Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Are You Freakin’ Kidding Friday – Still No Deal?!?

What a joke these Republican'ts are!  

Rather than sit down with the President and the Senate and negotiate a deal that everyone can agree on, they have WASTED 3 days of our nation's time hammering out a bill that their own caucus can't pass.  This is, at this point, gross political incompetence and I think that we, the people, should initiate a class-action lawsuit against the Republican Congress for damages caused by their gross mishandling of our nation's debt, which is going to end up causing the first-ever downgrade of US debt and will end up costing our nation hundreds of Billions of Dollars – Dollars that, in case you have lost track – WE DON'T HAVE!  

Don't worry, Congresspeople can afford to get sued.  Ben Quayle (son of Dan The Great) was speaking on behalf of the Republicans this morning and, of course, why shouldn't he as he's 34 years old and has been in Congress for 6 months now so who better to go on TV and spout out a slew of lies than the man who ran on a campaign last year that called Obama "The Worst President Ever" and promised to "Knock the Hell out of Washington" which, of course, whipped the immigrant-hating white folks in Arizona into a frenzy and they sent him to Washington to wreck the place.  Well Mission Accomplished, as we sit now just 72 hours from the point at which the United States defaults on it's debt.  

And who sponsors Ben Quayle?  Why the Financial Sector, of course, those who will, once again, benefit the most from fear and panic in the markets as another few Trillion Dollars of Middle-Class wealth is transferred up to the top 1%.  Ben collected a whopping $709,660 from the Finance sector last year with $97,000 just from Cerberus!   As I said before – what makes you think that the Reps don’t want a default?  Look who’s pulling their chains….  

I think they should make politicians wear the patches of all their sponsors on their jackets – like race-car drivers, that way we'd know who were really talking to.  Of course it could be dangerous for the sponsors – Lehman Brothers sponsored Barack Obama and look what the happened to them!  

 8:30 Update:  Well that's enough political nonsense.  We're screwed and there's nothing we can do about it except vote for another round of sell-out hacks in November so they can get rich selling our country down the river to Corporate Interests.  Let's take a look now at our economy and – OH NO!  Holy Mother of GOD – The GDP is TERRIBLE!  Sorry, that was my first reaction…  Now that I've had a moment to reflect on our 1.3% revised GDP (down 31.5% from last Q) and our GDP Price Index that's UP 3.2% (50% more than predicted by leading Economorons) I can state more definitively – Holy Mother of GOD – The GDP is TERRIBLE!!!  

OK, that's enough sugar-coating – let's take a closer look at this report.  Well, on the bright side, they've revised Q1 down to 0.4% (from 1.9% so they misrepresented Q1 by adding 375% to the actual number) so, I guess you can say things are improving now.  According to the BEA, "The increase in real GDP in the second quarter primarily reflected positive contributions from exports, nonresidential fixed investment, private inventory investment, and federal government spending that were partly offset by a negative contribution from state and local government spending."  Wow, it's a good thing we're going to stop all that Government spending because that will fix everything, right?  

So a weak dollar a build-up in inventories (and I don't know why they call this a positive when people aren't buying what we are building) and that evil Government spending were the only things that kept our nation from contracting last quarter.  Inflation was also a big help with the Price index up 3.2%, forcing people to pay more money for less stuff – that was America's formula for success in Q2!  Our Republican friends will be happy to know that ALL of the increased Government spending was military, which went up 7.3% and that swamped a 7.3% decrease in Non-Defense Spending to net a 2.2% total increase in government spending because, of course, we spend 30% more money on Defense than Non-Defense.  Come on everybody – sing with me!  

On the bright side, perhaps the news is so bad it's GOOD.  This should certainly put QE3 firmly back on the table and we know how devaluing the Dollar is always a great way to boost the PRICE (not VALUE) of stocks and commodities and looks are everything in the superficial US markets.  It's even possible that the Republicans will take this opportunity to step back and say:

"In light of the weaker than expected economic data, we feel this may not be the best time to cut back on Government spending and strip the social safety net away from our society's neediest members as it could, if not done carefully, lead to a total economic collapse."  

That would let them back off their insistence on matching cuts to a raise in the Debt Ceiling and they can extend the limit THE WAY IT HAS BEEN DONE 117 TIMES BEFORE without all the brinksmanship and save it for the 2012 Budget Debate – WHERE IT BELONGS!   

Do you think that's going to happen?  Of course not because we have elected single-issue psychopaths to Congress and they would rather let this entire nation crash and burn rather than admit that their strategy might not be best for our country.  And again, I remind you – what makes you think they don't WANT to wreck the economy.   It worded out so well for the Too Big To Fail Financials last time – why not engineer another crisis to wipe out the rest of the competition and have the Government hand them another $7Tn in bailouts and loans?  

I should be thrilled as we're short.   In fact, in last nights $25,000 Virtual Portfolio Update I was wondering if we were too short.  Now I'm thinking maybe it was foolish not to bet the farm on the fact that our elected officials are going to allow this country to go straight to Hell rather than sit down like adults and come up with a solution that will benefit our country.  

It's a very sad day for America – good luck to all.  Our plan for the day (as we've been short all week) is to get back to cash for the weekend but I'm sure we'll find some speculative upside plays (like USO at $37) to play (we already went long on Silver in the Morning Alert to Members) for now – it's a simple plan (and congrats to all our short players!):  



Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!

Comments (reverse order)

    You must be logged in to make a comment.
    You can sign up for a membership or log in

    Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

    Click here to see some testimonials from our members!

  1. I can’t wait to read the rest of this post, hurry Phil, I am loving the nascar sponsor patches idea.  God that would be hilarious and say alot about each candidate.  Talk about transparency.

  2. Phil
    Crappy personal consumption numbers (.1 compared to .8 expected) and, more than likely, less than stellar GDP numbers. Is it time to take another shot at shorting XRT? Still amazed at how well it is holding up.

  3. Please read July 28th —9.38pm post for info on the meeting in Oct--starting to collect the deposits

  4. I too love the NASCAR patches idea! That way we could see how FOS all of them are, and we could vote for the “slowest car” – the one with the fewest patches.

  5.  Great call on silver this morning, Phil! Too bad I didn’t follow it… 

  6. Phil
    do you have any "fun money" plays for this morning?

  7. Phil
    Great idea on the NASCAR patches, but musn’t let politicos wear the race drivers’ flame retardant suits (that’s so their feet can be held to the fire!)

  8. OMG—now Obama made up his own birthday to be one day after the deadline—are they crazy or what—

  9.  Looks like it’s going to be an interesting day! Good thing I still have a handful of shorts left. 

  10. Good morning,


    IWM   77.34,  77.84,  78.64,  79.58,  79.89,  80.18,  80.52,  81.07,  81.22,  81.85,  82.24,  82.51,  82.72  and  83.05

    Man those puts are looking good !!

    Chart from SHJ shows support at SPX 1260 (IWM 77.40ish)

  11.  Is NLY in trouble?

  12. Phil / Ddip   I’ve been talking about this for some time.  With construction sector dead for years, there’s no catalyst for growth other than gov’t spending.  And, the idiots in the GOP want to crush that and plunge us into a Depression.  Maybe this awful GDP reality now being published for the 1st time strengthens Obama’s hand.  Ceiling extension now passes, infrastructure plans gain support as even GOP members will not get re-elected if we fall into a Depression.  Some form of QE3 in US and Europe now inevitable.  Thinking dangerous to go panic short here as the news can’t get much worse, so Gov’t will now have to launch some constructive actions.  How would you play this, while everyone is panicing?

  13.  Closed my DIA puts and SDS calls on the initial open today.  But leaves me neutral, not short…..going to look for another short this morning after things settle down…

  14. Good morning!  

    What a friggin’ mess.  Let’s sum this up.  Our economy was actually 75% less active than we thought in Q1 and Q2 was just revised down 30% and our Government is officially out of money on Tuesday and will no longer be able to borrow the $140Bn a month they need to keep us out of default.  

    OK – what can we buy?  (other than Bullets, Beans and Bullion)

    Oil is $95.40 after bouncing off $95 but that’s only because the Dollar just collapsed to 74 and I think it’s going to break lower from here.  Gold $1,634, silver still cheap at $40.34 because not everyone has $1,634 to buy gold.  I do not thing it’s a good idea to try to guess a bottom on the indexes other than our 5% lines and the RUT is most likely to test at 775.

    USO Next week $36 calls are $1.45 so 10 of those in the $25KP with a stop at $1.20.  

    TNA Aug $69/73 bull call spread is $2 and you can sell the $51 puts for $1.20 and that’s my favorite index play at the moment.  Of course any bullish offset would work but this one is focused on the RUT and betting it won’t drop another 8% by Aug expiration (725). 

    That’s it for now, there’s no point in looking at the news because the only news that matters is our GDP sucked and the only reason we’re not officially in a recession is the Government spending that the Republicans insist on cutting otherwise they are willing to send our Nation into default, which will also cost us hundreds of Billions in increased borrowing costs and – possibly – much, much, MUCH worse.  

    You know, I kid about it sometimes but this is psychotic behavior – they are murdering our country…

  15. FU PCLN!!!

  16. A propos my point, Obama at 10.20 is going to trash the concept of slashing Gov’t spending short term, with no GNP growth evident.

  17. VIX nearly at 26(!)

  18. Volume is not very high – this is a retail panic so far.  If you have short positions, strongly consider put tight stops on them (this includes the $25KP and Income Portfolio) as they put plenty of cash in your pocket and we can always find another layer of shorts if the RUT can’t hold 775.

    Chicago PMI was 58.8, not too terrible.  ISM was good EXCEPT employment, which is getting very bad again:

    July ISM New York Business Index: 57.2 up from 52.3 in June. Six-month outlook jumps to 63.2 from 53.9. Employment fell to 46.6 from 47.8 – marking the first back-to-back contractions in almost two years.

    The Republicans are such fools – No Reed is talking about going over Congresses’ head and putting a rescue plan together and if they get something out and the market turns – the Dems will have "saved" the economy from Republican bumbling.  Amazing how the Reps have taken a massive political advantage and turned it into the mark of Cain in just 3 months!  

  19. JRW / TZA  Are you playing for 778 on the RUT this morning.

  20. why is PCLN up F N 15 points????? EXPE?

  21. what that a stop run on nly?? LOD was 14.50.

  22. PCLN TODAY $545 calls can be sold for $3!  

  23. Sorry late start with a home emergency….
    Oil Lines
    R3 – 99.09
    R2 – 98.55
    R1 – 97.88
    PP – 97.34
    S1 –  96.67
    S2 – 96.13
    S3 – 95.46
    We have already breached S3 but are over it now! Got to watch it!
    Yesterday’s high and low – 98.01 / 96.8
    Breakout lines – 98.75/99.96 and 94.84/93.63

  24. Phil,
    TBT @ $32.  People are rushing into bonds that may default next week?  Obviously these buyers don’t think that is going to happen.  That $32 line has held pretty well, I am looking at selling some $32 puts here @ $1.50.

  25.  Wow, F’ing Momos are getting scooped up already.  QQQ TODAY $57s are .72, worth risking a stop out at .50 for so 20 in the $25KP.  

  26. People are going to say "markets are oversold" Im not expecting a huge move down….cant forget the Bernanke Put.

  27. tusca & Phil  / DDip – I agree that we’re in a right mess and the contractionary policies being pursued by both parties are only going to hasten and sharpen our descent.  What’s interesting to me is how this might play out over different timeframes.  For example over the next month.  Then the two months after that (1 quarter).  Then go a quarter or half year out from that.  Then ask where we will be in a year.  Maybe I’m asking too much.  But Phil did a nice narration the other day of how the whole economic house of cards fell in mid to late 2008.  I know we can’t predict the future, but looking at some paths forward would be interesting and perhaps helpful (or perhaps futile, don’t know).  Maybe something for the weekend.

  28. FAS Money (Weekly) – We are short the 25 Calls (0.75 now toast!) and we rolled the 24 Puts yesterday to next week 23 Puts (1.00 now 1.41).
    FAS Money (Monthly) - We are short the August 25 Calls (1.15 now 0.81) and the August 26 Puts (1.75 – now 3.93).

    Phil, next week 23 calls are now under $1.00 as you suggested yesterday. Do we sell these. This week’s calls are toast anyway so they could be left to die

  29. tusca / TZA

    I’m actually in TNA (1/3) but I’m REALLY busy selling puts here (taking profit) !!

  30. Poor Yen is on the 77 line – a whole week of BOJ manipulation out the window!  Euro $1.438, Pound $1.64.  Silver topped out on this run at $40.50 and gold at $1,636.  Fear subsiding because Obama is speaking at about 11.  

    XRT/DC – We just did them.  

    Oh damn, buy back the short calls on the FAS Money of course!  

    VIX Aug $19 puts are a fun gamble at $1. 

    Consumer Sentiment 63.7 – worst since March of 2009! 

  31.  Phil, those core tea partiers don’t really give a crap about the politics of this, and Boehner and Obama are still trying to play the game.  This results in Boehner’s bill not even getting voted on, and Dems slamming Repubs for it, but that misses the larger issue.  
    If they won’t bend to Boehner’s plan, the Senate/WH plan is DOA.  This isn’t chicken anymore, they are serious about stopping spending now.  So I think that’s what we have to play, so I think your call about looking at more shorts on RUT below 775 is smart.  Thinking about adding shorts if we get any kind of rally this morning…..maybe DIA puts again as it has held up the most so has the furthest to go?

  32. IS PCLN up 20 because of EXPE?

  33. Vegas/Savi – You can repost it every morning if you need to, no biggie.  

    Fun/Dave – Yep, see above.  You just have to find the bottoms and take a stab at them, set reasonable stops and try again next time you think you have a bottom if the first one fails you.  That’s why we ALWAYS sell into the initial excitement – you could have sold puts on almost anything at the open and be well up already.

    And by the way, it’s got to be said:  

  34. Phil
    Ooops! Sorry I must have missed that one. Thanks

  35. stjeanluc
    FAS Dont you think it would be better to wait with the calls until the gov boneheads made a dicission?

  36. LOL!  I love it when you bust out that Airplane clip! 
    Although I had EVERY intention of halving my short TNA position last night.. they couldn’t quite give me the price I wanted.   SOOooooooo…. long story short, I was 2/3 short in TNA overnight and am now up 6% and fully covered.  Cha-ching.  My day should be over! 

  37. FAS Money / Phil – Do we buy back the weekly and monthly short calls? The weeklies are now at $0.01. No charge to buy them back on TOS, but that’s not the case for everybody.

  38. Entered RUT IC play Sept 875/885 680/670 credit 1.87

  39. Phil -

    You going long oil into weekend?

  40.  end-o-month short profit-taking in play on top of shorts worries about deal over weekend…france breaking below greece-debt deal lows….germany about to take out 200-day

  41. Looks like TBT just broke below 31.

  42. time fo rth e14th amendment

  43. yodi -

    1) I have not read that book abt IC, what shud the delta be when you initiate the play?

    2) when do you adjust your IC plays?

  44. NLY/JMM – Nothing I see that’s so bad, maybe a good time to enter a new one.  

    In Income Portfolio:

    • Lets sell 50 DIA Aug $116 puts for $1.10 to cover 50 March $110 puts.  
    • Let’s offer $2 to buy back to the 2013 $15 calls and sell the other 15 2013 $15 puts for $2.80
    • Let’s buy back the FTR 2013 $7.50 calls for .60
    • GLW – Rolling 2013 $25 calls (.40) to Jan 2012 $16 calls at $1.30 (net .90).  
    • HCBK – Buying back 2013 $7.50 calls for $1.05

  45. my other question, the AAA debt space is pretty small if you remove the US right?  And there are funds with requirements around owning AAA paper, so how do we profit from a potential downgrade forcing lots of money through a very small hole?

  46. Phil, any plays on TBT?

  47. yodi – thanks for your input.

  48. IWM is now below its 200 DMA. SPY touched its 200 DMA (128.65) briefly before clawing back…  Both DIA and QQQ are still holding. Pharm’s favorite, TLT is flying over 97, up $1.00 in the excitement. $97.50 has proven a tough line to crack previously so worth watching, but that’s not helping TBT which is now below 32 and adding to the decay!

  49. Nicha – I read the book. Initiate with Deltas close to 10 (no more than 12).  Always have at least 12% credit.  Adjust when deltas get to 30, or the mark is within 4% or so of your exposed wing (delta will be around 30 at this point anyway, so a bit redundant). 

  50.  Primary dealers called to NY Fed for Noon mtg…..hrmmm

  51. phil—could you please explain why PCLN was up 20 and still up 14?

  52. jceasar- I just leafed through the book- going back to read it in detail- I don’t recall seeing the 12% credit item? Can you elaborate.

  53. Thanks, jcaesar. I think I better read the book before initiating a trade.

  54. stjeanluc, have you sold the FAS23 calls yet?

  55. FAS Money / Jr_mints – Yes, I did. If you have not, they are at $1.28 now. We sold them for $1.00 so a better deal for you… 

  56. Jabo -

    I’m not Phil…but I’d direct you to my recent post.


    GDP growing at 1%…PCLN at 37%…and EXPE rocked it.


    I really think you all need to consider the high growth argument…

  57. hoss18 / AAA – Careful, the rules are in flux: Fund managers seek freedom not to sell on U.S. downgrade

  58. Phil
    thanks for the "fun" play    VIX 19p :)

  59. Phil INcome Port point two the stock is NLY and DIA I trust is Sept long puts right

  60. Nicha - Agree.  Best to read the book.
    pstas – It’s on page 89, 1st rule of putting on a trade.

  61. stj—could you please post current position on fas money weeklies --I think I missed a trade

  62.  Bought GOOG 610 weeklies first thing this morning, buying into the panic. Just sold out for a double- NOT going for the home run since that’s what always gets me into trouble. 
    Assuming congress gets the job done at the last minute (of course) what are some bullish plays to capitalize? I’m thinking of a bullish August GOOG spread, thinking they will probably make another play for the 630-640 highs. 

  63. AGNC could suffer from US downgrade 
    AGNC spiked down to $22-24 this morning (I sold some puts)

  64. stjeanluc, thanks, I sold them for $1.00 as well, I never saw them hit 1.28.

  65. @Felipe
    It’s impossible for me to actually believe that you actually believe the U.S. will ‘default’ on its debt. 
    Postpone payments, sure, stretch out current pay to 30 day , and 60 day to 90 day….but default…’re beginning  to go off your rocker to hype a default. 

  66. TRLG flying high on a day like today….

  67. EDZ not participating today, just sucking wind.

  68. nicha
    IC plays you should read the book as you should never bank on some one elses dicissions. Your short legs should be around delta .10 +-. Adjusting you hope you do not need to adjust follow IT for good advice however it depence on the tolorance of the trader As guidlines I look at adjustment if the short is closer to .30 even .35. Just look at the range RUT condor has a span between 885 and 680 on the put. As long this range is not violated you are good but let the stock not get to near to this range or you going to burn your wings. Trust this helps start with paper trading.

  69. Obama, I don’t like the guy, but he’s doing a good job… positive message with no bashing so far. Hope he maintains the tone, let’s get this thing done.

  70. QE3/Tusca – I would think that’s what’s keeping the buyers in today.  That news was so bad that it’s good.  Your instincts are dead on.  

    Yours too Hoss, good job!  

    TBT/Button – I ALWAYS like selling puts on TBT when they test $32.  Sometimes they go lower but, so far, not for very long. 

    Path forward/JC – Definitely for a weekend and only AFTER we have a deal.   Otherwise, there are too many variables so you can write 20 pages of stuff and 18 of them will be worthless once the deal is announced.  Kind of like an opening move in chess – AFTER the first move, then the game begins to take shape and you can begin to plan ahead.  

    FAS/StJ – Did we not sell the calls yesterday?  I know I logged them at $1+ into the close and, hopefully there were taken back out at .75 this morning and now naked on the call side until we see what the President has to say. 

    Good plan JRW!  

    DIA/Hoss – I agree, that’s an easy mark but I still have faith.  There are enough Reps to vote with the Dems when push comes to shove but it would spell the end of Boehner’s Speakership.  

    PCLN/Jabob – Yes, I think so.  More travel is assumed to be spread evenly around.  That’s why I like those short calls – it’s not specific to PCLN. 

    Nice on TNA Matt!  Sticking to your guns paid off nicely. 

    FAS/StJ – I would not buy back the weeklies for .01 – no reason to give them the penny.  On the monthly play – I’m not sure if your goal was not to touch it except once a month or not but now would be a good time to buy back the caller.  

    Oil/David – See above. 

    Europe down 2% on CAC, 1.2% on FTSE and 1.12% on DAX with an hour to go.  

    AAA/Hoss – I don’t follow it enough to know.  I think your premise is sound but the reality is just like the reality of currency.  62% of the money in the World is dollars – You CAN’T convert it to another currency without driving mad deflation into the other currency and that would crash the economy you are trying to escape to.  It would take many years of globally coordinated money printing AND cooperation from the US NOT to print money in order to make even a small dent in the Dollar’s dominance.   AAA paper is the same except about 100-fold more so.  

    TBT/Pentax – Same play as always – sell the $32 puts.  

    Obama with good speech but bottom line is we’re going into the close today with no deal – Don’t be greedy on those longs – we can always buy more with CASH!!! 

  71.  JR/Puts
    Sold my IWM Aug 81′s Puts at 3.75 out of the box this morning…… 2.05 Profit….. How ya doing…. :) Also, my SDS Aug 21 Calls……… I’m in Russia at 5:45 PM……… 

  72. NLY: Not a stock I own. But it looks like earnings coming out 8/1 and is saying they expect revenue down approx 20%.  I really have no opinion, just the messenger.  I have thought about taking a position from time to time.

  73.  Phil/AAPL is there any opportunity on the current weakness?

  74.  market plunging BUY LNKD…safehaven..haha!

  75. Fully in TNA now, fwiw !!  Smiley

  76. qqq’s moving nicely, feel like I’ve had a full day in less than an hour and a half, love it.

  77. Pharm- if you’re here today let me know if you have any questions you’d like me to ask the people over at Curis (CRIS). Turns out they are 2 minutes down the road from Hanscom. I just went in on my lunch break and inquired about a tour – they said they’d get back to me, we’ll see.

    Phil- do you like nat gas or some derivative of it here?

  78.  Back in on the GOOG weekly calls when they popped resistance at 608.50. Just sold into the excitement with the push to 612. Good for another $1K. 

  79. Jbur
    NLY is the next Div date not 28th Sept?

  80. @JRW III
    At what average price?

  81. FAS Money / Phil – We didn’t sell the calls yesterday. At 3:54 you said to sell the 23 Calls if they fell below $1.00 which they did only this morning (they were $1.20 then – in retrospect, it would have been great but oh well). With the $1.00 for the puts (which we sod) it would be $2.00 of premium! So as of now, we are short only next week’s Puts and this week’s calls. 
    As far as the monthly are concerned, ideally we don’t want to touch them much, but that doesn’t mean we can’t take advantage of dips when we can! I think it might make sense to leave them alone though as we are climbing back and it might not be worth another transaction! The 26 Puts are not looking good, but I assume that we wait for a bump if they put a plan together and see what we do then!
    The current situation is as follows:
    FAS Money (Weekly) – We are short this week 25 Calls (0.75 now toast!) and we rolled the 24 Puts yesterday to next week 23 Puts (1.00 now 1.13).
    FAS Money (Monthly) - We are short the August 25 Calls (1.15 now 0.94) and the August 26 Puts (1.75 – now 3.70).

  82.  wheeeeeeeeeee

  83. Phil
    I agree with you on the Presidents speech. For once it was not full of right-bashing rhetoric. That is leadership we all can believe in. I also like the fact he said he was willing to put enforcement mechanisms in place to make sure they do as they say. Another olive branch to the Obstinate One’s on the other side of the aisle. All the bashing just adds to the level of mistrust that already exists. I am more optimistic that something will get done after hearing the speeches from H. Reid and the President this AM.

  84.  45M on Dow at 10:45 – about a normal day’s worth of volume so big boys are generally complacent so far.  

    Income Portfolio/Yodi – Thanks, that was NLY where we’re buying back the $15 calls.  The short DIA puts we’re selling were the AUGUST $116 puts.  

    Oh my, now it’s a rally!  Quick, where’s Boehner and company to put a knife in it?  

    GOOG/DrC – Smart play!  I don’t know why fixate on GOOG when you can just do my TNA spread or a QQQ or SSO – so many ways to make a lot of money…

    AGNC/Yshen – That makes sense – hitting all the REITs even BXP took a nice dive.  

    Default/Flips – Well last week you didn’t think they’d take it down to the last possible day, did you?  I don’t think they will default, obviously, or we wouldn’t have cashed in the shorts and flipped bullish, would we?  Still, the fact that the people we entrust with the running of this country are willing to take us right to the edge of the cliff is very, very scary but you keep voting for those jokers if you want.  I think Einstein said that he didn’t know what weapons would be used in WWIII but he did know that WWIV would be fought with sticks and stone – that’s pretty much the situation in Washington right now – the Reps went nuclear and now they’re willing to roll the dice and see what the response is but they have now turned both keys….

  85. flipspiceland / TNA

    $69.99 !!

  86. JRW, sold TNA I dont like what Bullard is saying

  87. From seeking alpha…
    10:56 AM The AP is reporting the Boehner bill has been revived in the House with a vote possibly coming today, and at least one previously opposed Republican saying he will now vote "yes." Though the President said minutes ago that bill could never become law, stocks have rallied to their highs of the day.

  88. NLY/YODI
    Don’t know when dividend date is, but I did dig up another potentially impt piece of info:
    Dividends From Annaly and Cypress Sharpridge in Danger if S&P Cuts US Credit Rating

  89. Phil:
    Great call on the short term longs you called today. Not participating, but fun to watch!

  90. Time to crush /DX

  91. There goes 74 on the Dollar – Now we can dump the bull bets if it breaks back over.  

  92. @Felipe
    It wasn’t Flipster that said they wouldn’t take it down to the last possible second, I don’t think.  I can’t imagine I would because that’s the M. O. of handling a Rahm Emmuel Crisis in order to transmogrify it into an opportunity.  Think of ho heroic they’ll each look to their contributors, fans, and supporters of each party when they pick a Third Way to handle it.
    But Default on the trillions and quadrillions of debt……come on./……You even mention above that you have hope  some repubs and the dems will block any default…….
    You know you agree with me on this one. :-)

  93. Yodi/Jbur:
    NLY: See Yshenar’s post at 10:34

  94. @JRW
    Then hopefully you’ve pulled the trigger at $73.00??

  95.   A 3X AAPL option profit went to 1X in under 5 minutes.  The quick and the dead.  At least I’m up.

  96.  And now it’s almost back.  This is amazing.

  97. Holy $hit!

  98. Nice break through IWM 79.89. I think the target is 80.52 but the PPT has spent a LOT of money on this one, so watch out at 80.18 !!

  99. jcaesar, or others
    I’ve hunted a couple of times now over the last couple of weeks as I’ve popped in & out during the day, for the name of the book you guys are discussing again today.  Can’t find it.  I know it came up over a month ago, and several times since.  Can you post the name of the book again and the author.

  100. Good grief!  Boy am I glad I was covered.  It’s just amazing how they can move this market around.  Uncovering half-

  101. Jbur
    Thanks for the info It all is about the Government if interest rates go up REIT stocks can not borrow money any more as low as they do now and the div payments can be expected to be lower. However it will not happen in the short time I think They would be absolutely stupid if to permit to get inflation up at this time. If there is a cloud on the sky all sheep run to the excit look what happened this morning down 135 now down 20 and wait in a while it will be plus again they play the market like a casino

  102. JRW, Thanks for the update. Keep posting your thoughts, I’m loving it!

  103. @Felipe
    I ceased voting when i realized years ago that no politician could govern this country.  (See previous posts on Size, multiplicity, and population).
    I could— if they couldn’t, or refused to—- see that you can’t have a republic, Franklin was prophetic and absolutely correct)  when lobbyists of a few ten thousand, rule the country and write the laws our representatives don’t read, from behind the scenes, when lawyers make up 90% of the governance, such as it is) and practically the entire country is, "Bowling Alone". 
    Voting is pure folly so from that standpoint don’t charge me with an iota of blame.  There is as much marshalled against the democrats as republicans, (though this site discourages the folk into silence in that regard) so don’t blame me for not voting for democrats.  I have, when I did vote, to no benefit to the country.
    As I look back on it I was a fool to believe that government in the aggregate would be a force for good for the many and the few.  One of these groups had to eventually buy the government and they did.
    There will be no default and you’re only gripe is that your expectations were a bit high, hoping for a more timely solution.  My predictions have always been based on dramatically reduced expectations from just about everyone on the planet. It sure makes life and living far more tolerable. 

  104. Phil / bounce   Is this just the PPT or is it based on Lloyd having inside infor on what will finally transpire?

  105. bassdad – It’s "Profiting with Iron Condor Options" by Michael Benklifa.

  106. I missed it……what happened…..did one of the parasites come out and save the day?

  107. Money Fund Investors Bailing With Increasing Speed -- "Money funds have experienced outflows of $9 billion per day this week"

  108. Jbur
    See what I mean my ink is not yet dry and we in the green

  109. Wow look at everything shoot up…..did everything get "fixed"…
    wondering if its a good idea to buy puts on this euphoric relief high….maybe longer term like
    So they make a deal, still seems like we are taking billions out of an already bad economy
    "I am amazed how well you seem to predict"

  110. exec, tomorrow we burn.  But today… we dance!

  111. About to call it quits for the day when it looked like we were going to pop and hold 612 on the GOOG. Went into the 615 weeklies for 1.30, out at $2 as we jumped to next resistance at 614.50! JR, you taught me well- and it seems I’m listening today! I’ve been setting limit orders for my target prices which seem to be going well. 

  112. This should bode well for the income portfolio when the buying starts (bespoike graphic): Industrials Sector Collapses

  113. Phil Has Loyd not yet received the news? It looks like it

  114. EDZ/Rustle – It’s America that will go BK on Tuesday, not the EMs!  8-)

    NLY/Jbur – They are down a lot, I’d say priced in. 

    AAPL/Ksone – I don’t know if I call up $2.50 a dip to buy into! 

    HOLY COW – Look at the Nasdaq fly!  The fix is in somewhere – this is nuts.  

    Great call JRW!  

    Tea party doofus says "We have a compromise – it’s called Cut, Cap and Balance and it’s on the Senate’s desk ready to pass – that’s our compromise and they need to vote it through."  I wish there was a way that just the people who voted for these morons would suffer from their decisions…

    Nat gas/Jrom – UNG is back at the $10.50 line so how about the Jan $9/11 bull call spread at $1.09, selling the CHK Sept $32 puts for .82 for net .27 on the $2 spread and, after Sept, you can sell more puts and reduce it further.  CHK just had great earnings.  

    FAS Money/StJ – Oh you are right, I got confused.  It was the puts we sold and they are back to .95, thank goodness.  Still would rather sell the $24 calls for $1 (now .85) so back to the same contingency and only selling $23s (now $1.40) if we have to.  

    1,300 on S&P (/ES) and 800 on RUT (/TF) and 12,200 coming back on Dow (/YM) – Those are going to be our next bullish breakups to watch. 

  115. Or are we still waiting for dollar back to 74?

  116.     $3.88 !!

  117. JRW TZA?


  118. in 37.43 not looking for a homerun happy with .30

  119. kustomz / TZA ?

    I’m not going to fight this trend just yet; keyed in for a TNA buy at IWM 79.60ish !!  We’ll see !!

  120. Thanks DC – If you are short, it’s great to balance in off a big move like that.  More than anything else, it locks in some profits.  

    Dollar back over 74 – thank the BOJ as they try to push the Yen back over 77.  Europe closed down 0.85% in UK and France but Germany came back to down just .17%, gaining more than 1% in the last hour.  That means the EU may have been our buyers and now they are winding down and we’re on our own…

    Agree/Flips – I’d agree if I could keep track of what we’re talking about.  Anyway, I’m trying to be very zen about this and just keeping myself open to go with the flow and trying not to have any pre-conceived notions.  We’re just going to have to see how it plays out and then make our bets.  

    Bounce/Tusca – See above.  I think the EU takes what Obama says at face value.  If Merkel said there’s a deal – there WOULD be a deal so they can’t understand a situation in which Obama would say we will make a deal but then, come Tuesday, there is not one.  

    Puts/Russell – I think going back on speculative SQQQ or TZA plays over the weekend could work out well if there is no deal.  At this level – any Disaster hedge we took in the last couple of days is back on the table.  

    Thanks Rain:  

  121.  Love the Strangelove clip!   Is YRCW still a good long-term gamble?  

  122. Phil – So Boehner will add a Balanced Budget Amendment to the House plan and then he’ll have his majority.  It will get rejected by the Senate and then they’ll ask the House to vote on a deal without the BBA.  Think the House will do it? 

  123. Come to papa 37.77..

  124. kustomz / TZA

    If "they" can’t take back IWM 79.89, then this was NOT the PPT, it was an i bank Pump and Dump !! 

    Good call !! 

  125. Stoch turning back up on TNA on the 10 min 74.09 may be a tough nut to crack on the upside as they tried and failed on the huge run up earlier..

  126. SPX IC/Yodi:
    I saw your post from yesterday on your Oct SPX 1100/1125/1425/1450 IC. I am seeing it at about $1.80-$2.20. And you got $4.35 for it? Did you sell yesterday? THX

  127. Yodi: Nevermind.. Sorry, I was looking at Sept. Not enough caffeine

  128. Jbur - I know you didn’t ask me, but I have the same spread on my screen right now.   The mid is 4.20.  You sure about the strikes and month?

  129.  homebuilders strongly outperforming last 2 days…value trap…you know i dont even hear people talking about the MASSIVE increase in property taxes that countries are putting in place right now….3 countries right around us have put in 30% tax hikes on property…our county will be soon.  i can’t believe the reports that are slipping through censors out of china on that crash

  130. Thanks JRW, I wasnt close to 69.99 on TNA I got in at 71.35 and out 72.50 at 11:04 and missed most of the run up.


  131.  JRW, Your lines are working great as always, Thanks, in TZA just under 79.58 line

  132. i meant counties!!

  133. loopster careful the dollar bottomed at 11:22 and markets peaked…I doubt we get another crazy move like that one

  134. jcaesar: Wrong Xp month… thanks.

  135.  Thanks, Angel, great comment.

  136.  this is one of the websites that is putting out tons of info that makes govt. look bad that im surprised they haven’t taken down….

  137. Wow, how kind of CNBC to cut to Harry Reid in the middle of his speech.  You really can’t watch this station anymore if you want to actually be informed…  

    These guys are still miles apart.  

  138.  kustomz, Thanks for the tip, but developing rules to trade JRW program, under "the line", and  under  8 EMA, MACD pointing down, am staying short until it changes direction.  

  139. ttp://

  140. Nevermind loopster thought you mentioned TNA I see now your in TZA…sorry

  141.  Reshorted on the little rally there, in SDS 21 calls and DIA 122 puts, smaller positions paid for with booked gains, and still have a nice profit in the bank.

  142.  Iranian forces have seized three bases in northern Iraq used by a Kurdish force affiliated with the Kurdistan Workers’ Party, or PKK.  The Iranian assault on PJAK, the Party for a Free Life in Kurdistan, began July 16 and has taken some of the group’s bases close to the Kandil Mountains in Iraq. The action may have support from Turkish intelligence and special forces.

  143. phil
    I turned on CNBC at 10:50 and waited for the president to speak, at 11:40 ish I realized he was not late they don’t think the President of the United States is newsworthy!

  144. Joe Kernen is the the poster boy for the GOP now and CNBC is quickly turning into Fox’s little brother who’s getting bigger every day.

  145. turkeys top four generals just stepped down…

  146. Repubicans from Arizona are after 6 months of experience!

  147. obama just tweeted that white house is going to post twitter handles for all gop lawmakers..hahaha…he is the second most divisive president in modern history…anyone have a good handle fo rth epresident?

  148. bush being the most

  149. i got one BaRaKNPROMISES

  150.  oil cant rally with euro bounce, iran/turkey/iraq war fears, tropical storm hitting texas

  151. Buying TNA on the break North of IWM 79.58 !!

  152. ABX – I have short $46 calls sold at 1.34, now 2.3. Thinking about rolling to Sep $48 for even.

    Gold up $13 but miners lagging?

  153. Absent changes in the pension systems or new revenue sources, that could result in a doubling of the city property tax, according to The Civic Federation, a non-partisan budget watchdog group.

  154. It gets worse:

    The debt ceiling would be raised immediately but not by enough to get the government through next year. To get the second debt ceiling increase, House Republicans want a balanced budget constitutional amendment to pass both chambers first and be referred to the states.

    What kind of a process is that. In addition, the GOP budget plan as proposed by Ryan doesn’t balance the budget until way after 2020 so how would that work! I think that we have reached a level of insanity never seen before!

  155. The budget figures do not include shortfalls in city pension systems, which could add costs of $500 million or more annually in coming years. Absent changes in the pension systems or new revenue sources, that could result in a doubling of the city property tax, according to The Civic Federation, a non-partisan budget watchdog group.

  156. sorry meant to post the link then th ecomment

  157. Was daydreaming about Sofia Vergara when all of a sudden I had a paranoid episode wherein George Soros made a monstrous bets on severall asset classes that would explode when the Default charade becomes the No Default reality.
    I snapped out of it before I could learn what those assets might be.
    Any help greatly depreciated.

  158. JR,
    How do you play these false breakouts?

  159.  Flip: Caterpillar.  The bullshit in Washington is piling so high you’ll need wings to stay above. it.

  160. 0×0 / CAT — then shouldn’t he be in BA instead?

  161. exec / breakouts

    Watch the volume, and make sure your other indicators confirm; that push at 12:37 had no follow through volume and order flow turned red !!

  162. Today’s chart from 11:30 looks a lot like yesterday’s from 2:00, Bearish !!

  163. JRW / LAST HOUR   Rember the stats I posted yesterday!

  164. Phil /FTR: Bid price for Feb. $8 C is $.20 and Ask is $.30. When  put in sell to open order at $.25 , ask price immediately changes to $.25 . What’s this all about?

  165.  TBT, if a deal gets done we get some selling and if a deal doesn’t get done we’ll get some selling..

  166. in bonds that is

  167. Phil / stimulus    The most depressing aspect of this GOP intransigence is that there seems to be no way the Admistration can now implement fiscal / structural initiatives to address the Ddip and unemployment nightmare.  It’s hard to believe that the GOP can happily sit watching 20% of the population without a job or hope.  But of course the unemployed rarely vote Republican, unless they are religous nuts or obsessed with abortion.  The idealogical intransigence of the GOP, stubbornly hanging on to this mantra that lowering taxes for corps and the rich will solve all problems, is mind numbing.
    Obama missed his chance 2 years ago when he didn’t throw all stimulus into massive fiscal / structural stimulus and investment incentives.  His Presidency will now be seen as a huge failure thanks to his dithering and lack of courage in taking decisive action while he had the votes in Congress.

  168. YRCW/Chaser – I like them at .95 but I’d like them better if we crash next week and they hit .80 again.  You can sell the Jan $1 puts for .70 so you risk just .30 on a BK – that’s my favorite way to play them at the moment. 

    Deal/JC – I can’t, from a political standpoint – see the logic in all 240 Republican Congressmen refusing to join 193 Democrats in passing a bill that comes out of the Senate.  There’s no way they can do it without looking obstructionist and the week that follows such an action would be TERRIBLE and then Obama would be able to do dozens of things to "save" the situation (the Treasury can mint a $1Tn coin and sell it to the Fed and we’re good through the end of the year) and look like a hero to 40M people who would be cut off from SS and 40M people who get food stamps and millions more on unemployment, disability, veterans benefits, millions of government workers who don’t get paid.  I’m sure at least a couple of those very, very angry people are going to be people who USED to vote Republican. This isn’t just political suicide in 2011 – this could be it for the rest of the decade for the Reps.  Obviously, that’s an outcome I can live with…  

    I don’t think people realize that, since the 1940s, there have been just 8 out of 36 sessions that the House has been Republican and only 10 times in the Senate with 6 of those times in each coming since 1995.  This is not business as usual in America, this is a radical change of direction that is being jammed down our throats and I think they are pushing it way too hard and too fast and the blowback is going to be a bitch.  Do you think Americans were LESS Conservative in the 50s?  Only one session out of 10 went to Republicans back then.  NONE in the 60s, NONE in the 70s – THAT’s how pissed off people were after the Reps screwed up the economy in the 20s…  

    Of course, in the 20s the Banks and big corporations were running land grabs and taking companies public that had little merit and the levered themselves up to the hilt, ran up commodity prices and collapsed the economy.  Fortunately they are much to smart to repeat that mistake!  

    Why does CNBC not understand bonds?  People panic into bonds and that drives the rates down.  They can buy CDS’s to cover the bond and it’s totally safe.  

    Obama/Angel – On his twitter account it say s he’s following 692,618 people – no wonder he doesn’t have time to balance the budget!  I agree 2nd most divisive (maybe 3rd behind Lincoln) but no one can top the Bushmeister.  

    ABX/Nicha – Good company and tough to short.   Maybe sell some puts to offset a bit?  

    Insanity never seen before/StJ – Well there was that time that we were attacked by planes full of Saudis and a guy in Afghanistan took credit for it so we started a $3Tn war in Iraq – that was pretty darned crazy!  8-)

    Chicago/Angel – Not too terrible on a $6Bn budget.  A lot less of a gap than the US budget.  As with our whole country, a 10% tax hike would fix everything but no one has the political will to do it.  You are totally right about property taxes, they wonder why people don’t want "cheap" homes but taxes are catching up with monthly payments and utility bills have double – mortgages aren’t even the main part of the cost of owning a home anymore for smaller homeowners.  

  169. Matt/False Breakouts,
    I don’t know……these Bots are getting more and more cleaver.  They throw in the occasional volume move to keep the volume watchers guessing.

  170. Still buying TNA on a BREAK over IWM 79.60ish !!

    And it looks like "they" are setting up !!  Smiley

  171. Savi, just sent you a deposit, can you confirm?

  172. dflam / FTR — You are witnessing the bots first hand. If you watch the level 2 bid/ask on a more volatile issue, you’ll see them dance around trying to get the other side to bite. You can see the warm bloods as well when you see a bid/ask size that is stable at a small number at a price the bots won’t touch. So for you 0.25. When you get a fill, most likely you will see the ask at 0.25. and the bid will move to 0.15 (or worse 0.10 x 0.20).

  173. tusca / EOD Bummer

    Good point, thanks; I’m still waiting. Either way, I can’t see them just pinning it here for the rest of the day !!

  174. Obama / Tusca – If you remember, they had to compromise on the stimulus because he could not even get all the democrats to agree on what he wanted. Just read this article:
    Key section:

    If Obama had negotiated with nerves of steel, would he have gotten better deals throughout his presidency? I don’t think so. Unlike labor bosses and Soviet bosses, who could be pressured because there were things they wanted that a president could provide, Republicans — and especially tea party Republicans — want nothing that Obama can feasibly give them. If Obama had been tough as nails, they would have followed a path of total obstruction and nihilism anyway. Maybe some details here and there would have changed, but on the whole it just wouldn’t have made any difference. 

  175. If they get a deal maybe Boehner will cry again as he watch’s the market sore.

  176. rustle123—just got the e-mail re your deposit of $150

  177. Phil, Demise of the Repubs. – you must have a short memory as the election in 2008 was supposed to bury the GOP for decades also, how did that ork out. They got the media on their side run by rich corporations. They can tell you yellow is blue and say it long enough so 1/2 the peope will believe it.

  178. Savi/Vegas — I just sent you the deposit.

  179. Hey all,

    Thought you might like to know…

    Oxen Group sold $43 puts on LVS for some income as they seem very strong to hold, have high probability, and the company had amazing earnings. One of our favorite longs that has held up well in this downward movement.

  180. escohen5--thx—received $150 deposit

  181. Phil JRW / eod    Strikes me there will be a lot of funds wanting to be in cash by the EOD?  Bearish?

  182. exec, they definately changed their tactics.  What kills me is when there is a huge volume spike after the close say at 4pm.  It’s like they held reporting some of the volume throughout the day to cover their tracks.  That seems like it shouldn’t be allowed.
    Does anyone really think we are going to close greeen today?  I think this is a huge shorting opportunity right now.

  183. pcln—market gets killed this week and this POS is up almost $10 for the week and 16+ today???
    FU PCLN!!!
    and FU CMG too!!!

  184. Watch them pop IWM 80.18 and start the SHORT COVERING !!

  185. Phil / GNP  The debt ceiling settlement is built in, but after the awful economic news today, to which there is no fiscal initiative solution coming, the mkts should rationally be in a downtrend, as this will lead to downward earnings revisions?  Puzzled?

  186. jrw, what do you mean "and start the short covering"?  do you mean force others to start covering their shorts and drive the market higher?

  187. Dollar down..still market down?? I guess the money is flowing into commodities (ex Oil) and they are getting pumped up.

  188. I like the way BAC is taking down these paper houses shown on Bloomberg you surely would not be able to do this with my house here in MX solid concrete! Obviuosly these houses have no value.

  189.   gallup-obama new job approval low of 40%-GET LONG BABY!!!

  190. tusca / "the mkts should rationally be in a downtrend"

    Good reason to buy TNA  !!  8-)

  191. Phil/Banks- Why are the financials holding up when things look ready to go from bad to worse? Is this an indication the market believes this will get worked out over the weekend?

  192. JRW, if they pop 79.89, where do you think it would go from there?  Are you thinking they just want to force covering and then sell into it?  I just don’t know how they could close today green.  But then that’s how they make their money!

  193. lunar,

    Yes, unless they blow IWM 79.58 again !!!

  194.  JR- what is your real time option pain for IWM and GOOG?
    Playing a small number of 610 weeklies for fun at this point at 75 cents on the premise that we may have ‘hope into the weekend" stick. 

  195.  In cash.  BP  100/60  P 60.    :)      ZZzzzzzzzz.

  196. FTR/Dflam – That’s just the market maker messing with you.  Actually, you are the new ask, right – what’s so strange?  

    Stimulus/Tusco – No way, they are dooming us to a decade of high unemployment.  Unless, of course, the GOP plan works and cutting back $300Bn of money the government gives to the lower classes and extending the Bush Tax cuts and leaving all the loopholes open so Corporations can continue to pay just $198Bn in taxes towards our $3.6Tn budget – does, in fact, trickle down on us and create millions of jobs.  That was what Bush said would happen and maybe it was more of a 20-year plan and we just haven’t been fair giving it a chance to take hold….  Obama did blow it big time – inexcusable the way they failed to execute.  

    Yellow is Blue/Jomp – Sadly true (as Orwell predicted it would be).  

    EOD/Tusca – Well if you don’t have disaster hedges, you sure should get some:  

    • SQQQ Aug $23/28 bull call spread at .90, selling Sept $20 puts for .85 is .05 on $5 spread with SQQQ at $22.80.
    • EDZ Sept $15/17 bull call spread for $1, selling TBT Sept $31 puts for $1.22 for net .22 credit on $2 spread.  
    • DXD Sept 17 calls at $1.30, selling DIA Sept $110.75 puts for $1.05 is net .25 with DXD at $17.60.

    Green/Matt – I’d be careful into the close but this is the buy the dip crowd going wild at the moment because no one really believes we will default.  

    Puzzle/Tusca – QE3!!!

    Indication/Jakester – QE3!!!

  197. Savi,
    can you tell me when it is a definite so I can book the airline ticket.  Don’t want to do that till you’re sure.

  198. matt / Target

    I don’t know yet, but IWM 80.80 – 81.00 range could work !!  But, they have to pop it first !!…………….. (IWM 80.18)

    If we break below 79.78, I would short into the close, of course !!

  199.   The Fed’s preferred price gauge, which is tied to consumer spending and strips out food and energy costs, climbed at a 2.1 percent pace, the most since the last three months of 2009, compared with 1.6 percent in the first quarter, as higher oil and food costs pushed up prices of other goods and services. “This is the worst of all worlds for investors, certainly the worst of all worlds for the Fed,” John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina, said in an interview on Bloomberg Television. “A little too much inflation, not enough growth, that is a tough scenario in the U.S.” Consumer spending from April through June showed the smallest gain since the second quarter of 2009, when the economy was in recession.

  200. rustle—per Phil he would like 10 attendees minimum —at the moment I have only only 4 deposits--as soon as I get 10 we are set to go—will update daily

  201. So why is BP looking so spry on a down day for XOM, etc.?  Is is just a forex [USD/GBP] adjustment?

  202. YRCW.. / Phl..    Love it..  selling the Jan 1 Put for .70 …    excellent..  great way to play it with little risk..Thanks.

  203. drcraig,

    83 and 563

  204. Hell, With all of this mess don’t know whether to buy/sell/hold/hedge…. so I decided to be constructive and take an hour hike with the Mrs. and the dog. Now I feel better. This is my neighborhood park in Colorado Springs. Enjoy.

  205. @ JR great calls today as always! we are right there 79.80, if we hold, one more push up to the close?

  206. Phil / QE3 — How do you think QE3 might be implemented? I’d suggest taking down commodities. Probably could be done with regulation against speculators but big corps that hedge would fight it.

  207. asaenz / push

    I believe so, but you know, I trade what I see, NOT what I believe !!  8-)

    Still no break, strange !!

  208.  JR/pain – Well then, I guess it’s 1000000000 GOOG today 600/565 put spreads for me!

  209.  Savi -did you get my deposit?

  210. kurtww--just checked and yes

  211. JRW, thanks.  Nice to hear your thoughts-  but  you realize you never need to suggest I go short, right?  8-)
    zeroxzero, caught your post early this am about how campaign financing is/has ruined our country.  I couldn’t agree more and I’ve said as much on here many times.  I feel the only solution to the problem is a Constitutional ammendment that comes from the people.  It would never get started in Congress!  I feel very strongly about the issue and keep getting these corny feelings that it might be my true calling in life to help bring it to fruition. 
    And for all those out there who think it can’t be done.. it’s no sweat off my back.  But, that kind of thinking is really an insult to our founding fathers who crafted a living document for this very reason.

  212. drcraig,

  213. BP/ZZ – Yes, they sell more Brent than XOM and Brent is still around $116.  

    You’re welcome Topher.  I love positive risk/reward plays like that.   

    Oil having a crap close at the NYMEX, couldn’t get over $95.70.  

    Very nice Jbur – I’d be hiking more often too.  

    QE3/Rain – I think/hope they would set up a program that required lending – maybe target loans to smaller banks.  The big problem with QE2 is that almost none of the money ended up in circulation – so it was pointless.  

    Dollar back below 74 – maybe helpful if no one sells into poor Mr. Stick again.  

  214. YRCW /Phil..    does it make more sense selling the Oct 1 put..   they are .67 x .68.  ?

  215. @Felipe
    Guess I just feel contrary toooooday but QE2 was hardly pointless.
    Was it? Just ask the Financial Big Jefes if they ‘got the point’. 

  216.  Nice move up on Valero.  Not hanging around, though.

  217. @ Phil, if we get a stick on the final hour and our must hold levels on the dow and s&p are retaken, shouldn’t we be a little more bullish for next week?

  218.  You guys thinking down into the weekend? 

  219. VLO / Zero – Someone will have to explain to me why these guys are not making more money! The crack spreads have been at a very high level for months now.
    They reached an all time high of 35 last month! They should be raking it. Input costs are high (oil) but they enter in the calculation of the spread so it’s a wash… It should be like printing money. Maybe Bernanke as CEO! 

  220. Bloomberg reports Google buying a bunch of patents from IBM, GOOG down today.

  221.   China’s railway ministry plans to withdraw from regional rail investments partly because of heavy debt, citing three people familiar with the situation. The ministry had a debt-to-equity ratio of 58.24 percent as of the first quarter of the year, compared with 46% in 2008. Tight credit and the removal of preferential interest rate loans may also cause the ministry to pull out of investments.

  222. i feel sorry for children today ..going to be drowning in old people and working just to support them.

  223. Let’s hope it’s not Quayle.

  224. or steven tyler

  225. Oh! Man! Mistake! I bought (instead of sold) YRCW Jan $1 puts!
    Did I buy from one of you guys? Wish best of luck to both of us.

  226. FAS Money / Phil – Plan for the last hour? We can just ignore this week short 25 Calls as these are now officially dead. Next week’s 23 Calls are now 1.16 and the 24 calls are 0.70. I doubt that we make it to 1.00 on the 24. Do we wait until Monday and hope for a pop? 

  227. WOW once again, treasuries and dollar rising…its miraculous how the markets are keeping it together

  228.  FAS Money  - Not sure if anyone else missed the Put entry yesterday, but I was able to sell next week’s $23 Put for 1.50 today at the open, now about 1.05, and I just sold the $23 Call for 1.14.  Lot’s of premium.  Pinning $23 is a $2.64 win this week.  Not trying to hijack the official trade, just wanted to see if anyone else did this as well.

  229. phi:I’ve got 10 IMaX 2013, $22.50 P at $4 .now $6.55. Any suggestions? Thnaks

  230. Thanks angelcur !!

    I just got off the phone with a source on Capitol Hill who has spent the past few days trying to convince Republicans to vote for a debt ceiling hike.

    He told me that the biggest obstacle he faces has been "market complacency."

    "Frankly, a bit of panic would be very helpful right now," he said.

    As he explained it, lots of people in Washington, D.C., expected that this would be a week marked by panic in the markets. Stocks would tank. Bonds would get clobbered. The dollar would do something dramatic. And all of this would help convince reluctant lawmakers that they had to reach a compromise on the debt ceiling.

    "We were following the script from 2008. When the market collapsed after TARP failed, that spooked everyone enough to get them to fall in line. We thought the same thing would happen this week," he said.

  231. angelcur / cnbc — Un f’in real. Thanks for the link!

  232. cwan..  Yeah..   i sold 2 lots of 10 so far @ .70…and 5 @.72..      thinking of moving to the october now on some more…

  233. JRW — I liked this better:
    "Every day we wake up and think that stocks will send a shock up to Capitol Hill. And every day nothing happens," the source said.
    He’s still holding out hope for a panic sell-off at the end of the day.
    "It’s the only thing that’s going to bring everyone together on this," he said.

  234.  It is unreal.  We watch them for a solution, while they wait for us to lose enough money to provoke one?
    What Jrom would say: FUDC!

  235. Iflan:
    Still holding DIS 40/42 BCS? If yes, the short side is now .18. You holding through the weekend? Thanks.

  236.  JRW, you made reference shorting under 79.80, and not the line at 79.89.  Could you explain, AH, if you have time

  237. Remember, the deadline is Tuesday.  Monday should be very interesting especially as the clock ticks to the end of day. 
    So this is how I’m guessing it plays out…once the House is done with their bill today (and I’ll assume it passes) then it goes Senate where it gets smacked down.  The Senate then will be in a death embrace with the House and they’ll do all they can to convince the Revolting Republicans to pass their bill.  They’ll have meeting after meeting where one person or another will storm out.  This will go on all weekend through Monday night.  And then…???
    I hope to be totally wrong about this, by the way.

  238.   trump saying gop should let US default so obama not elected….he is so left leaning but always in disguise…

  239. 02:00 PM On the hour: Dow -0.38%. 10-yr +0.82%. Euro +0.38%vs. dollar. Crude -1.6% to $95.88. Gold +0.72% to $1627.90.

    03:00 PM On the hour: Dow -0.45%. 10-yr +0.98%. Euro +0.33%vs. dollar. Crude -1.71% to $95.77. Gold +0.67% to $1627.00.

    Reuters reports the House will vote on the revised Boehner debt plan between 6 and 7:30 PM ET.

    White House spokesman Jay Carney says the White House would consider agreeing to lift the debt ceiling for a few days if needed to finish a deal, while still expressing optimism that an agreement can be completed by the Aug. 2 default deadline.

    Failure on a debt ceiling deal would be an "act of collective insanity," Citigroup says, which would "severely" damage the U.S. role as an international financial power and provider of the world’s reserve currency. It sees a U.S. downgrade "likely" due to wide political divisions preventing meaningful agreement on addressing long-term U.S. debts any time soon.

    Jefferson County’s postponement of a possible bankruptcy filing looks to be the result of intervention by Alabama Governor Bentley. In backroom negotiations, Bentley proposed a Greek-like restructuring of the County’s debt, with the State backing new bonds. "A game-changer," says the court-appointed receiver for Jefferson. (previously)

    Real GDP, estimated at $13.27T in Q2, is still below the pre-recession peak, 0.4% less than the $13.32T in Q4 2007. At the worst point during the recession, real GDP was off 5.1% from the 2007 peak. (earlier

    The Canadian economy unexpectedly contracted in May, GDP falling 0.3% following flatlining in April. Expectations were for a slight increase. It’s the largest drop since May 2009. A sluggish U.S. combined with supply-chain disruptions from Japan seem to be the culprits and BoC Gov. Carney is on record expecting a reacceleration in H2.

    Rats leaving a sinking ship of state?  Corporate insiders are selling their companies’ shares at the fastest pace in decades, a sign Mark Hulbert sees as "ominous." Last week’s sell-to-buy ratio for NYSE-listed issues was 13.1-to-one, the highest reading since Vickers began collecting data in 1974.

    This is great!  New U.S. fuel standards unveiled today would require automaker fleets to average 54.5 mpg by 2025. Pres. Obama says the new rules would lower U.S. oil use by 2.2M barrels/day over the next 15 years, and cut 6B metric tons of carbon pollution. Current standards require automakers to achieve 35.5 mpg by 2016.

    Consumer spending may be weak, but people are still traveling, at least based on Expedia’s (EXPE +12.2%strong Q2 showing: profits +23% Y/Y, domestic bookings +10%, international bookings +45%. Analysts at Citigroup, Jefferies and UBS raise price targets on the shares. Priceline (PCLN +2.9%) also trading higher.

    Three lunchtime reads:
    1) The case for Africa in your portfolio
    2) How Democrats missed their one chance to put rating agencies in their place
    3) From outside the Beltway

  240. @JRW III
    The contrarian thought about that last sentence would be:  since TARP was a failure AND a hyped lie, why would the markets believe them this time? 
    Makes perfect sense as to why anyone should balk at the calamity a few days, weeks, or months delay would cause. Most sound financial decisions are not made in a panic, contrived or otherwise. And this is one for sure very contrived panic. 
    The market doesn’t believe (actually ‘the market’ KNOWS) there will be a default, but don’t tell anyone.  
    What appears to be a bonehead tactic —- waiting for the market to tell them what to do because that’s what happened in 2008— may not be so boneheaded afterall.
    I’m going with CAT as 0X0 has stated that’s the play if there is no default, and I’m doing right now or just before the bell.

  241. Topher, yeah, you bought some from me.  Good luck!
    YRCW / Phil : Okay.  So, I made a mistake of buying, instead of selling, YRCW Jan $1 puts for $0.7.  I guess I can hold onto them and see if I can sell for a better price.  However, is there anything else I can do to take advantage from my mistake?  Like selling front month puts?
    For the sake of education…

  242.  JRW:  I hope that’s a joke, or a coincidence.  I wouldn’t know CAT from a hole in the ground!

  243. YRCW /cwan..   you can always just sell them for a penny loss…

  244. I’m liking the RUT (/TF) short below the 795 line.   

  245. FAS Money / Palotay – You played it well this week! Congrats!  

  246.  could anybody explain me what is going on with TBT
    if it is risk of defult, bonds should go down and TBT up, or I don’t understand something?

  247. Phil
    Is there a bounce play if there isa deal this weekend?

  248. loopster / 79.78

    To avoid a flush !!   I’m waiting to see what happens at 79.58 !!

  249. stjeanluc , I’m in the next weeks 23 shorts and longs at 1.00 each where did the 24′s come from?

  250. tchayipov…flight to safety..note the yen

  251. TBT/tchay
    I think people are shifting $ into bonds b/c they think it is "safer" than the market right now with all the Washington uncertainty….. I know it makes no sense at all. And TBT really hurts.

  252. tch default is just a word :-)   …money looking for safety will always go into the bond market no matter how screwed up we think things may be

  253. Eric Cantor is probably cursing his own party because they’re hurting his TBT holdings.  He should’ve joined Phil’s Stock World.

  254. Jeepers, it’s the Alfred E. Neuman market – "What, me worry?"

  255.  With Reid now saying they won’t go for a short term debt ceiling plan, then the only solution is back to the grand $4T plan, which is a non-starter.  It that’s the case, then Reid’s just painting the Repubs into a corner.  Fairly safe play IMO, and indicative of the fact the Dems/WH knows it can’t get a deal, so they have to position themselves to "win the default".  Then they can say "see all the Armageddon the Repubs/Tea Party brought us?  We tried their way and it failed!"  Win back some seats, and then go back to business as usual.
    However, that’s assuming the bottom 99% want to go back to status quo.  And, as I’ve said before, I belive this is where Mr. Obama and the politicians on both sides have erred in their calculus.  The Tea Party was all about reclaiming America for it’s citizens, living within its means, reducing the size and scope of government and having accountability.  NONE of these things came out of any of the actions of either party or the President since the financial crisis began.  SO THEY(the Tea Partiers) DON’T CARE IF THINGS FLY APART, THEY HAVE ALREADY LOST EVERYTHING!
    Even though I and you know that’s the madman’s approach to resolving the issue, I firmly believe that’s the case.  And now Reid’s actions seem to hint that maybe there’s no deal to be had……….The Dems and Republicans didn’t brush the iceberg like the Titanic….they freaking SLAMMED into it, so we’re prolly gonna sink faster than the Titanic.  And someone turn out the lights would ya?  :P

  256. FAS Money / jr_mints – We have the 23 Puts shorts but didn’t sell any calls yet per Phil’s comments at 11:25 AM wanting to wait to get $1.00 for the 24 rather than sell the 23 if possible.  

  257. zero,

    That was flips !!

  258.  TBT
    doesn’t have any sence to me, only idiots move money now to bonds, unless they have access to free money and couple of points is a profit for them if they hold it till expiration 

  259.  Plus nobody is a believer in default — this is just a risky and very stupid poker game that politicians are playing for the benefit of their constituencies.  The risk is that foreign holders of U.S. bonds are successfully bluffed and dump mass quantities of Treasuries — this is the absolute height of political irresponsibility.

  260.  Ah, sorry, just making sure, JRW.  I’m jet lagged, 1/2 a brain today.  Like our Congress on a good day.

  261. Wow, someone’s heading out the door!!

  262. I think it was Hoss.

  263. Phil: "The big problem with QE2 is that almost none of the money ended up in circulation – so it was pointless."
    WTF do you mean it was pointless?????  It had a specific goal and hit it 100%.  The goal was to enrich the banksters.  You don’t really think the ruling class gives a rats behind about us little people do you?
    Same goes for this ridiculous circus with debt ceiling.  Banksters make $$$ when they print $$$$, so, yes, after a dog and ponny show, aka shake out everybody, everything will be done.
    This weekend or the next president and other monkeys in washington will get a call from the boss upstairs and will get their orders.  For WH monkey it will be fed into teleprompter as well, they don’t allow him to talk without one.

  264. YRCW/Topher – It’s essentially the same and a good idea with a quicker expiration.  

    Must hold/Asaenz – If they "fix" the debt, we’re still in bad shape so better safe than sorry for now.  No fix, of course, woudl be a disaster.

    VLO/StJ – Maybe doing it for tax reasons.   There are all sorts of games you can play with cash flow etc in that business.  

    ROFL ZZ! 

    How are we not selling off into the close.  I just have no idea what’s going on if we’re going to rally now…

    FAS/StJ – Yes, they expire worthless.  The rest is fine.  

    Nice job Palotay 

    Oh finally some down action.   Too late for a good one though…

  265. Congress / JRW:

    "On the one hand, much of Wall Street is insisting that the whole fight is political theater and that Congress and the White house will work something out. On the other hand, congressional Republicans are insisting that Wall Street won’t react negatively if a deal doesn’t get done. In other words, financial markets aren’t yet reacting because they think a deal is in the offing and the GOP isn’t cutting a deal because it doesn’t think Wall Street cares," - Stan Collender

  266. JRW: are you closing out our day?

  267. Damn!  Wanted to cover half my TNA short for the weekend at 72.04.  Wouldn’t you know, even with those two big spikes down, they managed to stop the fall a penny from price!

  268.  Buying OXY Septembers at the close.

  269. FAS Money / Phil – To be clear, we are uncovered on the Calls side. Our goal (11:25 AM) was to sell the 24 calls for $1.00 but they didn’t make it. Selling the 23 calls for $1.00 is now an option though.
    Current position is:
    FAS Weekly – Short 23 Puts (1.00 now 1.15).
    FAS Monthly – Short August 25 Calls and 26 Puts

  270.  StJ – EXACTLY!  the Tea Partiers are ready to F*** Wall Street, and now they have the chance……
    dclark – that wasn’t me, I’m holding my shorts from this morning’s little rally.  Sold enough to pay for the remainder, tight stops for Monday, bought back my puts and am ready for a hurricane.
    Cash is KING baby!!!

  271. IMAX/Dflam – Just waiting for now.  Amazing sell-off and a great entry opportunity.  

    Stick man working hard on the close – they are desperate to get something green… 

  272. Jbur,

    I’ve been in cash, waiting, since about 2:15; and too late in the day for me to do anything now !!

  273. They are really trying to print the close.  Looking at the volume the last couple of days… if it weren’t for the debt crises, I’d say we were poised for a big reversal to the upside.  Looks like that’s what they are positioning themselves for- 

  274. @0 X 0
    " Flip: Caterpillar.  The bullshit in Washington is piling so high you’ll need wings to stay above. it."

  275. somebody’s protecting this market!

  276. JR
    Your 1:32 post called it.

  277. Tea Party / Hoss – Trying to argue with a Tea Party member:

    In today’s Washington Post, Judson Phillips, the Tea Party Nation’s founder, stakes out his organization’s historic commitment to ineffable ignorance:
    We do not have a debt crisis. We have a spending crisis. There is only one way you get to a debt crisis — you spend too much money.
    Let us review with haste: No debt crisis here, just a spending crisis; however we to got to this debt crisis — the one he just declared nonexistent — by spending too much money.
    But let’s review in another way, shall we? Let’s say you, Mr. Phillips, have $100, and you spend that $100, perhaps imprudently, even recklessly. Do you have a debt crisis? No, of course not. You’re just broke.
    The crisis, Mr. Phillips, comes when you borrow $100 for a tax cut, and borrow another $100 for another tax cut, and then borrow another $100 for a new entitlement program, and then borrow another $100 for a war, and then borrow yet another $100 for yet another war. 
    And then you skip town, you retire, let’s say, to Texas, on a government pension, and you leave your entire, misbegotten indebtedness to your unfortunate successor.
    In a way, Mr. Phillips, you’re quite correct. You don’t have a debt crisis. He does.
    You see, Mr. Phillips, we can quibble from now till next week’s apocalypse about the wisdom of all your spending; we can argue and differ and do both rather violently about the fiscal smarts or ideological stupidity behind all of it; we can both haul out charts and graphs and think-tank propaganda to defend our respective positions — but after all of that, one thing and only one thing will still be standing with a magnificent terribleness: We still owe all that money you borrowed.
    This isn’t like your world, Mr. Phillips, which is to say, it’s not make-believe. These are real debts that we really owe. And beginning next month, unless we borrow more, we simply cannot repay them all. And that’s called default, defined by Webster’s as "a failure to pay financial debts."
    Catch that, Mr. Phillips? Webster casts no moral or partisan or ideological judgment here; he doesn’t on p. 300 of his tome point a finger at us and add: "because you spent too much money." 

  278. stjeanluc

    It appears we’re doomed, as all empires eventually are; see you in Monte Carlo !!  8-)

  279. Monte Carlo / JRW – We can party with Albert once he dumps his wife (any day now). And they do speak French there, big plus for me! 

  280. So to recap the day’s events:    GDP for Q1 & Q2 were revised down.  Big time.  On Capitol Hill, the Republicans are getting closer together to agree on a bill that is further away from what the Dems will sign.  Meanwhile, on Wall Street, the indices barely lost anything.  Yep, makes PERFECT sense.  And they wonder why no one takes anything serious in this country..   it’s because everyone is lying to us on a regular basis!  Why should we care?

  281.  Flip: If I get to Vegas, I don’t want to be tarred and feathered by members who traded my bon mots!!

  282. JRW:  Are we not already in Monte Carlo?  

  283. Wow, last 10 minutes was who wants to grab the stick.

  284. JR/Doomed
    You’re only doomed if you have something to lose……otherwise……it’s all good.  Misery loves company.

  285. seriously guys why did tat gorgeous woman marry that toad?

  286.  well, that closes one of the best trading weeks I’ve ever had.  Put all my Phil taught skills to work, and have done REALLY well.  Very happy about my personal situation, but that’s definately moderated by the larger issues at hand.  So, this weekend, I will review my favorite stocks, see what entry levels I would like for them, set some alarms, and just wait to see what happens next.
    Meanwhile, I’m going to drown some ice cubes in my favorite single malt, throw a steak on a hot grill, and be grateful that I’m alive to see all this…have a good one y’all.

  287. Somebody was busily shoving a stool under the corner of that three legged dog

  288. hoss drink it neat or with one cube..try it just once..laphroaig 10 not the 15

  289. angelcur  -  thanks!    Balvenie or Cragganmore for me…like the highlanders better, but will try neat.  

  290. Also, JRW, thanks for the tips and strategy that just about paid for our upcoming trip to Greece. I just need to learn to back off on the early unconfirmed entries, and exit quicker when the move reverses. That said I’m learning to love the day trade.

  291. 5+% on the day; have a great weekend all !! 

  292. Time to fire up the Strat and serenade the neighbors!  Peace, y’all.

  293. Money, Angel, money…. 

  294. Script/JRW – Isn’t that sick, they WANT to repeat 2008!  

    Good take on Trump Angel – he consistently gives the GOP the worst possible advice… 

    YRCW/Cwan – I would just try to get the money back and reverse it rather than try to cobble together some sort of Frankentrade to cover up a mistake.  You could sell 2x the Sept .50 puts for .17, I guess and then do that again a couple of times.  

    Bounce play/Streth – We did something to the upside yesterday – just in case but I’m not feeling like it’s something we need to worry about into the weekend.  As a toss, you can always just buy the QQQ Aug $59s for .80 as they were $1.20 yesterday so .50 would have to make you happy and, IF we fall, THEN you can find a put to sell to cover maybe a .40 loss on these.  

    Tea Party/Hoss – Oh PLEASE!  The tea party is nothing but a Koch/Murdoch-sponsored anti-Obama. anti-tax, Anti-regulation bunch of yahoos.  Your "plan" for America can’t be no government and no taxes – what countries in history have survived more than a weekend with that policy?  If this country were an actual democracy, there would be an "Unemployed" party, whose sole interest was to create jobs.  All they need is 30 or 40 seats from the most destitute districts in America and they can take an absolute stance that no money is ever spent unless jobs are created.  That would be a good idea actually because, in order to get rid of them, the other two parties would have to create jobs to diminish the number of unemployed…. 

    Hey, I know, how about a party that represents the Average Joe – the kind of guy who has a job and goes to work and tries to feed his family?  There must be 100M of those people.  We could call it – The Worker’s Party or maybe Organized Labor….  

    Talk shows this weekend are going to be knock-down drag-out blame-fests.  

    QE2/Lapper – Well yes, that part worked but pointless in fixing the economy.  

    Wow, we finished at 230M on the Dow, about 100M in the last 10 mins. 

    Monte Carlo/JRW – No sure it will survive a big collapse.  Their real estate is bubblicious too.   I seriously ended up eliminating Lerici and settling on Jersey as it’s completely self-sufficient and difficult for poor people to get to as there are likely to be Billions of them if the World goes to hell.  Also, I like living in a country you can walk across in a day!  

    Congrats Hoss – enjoy the weekend.  

    Have a great weekend everyone! 

    - Phil

  295. I am definitely taking a position in IMAX on Monday if it goes down.  21 RSI, insane for a company that should have a good 3rd qtr.  Wouldn’t have noticed it until you mentioned it Phil, thanks.

  296. well i hear she is miserable and tried to call it off and they paid her alot to stick around..sad huh..i am leaving ct and headed to the house in vt..i am oging toput up osme wood and look for motorcycle this week end..i may do some binge drinking..have fun and keep teh shiney side up!

  297. Phil / Jersey:  Solid points you make-  but how will I transport my bullion?  8-)
    Have a good one all-  I’ll be reporting from the beautiful Outer Banks of NC next week while on vacation.  Yahoooooooo!

  298. Today’s levels.

  299. IMAX/Rustle – I’m going to buy up their stock and then I’m going to go consult for them and the only advice I will give them is to mention the fact that they have a 75 theater deal in CHINA every 5 minutes.   That will give them 177 theaters in CHINA and the did not mention this once in their earnings report or conference call so the sheeple didn’t know to stampede into it.  Once they say CHINA 2-300 times in Q3, the stock should be at $150.   8-)

    Sounds like a good plan Angel – enjoy! 

    At the close: Dow -0.79% to 12144. S&P -0.65% to 1292. Nasdaq -0.36% to 2756.
    Treasurys: 30-year +1.66%. 10-yr +1.04%. 5-yr +0.71%.
    Commodities: Crude -1.59% to $95.89. Gold -0.19% to $1628.10.
    Currencies: Euro +0.29% vs. dollar. Yen +1.1%. Pound +0.33%.

    Market recap: Stocks wore down under the twin worries of the D.C. debt debacle and nearly non-existent economic growth. But it could have been worse, as the S&P 500 bounced off its 200-day moving average. The dollar took a beating, helping push gold to another record. Despite default talk, Treasurys surged, with longer-term yields falling to YTD lows. NYSE decliners led advancers three to two. 

    Yields on benchmark 10-year Treasurys fall 15.7 bps to 2.78%, the biggest one-day drop since December and down from 2.91% before the GDP report. But while longer-term investors focus on the economy and not Washington, the debt drama is giving pause in the shortest-term Treasurys, whose yields have been rising in recent days because of concerns that a default would hit them first.

    Today’s abysmal GDP numbers prompt Deutsche Bank’s Joe LaVorgna to lower the firm’s estimate of Q3 GDP by a full percentage point to 2.5%, and reducing Q4 to 3% from 4.3%. Seeing the typically optimistic LaVorgna throw in the towel prompts Zero Hedge to worry that "it may be time to panic." 

    The dollar sinks below ¥77 for the first time since spending about 30 seconds at that level in the panic following the earthquake. The yen’s recent strength has so far drawn a few tough comments from Japanese officialdom and complaints from industry, but no intervention … yetFXY +1.1%

    Brazil’s government posts a primary budget surplus of $8.6B in June, the biggest on record. A combination of strong tax receipts and a post-election slowdown in government spending  are behind the result. After taking debt servicing into account the surplus turns into a deficit of $3.6B.

    What’s more impressive than Apple’s (AAPL18.5% smartphone share? The fact that this share is good enough tocommand 2/3 of industry profits. Samsung (SSNLF.PK) claims 2nd place with a mere 15% of profits; Research In Motion (RIMM) is at 11%, and HTC (HTCCF.PK) at 7.4%. Apple also collects an outsized portion of PC industry profits. 

  300. To clarify, I am NOT a tea partier, just outlining what they have said from the get go. I don’t have much of a clue how to fix things in this country…just some thoughts on the situation on the Hill right now. And yes, anarchy seems like what they are after, then just before it sets in, they can pull TARP 2 and hijack even more from the rest of us.

    It’s crap, and I don’t like it, but that’s where we are IMO. And I try to make my plays reflective of those observations, that’s all. I agree with ZZ though, multinationals are a HUGE problem, and I agree with you about the top 0.1%…but that doesn’t change DC. They are gonna screw us all…

    Thanks for the kudos, but I couldn’t have done it without studying and learning from you Phil. Thanks!

  301. "Unemployed" Party / Phil : That’s a joke, right?  Who can serve in that party and be elected to any position?  Because as soon as you are elected, you are not unemployed.  And therefore, you have to excuse yourself from the party.  Right?

  302.  Barry’s Succinct summation of week’s events:


    1) Thru all the political noise, yields with maturities ranging from 2′s to 30′s are all lower
    2) June Pending Home Sales unexpectedly rise 2.4%
    3) Initial Jobless Claims fall a touch below 400k for 1st time in 16 weeks
    4) Conference Board consumer confidence up a touch but period ended 2 weeks ago before political noise got really loud
    5) India steps up fight against inflation with 50 bps rate hike


    1) DC politicians get us into this mess and have little courage to get us out
    2) Overnight LIBOR, repo and t-bill yields all spike
    3) Q2 GDP disappoints with only 1.3% growth off a lower than expected base from Q1, revised to just .4% gain
    4) Chicago PMI falls a touch, follows weak NY, Philly, Dallas and Richmond mfr’g surveys
    5) Final UoM confirms preliminary report that has confidence at lowest since March ’09
    6) MBA said purchase apps fall to lowest since Feb
    7) S&P/Case-Shiller home price index remains near multi yr low
    8) Durable goods orders disappoint with non defense cap goods ex aircraft falling .4%
    9) India hikes rates more than expected, are they killing growth?

  303. rnelson--received your deposit of $150


  305. Krugman – The Centrist Cop-Out:  

    The facts of the crisis over the debt ceiling aren’t complicated. Republicans have, in effect, taken America hostage, threatening to undermine the economy and disrupt the essential business of government unless they get policy concessions they would never have been able to enact through legislation. And Democrats — who would have been justified in rejecting this extortion altogether — have, in fact, gone a long way toward meeting those Republican demands.

    As I said, it’s not complicated. Yet many people in the news media apparently can’t bring themselves to acknowledge this simple reality. News reports portray the parties as equally intransigent; pundits fantasize about some kind of “centrist” uprising, as if the problem was too much partisanship on both sides.

     The cult of balance has played an important role in bringing us to the edge of disaster. For when reporting on political disputes always implies that both sides are to blame, there is no penalty for extremism. Voters won’t punish you for outrageous behavior if all they ever hear is that both sides are at fault.

    Let me give you an example of what I’m talking about. As you may know, President Obama initially tried to strike a “Grand Bargain” with Republicans over taxes and spending. To do so, he not only chose not to make an issue of G.O.P. extortion, he offered extraordinary concessions on Democratic priorities: an increase in the age of Medicare eligibility, sharp spending cuts and only small revenue increases. As The Times’s Nate Silver pointed out, Mr. Obama effectively staked out a position that was not only far to the right of the average voter’s preferences, it was if anything a bit to the right of the average Republican voter’s preferences.

    But Republicans rejected the deal. So what was the headline on an Associated Press analysis of that breakdown in negotiations? “Obama, Republicans Trapped by Inflexible Rhetoric.” A Democratic president who bends over backward to accommodate the other side — or, if you prefer, who leans so far to the right that he’s in danger of falling over — is treated as being just the same as his utterly intransigent opponents. Balance!

    Making nebulous calls for centrism, like writing news reports that always place equal blame on both parties, is a big cop-out — a cop-out that only encourages more bad behavior. The problem with American politics right now is Republican extremism, and if you’re not willing to say that, you’re helping make that problem worse.

  306.  You’re right…the blamefest this weekend is going to be incredible…

  307. RIGHT ON Phil !  Always refreshing and to the point cutting through the BS !

  308.   Corporations / Phil:   We’ve diced over this “corporate citizens” vs.  “wealthy Americans” distinction for awhile now, and I have tried to decoct precisely what our difference of opinion amounts to.  We are, for starters, in absolute accord on the debilitating effect of U.S. multinationals on American democracy.  
    If we disagree at all, it is that you would include both multinational corporations and wealthy individuals within your "1%" of Americans that inhabit the uppermost stratum of U.S. income distribution and who use their wealth to propel legislation through the legislative and executive branches of federal and state governments that  often confers astonishing advantages.
    I rather see them as entirely distinct phenomena.  You asked me the following question,  "Take the Kochs, for example, or Murdoch, or TBoone or Trump – how do you separate the people from the Corporations outside of your semantics?"
    My answer is that TBoone, with @ $1.4 B, Donald Trump, with $2.7 B, Jamie Dimon, with $1.7 B, Lloyd Blankfein, with $450 Million, and even Murdoch with $9 Billion [for all the good it does him at 85 years old] are merely irritating American rich people, whose influence I think you greatly overstate.    
    Even if you were to throw in Bill Gates, with $54 B, Warren Buffett w/ $45 B,, Larry Ellison, $27 B, the Waltons, collectively $125 Billion, , the Kochs with $32 B, — the top five richest U.S. families — you would end up with end up with less than the current market capitalization of Exxon alone — $410 Billion.
    Half of those families — as you have previously pointed out — don’t even bother with politics. Gates, Ellison, Buffett, the Waltons account for the lion’s share of American personal wealth and yet, collectively have a vanishingly small effect on the U.S. legislative process.  
    U.S. multinationals are an entirely different animal. The top 50 global companies have a collective market cap of $6 Trillion. Apple alone will have $70 Billion by the end of 2011, and $100 Billion year-end 2012 -- in cash.   Global multinationals are, as a group, at least an order of magnitude wealthier than the top 1% of the world’s richest families, as their ownership is spread much wider.  
    But cash, capitalization, income or net worth are not the critical elements.  It is their amorphous , nation-spanning “citizenship.”  They represent tremendous concentrations, not just of wealth, but of talent.  A multinational corporation is run by an elite group of highly integrated, motivated and compensated individuals which as a matter of law is singularly focused on the value created for its shareholders, to the exclusion of  all national loyalties or humanistic considerations beyond the minimum mandated by law.
    Quantity at some point becomes a quality.  The power of multinationals is a function of both their immense resources and singular ability to maintain teams in multiple countries, each of them striving to maximize the competitive position of the integrated whole on a worldwide basis while minimizing regulation and taxation.
    This is accomplished at least as much by political and financial legerdemain as through competitive excellence.  National governments and regions are forced to court these companies’ ability to bring employment, exports, and income to bear on local populations. Multinationals are offered infrastructure improvements, liberal permitting and tax regimes, and light labor regulation.  Their staffs of coordinated professionals are expert at organizing operations and allocating resources internationally, with a legal and mathematical efficiency that smaller domestic companies could not hope to match.
    The end result is a perfect beast of profit-maximizing anomie.  It is a legal creature loyal only to its managers and shareholders. the latter of whom comprise a mutually anonymous “Societe Anonyme” which judges performance on an exclusively quantitative basis. 
    The ideal environment of a multinational is the least regulated or, alternatively, most corrupt.  Gaining an “unfair” advantage over one’s competitors is their prescribed catechism.  A brilliant manager is one who dominates resources, production, or markets with as much government assistance and as little government intervention as the map of the world will afford.
    At bottom this is not a moral issue, although it has moral consequences, but a political one.  There exists a global economy, but there exists no global government with the power to restrain its depredations.  Economic competition among nations for resources, jobs, and capital investment kneecaps all but the most basic national efforts to tax and regulate these octopi.   A well-organized minority – multinational corporations – will always triumph over a disorganized majority – national governments, which, in many cases, exist in mutual enmity and competition.  It’s a walkover.  It’s no wonder most of them barely pay any taxes, while extracting all kinds of freebies from their hosts: their presence guarantees a measure of global competitiveness for a nation.
    The United States still maintains the dominant global currency, will continue to represent a substantial percentage of global consumption and trade, and is blessed with sufficient natural and human resources  — such that, if it were able to reform itself politically – which will probably require something very akin to a popular revolution — the U.S. should be able to put its fiscal house in order over the next decade by learning to do more with less, which will be, initially,  the price of eliminating today’s all-pervasive corporate influence over American politics and policy.
    Nothing less than a popular movement will be likely to break the grip that multinationals presently bring to bear on both policies and politicians in America and abroad.   Campaign finance laws require radical change, but every corporate warchest will be arrayed against such an event.  I’m pretty sure the U.S. economy will have to get much worse before Americans emerge from their political torpor, realize what has happened to their system of government, and turn the “Tea Party” into a movement that demands “No Representation without Taxation” from the corporate monoliths that have hijacked American democracy. 

  309. zero – most rich people may not be politically active, but there are a few who influence and as a result all of the .001% benefit.
    Koch:  influenced Wisconsin politics. 
    Jamie Dimon and Llyod Blankfein: influenced financial policy of the US
    T-Boone: I am not sure, but he is gotta influence Texas politics (I am not certain)
    George Soros: a bunch of New York state politicians.
    Trump – he tried to enter politics!

  310. Zeroxzero- a thoughtful analysis without the hyperbole and infantile ridicule. Well done.
    I think what you outline is but a  symptom (albeit of significance) of the much larger issue. I think Krauthammer pegs it nicely:
    "We’re in the midst of a great four-year national debate on the size and reach of government, the future of the welfare state, indeed, the nature of the social contract between citizen and state. The distinctive visions of the two parties — social-democratic vs. limited-government — have underlain every debate on every issue since Barack Obama’s inauguration: the stimulus, the auto bailouts, health-care reform, financial regulation, deficit spending. Everything. The debt ceiling is but the latest focus of this fundamental divide.
    The sausage-making may be unsightly, but the problem is not that Washington is broken, that ridiculous ubiquitous cliche. The problem is that these two visions are in competition, and the definitive popular verdict has not yet been rendered."

    From the New Deal through the social upheaval of the 60′s to the present we have undergone the growth of interventionist government on all levels. As we have turned our attention to government as the solution to social and economic ills, the opportunists have profited mightily feeding at the trough. Once you are in the business of "handouts" , everyone gets in line.
    No surprise there as human nature wills out.
    The pendulum must swing back in the other direction. From the default position of government as "we can fix this" to "it’s not our business".

  311. Savi,
    What’s the latest head count?

  312.  zero and pstas – I wish I had time to give your thoughts the attention they deserve this morning.  Briefly, I agree with zero that national and local democratic processes have not found a way to deal with the great power and reach of multinational companies.  Is there such a creature any more that could be called "Democratic Capitalism" or does multinational corporate capitalism inevitably lead to plutocracy due to the powerful forces zero describes?   The choices the electorate can still make are between parties beholden to competing corporate interests.  This gives us a little wedge to make a difference at the polls, but not very much.  
    Pstas – in many ways I agree with your assessment of human nature.  Yes, people are opportunistic and will find ways to feed at the government trough if they can.  There really is not a way to completely eliminate this from government programs.  It is impossible to micro-manage big programs dealing with health, social security, education and poverty to completely eliminate waste and counter-productive programs.  There is always a trade off.  Someone will always find a way to abuse the system.  The trick is to keep it as effective as possible.  But just advocating for "less and smaller government" will not solve this problem.  I don’t see any evidence that corporations are truly more effective managers of a society than government.  Opportunistic human nature doesn’t just try to take money from the government trough, it will also work in the corporate trough as well.  Its not a situation where people are greedy and self-interested in dealing with government, but virtuous and benevolent in the corporate world.  The downside of human nature is at play in both.
    Frankly I don’t see a huge difference between big government and big corporations.  They are often the same people.  People move back and forth between government and the corporate worlds through the revolving door.  I really don’t trust that the Republican establishment wants smaller government.  It seems like a smoke screen to me.  In practice it seems that the goal is to control big government to keep the cash flowing in the way of tax breaks, subsidies and favorable labor, safety and environmental standards.  We had 20 years of the combination of Reagan, Bush I and II, and the size in the growth of government was never checked.  I think many citizens who join the Tea Party really do hope for smaller government, but I do not believe the conservative movement will really deliver this.  They will only reallocate resources to their core constituencies at the expense of other constituencies.  Until conservatives do something that truly moves towards smaller government and a real sense of shared sacrifice, I’m not going to trust what is said.
    I’m baffled by the Grover Norquist rhetoric that wants to starve the beast.  What do conservatives truly want the world to look like if they get their way?  Do they plan on having a highway system, clean water, education for their children?  I just don’t see an ala carte, pay as you go society working very well for the majority of people or being efficient.  
    I just got the call to  make Greek salad so we can get to the boat with the tide, so I have to go.  Thanks zero for great analysis, and pstas, my morning ramblings are an attempt to understand.  I agree with your logic on human nature, but don’t understand how limited government will solve that problem rather than exacerbate it.

  313. right…and that includes the corporate hogs who have done inestimable damage to our social and economic fabric ..i guess the notion was to give the corporations whatever they want(and their chieftains) then no one would notice the swelling of the public levels of subsidization and the public debt used to finance both of these unsustainable myths of possibility.."grab NOW and THEY will pay later.". ..krauthammer is right the majority have not spoken yet…my sense of it is that a large outcry of disgust from the middle class right and left will echo what many already know..the entitlment promises made 50 years ago are are the subsidies to multibillion dollar institutions..and forget emigration reform..if there are 10 million undocumented workers in this country toiling for no benefits and at a wage of roughly 8 dollars an hour giving a net savings to the employers of roughtly 6 dollars an hour..thats a half billion dollars a DAY in savings..or 15 billion a certain politicians want these workers fully integrated AND CLEARLY has a different that underground economy is amazingly untouchable is my bet…what a clusterbang! Status quo..thats what all that is now fossilized.. ingrained..excision will be necessary to save the patients life…let’s see if the family ( can it stop fighting [when the fight perpetuates the inertia] ) ) signs off on the surgery….

  314. the point of all of that is that so long as we are debating ONE or the OTHER as a staked out invioable positions the less likely any progress to resolution will be realized..if the problem gets fixed NO ONE is going to like it ..but at least our children won’t beocme like the serfs in a Russian novel..remember Tolstoy’s great line which can be applied more generaly to both sides of this issue..’institutions/ideologies exist to perpetuate themselves" (his line was beauracracy)..i think its for the endgame….there WILL be middle ground or their will be nothing but dispute which will lead to our figurative dying breath rasping out the same unheard messages we have been shouting at each other for decades…i ve wondered for years now why no one has said all of this publicily..some modern day Diogenes..i now understand its not that ‘they’ don’t comphrehend the issues…and the unabated flow of injury done to ALL….it just doesn’t serve them to tell the truth..thats more firghtening to me than any left or right horseshit.

  315. well i ve managed to depress myself so i am going to find some weed and go tubing on the white river!

  316. ;)

  317. I am now collecting $150 non-refundable deposit p/p for the meeting —Oct 8th 9th and 10th— (of course if the meeting is canceled the deposits will be returned--also any unused portion will be prorated and returned)
    I will do it via paypal as suggested by one of the members--I think all you need is my e-mail--I will let you know when I have received the 12 deposits from the definites—the deadline to get it to me is Aug 5th
     —if anyone is uncomfortable with this set up let me know of a better way
    my e-mail is

  318. Revtod- only a moment to clarify- I meant to imply that the handout mentality is equally infectious; i.e., but economically and socially upward and down.  As a people, we are "equal opportunists"
    Now, off to see if the fish are biting.

  319. great conversation guys!

  320. Very good conversation and excellent comment by ZZ.  

    It’s my daughter’s birthday so I’m just going to contribute one thing to this conversation about Big Business and Government.  There is a documentary on HBO this week called GasLand about the natural gas industry that does a great job of illustrating how Pstas’ view of society with "less government" will doom us all – and may have done so already.  

    It’s a great nutshell view of how Corporate America does exactly what RevTodd is talking about.  Hyrdrolic Fracturing is a horrifying practice that was invented by Haliburton and was shoved through a loophole that was put into the 1972 Clean Water Act by a 2005 Act of Congress pushed through during our manufactured emergency and, of course initiated by Ex-Haliburton CEO Dick Chenney’s bogus Energy Commission.  Here’s the beginning and I guess you can click through and watch most on-line but I really urge you to sit down and watch the whole thing on TV when you are comfortable and have time to think about it.  Think about who is behind this stuff, how they get it done, how they use Government and the Courts to crush individuals rights and, indeed all of our rights – all in the name of profits that will be long spent before we run out of water (which they are also now investing in since they are actively destroying our fresh water supply):  

    This is very sick stuff folks – it’s going on right now and it’s spreading fast while we are debating whether it’s TBoon or just the Corporations who are causing the problem.  WAKE UP!!!

  321.  I very much appreciate your commentary, as I struggle to comprehend what has happened to American democracy and where the economic and historical currents will likely flow from here, both as a citizen and investor.  I’ve just had the pervasive sensation that the [human] citizenry are squabbling over misdirected "intiatives"  on the floor of the basketball court while the immense resources and reach of the multinationals play the game, relatively unnoticed, above the rim.
     It is undoubtedly true that rich American famiies fight their corner and move things around in the home states, but U.S. national and international policy are — I think — overwhelmingly the domain of the top 100 companies, whose $10 Trillion plus in capital value dwarfs the influence of mere rich people.  
    The 500 largest public corporations, have, by their very nature of their public character, managed to disperse ownership among millions of shareholders across national borders while concentrating power within a very finite ecosystem of a global managerial elite. 
     And, unlike conventional dictators, they have no need to provide for, or even concern themselves with the interests of any national population — their constituency is composed of a shifting and transnational group of investors.   It’s enough to make a conventional dictator weep with envy, constrained as they are by national borders and populations.
    What is essential to understand, and savagely ironic, is that pension funds hand over the pension contributions of millions of workers across the globe to institutional investors, who use it to buy shares in their tormentors.  Managers duly put it to use in the manner which would maximize its profitability, which, since these multinationals are essentially untaxed and unregulated, turns out to obey a kind of Gresham’s law of exploitative and inhuman practices, which includes buying the complicity of national politicians in impoverishing workers.  And this is done in the name of giving the workers a good return on their pension fund investment.
    There is a systemic problem here, I think, that has relatively little to do with a handful of global rich folk.  

  322. On a lighter note, check out Real Time with Bill Maher this week, many good conversations including the idea that Americans are "Closet Socialist," simply living in denial with Republican’s representing the self-hating brand that rails against it but secretly love it.   

  323. Not to open up some sort of political third rail and please don’t take this personally, ZZ but my problem with your take on individuals and corporations is that is sounds very much to me like "You can’t blame the actions of the Nazi Party on Himmler, Goering, Hess and Hitler – they were just working for the Party’s best interests."  In it’s infancy the Nazi party was an anti-Government Protest Movement that felt "economic liberalism" was the cause of Germany’s Depression (and war debts) – they were staunchly anti-communist, against immigration (and, in fact, wanted the illegals out of the country because they were stealing jobs and not pulling their weight) but did believe Germany should maintain a strong military presence or else the whole world would go to hell (after all WWI was started by a terrorist attack).  

    Like any Big Corporation (and you sure don’t have to be multi-national to be evil – just see the GasLand documentary!), they attract a certain kind of people to their leadership and the enterprise morphs into something that becomes destructive of other entities – IF LEFT UNCHECKED BY MORALS!  The Japanese are also severely nationalist and… oops, bad example…  OK, the CHINESE are very nationalist and, so far, haven’t gone on any International Killing sprees.

    There are many, MANY corporations who have the same legal BS "charters" to hide the consciences of their leaders behind yet they manage to run respectable businesses that don’t destroy the environment or diminish the rights of their workers or fail to pay their taxes or even get involved in politics at all.  Unfortunately, with 7Bn people on the planet, if Hitler was one in 2 Billion at the time, there are now 8 guys just like him running major corporations because THAT’s where the real power is.  

    Corporations are made up of citizens and Corporate Crimes are crimes against humanity and the fact that you have a "fiduciary responsibility" to skirt environmental regulations and lobby for loopholes that can destroy the ecosystem to maximize your quarterly return is total bullshit and I think you need to consider that part of this "belief" you have is based on your own personal guilt in facilitating that very process as a cog in the machine at some point.  They teach you to be amoral in law school – you don’t get very far in the profession without the ability to do whatever the client wants regardless of whether it’s right or not.  

    That doesn’t mean you can’t find it within yourself not just to change but to make a positive contribution to the other side later in life.  You KNOW how these things work and you KNOW what the mechanisms are and you write very well, I’d rather see you turn these great comments into publishable pieces that expose these machinations so we can make people aware of what’s being done to our Democracy and our nation.  

    And that goes for all of you because this "game" is getting very serious these days.  Things are going downhill for the bottom 90% at an alarming rate and, as I said earlier this week – I don’t think slave-owning societies start by one day saying "Hey, let’s all get some slaves" but it’s the eventual bifurcation of the classes, whether within or without a nation, that gets to the point of either you are a have or a have-not that leads to the permanent impoverishment of a class of people (and I am considering the bottom 90% to be an economic class).  

    Already we see that people are, more and more, only born into the upper rungs of society.  At $50,000 a year for an Ivy education – how many people from poor families are really getting in these days?  Mid-level universities cost $20,000 a year and that’s just the tuition against a median FAMILY income of $45,000.  That means it’s simply not possible for 50% of the families in this country to send 2 children to college already and that’s what we’re getting with just 14M college student or about 62% of the eligible kids going to ANY kind of college – including trade schools or community colleges.  

    What are the opportunities for the 38% that only go to high school?  What’s their retirement going to look like?  What are the chances their kids will go to college.  THAT’S A SLAVE CLASS RIGHT THERE!  We don’t feed them, we don’t educate them and we damned sure don’t give them an equal opportunity. Should we blame someone else?  Should we blame "the system" or say "well, all politicians suck, what can you do?"  Care – the answer is CARE!

    By the time that ratio is down to 20% that go to college and 80% who don’t – caring won’t be an option anymore, you will either be born free or born a slave and if you are born free and don’t like the system, there will be many people in your privileged class who will be happy to kick you down to the bottom and carve up your share.  If you are at the bottom and don’t like that system, you will be a rabble-rouser who will be put down like a dog because think of how impractical it would be to ask the top 20% to sacrifice their lifestyles to try to help that bottom 80%, who are clearly inferior anyway – because that is certainly what you will be taught (if you haven’t already internalize that message).  

  324.  Dear Phil:  I believe you to be both moral and high-minded in the best of senses.  I would submit that you often stray towards the ad hominen attack in defending these otherwise admirable sentiments.
    You are dead wrong to judge me on the basis of what you know, and I am offended that you presume to do so.  To wit,
    "you need to consider that part of this "belief" you have is based on your own personal guilt in facilitating that very process as a cog in the machine at some point.  They teach you to be amoral in law school – you don’t get very far in the profession without the ability to do whatever the client wants regardless of whether it’s right or not.  

    That doesn’t mean you can’t find it within yourself not just to change but to make a positive contribution to the other side later in life. "
    Would you be interested in the truth?  I worked 20 hours per week at the Environmental Protection Agency while putting myself through Georgetown Law School.  I spent 4 years, eight months in a major Wall Street law firm upon.  I joined an old school investment bank — Kidder, Peabody, and immediately put together first wind energy project in the Altamont Pass east of San Francisco.  I left after three years, and spent the subsequent twenty years installing $1.4 Billion of wind energy projects in California, Wyoming, Wales, England, the first wind project in Scotland [Hagshaw Hill], and 300 MW in the Spanish regions of Catalunya, Galicia and Asturias.
    That probably makes me one of very few private wind energy developers in the world to put up those numbers.  I withdrew from the business when the Spanish utilities made an offer to buy out my company with the understanding that I had no option to refuse.
    I would not compare my record with yours.  But perhaps you should. 

  325. Great op ed piece by Alec Baldwin, maybe he would make a good mayor:

  326. zeroxzero/corporations - the corporation entity encourages the individual to stripe the human factor from the decision making process, using the tools of capitalism as both the mechanism and also the ultimate excuse to wash the individual’s hands of the ensuing collateral damage.  The power resides in the cold hearted executives, while the worker "ants" play their role as powerless wage slaves.  Sure you can have a heart and get some power,  as long as one numbs themself with a heavy dose of denial…or be ignororant enough to not understand the ramifications of their actions.  These are my experiences from working for some of the best and worst multi-national billion dollar corporations based in America.  I, like yourself, helped make these corporations a fortune…and have some regrets like youself.  Even the best company I’ve ever worked for, the "Google" in their industry, ultimately pulled the greed card on my company in the end and shipped the second generation prototype I produced to an India firm, as my hourly rate was $75/hour higher than the third world countries….about $150,000 more for the second phase of the project.  And why not, it wasn’t the CEO, or the project manager, or any "human" who decided…instead it was in the best interests of the corporation, right?  And the corporation had no memory of the fact that I helped engineer the first generation of the product, which had over $1.5 billion in total sales, which is a lot considering the product cost less than $1,000.  The corporation also forgot that I worked 36 hour shifts for four weeks straight, redesigning an extremely complicated part on their latest iconic global product…one which was screwed up beyond repair by a engineering firm in India.  And as extra bonus, I had "members" of the company telling me I’d never work in the state again if I failed, as it was going to cost them about $30 million/week to shut down the product line.  I probably lost 6 months lifespan on that project…but hey, I walked away with an amazing $26,000…LOL…in which uncle Sam took 60% (36%+15.4%+6%+2%+misc expenses).

  327. wow zero i thought i might get some convo fired lit the lamp!…this is a good site..i am fairly confident that nearly all th econtributors are very ethical individuals and that makes their politics secondery to me as i am sure i can work with most to negotiate a consensus of reality to allow for frutiful discourse..its always the amorally grounded that have no time to listen..lots of that in dc now..its a very useless breed strutting around the capitol today… leadership from both parties are wearing asshats..

  328. angelcur – "leadership from both parties are wearing asshats."  Really?  Ever heard of "false equivalence?"  It seems one party, or sub-party deserves blame for our current situation.  That would of course be the Tea Party.  No offense, but it smacks of intellectual laziness to simply say "they’re all to blame."  I hear that line way too often. 
    As you say, we’re mostly quite discerning individuals on this site and have the ability (I would hope) to see what’s really going on in DC.

  329. zeroxzero/ad hominen - I admit, I have to break out the dictionary to read some of your posts…you should write as you definately have a well rounded understanding of written language!  That said, don’t take Phil to heart as he did post a disclaimer before responding, and once you get to know the guy somewhat (which is really difficult to know anyone for sure in a forum), he is almost always trying to help.  Plus don’t forget zero…"it’s a Jersey thing"…HA!…J/K Phil!…oh, oh…and Matt too as Matt will break my balls over such a comment!
    On a more serious note, I’m very interested in perhaps emailing you a few questions in regards to a plot of land that I have a contract to own, in which I am considering a wind farm in the distant future.  I’d like to give you the details in an email if possible (… if not, no biggie as I completely understand.  Now if I could just find a PSW member who is an oil drilling geologist…this forum could really, really pay dividends! =)

  330.  Sure, Troy.  I’ve never put up home-sized wind turbines, but I’ve sited lot of large ones, up to 2 MW each.  The essentials are interconnect, average windspeed and capacity factor — what percentage of the time it blows within a productive range [5.5 meters per second being about the minimum,] and capacity factors of 30%+ are good.  Wyoming has 44%, the highest I’ve ever seen; Scotland and Galicia were way up there, too.
    There are lots of windy places, but nearby grid connections are essential — there is line loss — and sometimes difficult to come by — utilities are very possessive of their grid capacity.  In the right places, they make sense.  
    As far as taking Phil personally, I’ll try not to.  But no one has ever had the temerity to suggest to me that "it’s not too late to make a positive contribution to the other side." I have been singularly dedicated to "the other side" all my life,  and not just because I developed environmentally-friendly energy technologies.  Sometimes you have to hang it all out there.
     In January 2010  I drove into Port au Prince 36 hours after it’s earthquake with a truck convoy of food, medicine and 10 Haitian doctors from Santo Domingo which I funded and hired on my own, arriving well before the U.N. troops and aid organizations gathered up the courage to leave the airport compound, and built a field hospital by hand with an Argentine army, colonel, a Spanish Karate instructor, a sailboard champion and other stalwarts, only to turn around and run 30 border checkpoints through the night to expatriate almost a dozen homeless and injured refugees. And that was just one of the splashier things I’ve had to do; most of my efforts are quiet work towards heath, education, and species conservation. 

  331. Well, ZZ, I did say not to take it personally as I failed to understand why you would work so hard to excuse the individual’s actions from the corporations they run.  Based on the information you provided that you used to work to help Corporations find those loopholes and you quit because you had moral issues I said I THINK you should CONSIDER that your own involvement may have left you with a desire to wash away personal responsibility from the equation.  

    Then you present me with a ton of new information about your past career and I applaud you for it but that makes me even more puzzled as to why a person with your experience would excuse away the actions of an environmental terrorist like TBoon Pickens, who is CLEARLY the spokesman for hydrofracking and whose "energy plan" is just  the same "chicken in every pot" BS that is meant to distract the public with false promises to keep America from investing in renewable energy (and I am more and more convinced every day that this is a plot to destroy the US fresh water supply so they can turn water into another necessity that people will have to pay through the nose to get).   

    That’s exactly what I’m talking about – you have a unique knowledge and you are a great writer.  I’ve spoken before about Tina’s work in the Solar Industry and my work on NJ’s Clean Energy Act (and we just passed 10,000 installations for 380MW, 2nd to California!) and I continue to work to push for improved CAFE standards (Victory there last week) and National programs for renewables based on my theory that our best efforts would be aimed at conservation in the near term, but your individual contribution and wind experience is fantastic.  I’ve decided to try to do what I can to change the National Conversation after seeing that it can be done in one state (we even have Christie sticking with the program – or so we believe as we’re waiting on the final 2011 Energy Master Plan) that is 3% of the country’s population and far less than that in size.  I’m simply encouraging you to use your own knowledge and skills to do the same.

  332. Meanwhile, Senate delays their vote now – what a mess!  

    I’ll be putting up some weekend reading later.  

    If a debt deal comes in the next three days, you’ll probably be tempted to join a relief rally in equities. Don’t buy it, says James Saft: Weakness in areas like housing and consumer spending isn’t going anywhere, and the trend toward U.S. austerity likely won’t change until "after the beginning of the recession it will help to cause."

  333. Good morning folks from a beautiful overcast day at the beach.  In all seriousness, is there any such thing as bad ‘beach’ weather?  I think not..
    Wow, great conversation!  It’s fun to see people reveal themselves and their life experiences.  ZZ, I spent the first half of my career dedicated to helping protect the environment.  The second half has been in pursuit of intellectual challenges and money.  I would have to admit I haven’t been terribly sucessful at either career!  I just haven’t how to make the leap like you did from ‘employee’ to ‘employer’.  Phil, I had no idea NJ was so involved in wind generation.  What a suprise.  Kudos to you for your involvement.  WHERE DO YOU FIND THE TIME?
    I agree with Phil, that we shouldn’t be too quick to excuse the individual’s running the multi-national corportations.  That being said, to the two of you, I wouldn’t waste another minute debating what each of you mean.  You both mean well and that’s all that matters.  You are debating semantics to a certain extent.  I agree with Angelcur, I really think a mutual understanding can quickly arrived at given the thoughtfulness of both parties involved (here, not DC!) .
    As for the markets, I have changed my fealing regarding a releif rally once the impasse has been breached.  Before, I said we’d rally for an intense short period of time before reversing.  I now feel that the rally will be longer sustained.  ‘THEY’ never miss an opportunity to take us higher.  And rallies higher, at least for me, always last longer then I think they will.  I think there is tremendous exhaustion out there right now and putting this behind us will bring intense relief.  Who knows.. maybe new highs for some indices?  But one thing is for sure to me, the higher it goes, the better it will be for ultimately going short.  And now, it’s off to the beach.  :-)

  334. Disclaimer- I am no expert on the subject but, as usual, there is another side to the argument.
    "The environmental impacts of shale development
    are challenging but manageable. Shale
    development requires large-scale fracturing
    of the shale formation to induce economic
    production rates. There has been concern that
    these fractures can also penetrate shallow
    freshwater zones and contaminate them with
    fracturing fluid, but there is no evidence that
    this is occurring. There is, however, evidence
    of natural gas migration into freshwater zones
    in some areas, most likely as a result of substandard
    well completion practices by a few
    operators. There are additional environmental

    challenges in the area of water management,
    particularly the effective disposal of fracture
    fluids. Concerns with this issue are particularly
    acute in regions that have not previously
    experienced large-scale oil and natural gas
    development, especially those overlying the
    massive Marcellus shale, and do not have a
    well-developed subsurface water disposal
    infrastructure. It is essential that both large and
    small companies follow industry best practices;
    that water supply and disposal are coordinated
    on a regional basis and that improved methods
    are developed for recycling of returned fracture
    "The potential for impacts to surface water and groundwater from development of the Marcellus shale are expected to be minimal because of the regulatory requirements from state oil and gas agencies involved and the practices operators are implementing to ensure fluids are contained. In evaluating the risk of fluids migrating up to reach groundwater; the depositional environment of the Marcellus Shale that produced a thick blanket of Devonian-aged shales above the Marcellus should also be considered as this thick sequence of overlying shales act as series of confining layers to prevent the vertical migration of fracturing fluids toward groundwater systems."
    Certainly, the above studies could very well be industry sponsored white washes  to explain away nefarious , evil ,profit making activities. Or, they could be reasonable attempts to set the record based on facts. I have not seen the subject film. Just as with the cited studies, it could be an agenda driven emotional  attempt to scare people to death and launch the author on to a new career of fame and fortune (see Al Gore/Michael Moore).
    Oh, and by the way- limited government does not imply NO government. Left on their own, the lefty statists would have us all spending our summers at collective reeducation camps raising organic corn and lettuce learning about the evils of capitalism and the glory of communal living.
    Ain’t hyperbole fun? Unfortunately, it adds little  of substance to the discussion.
    So, what began as an interesting and thoughtful intellectual exercise quickly devolved with the introduction of argumentum  ad hominem  and the usual leftist shibboleths. What a shame.
    Once again, time to turn off my editorial radar and go back to finding ways to accumulate filthy lucre.

  335. Hello Phil I would like to ask you for an advise. There are many stocks that seem to be attractively valued and/or near their 52 week lows including
    GLW, F, TEVA, OSK, AKAM, ASYS, RBCN, ITRI, ALU, AFOP, BAC, GS, PRU, AXL, IMAX, MOS, VALE. Do you think that any of them are good value?

  336. Just had to turn off the TV as I was watching Mitch McConnell reciting his little talking points – must have said job-killing tax increases 10 times in 15 minutes! On the other hand, apparently spending cuts don’t seem to have any impact on the economy despite the fact that government spending made up the majority of the GDP increases the last 2 years. I am trying to understand the GOP stance here because by getting so involved at this point, they can only increase their stakes in the current economy. If the economy doesn’t get better by 2012, can they only blame Obama for it when they fight tooth and nails for these spending cuts?  I am sure they will, but they are now on record (and there is a great deal of it) asking for these spending cuts and I can see how their criticism (and there will be a lot) of Obama can be deflected by "Well, you did push for all these spending cuts back in 2010, didn’t you?". Not that I am counting on the MSM to make the case….
    Related to the Slave Class, Phil’s comments regarding the cost of education reminds me that I am yet to find any conservative who can explain to me how an average family of 4 making the average income of $50,000 (to be generous) can afford to save money for college, retirement and healthcare (pre- and post-retirement). That kind of income means about $3200/month of net income. Rent and utilities probably eat about $1500, food, another $800. Car expenses (payment, insurance, gas), another $500. That’s already $2800. That leaves about $400 for clothes, entertainment, a family vacation and any emergency that could arise! And yet, they are supposed to save $200,000 to send their kids to college because there won’t be any more college grants or subsidized student loans, save $1 millions for retirement because we get rid of Social Security and another $500K for retirement healthcare because Medicare will also disappear. All that with $400/ month. And I am assuming they have healthcare through their employers because for a family of 4, the costs are above $1000 a month not counting deductibles. But I guess in the view of the Tea Party, they are the lucky ones because they hardly pay any income taxes… So instead, you have people working 2 jobs and working until they are in their seventies because they can’t afford to stop! And their kids repeat the cycle as they are unable to break from the "slave" class. My guess is that politicians in Washington never had to experience that life or have grown so cynical or greedy that they ignore the situation of these people completely.

  337. stjean – Nice post. Yeah, I don’t quite understand how the middle class and poor are supposed to be able to save for kids college, retirement, etc., when they just struggle to get by.  It seems to me that people who recommend this (and I know a couple of them in my own family) are just too wealthy to understand that the things they take for granted can’t reasonably be accomplished by people living paycheck to paycheck.  This age is indeed characterized by a loss of empathy, among both the rich and poor. 
    In 1936 during his reelection campaign FDR said this:
    "Tonight I call the roll--the roll of honor of those who stood with us in 1932 and still stand with us today.
    Written on it are the names of millions who never had a chance --men at starvation wages, women in sweatshops, children at looms.
    Written on it are the names of those who despaired, young men and young women for whom opportunity had become a will-o’-the-wisp.
    Written on it are the names of farmers whose acres yielded only bitterness, business men whose books were portents of disaster, home owners who were faced with eviction, frugal citizens whose savings were insecure.
    Written there in large letters are the names of countless other Americans of all parties and all faiths, Americans who had eyes to see and hearts to understand, whose consciences were burdened because too many of their fellows were burdened, who looked on these things four years ago and said, "This can be changed. We will change it."
    Those Americans who have eyes to see and hearts to understand are MIA in 2011.

  338. Pharm, Is KERX worth looking at ?

  339. PHARM,
    reviewing your June 19 BMY trade.  I get the 19.80 cost base if called away at $25, but why is it $23.60 if the stock is put to you?
    "I like playing BMY conservatively by buying 100 shares (currently at $27.52) and selling a January 2013 $25 call and $27.50 put for $7.70 or better. That is a $19.80 basis if called away (if BMY is trading above $25 in January 2013), or $23.65 if BNY is put to you, "

  340. Jcaesar – Good stuff… I was reminded of that Colbert vid that Phil posted this week when the Heritage guy on Fox was saying that the poor are not really that poor – "Look, 99% of them have a fridge, 75% have a microwave and not 12%, but only 2% of the kids in this country go to be bed hungry!" This is fraking America, not some 3rd world country! You would think that 2% of the kids going hungry would raise some huge red flags in DC. But for them it’s a sign that it’s not that bad! Clueless and insane… Actually, criminal! No wonder Revtodd doesn’t have time to post more… Too many mouths to feed.

  341. That 2% number is BS, of course, but notice how a lie like that is not checked because it’s thrown in with all that other BS!  Also, when you think of a "fridge" you think of a side-by-side that you put a couple of week’s of groceries in but a fridge is also a $49 cube refrigerator and small microwaves cost even less and, of course, if you find those items in a dumpster – they’re free.  We throw out a fridge when it makes a noise or if the freezer stops working – that becomes furniture in someone else’s house.  I live in an area where we’re not far from a poor town (Paterson) and there is no such thing as waiting for some special day to get your junk hauled away here – it’s like magic – anything you put at the curb at night is gone the next day!  

    That’s a very unfortunate thing about statistics, because they are full of misleading words that are twisted by those who want to paint a rosy picture because those of us on the top rarely think about life down below.  Even health care is like that as what we consider "healthy" is a lot healthier than the things poor people are willing to put up with.  As to hunger – there’s a good study by, one of our best national organizations.  In it, they have 14M children in their national program and that’s "just" 4.5% of the population but it’s about 25% of the actual children – and this is not the only program, of course but the biggest.  Other findings:  


    Client Households

    • 76 percent (10 million) of client households served are food insecure, meaning they do not always know where they will find their next meal.  
    • 36 percent of these client households are experiencing food insecurity with hunger, meaning they are sometimes completely without a source of food.
    • 79 percent (11 million) of households with children served are also food insecure.
    • Of the 37 million people the Feeding America  network serves:
      • 70 percent of households have incomes below the federal poverty line.
      • The average monthly income for client households is $940.
      • 36 percent of households have one or more adults who is working.
      • 10 percent of client households are homeless.

      Tough Choices

      Many of the client households served by Feeding America food banks report that their household incomes are inadequate to cover their basic household expenses.

      • 46 percent of client households served report having to choose between paying for utilities or heating fuel and food.
      • 39 percent of client households said they had to choose between paying for rent or a mortgage and food.
      • 34 percent of client households report having to choose between paying for medical bills and food.
      • 35 percent of client households must choose between transportation and food.

      One in four client households (24 percent) do not have health insurance and nearly half of our adult clients report that they have unpaid medical and hospital bills.

      Thirty percent of households report having at least one member of their household in poor health.

      Role of Federal Government

      • 54.4percent of pantries, 33.5percent of kitchens, and 31.4percent of shelters receive food from TEFAP.
      • 41 percent of client households are receiving SNAP (formerly food stamps) benefits, an increase of 64 percent over 2006.
      • 54 percent of client households with children ages 0 to 3 participate in the WIC program, compared to 51 percent in 2006.
      • Among households with school-age children, 62 percent participate in the federal school lunch program and 54 percent participate in the school breakfast program.
      • ALL of these programs are under the Republican knife!


      • Feeding America food banks provide food and groceries to 33,500 food pantries, 4,500 soup kitchens and 3,600 emergency shelters.
      • 68 percent of pantries, 42 percent of soup kitchens, and 15 percent of emergency shelters rely solely on volunteers and have no paid staff.
      • 55 percent, are faith-based agencies affiliated with churches, mosques, synagogues and other religious organizations; 33 percent are other types of nonprofit organizations.


    • Good FDR Quote, JC.  

      By the way, has anyone noticed how FDR has been pretty much expunged from our history?  The man was President for 12 years yet there are Reagan and Bush and even Kennedy centers and airports, etch but almost nothing of FDR.  It’s like someone doesn’t want that Presidency to be studied too closely.  Maybe it’s because he said things like this:  

      "Great power involves great responsibility" - That’s right, Spider Man did not say it first!

      "Human kindness has never weakened the stamina or softened the fiber of a free people. A nation does not have to be cruel to be tough." 

      "We have always known that heedless self interest was bad morals, we now know that it is bad economics." 

      "The liberty of a democracy is not safe if the people tolerated the growth of private power to a point where it becomes stronger than the democratic state itself. That in its essence is fascism: ownership of government by an individual, by a group, or any controlling private power." 

      "Democracy cannot succeed unless those who express their choice are prepared to choose wisely. The real safeguard of democracy, therefore, is education." 

      "Organized money hates me--and I welcome their hatred!" 

      "The real truth of the matter is, as you and I know, that a financial element in the large centers has owned the government of the U.S. since the days of Andrew Jackson." 

      "Remember, remember always, that all of us, and you and I especially, are descended from immigrants and revolutionists." 

      "True individual freedom cannot exist without economic security and independence. People who are hungry and out of a job are the stuff of which dictatorships are made." 

      "The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little." 

      "Happiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort." 

      "A conservative is a man with two perfectly good legs who, however, has never learned to walk forward." 

      "Should any political party attempt to abolish social security unemployment insurance and eliminate labor laws and farm programs you would not hear of that party again in our political history. There is a tiny splinter group of course that believes you can do these things. Among them are a few other Texas oil millionaires and an occasional politician or business man from other areas. Their number is negligible and they are stupid." - Unfortunately – he may be wrong about this one as it’s happening right now as America forgets the man who saved us from Capitalists the first time.


    •  CanuckBob/BMY — the $23.65 is the average cost of all 200 shares after the 2nd 100 is put to you at net $19.80.

    • Phil / FDR – Yes, he has been expunged.  Part of that I think is due to the fact that we have a short attention span, the other is that he sounds like a "radical socialist" today – far to the left of even our current Kenyan Muslim socialist president.  I’ve provided my Mom with several of his quotes and speeches, but she can’t believe/remember that he actually said those things.
      Remember when Reagan was president and people gushed over his communication skills.  Many called him "The Great Communicator" at the time, but they would often follow such a statement with something like, "of course the true Great Communicator was FDR."  No one seems to know or appreciate that fact anymore. 
      Here’s one of my favorite passages not included in your list above – I’m sure you heard/seen it before.  It’s from his statement on signing the National Industrial Recovery Act of 1933:
      "In my Inaugural I laid down the simple proposition that nobody is going to starve in this country. It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By "business" I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white collar class as well as the men in overalls; and by living wages I mean more than a bare subsistence level-I mean the wages of decent living."

    • Matt – bad beach weather = hurricanes :)  In what part of the outer banks are you spending your vacation? I haven’t spent any appreciable amount of time there I think since I was a teenager.

    • Jcaesar, stjean and Phil – I appreciate what all of you have contributed today.  I get a great deal of inspiration from this group, and am glad to hear that even though we are all hear to make money (well, sometimes I make money) there is still a strong concern about the poor and social responsibility.  I especially liked the Roosevelt reference, Jcaesar, since we live next door to Hyde Park, New York and Valkill, where the Roosevelt’s live.  I shared the quote with my mother-in-law, now 81, for whom the Roosevelt’s (especially Eleanor) are her guiding lights.
      I post less on the list these days because I don’t want to bum everyone out and don’t want to distract from trade talk.  But you have all put my issues front and center and can’t resist today.  Our non-profit is surviving the economic downturn by taking on the hard task of housing people who are being de-institutionalized.  This happened rather unsuccessfully, with the mentally ill two decades ago, when psych hospitalized were closed, but few communities prepared for the needs of the mentally ill and the shelters and jails filled.  New York state is closing 7 prisons this year, and Parole is desperate to find housing for their hardest to serve populations, like felons who committed sex offenses and or are mentally ill.  We got a boatload of money to take 5 parolees at a time for up to 90 days and get them on their feet coming out of prison.  What we make from this contract replaced what we lost in cutbacks so we can keep everything running.  
      Working with this new population has opened my eyes to a few things.  The big thing that has hit me is how many people just are not equipped to live in our society.  What do you do with someone who is 45 years-old, grew up in poverty, neglected by their parents, never finished high school, got caught in an armed robbery at age 21 where his accomplice shot and killed the gas station clerk?  Now the guy has done his time and ready to come back to society.  What the hell is he going to do?  His last telephone was mounted on the wall with a rotary dial.  
      Here is the answer our brilliant Department of Social Services is giving people.  If you want public assistance benefits, you have to spend 40 hours per week in job searching activity.  Only a few hours can be filling out online applications.  Most of it has to be showing up with a resume at an employer and getting a signature that you were there.  They want 40 resumes a week going out, plus 10 hours a week face time in interviews for jobs.  Sounds good in theory right?  Get people out there to work for a living, right?  But even the case managers know that it is physically impossible to fulfill these requirements.  All this work has to be done without a car, so you have to get around by our poor public transportation or if you are lucky by bike.  If you have kids, you have to get all your day care arranged and dealt with.  Most of them can’t get one interview, let alone 10 per week.  Even if they could fulfill all the requirements, THERE ARE ALMOST NO JOBS.  If you are a felon, or have big gaps in your work history, forget about it.  A few of the workers are compassionate and give people a break if they are trying, but some just cut them off Public Assistance, so they then land in my shelter.  I’m full in July.  I don’t know what will happen in the winter.
      Now you may think that people have to deal with the consequences of their life choices.   But here is the stupid thing about our public policy.  My shelter beds cost as much as putting someone in an effeciency apartment for a month.  I have to transport people to the site, have security all night long, housekeepers to clean and do the laundry.  That adds up to a $500,000 yearly budget for 60 beds a night.  That’s $22.58 a night or $677 a month.  (We are serving dinner and breakfast too, but almost completely with donated labor from 35 volunteer groups and food to pull that off.  Its a great value as a bed and breakfast-showers, two meals, security, clean sheets each night, you just have to deal with sleeping in a bunk bed with 59 other people around you.)  We get about 60 percent of our funding from government sources and the rest is up to us.  Still, that is $406 per month in tax money.  And the public assistance grant for Dutchess County New York is $383 per month!  So if we made poor people pay to be in the shelter what it cost us to house them, they could not afford it on public assistance. 
      The transitional housing programs I run get people on their feet for only about 50 percent more.  But once they are on their feet, they are no longer a cost to society.  I once calculated the savings for every person who overcame an addiction and moved from homelessness to a job.  The ten year payoff of someone off entitlements after spending two years in our program is over 10 to one.  Even with our 60 percent success rate, that is a great payoff to society.  It is a much better value than most dollars in the federal budget.
      Roosevelt had by far the better plan for dealing with an economic calamity.  Even ridiculous jobs are better for human dignity than no jobs.  Better yet it is cost effective.  People sitting around with nothing to do are expensive.  And not just the $677 a month that a shelter bed costs.  The real expenses are in incarceration, health care, crime, mental health treatment, drug abuse on all the other costs that make the social safety net so expensive.  I firmly believe that the cuts entitlements will create more expensive problems that could have been dealt with by just creating jobs in the first place.  (When I’m done ranting, I will find research.)  Miserable people do miserable things, to themselves and each other.  If someone has a little hope in their heart, many of them will get up in the morning and ride their bike through the rain and snow to empty bed pans or serve burgers out a window.  But without hope, they will simply learn to game the system and do whatever they can to get by.  And that will cost us all. 
      I know the ton of waste that exists in entitlement spending.  But it is not what you think.  The waste is thousands of people are going to lose their way to drugs, depression and crime.  The waste is that it always costs more to get people out of really desperate circumstances than to offer a little help that would have kept them on their feet in the first place.  The waste is millions of people could be working doing something valuable for their families and country.  There are things that need doing.  Fix the roads, build public transportation, make buildings energy efficient, sweep the streets and wash windows if there is nothing left to do.  
      Thanks for the inspiration from all of you who write in and share your thoughts on the weekend.  It keeps me going to know that people do care about what happens to the poor.  Now keep those ideas coming so I can fund my retirement and maybe a trip to New Mexico this year! 

    •  I also have a new post for the Relative strength portfolio I use for 401K and IRA funds.  Its designed to be a low touch, re-balance once a month portfolio.  Just click on my user name.

    • Looks like futures are opening way up…. Oil, dollar, S&P, copper. Gold seems lower though… 

    • Rev, the problem, once again, is that the people making the decisions are detached from your reality (most of them), oblivious to it, or just blinded by their ideology! If you have been told all your life that just working hard will get you what you want while ignoring the effect of your family environment, on what side of town you were raised, your intellectual capacities, your education and many other factors including luck, how can you understand the plight of people already working 2 jobs at the minimum wage! Your first instinct is to see them as lazy, or too dependent on various programs because you have always been told that it’s not possible to work hard and be poor at the same time. All members of Congress should to work in your shelter for a week! And live there as well… 

    • revtodd – Very good to read about your work, though I understand it is VERY difficult and comes with it’s frustrations.  I find your words inspirational – they certainly don’t bum me out in any way. 
      As FDR would say, you certainly have eyes that see and a heart that understands.

    • Democrats are such spineless idiots! They didn’t even get thus full 2 trillion ext lasting past the 2012 elections!!!!! Sooooooooooooooooo pathetic!!!