoughts on trading oil at some point after your trip, I would love to hear that also.

  10. Phil / Oil $98    We shorting at this level?

  11. "All we can do is to get as rich as possible before this whole mess begins to come unglued so we can be one of "THEM" ourselves!"
    Touche, and zoots and alours!

  12. Anyone on Schwab having trouble with RUT?

  13. dclark/Borders: I lived in Ann Arbor for 8 years (’75-’82) while getting my dental and dental specialty degrees. Used to hang out on State St. on the weekends after a dinner at Lamplighter or Pretzel Bell. I remember going into this little book store on the second floor of this ancient building on State Street that had an old couch and a few chairs. Didn’t think much of it at the time… but I did always remember it was called Borders. It was the first store they had, long before going public. Happy I can say I was there.

  14. PP for today for this psycho thing we call a market.

  15. Phil, what’s your view on MGM and TSO short term? Thnx

  16. Phil what do you think about aug USO puts right now?

  17.  Agree, Flip, a fine capitalist sentiment — "Living well is the best revenge."

  18. JRW/IWM – where are you sitting currently?

  19. Oil / Kurtww – I’ll try to put something together over the weekend! 

  20. Pharmboy
    Looks like Delcath financing was at $4.75. Awfully low. Your take. Thank you.

  21.  stj – thanks, that would be great. Curious how your strategy compares to Phil’s. Are you going to Las Vegas in October by any chance?

  22. oil / stjean – I would also be interested!

  23. FAS Money – Not a lot of conviction in the financials – BAC and GS are both down this morning while the market is up over 0.75%. XLF is holding around 14.68 right now. The Puts are looking better this morning than yesterday! Should we look at selling the 23 Calls at around 0.59? All premium for now…

  24. @Felipe
    Reading from a ‘different book’  can sure add to your pile.
    In Canada last week, I was surprised to learn how the Euro and Loonie were parting ways even faster than the Dollar and Euro were.
    That lead to a sell of the EUR/CAD cross.  And paid off to great effect this morning. Thank you, Toronto Globe and Mail, now one of my favorite ‘liberal’ newspapers. 

  25.  Yup, oil over $98′s got everyone’s attention.  Euro up today, so I dunno.

  26. pharm, I think our silly little market is just trying to put on a brave face.

  27. Phil – Wondering what your thoughts are on the better than expected housing numbers that came out today.

  28. Good morning!

    Wow, what whipsaw action we’re getting.  

    Word is that NWS is going to skate through their testimony today and it will really cheer rich people up to see two of their richest walk all over British Parliament.  Keep in mind that Murdoch is an Aussie and ONLY gets such good treatment because money trumps nationality every time.  

    This is Team Wealth going up against Team Government and its like a World Cup final to see what the rich can get away with in the current global climate.   As I said in the morning post, if the Murdochs get to walk away from this with a wrist slap, then it’s game on for all sorts of Global abuses as the top 1% once again begins to feel untouchable.  

    Already the markets are flying on nothing in particular and our targets for today are those next lines of upside resistance at Dow 12,500 along with 1,317 on the S&P, 2,775 on the Nasdaq, 8,300 on the NYSE and 825 on the RUT. 

    Other than that, it’s kind of a watch and wait day as we flipped bullish at the perfect time yesterday so now we just need to see what they can make stick on this rally.  

    Tuesday’s economic calendar:
    7:45 ICSC Retail Store Sales
    8:30 Housing Starts
    8:55 Redbook Chain Store Sales

    Notable earnings after Tuesday’s close: AAPLCCKCSX,CTASFISFTNTRVBDSYKURIVMWWITYHOO

    At the open: Dow +0.58% to 12457. S&P +0.53% to 1312. Nasdaq +1.02% to 2793.
    Treasurys: 30-year -0.2%. 10-yr -0.21%. 5-yr -0.14%.
    Commodities: Crude +2.01% to $98.18. Gold +0.12% to $1604.30.
    Currencies: Euro +0.34% vs. dollar. Yen +0.08%. Pound +0.33%.

    Market preview: S&P futures +0.6%, bolstered by data showing U.S. home construction rose in June to the highest level in five months. Apple +1.4% ahead of what promises to be another juicy earnings report, while Harley Davidson revs up 8.9% after beating forecasts. Bank stocks are mixed following several earnings reports (IIIIIIIV), with Goldman -3%

    The S&P 500 has tried and failed three times to recapture the 1320 level, which worries Raymond James’ Jeff Saut. While he hasn’t given up on the notion that the economic backdrop is set to improve, he says he might if the S&P falls below 1295, a level that can easily be reached with one more sour day of market action.

    June Housing Starts: +14.6% to 629K vs. 575K expected and 549K (revised) last month. Permits +2.5% to 624K vs. 609K (revised) last month.

    ICSC Retail Store Sales: +0.4% W/W similar to last week’s growth. +4.5% Y/Y, vs. +5.5% last week. The demand for seasonal and clearance goods continue to give a boost to sales.

    Redbook Chain Store Sales: +3.8% Y/Y vs. +5.4% last week. The report mentions, ‘July is often a trendless, transitional month with weekly results tied to each chain’s promotional calendars’.

    Home builders are set to spring higher after June housing starts crushed expectations, along with larger-than-expected gains in starts of multifamily units and single-family homes. Are the worst days of the housing market "getting behind us?" The top five home builders by market cap all up premarket: DHI +1.6%TOL +1.9%,LEN +1.3%PHM +1.7%KBH +2.8%.

    Pushing the Dollar down to 75.35:  The Bank of Canada maintains its overnight target rate of 1%, but hints at future hikes, saying inflation will reach 2% earlier than previously anticipated as "excess supply in the economy is gradually absorbed." The loonie jumps sharply, +1.0% at $1.0524.

    The House is due to vote today on the GOP’s "Cut, Cap and Balance Act," although while it has broad support in the chamber, the Senate is unlikely to pass the measure and Obama has said he’d veto it. 

    As the debt talks continue to stall, Pres. Obama accepts a $4T deficit-cutting plan is out of reach. The most likely option appears to be the Senate-hatched deal to let Obama raise the limit by $2.4T in three increments but to give the House "ownership" of the bill so it has a better chance of passing. 

    Despite the uproar over faulty foreclosures, AP and Reuters find that problematic practices continue. These include widespread "robo-signing" and the filing of thousands of documents that appear tohave been fabricated or improperly altered, or have sworn to false facts.

    The German ZEW economic sentiment indicator falls to -15.1 in July from -9.0 in previously, a far bigger drop than anticipated. Difficulties elsewhere in the eurozone are apparently outweighing what appears to be a strong German economy.

    ECB member Nowotny breaks from the central bank’s hard line against anything even smelling of Greek default, telling CNBC "the full range of options," including "selective default" and "credit event"  need to be looked at. The ECB has previously threatened to pull the plug on the Greek banking system if anything of the sort occurs.

    A new record!  Reacting to ECB member Nowotny’s signal that the bank may allow some sort of default, Greek 2 year notes plunge, their yields rising 316 basis points to 39.1%. If true, it’s a major policy shift, meaning the ECB could accept defaulted paper as collateral for borrowings. 

    Eurozone officials are floating a special bank tax to coerce lenders into playing ball to help solve the Greek debt issue, reports Reuters. As part of the same proposal, Greek bailout loans would be extended out to 30 years and the interest rate cut to 3.5% from 4.5% (was 5.5% originally).

    The leader of Spain’s "center-right" party and the next probable PM, Mariano Rajoy expects to endure heavy protests against an economic "shock plan" to restore market confidence and get growth moving again. "People will have to understand that we lived beyond our means." Elections must come by next Spring, but could be called sooner.

    Spain sells €4.45B in 12 and 18 month paper at 3.7% and 3.9% respectively, sharply higher yields than last month’s auction. However, the sale is being spun as a strong one, with €11.8B being bid for, allowing the Treasury to move as much product as it hoped for. Spanish shares are sharply higher, led by the banks.

    NEXT!  A worrisome sign for France, its asset markets are beginning to correlate more with the periphery than Germany. Once considered a benchmark along with Bunds, French 10 year notes have widened to a 70 basis point spread to German paper. French stocks are off an Italian-like 7% in July, vs. just 2% in Germany.

    China’s tax revenue through 2011 H1 rises 29.6% Y/Y to $773B, assisted by strong economic growth and inflation. Beijing’s solid fiscal position is a necessity if reports about the size of the bailouts required for China’s local governments are true.

    The bad debt of local Chinese governments and their affiliates is massive, coming to a head, and very much solvable, writes Standard Chartered’s Stephen Green. Beijing is used to recapitalizing its banking system every so often, and the government clearly has the resources to do it this time. 

    Deutsche Bank moves bullish on the restaurant sector,lifting price targets on a number of firms it finds "inflation-resistant." Increases: Chipolte (CMG) $300 from $270, McDonalds (MCD) $98 from $89, Panera (PNRA) $150 from $140, Ruth’s Hospitality (RUTH) $8 from $6. 

    Cisco’s (CSCOrestructuring, which will reduce the company’s headcount by more than 15%, is receiving positive reviews. Gleacher & Co. believes the moves could add $0.25/share to Cisco’s 2012 earnings, while Sterne Agee thinks the outsourcing of set-top box production to Foxconn could set up a full exit from the low-margin business.

    Quick take on Cisco commentary: Cisco’s moves should boost its profitability, but might not stop enterprise share losses, as IT departments become more comfortable housing switches and routers 

  29. Phil

    Quick take on Cisco commentary: Cisco’s moves should boost its profitability, but might not stop enterprise share losses, as IT departments become more comfortable housing switches and routers from multiple vendors. Also, Cisco might not want to fully divest its set-top business, since that could hurt its ability to compete with Motorola (MMI) for end-to-end cable infrastructure deals.

    Peabody (BTU): Q2 EPS of $1.11 beats by $0.05. Revenue of $2.01B (+20.9% Y/Y). Shares -0.7% premarket. (PR)

    More on Peabody’s (BTU +0.5%earnings: "Pacific Rim growth continues to lead coal through the early stages of a demand supercycle, bolstering Australian metallurgical and thermal coal demand and pricing that continues to be near record highs. Seaborne demand is further strengthened by rising needs in the Atlantic market where coal is required to backfill for declining nuclear use in Europe." 

    Goldman Sachs (GS): Q2 EPS, excluding certain charges, of $2.75. Inclusive of charges, $1.85 vs. consensus of $2.35. Revenue of $7.3B (-18% Y/Y). Shares -2.6% premarket. (PR)

    More on Coca-Cola’s (KOQ2 earnings: Excluding new cross-licensed brands, worldwide volumes grew 5% Y/Y, but North American volumes were flat. Volumes were up 21% in China and 8% in India. Cost of goods sold grew 69% Y/Y due to higher commodity costs, strongly outpacing 47% revenue growth. Shares +0.5%premarket.

    Wells Fargo (WFC): Q2 EPS of $0.70 beats by $0.01. Revenue of $20.39B (-4.7% Y/Y). Shares +0.1% premarket. (PR)

    More on Wells Fargo (WFC +1.2%earnings: WFC says its business fundamentals were strong, with increased loans and deposits, lower costs, improved credit quality and higher capital levels. Under Basel III capital proposals, WFC estimates Tier 1 common equity ratio at 7.4%. (PR)

    Apple’s (AAPL) FQ3 results are due out later, when it’sforecast to report that EPS surged 66% to $5.85 and revenue 59% to $24.99B. Investors will look for details of a new possibly cheaper version of the iPhone that can better fend off competition from Android (GOOG) handsets.

  30. Jbur
    The main store downtown is now located on Liberty street. It is going to be interesting to see what that area becomes without it. I have been in Ann Arbor since 1983 and have owned a business there since 1992. Many changes have occurred since you were last there.
    Bookstores really fit a town like Ann Arbor. It is an active town even at night. It will be sad to see another form of entertainment disappear. There is something special about going downtown to a bookstore that can’t be matched by visiting a bookstore located in a mall. Ann Arbor is quirky, young, vibrant, and little bit out of the mainstream, but it is safe.
    Who’s in charge of society in this country? Phil and others really opened my eyes this AM with the bookstore conversation. Technology is great but at some point someone has to realize that efficiency may take all of the life and spirit out of humans.

  31. What do you think of a BAC short?

  32. @0 X 0
    Agree, but with one exception:  Revenge is also a very fine human trait, especially when carried out anonymously.  You get the benefit of the payback, without further escalating the bellicosity.  That’s what’s wrong with Hatfield/McCoy type comeuppances. The players all know who’s responsible.
    What I have found is that those who commit the first strike at you, have usually done so numerous times to others and since they have created so many adversaries, bitter enemies, they do not know where the payback is coming from. Look at the tribulations of News Corp Master of the Universe, Rupert Murdoch…….sweeeeeet…
    And remember god saved revenge for herself and admonished us to turn another cheek. It wasn’t because it was a tough chore to punish. It’s a lot of fun, really. She wanted to keep that bit of great satisfaction for herself.

  33. The Commerce Department said Tuesday that builders began work on a seasonally adjusted 629,000 homes last month, a 14.6 percent increase from May.
    Still, that’s roughly half the 1.2 million homes per year that economists say must be built to sustain a healthy housing market. Jennifer Lee, a senior economist at BMO Capital Markets, called the gains "just a blip in the overall flat-lining trend of homebuilding activity."

    "We have to see a rebound in job creation to sustain a recovery in housing," she said.
    Much of the increase in June came from a surge in apartment construction, a volatile part of the industry. That sector jumped 31.8 percent last month.

  34. we can pay off the deficit (the one we built up because the rich people didn’t pay their taxes)

    Phil, I dont think this is true. Since all money is created by debt, the money we need to pay down the deficit just creates more debt. Therefor it’s impossible to pay off debt.

  35. Jbur/DC, AA is a great town I lived there 64-75. Nichols Arcade was always pretty cool to have a store.

  36. DCTH – I think Jefferies was the ones that caused that massive run up, sold at the high, and are now underwriting those 750K overallotment shares with the $$ they made on the run up.  ALL for free.  If we look at the price in the weeks b’f the offering, they were $5.0X, so $4.75 is a 8% discount, which is not uncommon in these companies….but did they screw those who bought during the run up for no reason!  Holding for now, but we need to figure out an exit path.  I am growing tired of supporting a technology that I believe in, but the management is not helping my cause…..

  37. Hey! All is well again! Yeah!

  38. Infl, Do you have a plan for AAPL today? I’m thinking of selling 1/2 before the close and 1/2 tomorrow am. What would be your thoughts. thanks for the nice trade

  39. Pharmboy/DCTH
    I hear you. I believe this financing is less than the last one! And what do we have to show for the last one? Not much.

  40. @Felipe
    re: CHK
    Several months ago you answered—-in response to a question about how to join "THEM"—--"Sell 2013 CHK 25 puts!"
    Following that recommendation, I have phased in every time CHK has dropped and now have 15 of them. It has been a consistent paper profitable trade, and i don’t fret when it calls, looking at it as yet another opportunity to phase further in.
    Just a reminder in case you wanted to recommend it again under today’s ‘joining them’ mantra.

  41. So the cup with handle pattern on SPY daily is still intact.  If this run up is to be fulfilled, $134 area is the one to shoot for.  I am buying a few longs to cover the shorts.  Unf’in real….the man who planted trees, huh? One percent moves every day does not help the farmer!

  42. Finally some movement in XLF and FAS….

  43. James Murdoch is stuttering like crazy and hemming and hawing.  Sounds like he’s trying to remember the story they told him to tell.

  44. Dollar support is ~75ish FWIW.

  45. funny how almost all the momos are doing better than wynn today!

  46. 75.29!  Almost down 1% on the Dollar and the markets are up 1% – funny how that works out…  

    Gold is NOT up 1% but oil is through the roof again at $98.58.  They got rid of all but 86,892 contracts for Aug with 3 days left to ditch another 60,000 – very easy so we no longer want to bet against oil unless their inventory report comes in bad.  Next month should be fun shorting again as they already have 343M barrels jammed up into September and now the rolls will bump into December, which already has a 205M barrel pile-up!  

    Click for
    Current Session Prior Day Opt’s
    Open High Low Last Time Set Chg Vol Set Op Int
    Aug’11 95.00 95.93 94.95 95.93 20:07
    Jul 18
    -1.31 188121 97.24 86892 Call Put
    95.75 20:07
    Jul 18
    -1.35 174234 97.60 343972 Call Put
    96.89 20:07
    Jul 18
    -1.34 48225 97.99 81868 Call Put
    78.01 20:07
    Jul 18
    -1.34 22202 98.46 68537 Call Put
    101.31 20:07
    Jul 18
    -1.37 35378 98.99 205343 Call 

    Steve Wynn/Terra – Gosh it’s been 3 years of Obama-bashing already, at what point do Conservatives have to stop painting Wynn as a Democrat every time he goes on the attack?  Does the fact that Wynn is a Democrat (if he is) mean he should be listened to?  If so, why to Conservatives ignore EVERYTHING else Democrats say?  Just in case anyone has an interest in actual facts without simply swallowing right-wing spin – Steve Wynn gave $2,400 to John McCain and $30,000 to the NRC and a mix of local Reps and Dems (you’d better be giving money to Harry Reid if you want to do business in Nevada!) but not one penny to Obama or the DNC – EVER…  This is a great example of something that is total bullshit but is repeated so often that people believe it….

    Dips/Exec – Today (well, yesterday, actually) it’s a big winner!  

    75.18 on the Dollar.  

    GLW/Terra – Sure, before the VIX washes away I like the stock at $16.73, selling the 2013 $15 puts and calls for $5.45 for net $11.28/13.14 so a nice 20% discount even if put to you and a 33% upside if called away at $15.  

    FAS Money/StJ – I’m glad we waited.  Looking good to get back to $15 and we want to sell the weekly $24 calls, now .27 for .50+ if possible. 

    Let’s watch that 75.20 line to assert itself on the Dollar as that held up last week and gave us tops.  We are there now with the Dow at 12,521, S&P 1,319 (and 1,320 is tough to crack), Nas 2,812, NYSE 8,223 and RUT 828.  Of the Group, I like shorting the Dow below the 12,450 line in the futures (now 12,465) so pretty much on a cross back below 12,500 on the Dow.  

    DIA is at $125 and I like the Aug $124 puts at $2.02 as a downside play with a stop at $1.90 – 10 in the $25KP.  

  47. BTFD’ers
    How can you not BTFD when each and every time you make money?

  48. KO explodes, like if someone has thrown a mentos into the coke bottle…

  49. Phil
    short oil using uso aug 37 put  ?  or wait

  50. Hi Phil :Thanks for the input on FDX/UPS.
    I have a BCS on TZA ( Jan. $25 at $7.90 with sale of Jan. $30 at $7.30) for net $.60,now  net $2.35.I have no other hedges. Take the  money & run?
    also,what do you think of BA Jan. $60 P at $2.27. I like BA long term

  51. RIGL – WTF?

  52. KO breaks out on earnings.

  53. Got out almost even on GS, If these guys arent making money then something is very wrong.

  54. NFLX/Jabob – Amazing isn’t it?  Up 2.5% today, erasing all of yesterday’s loss but still way off the $304 high from last week.

    Oil/Tusca – No longer a no-brainer but, of course, $100 oil is still impossible to pay for long-term so this is always a good place to establish a short.   DUG is nicely smacked down at $26.37 and the Sept $25/29 bull call spread is $1.50 and you can sell USO Jan $32 puts for $1.23 for net .27 on the $4 spread and USO hasn’t been at $32 since last summer, when oil was $70 so it’s a fair assumption that anything that causes you to take a loss on DUG, which is $1.37 in the money now, would keep you on a very good path to having your Jan short puts expire worthless.   Of course, just he vertical with a $2.50 payoff on $1.50 (166%) is not a bad play either and you can stop at .75 so you risk just .75 to make $2.50, which is a great risk/reward.  

    MGM/B1 – I like them long-term but Vegas is very rough on earnings and they spent A LOT of money on their City Center property that is not coming back to them yet.  TSO is a very different business and I don’t like them compared to VLO so I would never play them – they are simply not in the same league.  

    USO/Celest – See above trade idea.  I like USO puts too but Aug expiration is the 19th so cutting it close on the next NYMEX cycle.  We have inventories tomorrow so I’d look for a really stupid run up to short into, maybe with the Aug $38 puts, which are now $1.17.  At $1 I would want 20 for the $25KP.  

    FAS Money – Now we’re getting weak so better sell 1/2 the weekly $23 calls at .68 – just in case we don’t get a better chance.  

  55. Phil / Euro strength    Hard to understand this with a tricky Euro leadership mtg coming Thursday and the 10 year notes of the PIIGS spinning out of control.  Clearly some debt forgiveness (default) is coming soon?  Is Thursday the day the mkt swoons on $ strength / Euro panic?

  56. I am struck by Phil’s railing against the wealthy 1% [net worth over $1.8M] and 0.1% [net worth over $5.5M] as if they chair the "Trilateral Commission" or are "Elders of Zion" whose Protocols rule the world.  It’s nonsense; most of them are quite generous with their wealth and likely do as much good as they do harm to the country.
    On the other hand, "U.S. multinational" is an oxymoron.  They are not "U.S. companies"   They are not citizens. They shift income on a massive scale out of the U.S.   They cannot vote, but make massive contributions to political campaigns and have an immense effect on U.S. policy.  Yet somehow they are never pilloried as being in this evil "1%".
     I find this constant carping over the "wealthy" amazingly myopic.  Phil, your heart is in the right place but your target is misplaced.  Murdoch is an exception; you paired him with "GE" today, which is much closer to the mark.  The Multinationals — from Exxon on down — pay far less tax than your "1%", do much more harm to public policy than all the "1%" put together, and are vastly richer as a group.  

  57. AAPL/jomptien….what are you holding?

  58.  I care for riches, to make gifts
    To friends, or lead a sick man back to health
    With ease and plenty. Else small aid is wealth
    For daily gladness; once a man be done
    With hunger, rich and poor are all as one.
    Electra [413 BC]

  59. Lflan – holding two 380 weeklies. My inclination is to sell these by the close. I have a stop on them as well, in case we pull back. How are you feeling about a pop to > 390 because that’s what I’d need not to lose on the weeklies. I may buy some monthlies into the close, particularly if we pull back.

  60. drcraig….clarify …….long weeklies?   what did you pay for them?  

  61. Infl/AAPL,
    I have 2 365 Aug calls

  62. WTF is going on with PCLN,NFLX,and CRM today???
    FU MoMos!!!

  63. FAS Money – We are now short 10 23 P ($0.70 now $0.57) and 5 23 C ($0.68) 

  64. Watching this Murdoch bit is completely distracting, but I can’t help myself.  I will say that James Murdoch reminds me of Tim Geithner when he testifies.

  65. lflantheman
    July 19th, 2011 at 10:55 am | PermalinkIgnore this user
    drcraig….clarify …….long weeklies?   what did you pay for them?  

    July 19th, 2011 at 10:58 am | PermalinkIgnore this user
    I have 2 365 Aug calls
    You all turning out a bit like Phil simply say bought or sold

  66. Sold USO weekly 38 calls bought yesterday (.28) for .72. Pool time!

  67. Is it the accent?  Perception perhaps?  But why do the British parliament seem so much more direct and more intelligent than the American Congress?  They don’t seem as bought off.

  68. Loonie/Flip – Nice job catching that!  See, it’s good to check in on the "other" side once in a while.  8-)

    Housing/JC = It’s just on a PACE to hit 629K vs 575K expected so about 4,000 more starts this month (x12) than expected.  That can be due to better weather or people rushing to lock in rates or just a twitch in the data – not very meaningful when you consider we’re down from 2.2M in 2006, right?  Certainly nothing that rational people would base a rally on!  

    And what Troy said! 

    BAC/David – They have $2.2Tn and they are short $50Bn (2.25%) – that’s nothing you want to actively bet against as it’s already baked into the $9.58 price.  You know they are "too big to fail" so why pick on them?  

    Debt/Peedle – Money may be created by debt but it multiplies out in the economy as it’s put to work.  The problem this country has is we create the money (and the debt) but we never put any back (through taxation) and THAT is what makes the system fall apart (and causes inflation).  It’s very simple to pay off a debt, you take the money you have and you pay it off.  The top 1% in this nation have amassed 40% of the wealth, roughly $40Tn and the next 9% have another $40Tn so that’s $80Tn held by the top 10% that was created by our nation going "just" $15Tn into debt.  On the whole, that’s pretty good but now the refusal of those same 10% to put back the $15Tn they borrowed is essentially causing the problem.  Then there’s corporations, who earn another $6Tn a year and paid $195Bn in taxes last year – but I won’t even get into that or Flips will become angry so let’s just say the top 10% need to turn over 20% of what they have to pay off our debts and then everyone is happy (except the top 10%, who are 20% less happy but that still would be 3.2 times happier than the entire wealth of the bottom 90% combined vs 4 times happier now).  

    CHK/Flips – Ah, you must have known I was just talking about you…  CHK not cheap today but always a great stock.  I’d rather catch them on a pullback, which we missed last week as I still think the markets, in general, are going to crash if the wrong person sneezes….

    Oil/QC – See above.  

  69. Good morning, 


    IWM   80.73, 81.22, 81.57, 81.82,  82.20, 82.52,  82.86,  83.07,  83.39,  83.59,  and  83.88

  70. jomptien.  I like your plan to sell 1/2 (toward end of day) and keep 1/2.  I think we run up in the afternoon….but……some may close out their AAPL trades before market close, so we might see a drop off in the price at the end.  And yes, tomorrow get rid of the last 1/2 after the pump. 

  71. Sold QQQ calls bought yesterday, for + 47%.  Take it when you can. 

  72.  I need a long-term solar position.  Any votes on a favorite?

  73. JR- I have a trend line from the tops of 7/13 and 7/14 which coincides with our top of today.  I am currently tza with a failure to break that line upwards.  This same slope also fits nicely with the bottom of 7/12 and 7/18, but the channel is rather too wide for my liking.

  74. Yodi/APPL,
    2 365 long

  75. Ifln?APPL,  Thanks

  76. JRW
    Thanks for the levels, at tis time I’m in TZA and was expecting a retrace to the open but your 82.52 line may be it. What do you think?

  77. jomptien
    AAPL now you talking !!

  78. lflan/AAPL
    Lflan.  I have a couple of AAPL aug 375 calls bought yesterday for 13.35.  Do you suggest that I hold through earnings or let them go prior for a modest gain (17%)?  thanks

  79. CNBC gives uncle Rupert more air time than the prez!

  80.  PPLT [platinum] rising, gold down.

  81. CNBC knows how to get paid, no need for commercials!

  82. Hooooooey this a boring day and I’m not even watching!  Volume has absolutely vanished due to the make believe BS they play.

  83. Iflan – you don’t think we drop on earnings becuase the run up has been huge?
    I am thinking of buyng an Aug call and sell a weekly later in the afternoon cause I think AAPL drops by Friday to the $360′s.

  84. kyw….If I had those I’d probably convert to a spread…….sell a couple of Aug 405 calls  for $5 each to reduce my cost.   I’d do that about mid afternoon.   That leaves 180% profit if AAPL is 405 at Aug expiration, and leaves breakeven  at 385. 

  85. The consumer is back: Harley, Polaris Surge as American Demand Returns
    "Americans are back to buying recreational vehicles, and two of the biggest manufacturers see the trend continuing. Harley Davidson (HOG) and Polaris (PII) blew away Wall Street’s expectations with their second quarter results this morning thanks to big domestic sales gains, and each company raised its full-year outlook."
    I’m personally glad to see it, I have a boat to sell!

  86. nicha…I don’t think we drop on earnings, at least not initially.  Later, perhaps.  But everything I’ve read recently is favorable, and if you are a chartist the price is just about where it should be.  Risky play on earnings is buy calls.  Safer play is bull call spread out into the future.  Safest play is sell puts way out.  Safest is cash and watch the action.

  87. TZA/Dflam – I’d keep it if you are not protecting anything else.  As the $25/30 spread is all in the money at $2.35 with $2.65 left to gain, I’d sell enough to lock in 100% ($1.20 back) and let the rest ride.  At $30, you would collect about 75% of the max possible payoff on the trade but you lock in a gain now (and that money can be used to buy a new spread if things head the wrong way).  BA I always like as a long-term play.  

    EU/Tusca – Well the stress tests indicate the banks can withstand a Greek default so now we can let them default and be done with it.  Next comes Portugal but, if we survive a Greek default (which is small and very survivable), then Portugal, Spain and Italy won’t look as scary (even thought the math will be totally different on them).  EU closing up 1.25% on the continent and up 0.7% in London.  Today, for a change, the EU has been holding us up – now it’s 11:30 and we’ll see if we can hold up on our own but, as you can tell from my last comment’s picks – I’m thinking not.  

    Of course oil futures (/CL) can be shorted below that $98 line with tight stops!  

  88. Should read "safer" play is sell puts way out (and well OTM).

  89. rainman
    It is time to sell motorcycles and snowmobiles, you may need the boat soon.

  90. Who is buying? That is what I would like to know? I love these stories that make it seem like everything is A.O.K. and returning to normal. No jobs, poor economy, but somehow there are these people who have decided that now the time is right to buy recreational vehicles!

  91. Rain, I was quite surprised that sales have done so well, I buy classic cars and the market stalled back in Feb and has declined since. Maybe we can attribute the great sales to farm land prices rising and low financing. Europeans and Aussies were major players and have since disappeared from the classic car market. US buyers arent spending.. of that I am certain.


  92. dclark / who — and I always wonder how restaurants can be so packed!

  93. Rainman/Harley - subprime loans via govt handouts have really propped up the Harley markets.  Plus what does one do with all the "savings" when they don’t have to pay their mortgage anymore.  Vrrrrm Vrmmm…  At some point, HOG will be ripe for shorting!

  94. kustomz / farms  — you need a place to run those PII’s so maybe you’re onto something!

  95. ssdirk, Troy, shadow,

    ss, sorry I missed your coment from last night; thanks for the offer, but Jake is a local high school kid (very bright) that is only executing trades when I tell him and calculating the price averages. That save me several steps !!

    I’m not trading today, but I would be in TZA. They may be looking for a floor (82.18 ?) for a push later; if they break 82.86, go long !!

    Good hunting !!

  96. Resistance:

  97. Why do I get the feeling the DOW will magically hold 12500 almost exactly at the close.  God I hope I’m wrong and it’ll break already.  Eric Cantor must be scrambling to delay a deal today as TBT is down.

  98. WOW, what just happened at the Murdoch questioning.  That was wild.

  99. Glass of water on Murdoch?

  100. kustomz/farm land - even USA today is pumping farm land…my WIFE showed me this story!  I stopped purchasing farm land about 3 years ago, as I was competing with a bunch of retirees who starting dumping their crappy CDs for a piece of something real…paying WAY, WAY too much per acre like the speculator in the USAToday article…who paid $4 Million for 430 acres…IN MICHIGAN.  For anyone thinking of getting into farm land at this point…buyer beware…
    CNBC/Rupert’s Circus - mysterious foam thrown on Ruppy’s face…Ruppy’s wife hits young man…media thrown out…weeeeee, finally something worth watching!

  101. Apparently paint.  May not have hit Murdoch.

  102. Wealthy/ZZ – I just said yesterday I have become tired of making the distinction.  It’s the top 0.1% that I am generally talking about and that does include our venerable Corporate Citizens.  Your numbers are off though as the top 0.1% have $1.6M in INCOME, not net worth which is, of course, substantially higher.  Once you get below 98%, in fact, we’re just talking about ordinary people – it’s the Conservative Rhetoric that attempts to lump the bottom 98% in with the super-rich and the corporations in order to make them feel like the Republicans actually give a crap about them:  

    Jim Murdoch needs to work on that stutter thing.  Not good when you are testifying.  

    Coming up to noon, volume on Dow is 60M, pretty low.  

    Clarify/Yodi – Do you have no sense of context at all?  It’s funny when I see you complain about someone else as I can tell you there is no possible way on earth from reading what Jomp has been writing that I would think he was anything but long on those calls.  Do you just scan chat for symbols and read everything out of context?  It wasn’t even a conversation aimed at you, it was a response to Iflan’s very simple question at 10:44 saying "AAPL/jomptien….what are you holding?" after a conversation in which Jomp had said he was thinking of taking profits ahead of earnings.   How about take a little responsibility as a reader, rather than constantly bitching that people aren’t making their comments simplistic enough for you?  

    Wow, Murdoch testimony broken up by protester throwing something and, as we expected, markets are happy to see the thing end (almost over) without too much damage to the Empire.  

  103. Let’s take the money and run at $2.22 on the DIA $124 puts in the $25KP.  A quick 10% is fine. The USO trade is still on if we get our price.  


  104. dclark – the mortgage on rec vehicles is deductible as a 2nd home…..

  105.  OKay,  I’m all for bashing the political elite and the billionaires but throwing something at an 85 year old man only serves to mobalize the elite to crack down on legitimate protesters.  Idiot!
    Thanks to that chap the British parliament looks like a laughing stock on the global media!
    Doe anyone feel the BoJ might starting wading in on the dollar?  

  106.  lflan,
    Another "safe" play would be a weekly ITM BCS.  A 355/360 BCS is $3.40 currently and that would be a 47% return in 4 days if AAPL just holds 360.  Not a home run, but it’s a lot less stress than hoping for APPL to hit 405.

  107. I will always remember the day when "Johnny Marbles" attacked R. Murdoch.
    ….on the other hand, did you see his wife in action? Now that’s what I call protecting your investment!

  108. Phil/DIA$124s – Nice, I’m up 9% on the DIAs in 1.5 hours…great call Phil!!!  When/Were do you see an appropriate exit?  Moved 1/2 already…perhaps too soon?  Damn, you are right…MUCH easier than daytrading!  =)

  109. Phil/DIA…woops, just read your exit signal above!

  110. Pharm
    Perhaps, but I thought the article was referring to smaller type rec. vehicles like motorcycles, four wheelers, and snowmobiles, etc..

  111. Phil CLARIFY. I do not think giving a clear statement with out guessing or asuming is stupid.

  112. Troy …. I cant bear the thought of investors running this countries farm lands!!! We can only hope prices collapse!!

  113. Phil/Forum alert – would it not be neat if we could set a "ding" noise when certain individuals posted…or how about a cramer "SELL SELL SELL" alert blazing through my speakers…LOL!  You got to admit, the guy has a lot of hard to forget jingles…reminds me of Jerry Springer…intelligent guy, who is entertainingly manipulative…although unlike Springer, Cramer takes himself serious, which makes it even more amusing…

  114. Do our kids still learn the difference between success and failure?
     Amazingly enough, private schools are the worst offenders. I guess you can buy good grades!

  115. @Phil, do you like any of the airlines? My personal favorite, UAL, is at $20, might be a good place to start a long position here…any thoughts? thanks!

  116. CMG over $330!
    To short or not to short?

  117. Troy
    A farm in Alta Wyoming of app 4 sq mi has a subdevided 3.5 acres with a 500 sq ft house about 75 years old is on thecorner of Ski Hill road is on the market for 1.4 million. Do you think the brothers are a bit greedy?

  118. James Murdoch just did a great Porky Pig imitation.

  119. kustomz / farms — I don’t think "investors" want to run the farm land but there is a trend in place of small farms returning. The whole "unindustrializing" of our food kind of thing. You know, organics, vegans, localvores et. al.  I think you’ll see a trend of people paying up for better food (after all, our food is cheap!) and more of the industrialized foods being exported. Higher oil supports this as well.

  120. Murdoch/Parliament – just another circus like the US congress brining in the auto execs and wall street execs..must be current fashion for the top 0.01% to come speak in front of their lackeys in a charade for the monkeys, er, "citizens" who will then go on to reelect the lackeys ad nauseum.

  121. kuistomz / farms — Oh, and if you think investors running farms would be any worse than what we have today, you probably haven’t watched "Food Inc.".  Hard to imagine how things could get much worse.

  122. kustomz – god help any investor who invest in farm land without experience growing up on a farm, or without the intelligence to hire a farmer to manage their properties.  It is so much more complicated than people realize, and I consider it much more risky than day trading.  I’m not conerned about the speculators as many will fail over time…I’m just trying to figure out when to unload to said speculators.  Specifically concerned about global warming depleting rainfall amounts over the next two decades, and capital gains getting taxed as ordinary income as the govt "Tweaks" taxes…which is a real issue as my basis 6.25 times less than current land prices.  It is a good problem to have, but vexing!

  123. Wow, soon as Murdoch hearing over, market starts running.  How wild would it be if you found out, Murdoch paid the guy to try and hit him with the shaving cream foam for the sympathy.

  124. Shadow/Wyoming Land - 4 sq miles ia 2,560 acres…which is $546/acre ignoring the structures.  It must not be crop producing acreage…and it doesn’t have timber I’m assuming.  Is it really 4 square miles?  Decent timber land runs at least $2500/acre, farm land $4k-$8/9k in the midwest. 

  125. dc – guess it helps to scroll up and follow the thread!  HOG and POLARIS, well, if they ain’t buying houses/paying mortgages, then why not have fun and go on vacation!

  126. U.S. Kids Appear Lost in Latest Study of Geography Knowledge
    "Only half of fourth-graders correctly put the following in descending order of size: North America, the U.S., Californiaand Los Angeles, according to a federal test known as the Nation’s Report Card, the Education Department said today."

  127.  Goldman’s July report ["Where to invest now - Rising profits in a faltering economy", July 2011] predicts, among other things,
    1/ oil will reach $140 by year end 2012;  
    2/ 25 U.S. stocks will account for more than 100% of total expected 2011 S&P margin expansion.
    And no, I don’t have an account with them!
    Phil:  ; My facts may be wrong, but not because I invented them to support my argument.

  128. @rainman
    You don’t need to read that article, just watch this.

  129. and market comes down as Brooks now testifies.

  130. No child left behind….rainman…’s working!  Make ‘em stupid so they cannot follow the crowd, or maybe they do follow blindly.

  131. The Oxen Group is selling $158 Weekly Calls on GLD for 0.40+. Nice premium for what should very likely expire worthless here.

  132. Pharmboy - there is a reason the public schools don’t teach how to do ones taxes, how to budget their finances to live below their means, etc.  The entire scheme depends on public ignorance along with wage and debt indentured civilians…but at least the govt isn’t forcing us to build pyramids to keep us bridled, right? 

  133. Troy
    The farm owned by 3 brothers is over 4 sq mi, in barley, hey, and some sheep. The 3.5 acres is $1,400,000 or $400,000 per acre. These same people have my 3.5 acres in barley so I don’t have to take care of it. The lot isn’t selling and I asked about the price, they said there was no flexability and the would not consider a swap with my property. My desire was to get out of the homeowners association. My house and garage 15 years old is 2,000 sq ft, full basement, and 1,100 sq ft garage. They even farm it, one brother is next door, out my back window and dislikes me more than anyone! Go figure that one, I was up for setteling that problem.

  134. Hey Pharm your the man with the charts, any chance you can get something up in regards to the financial sector so we can compare the timeline just before the markets collapsed to current levels along with QQQ’s?

    Rain its a land grab pure and simple with the hopes of profiting greatly due to rising food prices.

  135. Grades/stjeanluc – Meh. It all means the same to the students anyway. Along with med school I taught grad school for a number of years, in state schools. In the interests of tougher standards, students are required to retake a course in their major field if they get a C grade. So, out the window for any useful purposes went the D and F grades. I compensated by using the + and – subcategories on each letter grade. So if I gave a student a B-, trust me, they knew what it meant and so did their advisers. The NY Times article doesn’t mention that, I notice. What really drove me nuts, especially with the med students, was that our grading had to fit a pre-determined curve, i.e., we had to give a set proportion of grades at each level….if I remember correctly we could give no more than 10% A. That was really frustrating.

  136. Phil/1320 EOD - 1320 would be a nice place to park the market EOD, you think???  It is going to take one hell of a buy program to get us further today!

  137. SPY spikes right after the bell (grey shaded areas) are a telling sign where ‘they’ are going to take it.  See the blue circles…..

  138. kustomz / grab — there’s a web site for that!

  139. O boy

    Chart 2:
    This one says it all. Below are the total reserves as a percent of loans and leases. In other words as provisions are reduced each quarter to help pad earnings, less is set aside for future losses. What makes this chart interesting is the right axis that shows the value of home prices over the same period. How can you reduce reserves while home prices keep falling and unemployment is rising?

  140. Any Doctor member
    A physical therapist is here for my mon. This is the second one that is into her pain pills with their advice. Since when did they gain the expertise in such matters? I was in and out of PT for 8 years never advised me on drugs.

  141. kustomz/bank reserves - why not just reduce reserves to zero, as the govt (taxpayer) will continue to secretly absorb the losses.  Perfect biz plan if you ask me…kind of jealous…=) 

  142. it amazes me that goldman, citi, bac (~~40%) could be down almost 30% this year and we are 300 points away from the closing high?

  143.  Troy:  I have a buddy in South Dakota, former Hercules engineer who took over the family farm.  He has more time, talent and equipment than land, and I’ve often thought of buying something nearby and having him manage it.  But it sounds like the ship has definitely sailed on that idea from a land price standpoint.  True?  I try not to buy high and sell low, although it would obviously be a long term investment.  

  144. Kust – this help….doesn’t do it for me.  Green = NASDQ (+5%), Red = SPY (-8%), bars…bank sector (-60%).  That is why this recovery is a farce.  Banking needs to help lead…not lag….

  145. Parliament/Rustle – The UK political system is based on a system of debating so you have to at least be a good speaker with command of the facts to rise to the national stage.  I love watching Parliament debates – those guys are great.  

    QQQ/Iflan – Very nice!  

    Solar/ZZ – WFR, of course – still $7.69.  You can sell the 2013 $5 calls for $3.35 and the $7.50 puts for $1.70 for net $2.64/5.07.

    Consumers/Rain – The top 10% have plenty of cash, it’s the consumer companies that service the bottom 90% that are struggling.  

    12,500/Rustle – It does look like we’re toeing all the lines at the moment.  

    BOJ/Malsg – Good point and good timing!  The Yen fell to 78.8 and they just jammed it back to 79 now by buying up Dollars so we should get a bit of a breakdown here but too risky to short with the inquest winding down.  

    DIA/Troy – Good instincts.  The faster you make money, the faster you should look to take it and run.  

    Clarity/Yodi – I’m sorry but I am having a conversation with people and if I have to stop every time to make sure every trade is laid out then it won’t be natural for me to type.  IF you are interested in the trade, you can always ask politely – but you don’t – you just bitch and moan about how incomprehensible things are, which is very annoying and now I see it’s not just me so I’m much more annoyed at you than I was before.  

    Noises/Troy – No thanks!  I’m sure someone clever could set their own alerts but I’d like to NOT make this into a circus.  

    Wow, Murdoch’s wife is like a Secret Service Agent!   She was all over that guy with a flying tackle.  Jim Murdoch looked like he was about to inherit a Billion Dollars as he sort of sat there stunned for a second…  She’s a pretty young (about 45) Chinese woman who’s been married to Murdoch for about 12 years.   Good summary video of the overall scandal

    Airlines/Asaenz – I like RYAAY as they got killed recently on no particular news (but Q2 is tricky for them).  I would go light, in case they miss with the March $25/30 bull call spread at $1.90, selling he $22.50 puts for $1.60 for net .30 on the $5 spread that’s currently $1.15 in the money.  UAL may be a falling knife here but, then again, so could Ryanair but I like RYAAY’s business model better (more flexible).    

    CMG/Cwan – Aug $330s can be sold for $16 – hard to turn that down.  You can cover 3 short sales ($4,800) with 2 long Dec $360s at $18 ($3,600) for a net $1,200 credit that shouldn’t be too much trouble if they go higher.  

    Show/Scott – Well it makes people think that "something" is being done…  

    Set-up/Rustle – That’s an interesting concept.  I don’t see how this guy walked into the room with a paper plate full of shaving cream, let along approach the desk.  

    Geography/Rain – I know, it’s terrible!  We used to have to know this stuff, didn’t we?  

    Facts/ZZ – Slippery things.  Here’s a nice chart of income distribution.  From

    In March 2006 Forbes reported 793 billionaires in the US with combined net worth of $2.6 trillion. In March 2007 Forbes reported 946 billionaires in the US with combined net worth of $3.5 trillion. That is a 1-year increase of 19% in the number of billionaires and an increase of 35% in their net worth during a time of increasing poverty. Severe poverty is at its highest point in three decades.

    So 946 people in the US generated $900Bn of ADDITIONAL income in one year.  Had they paid a 35% tax rate (these top 0.0003%) then that $1.225Tn would have closed the entire gap in our national debt.  Had the Corporations also paid a 35% tax rate – there would have been no need at all to collect ANY taxes (including SS and medicare) from the other 309,999,054 people in this country.  I know how awful it would be to say to a group of people who are "only" earning an average of $3.7Bn a year each to only take home $2.4Bn – surely that’s not what our founding fathers would have wanted…  

    You are right, ZZ, it would be inhuman to ask the top 0.0003% to make such sacrifices.  After all, what would be their incentive to get up and work in the morning if the government was just going to leave them with $2.4Bn after a hard year’s work?  Thank goodness you have their backs – someone has to stick up for the creme de la creme!  

    Soros/Pharm – That’s very smart – why play if you don’t know what’s going to happen?  

    GLD/David – I like that call.  Nice and ballsy.  

    Buy program/Troy – I wouldn’t count it out.  Volume very thin again, not even 15M on the Dow in last hour.  

    Reserves/Kustomz – That mark to fantasy will catch up with us one day.  

  146. kustomz / chart — That’s why they are increasing reserves and not loaning: Easy Money Makes the World Go Stop
    "To give you a sense of how big that number is, the total amount of deposits on which customers can write checks in this country is about $1 trillion. Turns out we do have a fractional reserve banking system, but the fraction is greater than one. 3/2, if anyone’s counting. For every two dollars customers deposit, the bank keeps three at home."
    The only reason I can see that they would do this is to twart the coming tsunami when reserve provisions go to zero. I’m assuming it is also why they aren’t pushing foreclosures. The whole system is in a death spiral.

  147. Soros,
    Actually if most of big money do this,
    it’d mean a lot of cash on side-lines
    And when rally starts – it will get boost from that money.

  148. KO now at 12 year high. Glad this world has its priorities straight! Who’s the best diabetes play?

  149. Many reasons why KBW has been weak and ignoring them seems like a disaster in the making^GSPC&c=^IXIC

  150. Think we’re running up on the Prez speaking?

  151. zero/South Dakata – Sorry to type so much but I had two cups of coffee this morning…wee, there was a reason my parents banned caffeine, better watch my posting before Phil throws me out =)  I do think the ship has sailed, as of about 5 years ago on land prices in the midwest.  Not familiar with South Dakota.  I will say that I’ve never bought any land that I couldn’t sell immediately for a 30% profit.  I seek out those in need of cash, and make a quick deal before anyone even knows the land is for sale.  20 years ago it was a near bankrupt turkey farmer…who didn’t want to go bankrupt, and wanted to keep the transaction private.  The land was just a bonus, as the mineral rights are the true long term investments.  I never buy land without mineral rights, as a few feet of coal doubles the land price instantly, etc.  I’m curious if the land speculators are buying the mineral rights…as those deeds are seperate from the land itself.

  152. Thanks Pharm, I went to yahoo and compared KBW to the S&P and Naz..good enough

  153. On the whole, you have to feel bad for the Murdochs.  They  didn’t know nothin’ – otherwise known as the "Jersey Defense".  

    Holy cow, not our debt crisis is rumored to be fixed and we’re really flying!  

  154. Why is it that I don’t believe one word that he speaks publicly, from George Soros?
    I guess it’s because I can’t believe a multibillionaire would actually tell the whole world what he is really doing. That just seems pretty stupid and I don’t think George would come in below 180 on an Binet IQ test.

  155. Phil / ADM — While we’re on the topic of farms…I never bought into ADM last earnings and they are off nearly 20% since then. Thoughts on positioning before or after earnings? We have CAT and CPO (Corn Products) reporting before then. Let them hint?

  156. Nope, no agreement, just an agreement in the Senate to try to agree but that doesn’t change the psychos in the House.

  157. Phil, I closed my TZA 30/35  BCS yesterday and need another hedge. What do you think of the Sept SDS 19/22 BCS @ 1.19 and selling Jan VLO Sept 24 put for .98 = .21 on the $3 spread or is VLO Jan 20 @ .89 better? Or any other one you can think of. Thanks

  158. Troy mineral rights
    I owned 40 acres in Montana, when I sold it I retained 90% of the mineral rights. It has gold even a closed hole, gold wasn’t worth much in1987 but today? Thanks for reminding me!

  159. Phil
    That was the Aug 30/35 on TZA = nice profit on your call

  160. Flip / tell — He’s not telling you what he’s doing. He’s telling you what he’s done. 
    I had an extra cup of tea today as well :) (actually, very boring rally).

  161. TLT on the move!

  162. KO/Rain – Their growth is actually through water and Vitamin Water (sports drinks).

    OK, we’re good to go on USO shorts and a fine time to reload but this time it’s 10 SPY weekly $133 puts at $1.15 in the $25KP with a stop at .95.  

  163.  Phil — On today’s oil spike, I’m thinking of SCO, maybe a September BCS of 44/50 for $2.05, offset by selling the Sep 41 put at about $2.10. The last SCO trade you suggested worked really well.  What you you think?

  164. Dow overshot by 7 pts on a 200 pt range. That was probably the high.

  165.  Phil: Never been on a debating team — although with my selection of friends I might as well have been — but moving from the "1%" to the "0.0003%" does sound a bit like shifting the grounds of your argument.  
    I am not shifting mine.  I don’t know any billionaires, but the wealthy humans I know are mostly [not all, surely] decent people who generously fund some very worthy causes.  Perhaps because they were all self-made; inherited money has a certain stupifying "rags to rags in three generations" effect, and I don’t hang with ‘em.
     Corporations --which you either do/don’t lump into your numbers base --??? – are a quantum leap apart.  You referred to them as "corporate citizens", which they absolutely are not.  They are, by design and structure, profit-maximing non-human entities, and the fact that humans run them is irrelevant, because their performance is measured with strictly non-humanistic metrics.  They make charitable contributions, true, but driven always by economic calculus, not human sentiment.  And those human billionaires you disparage would be considerably poorer if those corporations paid proper taxes.
    You yourself distinguished Steve Jobs from [say] a corporate raider like Ron Perelman, who later bought respectability giving away Klimpt paintings, but who in no way earned his money through anything but base financial manipulation.  But corporations who transfer billions of profits offshore, and keep them there, are indistinguishable and should be prosecuted.

  166.  For those following, The VXX SEP 29 CALL we sold yesterday at $1.28 are now $.93.  I am looking to cash out if the theta drops below 1.0.

  167. Phil, sorry, need a little clarification on the last instructions…"we’re good to go on USO shorts" – previously you said $1 for the Aug. 38′s and we’re not there yet.   "But this time 10 SPY weeklies…" – do you mean in place of the USO’s?  Or in addition to?  Don’t think USO and SPY move in tandem, but just wanted to check…

  168.  By the way,  I successfully completed my move to Washington DC from Cleveland and it looks like I have an offer from Booz Allen to start work next week.  Anyone have any experience with them?

  169. JRW/SSdirk/Shadow – 82.86…hold or fold?  My indicators show short…but they don’t take in consideration "buget fix" hype! 

  170. Nice timing on GLD short play David!  

    Soros/Flips – He talks his book like TBoon but he also likes to be right and doesn’t make a lot of public pronouncements so I wouldn’t ignore him.

    ADM/Rain – Corn is just so overpriced (unaffordable) that I find it hard to buy ADM, even at 20% off, which is still 20% higher than they were last summer.  On a major crash, back to the mid-$20s, they get attractive but his is kind of an in-between spot at $30.  

    Very good hedge idea Jomp!  I’d go Sept as you can always roll and, if it works out, you collect 3 months early.  

    Dow volume at 2pm is 88M so there were no actual buyers in that run-up. Isn’t this fun?  

    Dollar 75.32, gold $1,588, gasoline (/RB) hit our $3.15 shorting point again, oil just under $99 (/CL) is a re-short with the Euro at $1.4168, Pound $1.6138 and 78.946 Yen to the Dollar.  

    SCO/Esco – I like that one as oil over $100 is a good reason to DD the short puts anyway.  

  171. Silver going down nicely, might be time for an AGQ play soon…

  172. Scaling out of long AAPL August calls as we go up.   

  173. Troy
    I am short now but I have been mostly wrong today!

  174. Phil / ADM — Thanks!

  175. 75.46 breached!! That may spell trouble

  176. All out of AAPL.   $$$$$$      :)       Will decide at EOD regarding any earnings play.  

  177.  Thanks, Troy, I’ve always found it refreshing to plumb the depths of my ignorance on any particular topic.  Mineral rights? I don’t believe I was aware that there were minerals under the earth.  I thought they were all made in China. :)

  178. :) !!!!

  179. 75.64 is resistance, thats the line in the sand for shorts

  180. kustomz – what site do you use to track the dollar real time?  Thxs

  181. Troy/TOS

    $ cant fight its way out of a wet paper bag


  182. Corporate Citizens/ZZ – The Supreme Court disagrees with you.  Far be it for me to argue with them but you are free to take them on.  It is all the same to me – as I said above, whether you are a corporation or a person who earns $1Bn or more – there is no cosmic harm in your returning 40% of it back to the Government who will (yes) REDISTRIBUTE the wealth back to the people who need it more than you do.  This does not prevent you from earning $2Bn or $5Bn or $10Bn but it does prevent a single person or a single corporation from accumulating so much wealth that they create a permanent imbalance in the system.  Money is a commodity that belongs to the community – if a single person takes too much of it, it simply leaves less for everyone else.  If the argument is that if they made more money they would hire more people – that is complete BS because hiring people is an EXPENSE before income.  It is profits we are taxing, not commerce (although a flat VAT tax would be a much easier way to make sure Corporations stopped cheating).  Realistically, you will never get a bill passed to tax just those 900 Billionaires and the 500 Corporations that make the rest of the money in this country so yes, I talk about taxing the top 1% or top 10% and a person making $250,000 who’s taxes go from 35% to 40% should be TRILLED to see TBoon’s taxes go from 9% to 40% because, for TBoon – that’s another $1Bn in the Federal kitty and that $250,000 guy, who had to fork over an extra $12,500, will be getting a lot more country for his money! 

    USO/Jerconn – That was the $25KP play above (10:40) "Aug $38 puts, which are now $1.17.  At $1 I would want 20 for the $25KP."   My mistake as they hit $1.06 at about 1 and I was sure that last spike would have triggered but they didn’t fall below $1.05 for some reason so no trade so far…  No, I meant the SPY weekly puts – wasn’t about moving in tandem, was about calling a top in SPY.

    Booz/Craig –  I like the guys at Carlyle who, I think pretty much own Booz-Allen.  

    Dollar/Kustomz – Actually, it could be the opposite as they snuck the Dollar up while the market was rallying and that gives them position to jam it back down and get the indexes over the next hump they encounter.  To some extent, a deficit agreement that includes spending cuts could shoot the Dollar much higher (we are so much safer than Europe then) and could tank the markets first, but then we could have a great opportunity to go long. 

  183. Troy – everything I use is telling me down, but the invisible hand is holding it up.

  184. Wow…vix spike!  Also, Bloomberg TV giving debt deal details…

  185. Hi, Craig,
    Thanks for sharing the VXX trade.  Nice job!
    Congrats on your new job at Booz Allen.  Hopefully, you can continue to post your VXX trades.

  186. A good summary of the situation in Washington between Obama and the GOP:

     "Responsibility without conviction [apparently, Obama] is weak, but it is sane. Conviction without responsibility, in the current incarnation of the Republican Party, is raving mad." 

  187. ONTY – stock with the Aug $9C and $8 P for 1.10. 

  188. Phil not much movement in the short terms, 30s moved and that does nothing for the $ ..I must agree…

  189. Vix just dropped 4% in a few seconds?!?

  190. kustomz/dollar tracking – Etrade doesn’t have the license to track the dollar index real time…grrr

  191. ATH for CMG….YEAH!  I guess.

  192. Where is JRW’s chart of price going to the moon?  Look at CMG, PCLN!

  193. Troy / $ — open a TOS paper trading account.

  194. cwan--dont forget nflx,crm,bidu and LULU
    I hate these f n momos!!!

  195. PHil – so do we have a current play for going short on USO?  Aug $38 puts for how much?

  196. wow i think we just broke resistance, Phil will we get even more bullish if 3 out of 5 indexes hold the 2.5% levels?? thanks….

  197. Troy why are you using Etrade?

    Looks like the plan is to break 2850 on the Naz with great AAPL earnings….2615 low on June 20th. Theres a nice M formation shaping up

  198. kustomz – 11 year old account…Pro in nice for charting, and it works great on three screens at once.  Other than that…to lazy to switch…

  199. AAPL:   I’ve placed my earnings play.  I decided to sell premium.  Sold several August 350 puts for 4.60.  Rollable if necessary, but I doubt it will be.  Gone for the day.  Good luck!  

  200. 02:00 PM On the hour: Dow +1.5%. 10-yr +0.06%. Euro +0.29% vs. dollar. Crude +2.05% to $98.22. Gold -0.82% to $1589.30.  

     surprise jolt of bipartisan support emerges for a $3.7T deficit reduction plan given up for dead weeks ago. The plan, designed by a group of six senators, could be headed for a filibuster-proof majority in the Senate, but the House, preparing to vote for its bill tying a debt ceiling hike with a balanced budget amendment, is still a tougher nut to crack.

    Speaking ahead of the WH daily press briefing, President Obama calls the Senate "gang of 6" proposal "broadly consistent" with his goals for deficit reduction and how to achieve it. He says he sees a "potential for bipartisan consensus" developing. Stocks move to their highs of the day. 

    The Obama administration apparently has no plans to introduce another large-scale program for relieving the troubled housing market, despite Obama’s admission that efforts to help struggling homeowners was insufficient. The money, political will – and new ideas – to push through any meaningful legislation is tapped out. 

    Here’s a switch: Some economists are blaming the weather for the good results in the June housing report – "a reflection of good weather facilitating catch-up activity after the late Easter and severe storms depressed construction in previous months,” one warns. The weather affects housing permits much less than starts, and those were flat at the 13th lowest reading on record

    Moody’s places the ratings of 5 Aaa states on review because of the possible downgrade of the U.S. should a debt deal not be reached. There are 15 Aaa states, but Moody’s says these – MD, NM, SC, TN, VA – are especially "vulnerable to changes in the U.S. rating." About $24B of rated debt is affected. 

    Rupert Murdoch washes his hands of wrongdoing at the News of the World, saying he barely had any knowledge of it given News Corp.’s (NWS) size. Murdoch is responsible for corporate governance but no one saw fit to inform him, for example, of a widely reported blackmail conviction. 

    "James Murdoch is giving the Committee a jargon masterclass. We just had ‘financial quantum’ instead of ‘cost’. But here’s the thing: it’s working well. Murdoch Jnr is boring his audience to death with global management speak," says the Daily Telegraph’s Will Heaven

    How much veracity is there in Rupert Murdoch’s testimony? First he said he would seldom speak to the NOTW editors and then said it would be once a month. But Piers Morgan, a former editor at the paper, tweets that "Rupert called me every week for 18ms on News of the World."

    What we need is a nice war to focus on:   Tensions ratchet up another notch in the South China Sea as Senators McCain and Kerry warn a top Chinese official of "jeopardising the vital national interests of the U.S." China has recently gotten more aggressive in its behavior towards Vietnam and the Philippines regarding the disputed resource-rich waters.

    Two eerie comparisons of today’s events with the onset of the Great Depression: Ryan Avent sees parallels between the European debt crisis and a key European bank failure in 1931, and the debt ceiling debate reminds Ed Harrison of 1930′s Smoot-Hawley Tariff. "The macro backdrop is similar," Harrison worries.

    "Unsustainable," is how the IMF describes the situation in the EU, where (for the PIIGS), "private capital inflows have largely been replaced with ECB and official financing. Seeing large tail risk from these stresses, the group calls for the EFSF to be quickly boosted and allowed outright purchases of debt in the open market.

    The price of gold has shown no correlation with inflation for the past 15 years, Kash Mansori says, so there’s no reason anyone should care about it. Citing the small market for gold, he says its price is affected by things that have nothing to do with the economy, and thus should no longer be considered a meaningful economic indicator.

    Following a sharp spring swoon, copper continues a 3 week, 12% romp that has brought the price within shouting distance of its all-time high around $4.60. Fans say to ignore worries about economic slowdown, Dr. Copper indicates solid growth lies ahead.JJC +1.5%

    Economists remain calm on the inflation front, even withreports of "explosive" growth in M2 money supplies piling in. The surge they say is due to banks and investors sitting on hoards of cash, money that isn’t flowing into the economy quite yet. 

    Smarting from losses and lacking visibility in choppy markets, George Soros’ Quantum Fund is at 75% cash levels andwaiting for better opportunities, according to sources. Doing nothing is often the best strategy. Jim Rogers describes it as waiting for somebody to leave cash sitting in a corner and then walking over to pick it up. 

    Tony Pallotta cuts through the noise of the TBTF bank earnings: Income before provisions continues on a downward slope – "banks are simply generating less income." More importantly, loan loss reserves are falling even as home prices drop and unemployment remains high – a questionable padding of income.

    In spite of weak results from Goldman Sachs (GS) and Bank of America (BAC), Banyan Partners’ Bob Pavlik remains bullish on bank stocks, believing a recovery will happen once conditions begin improving in the mortgage space. Pavlik likes Citigroup (C) and BofA, but thinks JPMorgan Chase (JPM) "is probably the best of the group."

    And this is how GE can move the markets with SOX up 3.25% today:  SemiLEDs (LEDS) leaps +12% on speculation General Electric (GE +1.2%) has taken a stake. 

    With many analysts lifting their estimates recently, the consensus is for Apple (AAPL) to report FQ3 revenues of $25B and EPS of $5.85 today. But given the extent to which Apple has historically blown away guidance, the Street’s whisper numbers could be much higher, somewhere in the area of $26.7B in revenues and $7.09 in EPS.

    Three lunchtime reads:
    1) Conditions for the next crisis are firmly in place
    2) Is this more than a bump in the road?
    3) The dollar, gold and the quality of money 

  201. Phil / Euro    Do you really think they can side-step a Euro crisis.  GIP 3 will cost half a trillion to rescue if they want to keep them in the Euro.  Is that the decision the Germans will make on Thursday?  Mkts seem to have assumed best case?

  202. Nice squeeze.  Will we close at HOD?  I think prettty close after slight pullback-

  203. There is more in store as well matt.  Chart says 1 or 2 more days like this….OH, unless CMG misses, and AAPL….

  204. Missed the $8s on ONTY.  Moving to selling the $9 Ps.  $1.

  205. @Felipe
    I would never ignore a multibillionaire when it comes to money talk. 
    I just automatically don’t believe he is capable of telling the truth.  This goes all the way back to his billion dollar bet about the Pound wherein he claimed no foreknowledge of the event, a complete and outright lie.
    Nor do I believe any other billionaire, besides you, who have proven yourself not in the least bit duplicitous.  9Maybe that didn’t come out right…..(-

  206. Sold IWM 82 puts yesterday.
     Will buy again here and then sell again when this pop ultimayely  reverts. 

  207. pharm / chart:  care to share?  thanks-

  208. Troy Kustom
    A year ago I was hateing etrade but they have fixed every complaint. I run pro on 4 of 6 screens and not a glitch in 6 months. Their cost at 7.99 is about as good as any. But TOS is constantly complained about slow, down, and other problems. My only problems since March have been Verizon over and over and 1 time Cox cable went down for me and tens of thousands of others. Now if I could stop all tradeing mistakes things would be perfect.

  209. matt chart Pharm posted it at 1 this afternoon

  210. I said it before…cup with handle.  Along with the hammer formed yesterday that JRW posted, I thought this would be the case…and did not heed my own warning.

  211. VIX/Troy – That’s because this isn’t volatile at all, is it?  

    USO/Jercon – We didn’t get our price on the Aug $38 puts ($1) and tomorrow is inventories so better off waiting. 

    More bullish/Asaenz – Not to chase into a move like this – we need to wait and see if it sticks tomorrow and THEN we will have to get a bit more bullish.  Pressure now on AAPL to not screw up.

    Interesting Iflan – calling a top?  

    Euro/Tusca – Why not, we have (so far) side-stepped the fact that our banks are valuing $8Tn worth of mortgages at full value even though the homes they are written on have dropped to $6Tn…  I think, just like the US debt, that no one believes their Government would let things go that far but didn’t we think that about BSC and LEH?  That’s what makes it a crisis – when things don’t work out the way people planned. 

    Belief/Flips – I know what you mean (I think).  You have to listen, of course, but you also have to think about what’s in it for the guy who is talking.  Yes, Soros played many games in the past (that’s how you GET rich) but I think he’s more into being a prognosticator these days as simply being a really rich guy isn’t the kind of fame that satisfies most people.  There’s a guy on Bloomberg right now who has $120Bn of assets under management at TCW and he’s totally bearish.  I’m always thinking – "Doesn’t this guy have something better to do than be on TV on a Tuesday afternoon?"  

    Up about 3% in 2 days, that’s the 20% overshoot on the 2.5% rule – would be surprising if they have more legs than this.  

  212. Pharm
    Carefull of your cup and handle.  The handle is little deep.  It looks like it is half way down the cup.


  214. willex – 1/2 is about right (maybe a bit of an overshoot on the ‘stick’ part), and volume should start to dry up on selling pressure side….and look what we have on that hammer!

  215. Phil/SPY, would you hold the SPY weekly Puts overnight?

  216. maybe but half is deep in my book.  hammer yes but not perfect

  217. Phil – if only the Repubs and Dems could epic Rap battle our problems away…

  218. Phil – hold the SPY 133 P’s opvernight?  Never hit the .95 stop out tho got close…

  219. Poor Cantor, those TBTs are back to $32, where we love to sell puts.  The Aug $32 puts can be sold for $1.05 , that’s always a nice one to play.  

    AAPL is supposed to win big but if anyone does disappoint, the Nas may pull back.  I like the QQQ Weekly $58 puts at .22 as they were .90 yesterday, so even a 50% pullback could be good for a double.  

    IBM $185 is a nice Dow booster today!  Transports are still lagging. 

    SPY/Gsank – Yes, if they don’t stop out.  

  220. By the way, don’t play the video ^above^ in front of children…

  221. Holy $moke.  Just looked at the appl chart.  I don’t trade it so don’t bother looking.  But, boy.  I think Iflan is right to sell premium.  But, I’d be selling it in the form of a call!  That thing is damn near parabolic and clearly will be a sell the news event.  CLEARLY!  (…please don’t sue me if I’m wrong)  But what a ridiculous move!!  This whole market looks incredibly staged.  The only thing that gives me pause to the downside is the weak volume yesterday.  But it’s even weaker today on this huge move.  Go figger-

  222. …really one of the fakest days we’ve seen in a while.

  223. 3:00 PM On the hour: Dow +1.72%. 10-yr flat. Euro +0.08% vs. dollar. Crude +1.84% to $98.02. Gold -1.03% to $1585.90. 

    The new Portuguese government discovers a €2B hole in the fiscal ledger as Lisbon starts to feel its oats about the penalty interest rate on its bailout loan and having to take orders from Brussels. "I will not stand by and let Europe govern Portugal," says the new PM Pedro Passos Coelho.

    The Great Global Debt Depression: It’s All Greek To Me (Global Research

    What hope is there for us if America is driven to the brink of meltdown? (Guardian)

    A Basel committee has identified 28 banks it considers "global systemically important," and recommends they face additional capital requirements of 1%-2.5% of their risk-weighted assets, with some also subject to a 1% "loss absorbency requirement." It’s likely several major American banks are on the committee’s list.

     Wall Street’s Newest Regulator a Longtime Foe (Deal Book)

    Protectionism is on the rise as more countries try to block Chinese imports and other foreign competitors, according to a new report which found a surge in protectionist moves since November’s G20 summit. With reduced budgets and ultra-low interest rates, restricting foreign competition is one of the few tools available to governments to show they’re doing something. 

    Precious metals dive in wake of optimism over a possible debt deal, silver falling more than 2.5% in the minutes following President Obama’s comments. It makes Cullen Roche want to bang his head against a wall. "Did people really buy silver thinking that the U.S. would go bankrupt?" SLV -2.9%GLD -1.4%.

     The Scourge of the Faith-Based Paper Dollar (WSJ)

     Its a topsy turvy world! Wall Street Journal proves Keynes was right (Salon)

    From Barry:  

    Killer chart this week from David Leonhardt (We’re Spent), which very much supports the weak post crisis recovery thesis, as consumers cut back much more sharply. They are delveraging rather than adding more debt, this they cvannot spend they way they did previously.


    Click for ginormous chart:

    Source: Slumps in Consumer Spending, NYT

  224. Sold TLT hitting last Thur resistance and not taking a chance here.

    Good luck to those holding AAPL!!

  225. cmg???

  226. CMG getting spanked!

  227. phil--please let us know your cmg opinion???

  228. CMG down to 314.80

  229. SPY tails today.  130.53.  Buying a few SPY Puts.


    CMG going down…..darn.

  230. Nice drop CMG, keep it down….

  231. Good CSX numbers. Have to look for guidance now!
    Bad numbers for CMG, missed by $0.09…. Who could have predicted that? 

  232. Pharmboy/CMG,
    "CMG going down…..darn."??
    Wheeeeeeeeeeeeeeeeeeeee  for me, :-)

  233. cmg going higher already??

  234. ISRG hits one far to the center field and I don’t think it’s playable…. Up $20 AH!

  235. quick jabo, BTFD! :)

  236. And YHOO not liking the numbers… 

  237. Not too bad volume today @167M.

  238. CMG

  239. And VMW up about 3% after some good earnings…
    Mixed bag so far, after the small CMG enchilada, got to wait for the big AAPL one! 

  240. CMG wanted to say not bad from down 314. up to 322 and 325 again

  241. Phil, with a debt ceiling in place and if the country looks more fiscally responsible, would this not encourage the dollar to go higher thus making the equities market weaker?

  242. Rain—if only I would have went long every name that was considered a good short and went short what was considered a good buy on this board--I would be having a great year!!!

  243. jabo  — I occasionally go long the momo’s as a gamble. I’ve been thinking about taking a long call on a half dozen issues thinking that they won’t all turn around at the same time and see what happens. Might be a fun paper trade.

  244. WOW on AAPL..28+b rev

  245. Phil: CMG down in afterhours – which going to be good for our 25kp positions. How do you propose we exit the spread? Both out at the same time or exit the shorts first into the excitement and wait for the pick-up on the longs?

  246. Apple today announced financial results for its fiscal 2011 third quarter ended June 25, 2011. The Company posted record quarterly revenue of $28.57 billion and record quarterly net profit of $7.31 billion, or $7.79 per diluted share. These results compare to revenue of $15.70 billion and net quarterly profit of $3.25 billion, or $3.51 per diluted share, in the year-ago quarter. Gross margin was 41.7 percent compared to 39.1 percent in the year-ago quarter. International sales accounted for 62 percent of the quarter’s revenue.
    The Company sold 20.34 million iPhones in the quarter, representing 142 percent unit growth over the year-ago quarter. Apple sold 9.25 million iPads during the quarter, a 183 percent unit increase over the year-ago quarter. The Company sold 3.95 million Macs during the quarter, a 14 percent unit increase over the year-ago quarter. Apple sold 7.54 million iPods, a 20 percent unit decline from the year-ago quarter.
    “We’re thrilled to deliver our best quarter ever, with revenue up 82 percent and profits up 125 percent,” said Steve Jobs, Apple’s CEO. “Right now, we’re very focused and excited about bringing iOS 5 and iCloud to our users this fall.”
    “We are extremely pleased with our performance which drove quarterly cash flow from operations of $11.1 billion, an increase of 131 percent year-over-year,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the fourth fiscal quarter of 2011, we expect revenue of about $25 billion and we expect diluted earnings per share of about $5.50.”

  247.  shoot – meant to highlight the cash flow as well – 131% increase!

  248. Looks like AAPL may open at 388ish in AHs…2 minutes away!

  249.  At the current market cap, Apple could buy Dell twice, with cash.

  250. nope…moving to 395…398…weeeeeeeeeee

  251.  I guess I should have held that 380 call a little longer! 

  252. AAPL…..Blowaway quarter and after hours 400+.   Anyone that played it long in any way is a winner!!! 

  253. AAPL over 70b…in cash

  254. Wowie – lots of earning fun!  

    At the close: Dow +1.63% to 12587. S&P +1.63% to 1327. Nasdaq +2.22% to 2827.
    Treasurys: 30-year +1.04%. 10-yr +0.13%. 5-yr +0.01%.
    Commodities: Crude +1.89% to $98.07. Gold -0.85% to $1587.50.
    Currencies: Euro +0.18% vs. dollar. Yen -0.21%. Pound +0.41%.

    Market recap: Optimism over progress toward a plan that would cut deficits in addition to raising the debt ceiling sent an already rising stock market soaring into the close. IBM‘s strong quarter also pushed techs higher and helped the Dow to its best day of 2011. Treasurys and oil rallied, while gold‘s 10-session winning streak ended. NYSE advancers led decliners four to one.

    The plan offered by Sen. McConnell would avoid an imminent U.S. downgrade, but may not head off a lower credit rating in the coming 12-18 months, says Moody’s analyst Steven Hess. "In terms of any possible deficit reduction coming out of this plan, (the numbers) don’t seem to be very large." 

    Former President Bill Clinton says he would declare the debt limit unconstitutional "without hesitation" if Congress does not raise it in time. It’s an idea The Washington Post‘s Ezra Klein calls the best of a number of bad options if you consider the severe economic ramifications a Treasury default or prioritized payment plan could produce.

    The KC and Dallas Federal Reserve Banks – led respectively by the hawkish Thomas Hoenig and Richard Fisher – voted to raise the discount rate by 25 basis points to 1% last month, according to meeting minutes. Now retired, Hoenig will no longer be able to vote against policy decisions.

    Google (GOOG) and other tech giants are once moreinvesting heavily in their corporate venture funds, with fund investments up 31.6% Y/Y in Q1. Google, which has promised its venture arm $200M for 2011, is trying to differentiate its approach by "using data-driven algorithms to identify the would-be next big thing."

    Josh Brown sees "shades of BP" in the News Corp. (NWS) scandal, as both stories seemed minor at first but grew bigger and bigger every day. As with BP, there will come a day when News Corp. shares will have fully discounted all the risks associated with the scandal and be a great investment, but Brown says we’re not there yet

    Oh my!  Apple (AAPL): FQ3 EPS of $7.79 beats by $1.99. Revenue of $28.57B vs. expected $24.92B. Shares halted; will resume AH trading at 4:50 p.m. (PR

    Still a pretty good report:  Chipotle (CMG-4.6% AH after coming up $0.09 light on its Q2 EPS estimate of $1.59. Higher costs look to be the culprit as operating margins drop to 25.8% from 26.9%

    CSX (CSX): Q2 EPS of $0.46 beats by $0.02. Revenue of $3.01B (+13% Y/Y). Shares +1.06% AH. (PR

    Intuitive Surgical (ISRG) reports Q2 EPS of $2.91, beats by $0.20. Revenue of $425.7M (+21% Y/Y), beats by $15.4M. Shares+5.8% AH. (PR)

    Yahoo (YHOO): Q2 EPS of $0.19 beats by $0.01. Revenue of $1.12B (-5% Y/Y). Shares -2.5% AH. (PR)

    More on Yahoo’s (YHOOQ2 results: The company reports Q2 search revenues excluding traffic acquisition costs (TAC) fell 15% Y/Y; display revenues ex-TAC were up 5% Y/Y. Q2 free cash flow was $92M, down 25% Y/Y. Yahoo sees Q3 revenues ex-TAC of $1.05B-$1.1B, below the $1.12B consensus. Shares -2.4% AH. 

    Well AAPL is amazing, up around $400 now and that’s not even that expensive with those numbers as they will likely earn $40 a share next year.  

  255. Today’s levels. One additional week was added to keep the 5% lines in sight.

  256. Phil – levels look like they may follow the ‘M’ pattern.

  257. acd54- Thanks for your BCS idea. I agreed that would be a fairly safe way to play Apple into earnings. I picked up 10 360/365s for 3.45. Congrats to all who did well here!

  258. Iflan – thanks.

  259. Can someone explain how a new 29% maximum tax rate per reduces taxes by $1.5T, yet the advertised "savings" of the new debt plan are $3.7 T???  The article states:  "Simplify the tax code and raise as much as $1 trillion."  "Overall, the group claims it would result in a $1.5 trillion net tax DECREASE". 

    The Finance Committee would be instructed to deliver “real deficit savings” through simplifying the tax code and raise as much as $1 trillion. It would do this by establishing three tax brackets with rates of 8-12 percent, 14-22 percent and 23-29 percent. It would permanently repeal the $1.7 trillion Alternative Minimum Tax. And it calls for establishing a single corporate tax rate, between 23 percent and 29 percent, and to move to a competitive territorial tax system. 
    Overall, the group claims it would result in a $1.5 trillion net tax decrease


  260.  Phil — thanks for the BCS on AAPL re Jan 365/415!!….I got in at $19.73.

  261. Phil/Tax changes for  2012! - Perhaps you can write an article about how both the dems and repubs are planning to pillage the middle class via taxes?  The chained CPI will move the middle class into the 29% rate in less than a decade, and I’m assuming the non-inflation adjusted reduction of all tax write-offs will remove all write-offs in the same time period…brilliant! 
    Per AP:
    The tax reform outline would set up three income tax rates — a bottom rate of 8-12 percent; a middle rate of 14-22 percent; and a top rate of 23-29 percent — to replace the current system that has a bottom rate of 10 percent, with five additional rates topping out at 35 percent.
    It would reduce but not eliminate tax breaks on mortgage interest, higher-cost health plans, charitable deductions, retirement savings like individual retirement accounts and tax-free savings accounts known as 401(k)s, and tax credits for families with children.

  262. Hi, lflan,
    I saw your 3:01pm post about 10 minutes before close, and decided to follow you to sell Aug $350 put.  Thanks!  You are da AAPL man!
    BTW, I was so confident with your suggestion that I sold exactly one (1) contract!

  263.  While it’s perhaps premature to think that the U.S. Congress might actually break it’s deadlock and do something responsible   – anything responsible, by anyone’s definition — if the monstrous and justifiable skepcism regarding this possibility is dispelled, the Euro is going to drop like a stone.
     Leaving Portugal, Greece and Ireland aside — even for the sake of argument — Spain’s mortgage situation is tantamount to the U.S. situation, for one, and I believe it’s worse.  If you think U.S. houses have not been marked to market, you ain’t seen nothing yet.  Spanish banks have been playing the ultimate extend and pretend with housing, holding them off the market in a big way.  While U.S. housing is thought to have dropped on average @ 30%, Spanish housing numbers, which are even more squirrelly, have been cited as dropping as little as "11%" and "between 20 & 30%."  Not very useful numbers.
     But Spanish bank practices for the last number of years have been to offered reduced rates, lower down payments and assorted financial legerdemain rather than drop prices — and, more damning, have simply warehoused much of their inventory with the wink and nod of the Spanish government. How about Italy?  Lotta bonds.   Peripheral bond rates?  Unsustainable.  Consumer prices at 1.40+ to the dollar?  Exorbitant, given the unemployment rates in Euroland.  
    Bottom line, I believe that the Obama/Boehner show has been the thin red line holding up the Euro.  If I’m dead wrong, it shouldn’t take much time to find out, I’d reckon.

  264. Phil- do you like shorting copper here? Im short at 4.48, but the way it’s held up during this turbulence is making me a scared short…

  265. zero – here! here!  Rotten to the core, it is on the other side of the pond….I just have to remain solvent longer than them!

  266.  Phil/guys – In all this time I’ve never closed out a spread in one trade, and now I have a fairly deep ITM 360/365 this week Apple bull call spread. If I put in an order to close it out at $5, will this likely trigger, and when? Will I have to wait until 3:50 pm on Friday to extract maximum value from the spread? 

  267. My other fear is that when it does happen, we will initiate QE3.  I would like to know what exposure the big banks have in Euroland bonds?

    Oh, here it is:

    And here is what really worries me, the derivatives/insurance part….where our banks pick up the tab…

  268. AAPL/dr – put it in for $4.95.  Should clear on Friday though, $4.90 might go through tomorrow.  I have always had trouble until the last day where the MM sees the opportunity to make a few pennies.  I find it cheaper to do this than take the stock and roll it to the next buyer in TOS.

  269.  cwan…..One good trade here, one there.   It all adds up.  I’m already conjuring up some ideas for AAPL trades for the near term, and with the company’s report today, selling puts will be right up there as one of my favorite trades for this stock.  

  270. Oh, and my TBT ranting a few months ago….here you go:

    From PragCap: Mike Norman just posted a very good fact based story on the relationship between the Fed’s balance sheet and the US Dollar.  As I have often noted, the Fed does not print money.  QE2 is not money printing.  It is not debt monetization.  It will not cause high inflation.  It will not cause hyperinflation.  It will not cause a dollar collapse.  And three years into this massive Fed balance sheet experiment we have the facts.  Mike notes:

    Below I give you the US Dollar Index and the size of the Fed’s balance sheet.

    Date Dollar Index ValueFed’s Balance Sheet
    3/14/2008            71.66                                        $921 bln
    7/13/2011            75.24                                        $2.9 TRILLION!

    Words don’t do this justice though.  I put together this chart showing the dollar index versus the Fed’s balance sheet over the last three years.  As you can clearly see – there is no real correlation between the size of the balance sheet and the USD.  None at all.   This has all been proven correct despite my repeated ramblings, yet the inflationists and fear mongerers still garner all of the attention. Clearly, people prefer to be scared as opposed to being told the truth.

  271. Zero, not if Bernanke can help it. Who’s to say they cant keep playing the same game over and over. I cant see the majority of politicians sticking their necks out and saying enough is more debt…that’s just crazy as it would bring economies to a grinding halt. I understand the current environment cannot be sustained indefinitely but, its a game they cant afford to lose.

    Thanks to Bernanke emerging markets/corporations gain while the poor whither away. The only thing I see bringing the markets down is a sell off in commodities/stronger dollar. He will do everything in his power not to let that happen.

    New markets help boost growth too. IBM saw strong growth in emerging markets such as Brazil, Russia, India and China (the BRIC countries) but also growth in cloud deployments in places like Africa. Many emerging economies are turning to cloud computing as they build out their IT infrastructure, leapfrogging the legacy client server paradigm. IBM appears to be benefitting from this trend. 

    This above paragraph says it all….

    My jaw is still dropped over AAPL’s earnings and the cash that company sucks up.

  272. Hey Pharm maybe the problems in Euroland are playing a large role in supporting the doooooolar. You take that away and what supports it, Japan? Certainly not Geithner! Your not going to get runaway inflation here in the US while folks deleverage and jobs continue to be lost. There is runaway inflation around the world.

  273. Pharm take a look at the US banking sector, I wont mince words..earnings sucked = deflation. This country has a serious problem and the solutions being implemented aren’t benefiting the majority.

  274. kust – come on, no child left behind is supposed to benefit the majority!  That way the children of tomorrow can figure this whole mess out!  Give ‘em an Ipad…should be good enough.

  275. Mastering the Machine…..How Ray Dalio built the world’s richest and strangest hedge fund.

  276. Good read Pharm, a bit long winded in regards to Dalio and his mastery of the mind, body and spirit

    At the start of the year, Bridgewater turned bearish on U.S. bonds and built up a short position. When the bond market stumbled, this bet (which the firm has since reversed)

    Dalio is a consistent hitter of singles and doubles—the José Reyes of Wall Street. Sounds like Phil-osophy

  277. Pharmboy- "fear"…"worry"…???  Nah, I say laugh it off instead!
    Sarah Palin Vs. Lady Gaga Spoof –  (adult language) –
    Vader Vs. Hitler – (adult language) –

  278. Good morning!

    NOTHING going on overnight which, in itself is a little strange.  There was no follow-through to the upside off our rally in the futures despite the Dollar diving back to 75.25 at 3am.  

    The Yen broke below 79 again and is down to 78.75 (very strong) while the Euro is back to $1.42 and the Pound $1.61 so all moving to push the Dollar down as low as possible at the moment and they really do need to get it below 75 to protect our run-up in market prices and get gold back over $1,600 (not to mention oil $100).  I just don’t see it happening.  

    Gold’s run is almost over (Market Watch)

    The Nikkei managed to close up 1.17% at 10,005 so mission accomplished there but it was all downhill from the open.  The Hang Seng finished up 0.3% but that’s putting lipstick on a piggy day where they gapped open to 22,088 dropped over 200 points to 21,872 and finished at 21,971 on a mini-stick.  The Shanghai was similar but finished down 0.1% while the BSE was just down all day, now down half a point at 18,562. 

    Europe doesn’t seem to care about Asia and they are up 0.5% or better at the open.  Oil is $98.93, gasoline back to $3.13 and we’re done with them (/RB), Nat gas (/NG) is $4.56 and would be our best short play below this line (inventories tomorrow) with gold at $1,592, silver $39.28 and copper at $4.45.

    It’s all about earnings now but we do have a bit of housing data to get through today as well.  I’m still not quite convinced but we’re into a technical area where it won’t matter what I think if the S&P (1,333) and the NYSE (8,280) make their next goals.  The fact that the two biggest indexes (in capitalization) are lagging should make us all concerned about the rally.  The Dow SHOULD be leading us as Dow components are best-positioned to have taken advantage of a quarter where the Dollar was so weak and the Fed was still giving $5Bn a day away.  ANY company that does a lot of business overseas BETTER have done VERY well or it’s a disappointment!  

    Sign of Housing Bottom? Deja Vu All Over Again (Real Time Economics)

    Wednesday’s economic calendar:
    7:00 MBA Mortgage Applications
    10:00 Existing Home Sales
    10:30 EIA Petroleum Inventories



    Ron Paul to fellow House members, as they prepare to vote on the "Cut, Cap and Balance" bill: "What we really need is a constitutional amendment to limit taxes and spending, not simply to balance the budget. What we need is a dramatically smaller federal government. If we achieve this, a balanced budget will take care of itself."

    Obama Backs Senate Debt Plan (WSJ)

    After declining nearly 25% in the first half of 2011, iSuppliexpects smaller price declines for DRAM in the second half, thanks to lower capex. This could provide some relief for Micron (MU). However, the shift in demand from PC DRAM to mobile DRAM (used in smartphones and tablets) will continue hurting the company, given Micron’s weak mobile DRAM position.

    Setting us up for the next panic:  Goldman Sachs sees 7% as the critical level for Italian 10 year bond yields (currently at 5.7%). While it would take several years of debt rollovers for this price to pass through, markets wouldn’t wait for that, very quickly creating a negative self-fulfilling situation for the economy. Higher rates and a falling stock market in the past month have already done a lot of damage. 

    Venezuela surpasses Saudi Arabia as OPEC’s largest holder of proven crude oil reserves, at 296B barrels vs. 264B. OPEC’s overall reserve rose 12.1% in 2010 to 1.19T barrels. Saudi Arabia easily remains OPEC’s largest exporter, with the advantage that its oil is mostly light, conventional, easily-pumped crude.

    Zillow prices its IPO at $20/share, valuing the company at $720M, after originally hoping for a mere $12-$14/share in its filingjust two weeks ago. Zillow reported a $6.8M loss for 2010, on sales of $30.4M. 

    During Apple’s FQ3 CC, COO Tim Cook admits iPad sales could be hurting Mac sales. This is demonstrated not only by Mac shipments missing consensus forecasts, but by Apple’s FQ3 notebook revenue growth (14%) being lower than its desktop revenue growth (21%) – a stark reversal from FQ2. Intel (INTCcan’t be pleased. AAPL +5.4% AH. (PR) - Tag Cloud from CC is about as good looking a CC as I’ve ever tagged:

    Additional details from Apple’s (AAPLFQ3 CC: iTunes revs. up 36% Y/Y; 86% of Fortune 500 companies testing/using iPad; China revs. up over 6x to $3.8B; iPad outsells Macs in K-12 market; company says "future product transition" (likely new iPhone) could affect FQ4 sales; says it has "more to learn" about playing in prepaid phone market (cheaper iPhone?). Shares +5.3% AH.

    Apple’s (AAPL) cash pile grows ever larger: now a ridiculous $76.2B, up $10B in the past 90 days. How much in taxes does it pay relative to all that cash? This much:

  279. Dollar/Rustle – Yes, I think that’s right.  We have a pre-deal relief rally which will be a major "sell on the news" event because, unless the EU is "fixed" as well – the US will begin to look VERY safe to foreign investors (bad for TBT) and money will fly in from Europe and Asia and I don’t see how they can possibly keep the Dollar down.   If, on the other hand, they coordinate fixing Europe, then the Dollar goes back to being iffy but that would be very bad for gold – because we’d be running out of things to worry about.  That’s why I like the bearish play on gold (GLL) as it has more ways to win.  

    CMG/Etrad – Still have to be patient as we have $310 callers.  Our later trade (not $25KP) on the 18th was 3 Jan $340s for $26 ($7,800) and 5 short Sept $330s sold for $16 ($8,000) and that one’s looking very good.  Now that we KNOW CMG was not so hot, the aggressive move would be to take the longs off the table while they still have value and ride out the premium on the naked shorts.  

    AAPL/Deano – They have some nerve giving that guidance!  What’s the point of saying $5.50 when it’s about 50% shy?  It was cute when they were undercutting by 20% or so but this is just getting to be misinformation.  They beat by $2 this Q ($7.79 vs $5.80 expected) so that’s about 34% and their guidance was below $5 – I think AAPL has to grow up now and put out a realistic assessment of their business at this point.  

    DELL/Deano – Ah, but the fact that there is not a reason in the World for them to buy DELL speaks volumes for DELL’s future, doesn’t it?  

    M Pattern/Nicha – That assumes we will head higher than this but I don’t think so.  I think this was a spike up that breaks a downtrending pattern in which the early July BS rally was our "lower high" in a downward trend that’s testing the 50 dma at the moment (1,312 on the S&P), which is descending into our Must Hold line at 1,300, where it will meet the rising 200 dma at about the end of August and THEN we will find out what’s what.  We would be better off with a big pullback now and then recovering into September than trying to hold up and failing in August as that could turn pretty ugly.  Don’t get me started though – I’m trying to remain technically agnostic because, fundamentally, this market still sucks!  

    29%/Troy – Well if you eliminate deductions (especially cap gains and mortgages) then 29% is WAY more than the top 10% now pay.   Getting rid of the AMT would be very nice as that just kills middle-class people and, of course, if you could actually collect even 20% from Corporate America, all of our problems would be solved but good luck with that!  

    AAPL/Esco – You are very welcome and congrats to all the AAPL players!  

    Taxes/Troy – I’m not an accountant.  I’m sure someone who’s into that stuff will go to town on it but you are right – just another way to extract more money from the middle class while protecting the wealthy.  Sadly, the only solution in America is to become wealthy as everyone else is just screwed…

    Euro/ZZ – Good take.  I agree, that’s not a mess that’s likely to go away soon and once this nonsense with our debt is over – the Dollar becomes the global path of least resistance for wealth storage and then a stronger dollar will take down stocks and commodities, which will send more people panicking into the dollar.  That’s good news for Ben and Timmy of course as inflation gets lower and they get to keep selling $140Bn worth of monthly debt at record low rates.  

    Copper/Jrom – I’d short FCX, not copper.  They have a gold component that can take them down as well.  They will probably have huge earnings but, after that, no more upside catalyst unless both copper and gold go through the roof.  FCX has a strike in Indonesia (8,000 workers (25% of all company) want raises) and lots of countries are looking to tax the miners for extraction.  I don’t know when FCX has earnings but you can take the Sept $60/57.50 bear put spread for $1.50 and sell the $62.50 calls for $1 for net .50 on the $2.50 spread with 400% upside if earnings don’t take them over the $60 line (now $56.30) by Sept expirations.  If you want to be more conservative, you can also hedge that play with the short Sept $48 puts for .85 on the premise that they drop, but not that much.  

    AAPL/DrC- It’s worth a try as anything can happen when the stock is moving a lot.  It’s all about the relative bid/ask spreads at any given moment.  I wouldn’t worry, the $5 looks pretty safe.

    Bonds/Pharm – Check out Italy and Spain!  I don’t see how we can "fix" or survive that if it all hits the fan.  That reminds me, check out this article by Graham Summers:  

    The next Crisis will not simply be another 2008. The reason for this is that by transferring trillions in toxic debt to the public balance sheet, the Federal Reserve has put the US’s credit rating and debt situation in jeopardy.

    To be clear, the US was already bankrupt due to unfunded liabilities (including Social Security and Medicare, the US has over $50 trillion in debt). But the Fed’s actions truly brought things to a tipping point.

    Consider that before the Financial Crisis the Fed’s balance sheet consisted of $800 billion worth of Treasuries. Today, thanks to QE 1, QE lite, and QE 2, it’s $2.8 trillion. To put that number into perspective, it’s larger than the economies of France, the UK, and Brazil.

    Remember, most if not ALL of this increase was the result of the Fed taking on DEBT (and toxic debt at that). With only $51 billion in capital, the Fed now has a leverage ratio of 54 to 1. To put this into perspective, Lehman Brothers was only leveraged at 30 to 1 when it went bust.

    And the only reason the US financial system and currency haven’t already collapsed is because other countries are in even worse shape and on the verge of collapse themselves (see Europe, China and Japan… China is rapidly heading towards a subprime crisis of its own).

    Norman/Pharm – That’s not a good comparison.  They are comparing a dollar that had rightfully fallen apart on a doubling of the US debt under "W" and that slump turned around as the global markets crashed and people panicked back into the Dollar – then the Fed started printing money (and what else do you call it when you have a check book with no balance but you write checks for $2Tn which is then used as cash (and leveraged 10x) by the banks you give them to?).   The only reason we don’t have MASSIVE inflation is that the economy is SO TERRIBLE that the velocity of money is near zero.  Since anything times zero is zero – no matter how much you pump up the money supply, you’re not going to see any inflation until people begin to spend it.  Look at AAPL stockpiling cash (chart above) – the have taken $50Bn out of circulation since the crash!  They are not the only ones (but WOW!) as about $2Tn is sidelined by Corporate America AND there is a $1.6Tn reserve surplus on the Banks’ books.  That’s $3.6Tn (25% of GDP) that is NOT moving through the economy at all.  What do you think is going to happen when that money moves into the market and gets a typical 3.3x multiplier?  

    Do you know what that chart is like?  It’s like making a chart of how much steam is created by heating water to "prove" that raising the temperature from 50 degrees to 200 degrees Fahrenheit has ZERO effect and, THEREFORE we can extrapolate that raising the temperature another 150 degrees (to 350F) will not cause any steam to be created either..   Like many science experiments – monetary tinkering always seems like a lot of fun – right up until the moment it blows up in your face!  

    Dollar slapped down to 75.15 now, giving the markets a little push higher but still not very impressive considering we’re more than 0.5% lower on the Dollar since the close.  

  280. How on earth did boeing not land this full contract (so much for loyalty)?  I thought the A320NEO was even more expensive than the 737?  Airbus really ‘getting it on’ with the A320.
    "The 400 planes may have a list value of about $37 billion, based on average retail prices from which airlines negotiate discounts. Taken together, the transaction would be the industry’s biggest firm order, eclipsing AirAsia Bhd. (AIRA)’s agreement last month to buy 200 upgraded Airbus A320neos."

  281. There is no question that Apple is a juggernaut now.  Glad I sold back when they were in the 90′s!  But seriously?  That graph you posted Phil about taxes paid by Appl vs. their cash on hand is shocking.  NO WONDER THEY WANT A TAX AMNESTY!  Their is something seriously wrong with our tax code to allow that to happen.  I’m with zeroxzero, I think our anger is displaced.  It should be directed more towards the companies who are the REAL tax evaders and not necessarily the few billionaires who are out there.

  282. Politicians/ZZ – Check this out:  


    Signing Away the Right to Govern


    It used to be that a sworn oath to preserve, protect and defend the Constitution was the only promise required to become president. But that no longer seems to be enough for a growing number of Republican interest groups, who are demanding that presidential candidates sign pledges shackling them to the corners of conservative ideology. Many candidates are going along, and each pledge they sign undermines the basic principle of democratic government built on compromise and negotiation.

    Both parties have long had litmus tests on issues — abortion, taxation, the environment, the social safety net. The hope was that the candidates would keep their promises, and, when they didn’t, voters who cared deeply about those issues could always pick someone else next time. Human beings, after all, do not come with warranties.

    But iron-clad promises were just what the most rigid Republican ideologues wanted. They had seen too many presidents — specifically Ronald Reagan and George H. W. Bush — bend when confronted by a complex national reality. Both those presidents agreed to new taxes and some Republicans said they did not fight hard enough to outlaw abortion or cut spending to the point where government was unrecognizable. In other words, they compromised a bit, to keep divided government from destroying itself. Washington, the ideologues decided, corrupted true conservatives into moderates.

    More was needed to keep them in line, which gave birth to the signed pledge — no more enforceable than a spoken promise, but a politician’s actual signature was seen as more binding. The oldest and most pernicious of these modern oaths was dreamed up by Grover Norquist, the leader of Americans for Tax Reform, who has managed to get 95 percent of all Republicans in Congress to pledge never to raise taxes for any reason. If they end tax deductions, Mr. Norquist’s pledge-takers say they will match the increase in revenue with further tax cuts.

    That pledge is the single biggest reason the federal government is now on the edge of default. Its signers will not allow revenues in a deal to raise the debt ceiling.

  283. Huge money flow divergence occurring now-  ROOOOAAAAAAAARRRR!

  284. Dollar bottoming out at 75.035 so far, that’s down from 75.63 a 2:30 yesterday and the markets are up about exactly as much as the Dollar is falling.  This is going to be very interesting. 

    Dalio/Pharm – He’s a cool guy.  

    AMR/Kramer – Well, for one thing, AMR can’t be sure which of these jokers will actually be able to deliver their damned planes so putting all their eggs in one basket is not wise.  Also, what if one type of plane is recalled?  No airline is going to risk a shutdown over some part mishap.  If it were your business – would you go with one supplier?  

    Companies/Matt – I agree 100%, if we taxed corporations adequately, we would barely need to tax people at all.  The problem is that corporations are psychotically defended, both by paid puppet politicians and brain-washed Conservatives who think Big Business gives a crap about them (or are aspirational that one day they will be a big business).   There is nothing in the least bit American about Big Business – It was the British East India Company that was pissing off our founding fathers – just another mega-corp (which controlled a vital commodity) exploiting the working class and getting their pet politicians to pass favorable laws to promote commerce.  Try explaining that to someone at a Tea Party rally and you get a blank stare until they shout "Down with Government" or "No new taxes" although it wasn’t the taxation itself that we rebelled against (every idiot knows you need to pay taxes to maintain a civilized society) – it was the lack of representation.  We used to learn this stuff in school…

  285. Phil,
    could this be good time to short CL (below 100) ?

  286.  Matt/money flow – looking at Birinyi’s S&P weekly money flow chart, flows for the S&P have been in a rising trend since at least July of last year. There was a spike down late last December, and a spike upward in mid-March. There was a mini-spike upward in mid-June which diverged from price (which bottomed), and they converged again with the recent rally. 
    The sectors with the highest flows were technology and industrials. Over the past month there has been a divergence in flow/price for consumer discretionary and consumer staple sectors, where price has gone up, but flows have gone down. For all other sectors price is tracking flows. 

  287. Well the FTSE is loving a low dollar, Finland asking for a Greek Island as security for loans, Belgium warning on political upheaval, a sitting prime minister being called to a select committee ….
    But do not worry fellow investors.  Our Eurozone politicons are having a meeting on Thursday …. to discuss well, probably a meeting to have another meeting.

  288. Phil / signing — Ugh.

  289. Money flows – I spoke with a money manager once who uses money flows into and out of mutual funds as contrary indicators. He pays for this information and then, along with other research, makes contrarian plays in etf’s with his clients’ money. HIs results were really good.

  290. Home sales prices so bad they might be considered good (puts the Fed back in play).