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Testy Tuesday – More Stimulus PLEASE!

What a crazy ride!  

The chart on the left is a take on market sentiment but it’s the kind of mood swings that should be talking place over a span of weeks or months, not HOURS – like it has been recently.  

Volatility has gone completely crazy this year, to the point where a stock like BKS has an AVERAGE intraday spread of 8.3%.  8.3% used to be considered a big year for a stock – now it’s considered lunch…

Even worse, BKS doesn’t even top the list:  GMCR (8.7%), PDC 8.5% and PCX (8.4%) as well as BAS (8.2%) all have AVERAGE daily price swings above 8% and Bespoke has a list of 50 stocks (not even the ultra ETFs) that move 6% or more in the average day.  

MS is one, so is X – as well as JEF, NFLX, AMED, ANR, FSLR, NILE, ZEUS, LZB (really Lazy-Boy?!?), TEX and HAYN among the well-known names that swing up and down like penny stocks in the "average" day.  This is not rational.  MS has a $32Bn market cap – do we really think the value of MS jumps up and down $1.8Bn a day based on anything other than sheeple stampeding in and out of the stock?  

This creates tremendous opportunities for Fundamental investors as well as option SELLERS, which is what we prefer to be as – whether the market goes up or down – there is always someone who thinks it will go much lower or much higher and they are willing to give us lots of money to bet that they are right.  All we have to do is BE THE HOUSE and take bets on both sides and wait for those times when nothing happens and we cash out both ends of the trade (kind of like bookies when a team wins but doesn’t beat the spread). 

That’s right, bookmaking is illegal (unless you are Steve Wynn) but ordinary citizens like us can SELL options to suckers who think they are smarter than the markets.  I was on BNN yesterday and I’m sorry I didn’t catch the guy’s name but I guess he was another host and we were discussing using offsetting short puts to lower the next cost of our GNW and AXP spreads and he said "but retail investor does have to understand (the risks)" – which is a very important point but let’s not overstate the risk COMPARED TO OWNING A STOCK.  

With GNW, for example, on October 24th, the stock was $6.15 and, rather than buy $6,150 worth of stock and hoping for the best, we instead bought the Jan $5 calls for $1.50 and sold the $7.50 calls for .40 to drop the net to $1.10 on the $2.50 spread.   We also sold the December $6 puts for .85 to give us a net .25 entry on the entire spread.  We did 10 of these spreads in our WCP and, while our obligation was to buy 1,000 shares of GNW as net $6.25, the margin requirement on the short puts was just $625.  

This is not to say you should be reckless with margin but you can be realistic.  The reason the margin is $625 is because many well-paid derivatives experts have determined that the loss-risk of holding 10 short contracts of GNW Dec $6 puts is approximately $625 – NOT $6,250.  Can GNW go bankrupt and leave you with a $6,250 loss?  Sure, anything can happen.  It has, however, been determined by top analysts that the likelihood of this happening is roughly 10% or less so they are willing to extend you 90% margin against that possibility.  

You all look at Lloyd Blankfien and Jaimie Dimon and even Warren Buffett and say, "why can’t I make money like that" and one reason is that, when someone allows them to leverage their money 10:1 against REASONABLE risks – THEY TAKE IT!!!  The reality of having 10 contracts of GNW for net $6.25 is that perhaps GNW drops 20% (to $5) on some catastrophe before we stop out then we lose $1,250 – but not $6,250.  That’s why we’re playing with GNW and not NFLX – we think the odds of GNW suddenly going bust in the next 90 days is thin – beyond black swan thin…

When the calls dropped to .14, we bought them back for a small profit, leaving us in the $5 calls at net $1.34 along with the short puts, now .13.  With the Jan $5 calls now at $1.90, less the .12 we require to buy back the short puts if we closed it out today (but we are confident they will expire worthless), the net on this trade has gone from .25 to $1.78 up $1,530 (612%) in just over a month.  The stock is at $6.71, up "just" $656 on the same 1,000 shares (10%).  At 50% margin, $3,000 was committed to owning the stock while we committed $675 of cash and margin.  

This IS how the big boys make money.  We did not risk more than a typical retail investor who just buys GNW for $6.15 and crosses his fingers.  In fact, our net entry with the short put sale was $5.25 per share so we had a better than 15% downside buffer before we would begin to take a loss.  This is the fairly simple math of option strategies – we SELL the premium – we don’t buy it.  It puts us in a BETTER position than the retail investor but, as you can see from the BNN interview – there is always someone lurking around who wants to keep retail investors out of options.  

Of course the big boys want this to themselves – it’s where they make all their money!  

We don’t control the kind of Billions that let us design our own derivative deals (yet – see Build a Berkshire Workshop for our plan in that regard) but we can take advantage of leverage to sell our options – essentially taking out loans in order to operate our own little casino, where traders line up every day to take our bets – handing us cash so that they can speculate that, for example, TLT will be over $120 on Friday, for which they will bet us .50, even though TLT is at $118.40.  

That’s our "spread" – we’re the bookies and they are spotting us $2.10 (the $1.60 out of the money plus the .50 they pay) on the bet.  Now, we may win and we may lose but we know that there’s another sucker lined up next week to spot us another $2.10, and then another and another.  It’s not about us winning or losing a single, $2.10 bet – it’s about the fact that, over 52 weeks, we can collect $26 against $2 spreads betting TLT stays under the $120s.  Sometimes we may be wrong and sometimes we’re right – but our bet is that we won’t be $26 wrong!  

The gamblers come and go but the casino is always there – always taking the bets.  That’s how you win over time…  

As to the markets, we’re waiting and seeing as we continue to test our levels, generally consolidating in a pretty healthy way – the same way we did in mid-October, prior to making another big move up to close the month – a move that would give us a classic Santa Claus rally to finish 2011.  Lots of "bad" news yesterday did not do significant damage and even Europe down half a point isn’t bothering the US futures (however we did short oil this morning at $101 in Member Chat and got a quick ride back to $100.25) so, on the whole, it’s very impressive so far.  

We’ll just have to see how things shake out but, if the Dollar goes back over 79 – I would certainly get a lot more cautious.  

 


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  1. Oil Lines

    R3 – 104.09
    R2 – 103.26
    R1 – 101.90
    PP – 101.06
    S1 – 99.69
    S2 – 98.86
    S3 – 97.50

    Yesterday’s high and low – 102.44 / 100.24

    Breakout lines – 106 / 94.48 


  2. Talk about more stimulus, I read an article this morning about the Treasury Real Yield Curve which is published every day by our Treasury Dept.:

    http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield

    Amazingly enough, investors are now lending the USA money for free or even at a loss for up to 10 years when inflation is factored in which is what this real yield is all about:

     

    Why worry about deficits… Borrow, borrow some more!


  3. And forgot to post the crack spread with my oil lines. Today I am posting a 5 year chart to show what an aberration 2011 was in that regard. Crack spread is now below 15 which is much closer to historical level… VLO and others must have been minting money the last 12 months or so!


  4. Phil, and members:
    There has always been some interest on this site in trading AAPL.  As most of you know, I generally trade AAPL when I’m trading nothing else, and I’m never in more than 3 or 4 other positions besides AAPL.   I theorize that the human mind can manage one or two things well, but many things poorly, so I limit myselft to the management of very few positions.  Apple’s  stock and its options are easy to trade because the high volume leads to narrow spreads and there is little "slippage" .    I often post my AAPL trades, but I thought it might be fun to actually let some of you delve deeper into how I trade AAPL.  So I’ve deposited $50,000 into a new AAPL portfolio which I’m going to start trading today.  I will be using various techniques to capitalize on stock movements, but only AAPL will be traded in the portfolio.  My goal will be to double this portfolio yearly, and to turn the 50k into 1 million within 4.5 years.  It should be fun.  But I will only post this with Phil’s O.K.    So I’ll wait to hear from him before posting my first trade today.  


  5. PP for today:


  6. AAPL / Iflan – I think that this is a great idea (not only for the financial rewards) but as part of the education that this site provides. Having a more "structured" environment such as a portfolio makes it that much easier to learn as you can track the trades and learn from success and mistakes! Thanks. 



  7.  I trade AAPL. I am interested what Iflantheman has to post.


  8. pharm
    IS it time to double up on PLX they got hammereed this AM on a fda extension


  9. @Felipe

    Thx again for the oil trade. with last week’s cl trades there is a surplus to pay for next quarter’s fee.


  10. Phil
    great interview!  thinking about GNW. I am a newer member who came on after the original GNW trade.  One could buy the March 2012 BCS for $.90 and sell the March 2012 $6.00 Put for $.70 for a net debit of $.20. So, invest $.20 to make $1.80 or 800% upside (if my math is right?). Or worst case, GNW is put to us at $6 with a basis of $6.20 and its looking to open about $6.55.  I have tried many  subscription services over the last year but finally found the real deal with you! Is my thinking on track with GNW? what do you think Phil? Thanks you


  11. In my morning readings, I see that the FDA is understaffed and has extended the PLX PDUFA date by 3 mo.  Pounding the stock is not a worry, as we are going to sell puts.  Let’s see where they open and what they will give us for the Dec or Jan $5 puts, but those are the ones to focus on…maybe even February….


  12. Oh, thx Bert…yes, we will do some trading on them in here.


  13.  Iflantheman
    I think that is a Excellent idea!  If Phil approves, I would love to see it in your own "Tab" though.  Finding trades in the daily chats are hard enough if you have been gone a few days.  Since IncomeTrader was booted/left, maybe take over his "Tab"?  
     
    I think there are many many people who would be very interested.


  14. Iflan/AAPL – good idea. I would be interested.


  15. iflan/AAPL – sounds really good. Thanks.


  16. Felix take on the current Europe Merkozy plan:

    http://blogs.reuters.com/felix-salmon/2011/12/06/the-eurozone%E2%80%99s-terrible-mistake/

    Now, however, Angela Merkel has come up with another plan. The details aren’t clear, but it seems to involve the EU guaranteeing the debts of its member states. Why this is acceptable while eurobonds aren’t acceptable is a mystery: a mulit-trillion-euro contingent liability is hardly preferable to a couple of hundred billion euros of real liabilities. But there’s eurologic for you.

    The immediate result of this plan is that everybody will rush into the highest-yielding bonds in Europe, which is exactly what seems to have happened today. The other effect of the plan, however, is that every country in Europe is now effectively guaranteeing everybody else’s debt. Which is more than sufficient to explain why S&P is minded to downgrade every country in Europe, up to and including Germany. 


  17.  


  18.  lflan/AAPL — me too.


  19.  


  20. Lfaln/AAPL – I too mostly just trade in apple and believe in doing fewer things better.  I’m all up for your idea.  And your contribution to this site is very much appreciated. 


  21.  


  22. crack spread / st jean – As a trading idea can we say to short gasoline when the crack spread deviates so far above it’s long term avg? I see UGA as an ETF which uses gasoline futures but it doesn’t have any LEAPS so may be of limited use for this trade since the trends take time to unfold.


  23. Margin – (1) what’s PM? (2) I’m about to call my broker, but am generally curious about what effect the strike price of the long put portion of a bull put spread has on margin requirements? Thx in advance. After hours is fine here too of course.


  24.  Tom Toles


  25. Good morning!  

    ALL Members (Members Only) PLEASE read our "Build a Berkshire Workshop" post.  We’re interested in people with money, skills and or ideas to contribute so speak now or watch those first 100 spots fill up (it will be over a year before we can go public and make it more widely available).  Among other things, we will need people with a legal background to help set up the initial offering once we figure out what the business plan should look like but, for now, we’re just kicking around ideas, trying to figure out how to base such a business and what direction we’d like to take things in (initially, as you never know what the future may bring).  I look forward to reading everyone’s comments.  

    Dollar rejected at 79 and back below 78.80 at the moment gave us a good pop at the open but both the Hang Seng and the Nikkei were down about 1.3% and Europe is not too hot, with Germany down 1%, France down half a point and the UK flat at our open.  

    Oil (/CL) coming back to $101 and we only want to short there (again).  Gold bottomed out at $1,715, now $1,720 and that’s goaaaaaaaaaaaaal on our GLL Dec $16s at $1.05 (up 60%) and we’re done in the WCP!  

    I don’t see us breaking over today, or this week for that matter, without more stimulus.  I do think we get the stimulus and then I think we rally hard into XMas but, maybe next week they trash the market to sell TBills so CASHY AND CAUTIOUS remains the plan!  


  26. PLX….Let’s sell Feb $5s for 85c or better.  Let it come to you, don’t chase.  Also, if one wants to initiate a new position, buying stock here, selling those puts along with the $5 calls is a nice return for a few months.


  27. AAPL sounds good to me also.


  28. Crack spread / Pakdog – I have not thought of a trade idea based on that. Keep in mind that the spread is based on the price of oil, gasoline and heating oil. There might be a pair trade somewhere in there. In addition, you have to take into account the spread between WTI and Brent which is now going down. It’s one of the factors behind the fact that gas is relatively cheap compared to oil prices!

    In any case, in the recent moves, we have seen oil go up and gas prices go down (or at least stabilize) while the crack spread went lower. From May to July, the crack spread went up big time, but prices of oil and gas stayed somewhat stable (albeit high). In this case, the money was going in the refiners pocket! For myself, I would use the spread as an indication of how well refiners are doing!


  29.  Iflan,  Go for it…..Would make a nice addition to chat. 


  30. Iflan, Your AAPL trade posts sound good


  31. Iflantheman
     
    Good idea


  32. crack spread / stjean – Maybe a secondary indicator if you think the price of oil is artificially inflated AND the crack spread is higher than normal, then the prices of the derivative products would stand to fall further and perhaps more rapidly once oil prices fall. Probably over thinking this (which wouldn’t be out of character). What you said about refiners makes the most sense in an Occam’s Razor kind of way.


  33.  lflan: Great idea, thanks for putting in the time!


  34.  Iflan/AAPL,
    Sounds like a great idea to me as well


  35. Missed oil hit $101 right on the nose it seems at 9.30 but inching back up. Here kitty, kitty, kitty.


  36. Crack Spread / Pakdog – I am not sure I can access the crack spread data, but I could run an analysis of the correlation between oil, gas and the crack spread. Another project I guess… 


  37.  Iflan:  It’s interesting.  I never traded any Apple, but for an earnings play that went well last year, but become interested when Phil posted the "Bullish Cross" site — which has it’s own Apple tab. Plus, it’s a near-proxy for NASDAQ, with better earnings.  And now we read that Apple Chinese earnings exceed the U.S., although maybe that was a "smart phone" rather than an Apple number.  Anyway, it’s a juggernaut — but one has to consider whether it will be the same company going forward without Jobs.


  38. GLL – Viva GLL!  Grazie, PD.


  39. Iflan: Looking forward to seeing the AAPL trades


  40. More support for lflan’s AAPL trades.


  41. Oh my – sudden drop off again – how silly!  

    Same as yesterday, it only matters if the RUT fails 735 and the S&P fails 1,235 and the NYSE fails 7,473 – otherwise, we’re just bouncing around in the consolidation zone.  

    Lending at a loss/StJ – That can only last as long as fear of loss is greater than fact of negative returns – either inflation or simply fear fatigue will do that in eventually.  As to borrowing – if you can borrow money for 1% – why wouldn’t you?  

    I don’t know why this concept isn’t argued with Conservatives – if profits are so great and our Government has the ability to borrow 10 or 20 Trillion Dollars at 1% – then why shouldn’t they?  Don’t they have a responsibility to our "shareholders" to maximize America’s profits?  The Government should borrow the money and turn around and use it to refinance up to 75% of a home (so much be 25% over water after clearing debt) at 2%.   Figure 50M homes qualify with an average $200,000 mortgage is $10Tn and 1.5% interest spread is $150Bn a year in profits from just making home loans.  Knocking 3-4% off 50M people’s $200,000 mortgages drops $8,000 x $50M or $400Bn a year back into consumer’s pockets and that should create a couple of jobs and generate some tax revenue as well.  Also, 2% loans would probably kick-start the housing market for anyone who can afford to go 25% down.  

    AAPL/Iflan – Sure, go for it.  If you want a box, I’m sure enough people are interested.  

    50-day swing/StJ – That’s crazy! 

    You’re welcome Flips!   Getting another whack at $101 (3rd today).  

    Thanks Crussell!  On GNW, I would not chase it too much right now.  Not with the markets still alive and dead at the same time.  As a new entry, I’d look at the 2013 $5/7.50 bull call spread at $1.15 and sell the $5 puts for $1.05 for net .10 on the $2.50 spread – that’s very conservative and pays very nicely.  

    Money trades/StJ – Good day for watching and waiting. 

    Portfolio Margin/NF – See "Portfolio Margin – Useful and Dangerous Leverage" – It’s from our Education Section.  

    Crack spread/Pak – I doubt it will be a reliable indicator as there are too many moving parts.  

    LOL Pak! 

    Crack spread/StJ – There’s a chart for that:  

    Bloomberg Nymex WTI Cushing Crude Oil First Month 321 Crack Spread (CRK321M1IND_2011-11-17_12-16-39

    You’re welcome NF! 


  42. Nothing much in Faessel’s post today that we don’t already know:
     
    Tuesday 12-6-2011
     
    Dr. John L. Faessel
    ON THE MARKET
    Commentary and Insights
     
    Quote of the day
    “No matter what the objective of the spending program may be, government expenditures always constitute economic costs that are borne by taxpayers, lenders, or inflation victims."
    ~ Hans F. Sennholz ~
     
    ~~~
    Declining Tops Resistance Still Rules Charts
     
    EuroLand Bond Yields Continue Precipitous Retreat
    Italy 10-year (gross) bond yield – 5.89% off from 7.26% on 11-24
    Spanish 10-year (generic) bond yield – 5.11% - off from 6.7% on 11/24
     
    The McClellan Oscillator is in NEUTRAL @ plus 77
    Yesterday the stock market was up about 1.51% but at 1:45 Standard and Poor’s warned 6 members of the Eurzone that their top tier debt ratings may be downgraded because of ongoing financial and budget turmoil. Even Germany, the region’s supposed safe haven, was warned.
     
    From a technical perspective the key declining Tops line resistance at (SPX) 1270 that comes off last July’s top tick will be the overriding wall of resistance. The 200-day moving average that comes in at (SPX) 1264 is likewise formidable. The McClellan Oscillator is in neutral at plus 77 so there is "room" before we reach any overboughtness considerations. European headlines will continue to tweak the daily or hourly trade.
     
    ________________
     
    The (SPX) closed yesterday at 1157.08
    ___________
     
    S&P 500 (SPX) – Short term price support is at 1250
    Then at 1244 and 1240 and 1233
    The 50- moving average support is at (SPX) 1212.
    (SPX) support at the August 8th lows is at 1101.
    Support at the October 4th lows is at 1074.
    ____________
     
    Key “declining tops” resistance is at (SPX) 1270
    The 200-day moving average resistance is at 1264.
    Short term price resistance is at S&P 500 (SPX) 1259
    More formidable resistance is at (SPX) 1266
    Price resistance at the top- tick of the near four month old consolidation is at 1292 then at 1277.
     
    Monday’s key indicators and metrics:
     
    ·     McClellan Oscillator is Neutral @ plus 77            
    ·     VIX – 27.84


  43.  Pharm / NVS – I have been tracking NVS recently due to a personal interest in Afinitor.  This drug seems to have blockbuster written all over it.  Expect some more information to come out this week associated with its successful Phase 3 Trial for breast cancer.  Also, I saw this Phase 2 trial associated with autism as well.  
    http://www.prnewswire.com/news-releases/autism-may-involve-disordered-white-matter-in-the-brain-135030988.html
    With a treatment cost in the range of $80K/year.  Any thoughts on NVS as a good long term hold? 


  44.  I’ll repeat that I’m no gold bug, don’t have any, and don’t much see the point of owning stuff that has no earnings yield, given the alternatives.  But it has been stuck in a doldrums/trading range for awhile, so I post this comment from FT, FWIW:
     
    "…The next leg of the gold rally may not be far away, however. If Mario Draghi, president of the European Central Bank, follows through on a hint last week that the ECB may step up bond buying activities, he could trigger a new rush for physical gold among conservative Swiss and German investors."


  45.  Lflan, 
    AAPL portfolio – great idea. Thank you!  
    Since Phil agreed, could you get your own color so the trades would be easier to see?


  46. Silver – a near term bullish argument, looking at short positions and sentiment.


  47. In TZA, with a sweaty upper lip…


  48. A question about spreads in options: say I am selling a vertical spread for 2.10 and the market is at 2.20 if I legged it: why wouldn’t I get filled?
     
    or why would the outright legs be a better fill than a spread? Is it just the depth or lack thereof
     
    Hope that makes sense.


  49. Phil, have very good people to put you in touch with for the Berkshire workshop.  Where can I email you at?


  50. sagemm1 / fill — If you are looking at the ask on the long and bid on the short, I’d switch brokers. Depth shouldn’t be a problem unless you are using an "all or nothing" order.


  51.  SCO/Phil – Hi Phil, I have an old $38/43 December BCS that you recommended a while ago.  Currently it would cost about 0.30 to roll to January.  When would you recommend doing that?


  52. not quite but close to the ask on the long and the bid on the short, which had me slightly confused.
    In general should I expect better fills using a spread worse or equal to legging?
     
    Thanks Rain


  53. Lflan
    Great idea and thank you for the extra effort to put up and track AAPL trades.
    I’ve capitalized on a few of your suggestions along the way and always appreciate the commentary attached to them.
    I’d suggest putting up your trades after you’ve made them, ala JRW, so you have a chance to make your strategies work.
    I believe there are times when PSW members move the numbers around pretty good because of the quantity of folks trying to execute the same trade at the same time.
    tia


  54. Thanks Phil, and thanks to members for your support in this endeavor to learn how to make money on AAPL trades.  I’ll leave the box to you Phil.  If you think it’s warranted, that’s fine.  If you want me to earn it by showing results over the next few weeks, that’s fine too.  I appreciate it.  So let’s get started!   The first thing i want to teach you about trading AAPL is to develop PATIENCE.  So what I see today is relatively low volume on AAPL and downward trending.   So for now, we leave the 50k in cash , and watch.   And members, I’m going to trade this so that you can do fractions of 50k, such as 10k or 5k.   I’ll set every trade up so that it is divisable by at least 10.   My next post will be mid-afternoon.  I’m pumped!


  55. iflantheman
    I very much look forward to your trades!


  56. sagemm1 / fill — In my experience, if you are putting in a limit within the spread, chances are it won’t likely fill. Paying the entire spread will sometimes fill within the spread.  You can often can get better execution when legging in on large spreads. That’s in relatively stable markets. When the markets are moving, things can get pretty nonsensical.  


  57. Phil, why are we not getting more of a reaction to the S&P Potential Downgrades of Europe?


  58. Let’s get Lflan his own colour – i suggest a mild red. 


  59. Quote of the day:

    “The function of a ratings agency is to visit the field at the end of the battle and shoot the wounded.”

    -John Heimann, Spring 1998 


  60. spread was filled but still wondering how spreads historically compare to legging inor out; I suppose the rsik profile can change quickly in a moving market thus giving an edge to spreads in the safety aspect.


  61.  


  62. Perma-Buys – PD, can u point me to your "perma-buy list" when you have time.  Or maybe someone else can help me search for same.  I’m setting up an "accumulate" watch list and would like to add some of your recos (like BA).  Thanks. 


  63. Out of TZA…


  64. Thanks agian Rain…I always appreciate time taken by my fellow PSW’ers :^)


  65. lflan,
    Can you provide lessons to speed up the learning of patience?
    :-)
    Just kidding.  Look forward to your AAPL trades!


  66. 11:00 AM On the hour: Dow +0.31%. 10-yr -0.16%. Euro -0.13% vs. dollar. Crude -0.55% to $100.44. Gold -1.39% to $1710.45 

    11:41 AM European shares close mixed, with Germany the big loser as 2 of its largest firms (retailer Metro and energy firm RWE) post big declines. Stoxx 50 -0.3%, Germany -1%, France -0.4%, Italy -0.4%, Spain +0.2%, U.K. +0.2%, Euro -0.2% at $1.3378.

    No comment not good for markets:  TIm Geithner and his German counterpart Wolfgang Schauble go before the cameras in Berlin following a meeting between the two. Geithner won’t comment on an ECB role, but says he does support the IMF stepping in to assist the EU in sorting out its troubles.

    Hey, this was my idea!  "Occupy Your Homes" is holding a National Day of Action in over 20 cities to stop and reverse foreclosures. Zero Hedge reckonsit’s a significant event as what makes banks most nervous is not demonstrators in tents but protestors "disrupting the lifeblood of the broken banking system."

    Redbook Chain Store Sales: +3.2% Y/Y vs. +5.4% last week. "The shopping patterns have intensified, that shoppers seeking bargains bulk up on Black Friday and then wait to shop at the last minute before the holidays."

    Main Street Stores still getting crushed:  ICSC Retail Store Sales: -2.3% W/W, vs. +1.7% last week. +3.8% Y/Y, vs. +4% last week. The sharp slowdown is against a very tough comparison with the Black Friday weekend of the prior week.

    Russian shares dive as troops enter Moscow and start making arrests amidst mass protests over Sunday’s election results in which Putin’s United Russia party squeaked out a small victory. An outside observer has said the election was slanted in favor of Putin’s party. RSX -5.9%.

    The S&P’s "late to the party" mass EU downgrade threatprompts Barry Ritholtz to ask: "Do the ratings agencies matter anymore?" Traders issue the call long before Moody’s or S&P actually downgrades a corporate or sovereign rating, he notes. Maybe, but it’s easy to forget that the U.S. is different, Randall Forsyth writes; a loss of triple-A status by Europe’s elite sovereignsactually would matter

    S&P places the AAA rating on the European rescue fund the EFSF, on "creditwatch negative" – not a surprise as all of the countries which back the facility are on watch for a downgrade as oflast night. Nevertheless, European shares and the euro both give up a nice chunk of points as the news hits.

    S&P expects the rating on EFSF paper to fall to whatever level the lowest rating of the six current AAA EU members falls to. Should none of the AAAs be downgraded, the EFSF would also be spared such. Plans to leverage the fund to a size of $1T have been vastly scaled back as investors have already done their own downgrade.

    Unlike the downgrade of the U.S., a rating cut for EU sovereigns might actually mean something as European banks are far larger (assets as a % of GDP) and far more intertwined with governments than their American cousins, points out Mark Grant. Lower sovereign ratings are then almost certain to increase already high bank funding costs. 

    Germany’s plan for increased control over the budgets of sinner EU states sets things on an ugly path, writes Ambrose Evans-Pritchard. "Merkel decides, Sarkozy follows," is about the most diplomatic thing heard in France, and that’s from Francois Hollande, possibly the next president. "Let the euro die a natural death," says right winger Marie Le Pen, now running 20% in the polls. 

    "This is still an insolvent economy," says economist Constantin Gurdgiev. "Just because we’re playing a good-boy role and not making noises like the Greeks doesn’t mean Ireland is healthy." The country is getting a lot of press as the poster boy for following the joys of EU/IMF-imposed austerity. Reality on the ground … a slightly different picture.

    Because foreign multinationals in Ireland have been increasing production, writes Paul Krugman, the gap between its larger GDP and smaller GNP has been widening. "I don’t want to deny that Ireland is doing somewhat better than the worst fears. But it’s by no means time to break out the whiskey," Krugman writes. (see also)

    Danger Will Robinson, Danger, DANGER!  German department store operator Metro AG, the world’s 4th largest retailer, dives 11% in Frankfurt as its cuts its 2011 earnings forecast. "Originally we had expected that, based on the weak prior-year basis, this year’s Christmas business would grow. However the start to Christmas business has so far distinctly lagged behind the prior year level," says the CEO. (PR

    Revised government stats, due out later today, are expected to show eurozone growth slowed to an annualized 0.8% in Q3 from 3.1% in Q1, with a recession looking likely for the current quarter. But analysts expect the downturn to be mild and short, with growth returning in H2 2012, if (and that’s a big if) the region can come up with a convincing solution to its debt crisis.

    German factory orders +5.2% in October vs. -4.3% in September and +1% expected.

    Swiss November CPI -0.5% Y/Y (-0.3% forecast) vs. -0.1% in October. The fall, which was the biggest since October 2009, was due to lower import costs because of the strong Swiss franc, and adds pressure on the SNB to raise its ceiling for the currency. (PR)

    Investors looking for a little candy from the Bank of Canada are disappointed as the bank gives little hint of dovishness whileleaving its benchmark rate at 1%. "Household expenditures have more momentum than had been expected and business investment remains solid." The loonie pops higher against the greenback, now buying $0.9829.

    Brazil’s once-booming economy flatlines in Q3 and rises just 2.1% Y/Y vs. expectations of 2.7%. Europe is no doubt having effect, but don’t forget China, the major consumer for the raw materials Brazil is chock full of. Economists slash their full year estimates for 2011 and 2012 to 3.09% and 3.48% respectively. 2010 growth was 7.5%. 

    Asia is facing "much greater downside risks" because of the possibility of new recessions in the U.S. and EU, and the threat of destabilizing capital flows, says the Asian Development Bank. The possibility of another global financial crisis means Asian countries must have "sufficient flexibility" to rapidly adjust policies. 

    A report from IHS Global Insight forecasts that producing natural gas from shale in the U.S. will add 870K jobs over the next 4 years. The rosy estimate includes direct jobs along with an "employment multiplier" to account for jobs created indirectly through shale drilling.

    Shell (RDS.A) and partner PetroChina find shale gas in China, a development that could eventually limit imports to a country that producers hope will drive demand.

    The economic potential from rising shale gas production is undeniable, but the enormous quantities of water used in hydraulic fracturing is becoming a major concern. In drought-parched South Texas, for example, each well using the technique requires ~6M million gallons of water, sparking concerns about depleting aquifers.

    Portfolio manager Vincent Fiorillo, an experienced hand in the area of MBS investment, believes it will cost at least $100B to clean up mortgage litigation, far higher than the $25B bandied about in settlement talks with state AGs. A figure that high would allow necessary loan modifications as well as paying back investors who lost money on questionable securities.


  67. Iflan: Thank you for the AAPL . I am definitely a reader of your post.


  68. What happens to AMR? Coming back from the grave?



  69. Bank stocks (XLF -0.2%), so resilient yesterday despite the S&P mass downgrade threat, are struggling today. Oddly, JPMorgan Chase (JPM -1.2%), widely considered the strongest U.S. bank, is down while Bank of America (BAC +1.2%) is up. Regional banks are especially shakySTI -4.3%RF -2.9%. Mark Gongloff suspects today’s moves are a "natural cool-down" after yesterday.

    Wells Fargo (WFC) is "well positioned" for upcoming stress tests, CEO John Stumpf says, and hopes to return more capital to shareholders next year. In Q4, Wells expects higher income from mortgage fees, but also increased expenses from those ops and from its 2008 acquisition of Wachovia. 

    Southwest Airlines (LUVNovember traffic +2.5% Y/Y to over 8.28B revenue passenger miles; capacity +0.7%, load factor 81.6% vs. 80.2% last year, unit revenue +9%. CFO sees "exceptional" unit revenue growth for December and says the firm is not seeking labor concessions following AMR’s (AMR) bankruptcy. (PR)

    Backing up Cisco’s (CSCOFQ1 CC comments about rebounding market demand, IDC estimates the Ethernet switch market grew 10.9% Q/Q and 6.1% Y/Y in Q3, thanks to a 27.8% Y/Y increase in Asia-Pac sales. Cisco’s share of the market is estimated to have risen 270 bps Q/Q, to 66.5%; the company was hit hard in the first half of the year by competition and price pressure

    While IMS Research reports retail LED lamp prices have held steady in most regions over the last 2 months, it claims average prices fell by nearly 2/3 in China, to $11. The figure, likely the result of fierce local competition and oversupply, is well below the prices found in the U.S., Japan, and Europe, and begs the question of whether Chinese suppliers will soon begin flooding export markets. (also)

    The price of cocoa continues to fall back as chocolate manufacturers see demand in Europe wane with all the financial unrest. After hitting a 33-year high last year due to a supply disruption from political unrest in the Ivory Coast, prices have now retreated back 42% and look set to stay low with forecasts projecting that supplies will outpace demand for the next season. Cocoa futures-1.2%

    A Senate panel examines antitrust issues raised by the proposed merger of Express Scripts (ESRX) and Medco Health (MHS) today in a hearing. Lawmakers are expected to dissect if a reduction in major PBM competitors to two from three would harm the market by leaving customers with too few choices and very little room to bargain.

    More on the ESRX-MHS merger hearing (previous): Express Scripts (ESRX) and Medco Health (MHS) went on the offensive in advance of today’s grilling in front of Senators, funding a study that concluded a merger between the two PBM giants would save tens of billions of dollars in annual drug costs. Unfortunately for the firms, antitrust attorneys and consumer groups are shredding the report before the ink is even dry – noting that it uses stale data and government reports from 2002 and 2003 to draw on in its analysis.

    Stagflation victim – CEO on CNBC had nothing positive to say at all:  Darden (DRI) attributes the weak FQ2 to Olive Garden, which suffered from margin compression as the company worked to rebuild "guest counts" by emphasizing the restaurant’s "value leadership." Shares remain off 9% premarket. (previous)

    GE +1.2% premarket as Sanford C. Bernstein raises its recommendation to Outperform and lifts its price target to $21 from $19, citing rising dividends and energy orders starting in 2012. The Fed will complete its review of GE Capital in the first half of next year and likely allow it to resume its dividend, Bernstein says.

    Ford’s (F +0.3%) Scott Monty takes to SA’s Wall Street Breakfast comment stream to label as false a WSJ report that the automaker is searching for a new CEO to replace 66-year old CEO Alan Mulally within two years. Although no search is underway, "We will always consider both internal and external candidates," Monty writes.

    Frontline (FROannounces it will split itself into two companies with a new entity – Frontline 2012 – taking control of new vessels and outstanding orders backed by a capital infusion from Hemen Holding. Shares are up 31% in Oslo trading, and have popped a 27% gain in premarket trading on the NYSE.

    The National Football League is close to signing eight-year extensions of deals with Fox (NWSA), NBC (CMCSA) and CBS that should amass ~$3.2B/year from its broadcast partners, a 60% increase over its prior contract, WSJ reports. Adding other deals with ESPN (DIS) and DirecTV (DTV), the NFL can expect to lock in total average annual media fees of ~$6B.

    The Green Bay Packers start the fifth stock offering in the history of the NFL with a sale of 250K shares at $250 each. Green Bay is the only publicly owned NFL team, although unlike typical stocks, shares don’t carry any prospect of dividend payouts or capital gains. (PR

    Sprint (S), which has just finished up bailing out (III) Clearwire (CLWR), says it plans to offer its first 4G LTE devices in 2H 2012. Sprint has thus far relied on WiMAX technology rather than LTE to offer 4G services, and that’s put the carrier at a disadvantage with regards to the quality of its 4G phone lineup. Verizon Wireless (VZ,VOD) currently offers 16 LTE devices, with the Galaxy Nexus arriving shortly.

    Google (GOOG) says Verizon Wireless (VZis blockingusers from installing its Google Wallet payments app on the new Android-powered Galaxy Nexus line of smartphones. A joint venturebetween VZ, T, and T-Mobile called Isis – due to be launched soon – will be a direct competitor to Google Wallet in the mobile payment space. 



  70. Bernstein argues Apple’s (AAPL) calendar Q3 iPhone shortfall shouldn’t hurt Qualcomm’s (QCOM) calendar Q4 royalties (paid a quarter late by OEMs) too much, since Qualcomm obtains a relatively small royalty for the iPhone. However, the comments do show how Qualcomm often benefits more from high-end Android phone sales than from iPhone sales – especially if a high-end Android device uses its Snapdragon chips.

    Ticonderoga analyst Brian White reckons Apple (AAPL -0.2%) had its "best November ever" based on data from Taiwanese suppliers, which causes his "Apple Barometer" to jump a monthly 17% vs. a usual rise of 2%. In October, the barometer was weaker than normal. (see also III

    Canaccord’s Mike Walkley reiterates a Buy on Apple (AAPL) after his November checks indicate strong global iPhone sales, with the device gaining share relative to Android (GOOG) in the U.S. and Western Europe. This leads him to raise his FQ1 iPhone shipment forecast by 1.5M units, to 30.5M. However, like JPMorgan, Walkley is slightly lowering his iPad forecast for the quarter. (RIMM checks)

    Forrester Research analyst James McQuivey weighs in on Microsoft’s (MSFT -0.2%) interactive TV platform via today’s update for the Xbox 360 (III), gushing that the service/product comes close to the long awaited all-inclusive "Internet TV" bandied around for years. "This is now the benchmark against which all other living-room initiatives should be compared, from cable or satellite set top boxes to Apple’s widely rumored TV to the 3.0 version of Google TV that Google will have to start programming as soon as they see this."


  71. Phjil: great BBN interview ,but I’m willing to wager 95% of the viewers have no idea what u are talking about. They simply follow that clown;Cramer.
     
    I got tired of being retired and have activated my business brokerage career. Like your grandpa Max, I sold my business 6 years ago and regret it since,but fortunately I’m young enough to start again.


  72. Whuck? — S&P places the AAA rating on the European rescue fund the EFSF, on "creditwatch negative"
     
    Rate it NOW so you can jerk it around next week?!?
     
    FU S&P!


  73. Good morning,

     

    IWM  71.87,  72.15,  72.56,  72.98,  73.24,  73.61,  74.12,  74.62,  74.80,  75.06,  75.38  and 76.10

    I believe "they" will try again sometime this week to run stops to the upside, but without some REAL news, we will not see IWM 76.10 – 65 !! By next week we will have the Great European Compromise (agreeing to what they agreed to 8 years ago and failed) so likely downhill from there.

    So all those of you who follow my work know how I feel about Black Bars; I’m calling yesterday "The Top" !!

    I’m a tad under the weather today so may not post much, but should be able to answer any questions; I am and will be trading.

    Of course, if we break North of IWM 75.38, SPX 1260, you know what to do; Good hunting !!


  74. JRW – What’s a "Black Bar"?


  75. OK, that was a lot of news!  

    All red now with the Dollar at 78.74 again.  Oil still drifting around $100.50, gold $1,714 so a good exit there.  RUT 740 would be a bad break as would 12,100 on the Dow (and they’re not red above that).  7,500 on NYSE, of course, $13 on XLF – all good watch levels that we should hold as the volume (50M at 11:50) is still very low.  

    Build a Berkshire/Rustle – I don’t want non-members at this point (other than investors, of course) – it’s too early to start pulling in new people we don’t know, but you can send Emails through Greg if important (admin@phi…..).

    SCO/Paalotay – I’d spend .60 to just roll the $38 caller to the Jan $42s because, if SCO goes up, you can always roll the caller and, if SCO goes down, you will be able to make a cheap roll down when you are ready to sell calls.   For example, right now, you can sell the $41 calls for $2.55 and that pays to roll the $42 calls ($2.30) down to the $35 calls for a better spread than you have now.  Meanwhile, you save the .40 it would cost you to buy back the Dec caller.  

    Box/Iflan – The issue is, for daily trading, do you want to pop in and out of the main chat to go to your own section.  With 5 monitors, that kind of thing doesn’t bother me but you need to think about how you want your day to be.  I think tracking it like StJ does with the Money trades may be a better way to go (perhaps you can get the templates from him so we don’t have all different sheet styles).  I’ll have Matt set you up with a color regardless.  

    S&P/RPME – As I said to the television audience yesterday – Big Duh!  Why would you react to the fact that the EU’s overall credit isn’t AAA or even AA?  They were teetering on the edge of dissolution a week ago so this is not news.  In fact, the fact that they are ONLY on "watch" could be considered better than expected vs. the doom and gloom pronouncements we’ve been getting for months.  

    Mild red/Lol – Doesn’t work, Matt kept complaining it looked pink (not that there’s anything wrong with that!) when we first tried it.  I’m thinking a lighter green than Pharm. 

    Good quote StJ. 

    Legging/Sage – Way superior if you are a good day trader.   Don’t forget, you can scale into the full spread as you leg so, if you are filling 20, maybe buy 4 calls and sell 4 puts, then sell 4 short calls, then 4 more calls and 4 more puts, then 4 more short calls, etc….  The trick is to identify the short-term channel.  Take AAPL today for example – they’ve been in a pretty clear downtrend since yesterday morning so if you wanted to try to get into a bullish spread, you can see where the top and bottom of the 5-minute channel are and you can try to time your entries but, of course, the way that chart looks – I would sell the calls and wait for them to force me to buy to cover – hopefully around $380.  

    Perma-Buys/NF – Well, it doesn’t mean buy any time, it means these are ones I like to buy when they are trading down like (not inclusive):  AA, AAPL, AXP, BA, CAT, CHK, DIS, FCX, FDX, GE, GOOG, GS, HOV ($1.56 baby!), HPQ, IBM, IMAX, INTC, JPM, KO, MCD, MMM, MO, MON, MRK, MSFT, OIH, PFE, SLB, T, TASR, TIVO, TM, V, VLO, WFR, WMT, X, XOM.  That’s a good start.  

    Back in business/Dflam – Wise move.  Rolling stones and all…

    Feel better JRW.   


  76. Perma – I got ya’ on buying at opportune times and employing "our" discount strategies.  


  77. jcaesar / Black bar

    Here and here !!


  78. GOOG v. AMZN – I guess Google’s new-ish retail play imperils AMZN (if at all) – in one channel – mainly because GOOG has more money than Tim Tebow, er, I mean, God.  Seems they can really only compete in the area where AMZN relies on an underlying retailer to ship its own product (or relies on the underlying mini-AMZN service to do same.)   Without digging into data tho, I wonder aloud here what % of AMZN’s business this really is?  Clearly, wholly owned distribution centers are central to their service and growth – don’t see GOOG going there.   And their own DCs seem the only way to manage customer shipping (Prime esp) expectations.  Can never sneeze at Google, of course, but whats the longer term concern or ding for AMZN?
     
    Related question:  I wonder too if Google recognizes the value of having mobile customers coming thru them and Google-friendly hardware?  It’ll be interesting to see both the impact of AMZN and others "buy while waiting in line" strategy for Black Friday and beyond AND, more importantly, how quickly they realize the dream of the Fire serving its true role a branded shopping device.


  79. JRW,
    If you are calling yesterday "The Top", you know what!?  Yesterday’s S&P high was 1266.  And on Oct 7, I asked you what was the range of #13 on your Legendary Chart, and you said:
     
    JRW III
    October 7th, 2011 at 1:25 pm | PermalinkIgnore this user

    cwan120

    #13 = 1266 / 1282
     
    No kidding !!  You Are Da Man !! We will see soon if indeed 1266 is The Top !!


  80. JRW, thinking about getting back in TZA..AUD/USD top of the range and watching AAPL weaken..
    Where are you on this?

    Markets not too impressed by the move higher in the Euro as well..very strange action


  81. Thanks JRW.  I usually call them red bars, but I get ya!


  82. Gold – to raise capital if they do not inflate….which they won’t for now, reserve gold piles will be sold (IMF perhaps).  I noted this last week when I went short gold…..it will only accellerate as retail is in it, and why not wipe them out as well. 


  83. IBM and Micron are heating up the 3D memory chip game to the point where a commercial product may actually appear. (Well, technically cooling them down, wouldn’t work otherwise.)
    IBM is actually doing research again, and they’ve been consistently producing some interesting tech. I know phil generally likes them but it’s worth reiterating that they’re probably not going anywhere anytime soon short of the world physically ending. (2012!)


  84.  Phil, STJ, Pakdog: A similar spread you might be interested in involves using the Dec heating oil premium Dec unleaded regular gasoline.
    The spread is based on the relative movement of gasoline and heating oil based on the seasonal patterns of each one.
    The spread involves the use of the Dec futures contracts. The premise is that the Dec Heating oil contract will gain more than the Dec Unleaded gas contract because of the tendency of heating oil to increase in price during the cold winter months.
    The Unleaded gas contract usually, but not always,  goes down during the winter months. The trade entry is based on the spread between the two at 4.00 cents or less. Exit when the spread increases 1 cent or more. Strict money management rules apply. Also supply and weather considerations may play an important role with each commodity. 
    There is a reverse trade using the June Unleaded gas futures premium to the June Heating oil contract, with the premise that Unleaded gas will gain in price over heating oil as the spring/summer driving period comes into play.
    I traded this spread years ago with a reasonable amount of success. I no longer have a Futures account. 


  85. ARIA and IMGN are not holding up and cannot get to new highs.  Again, risk is off, and I will be selling puts at the $10, and $9 range on a sell off.  I am lightening up on CRIS again, and holding PLX after today’s sell off.  All others are ok.  SGEN seems to be holding as is VRTX.  For VRTX, watch the $28 line, and if they can get to $25, I would start buying….JNJ is lurking, as are several other Pharma companies (BMS??).


  86. @JRW III
    A very good golfer once told me that  "…you never want to bet against a golfer that is either getting sick or on the mend. He will always beat you." 
    However,  I didn’t golf, so I had no interest in his bon mot.  Until one day I realized that this bit of wisdom applied not only to golf but to many situations in life.
    Not feeling well today might be a blessing in your trading, if not your health.


  87. AMZN/NF – I can’t see GOOG sticking with it as the margins are a negative impact to their business (under 10%) so why would they want it?  They are just doing what’s easy for now but the depth of AMZN is hard to match and really not worth GOOG’s time – would make more sense for AMZN to come up with their own browser.  GOOG is just punishing AMZN for the Kindle at the moment.  

    IBM/Kwan – 3D memory is another game-changer coming down the pike.  Too bad all this cool tech doesn’t create jobs.  

    Speaking of cool tech – I know were I’m shopping this weekend!  

    WIRED Store presented by Buick will feature more than 10,000 square feet of the hottest holiday gadgets, art installations and special events from November 18 – December 24

     New York, NY (November 9, 2011) – Tech aficionados, gadget junkies and holiday shoppers rejoice! The WIRED Store (www.wired.com/store) returns to New York City, this time to a new location in the heart of Times Square, from Friday, Nov. 18 through Saturday, Dec. 24. The Store will be open noon to 7 p.m. Wednesdays through Sundays (closed Thanksgiving Day).

    Located at 42nd and Broadway, the 7th annual WIRED Store invites shoppers and curiosity seekers to get a first look at unique gadgets and gear, and to enjoy events, installations and experiences that embody the “WIRED lifestyle.” The Store is a brick-and-mortar spin-off of WIRED, known for its big ideas, innovative design and focus on forecasting trends.

    With a pixel-based winter landscape and color scheme, the 10,000-sq. ft. interactive shopping gallery will feature more than 200 of the hottest new products, on display and available for purchase, as well as a schedule of engaging events. Items include apparel, art and design fixtures, kitchenware, luxury items, games and an array of electronics for adults and children of all ages. For thrill seekers, in addition to displaying the 2012 LaCrosse with eAssist (http://www.buick.com/eassist-fuel-efficient-technology.html),Buick will present a unique experience where store-goers can test their own aerodynamics in a Human Wind Tunnel.

    This year’s out-of-this-world products include:

    • 24-carat gold plated Atari gaming console ($6,650)
    • Trithon Reyn 96” TV, mounted in a slick combo of walnut, steel and brass, with a genuine python belt ($30,000)
    • iTree docking station for iPhone and iPod, made from a hollow tree trunk ($15,580)
    • Superplexus, a supersized spherical maze ($30,000)

    Must-have holiday gifts include:

    • Lytro Light Field Camera ($399-499)
    • Intelligent play Sifteo Cubes ($149)
    • iCade iPad arcade cabinet ($99.99)
    • Coffee Joulies, cool down coffee that’s too hot and warm up coffee that’s too cold ($100)

  88. Oil breaking $101 again but dangerous as we get closer to 2:35 NYMEX close.  


  89. Portfolio Template / Phil – I am using Google docs to track my portfolios. I have created a new account specifically for the PSW portfolios that we could all share making it a repository for tracking trades. It will be accessible to all like the current one, but only some could edit it. I have already copied all the portfolio I track and we can add as many tabs as needed. The formulas and formatting are of course preserved. I believe it should work. Let me know what you think.


  90. jcaesar / Red bars

    Actually, we had a hollow red on Thursday, a bearish reversal bar on Friday, and the black yesterday; 3 reversal bars in a row !!

    kustomz TZA

    Well, I’m in cash now but played TZA earlier; sold when we failed to break my 74.14 line.

    The lines to watch for trend would be failing IWM 73.75 and 73. 51 !!


  91. flipspiceland

    Thanks !!


  92. Phil holding a SCO 34/40 BCS about even now, would you rsik holding through inventories tomorrow?


  93. Thanks JR, thats when I sold 11:41 IWM 74.14…Im following the lines..waiting for a test of 74.54

     



  94. lflantheman: I think its great idea!  I would also hope you’ll be able to post a spreadsheet of your trades as well.
    StJ’s trade status spreadsheet are of immense help!


  95. I show trendline resistance at IWM 74.70; we should bounc off, but if we don’t I’m long !!


  96. A good day for premium decay so far…. 


  97. Pharm, any opinion on RPTP?  I bought some at 5 based on an SA article and it’s going in the right direction so far.


  98. Still in cash waiting for SPX to catch up !!


  99. Oil spreads/L4 – I wish I had time to stare at things like that!  

    Great idea StJ, Iflan can be your first test subject.  

    Bearish/JRW – Do not underestimate the firepower that is likely to be thrown into manufacturing a Santa Rally – charts aren’t going to predict that.  

    SCO/Sage – Inventories is exactly what I do want to hold them for.  Don’t forget, my idea is based on Fundamentals so data is our friend (hopefully).  

    LOL Jabob.  

    Decay/StJ – Yep, a whole lotta nothin’ going on.  

    AMZN taking a hit.  


  100. HOV at $1.57, selling 2013 $1.50 puts and calls for $1.20 is net .37/.94 so if HOV manages to hold $1.50 through next year, it’s good for a 300% gain.  


  101. RPTP/mrm – I mentioned them a while ago, and then they got away.  I think the SA article is the reason for the pop, so be careful.  They are still in early Phase 2, which means that more often than not, they fail.  I need to dig into the science, as I do not know much about the things they are working on.  I will do some research.


  102. Link to the new spreadsheet is:

    https://docs.google.com/spreadsheet/ccc?key=0Anwf9je9MizqdGQzN2NZUjNfdjhrbjFwWlc1eDYtWnc

    This is the one to be used a repository. 


  103. They really need retail to jump in here…but they are not……



  104. This is the one to be used a sepository.  Huh?


  105. Pharm, the article that I read on RPTP was in October so perhaps a more recent article made it pop.


  106. StJ – Made you go back and look, didn’t I?


  107. Where is your mind Pharm? 


  108. What does a solid black or hollow red candlestick mean?


  109. Finally found:
    The lost inspiration of Lord Blankfein, Angelo, Thain, Kashkari, Gensler, Cox, Cassano, Paulson, Bernanke, Holder, Fuld, Lewis, Pandit, Prince, Dimon, Geithner, Frank, Dodd, Gramm, Leach, Bliley, Clinton, Bush, and thousands unnamed in the Mortgage and MBS securities fraud:
    http://www.youtube.com/watch?v=U2iiPpcwfCA&feature=related


  110. Phil/Anyone… a week or so ago you put up a very nice BRK.B trade with the 2014 puts or calls, how can I find that now?  Or would you do it differently today?


  111. mrm – Sorry, SA is broken for me….not sure why as I can get to the front page, but not any of the back links.  UR correct, I see no new news, so from a TA perspective, it was in a bull flag.  Otherwise, volume is low.

    I will look it up and I do see that the lead has completed Phase 3 and was successful, not phase 2 as noted by Yahoo.  For that compound my question is, how much can they charge for a more convenient formulation 2X/day vs 4X/day.   This is an orphan disease which has a treatment, and they have just changed the formulation.  I compare this to DEPO, which is the same for gabapentin….but the market size is many times higher than for Raptor’s.  To me, this comes down to payment. Will insurance pay for something that will be higher priced for an orphan indication vs something that may be slightly higher for a nominal dosing regimen and has more patients.  Now things are flooding back as I look at the chart and was contemplating a position in them…..my memory is not serving me well lately. 

    Time will tell, but I don’t see anything that really excites me with the lead drug – they will pop at approval, but then what – DEPO has not done anything.  IF it works in Huntington’s, then they may have something. The rest of the pipeline is fine, but I still need to research.


  112. AMZN Hit – exactly.  And the only new news I see on my modest skim is the GOOG news.   Is there short weekly put opp here perhaps?  (tho i already opened a 180/185 dec w bull put spread on monday – a little more perhaps?)


  113. CROX   losing 5%  will bounce?
     
    How you see it OPT.


  114. it´s bouncing…


  115. Phil – I see volume is horribly low….is that what you are noting?


  116.  JRW, tying together your note about the topsy black bars with the european compromise with the domed house timeline, do you see something like just < 76.10 sometime this week, followed by lowside retest next week, followed by rally into christmas to meet the 1285-1300 range, followed by the cliff in the new year? Just trying to string together the timeline…thanks!


  117. Tarpoon88
     

    What a great question, and the reason I am in cash every night !!  8-)


  118. Phil…EDZ  Bot  Jan 12  25c @ 5.40 and sld 40c @ 3.50 and sld 1/2 75c @ 1.90.The callers are going to expire worthless,how can I adjust the 25c? Thanks in advance


  119. 1:00 PM On the hour: Dow +0.34%. 10-yr -0.13%. Euro -0.03% vs. dollar. Crude -0.17% to $100.81. Gold -0.36% to $1728.25.

    U.S. home prices fell 1.3% in October, the third consecutive monthly decline, and -3.9% Y/Y, CoreLogic reports. While many housing statistics "are basically moving sideways, prices continue to correct for a supply and demand imbalance," CoreLogic’s Mark Fleming says, adding that its forecasts indicate flat growth through 2013.

    Invaluable public servants, researchers at the Cleveland Fed say the drop in home prices is adding to the strain on municipal budgets already burdened by the slowing economy. Upcoming reassessments, upon which taxes will be recalculated, could threaten revenue even more.

     Though Goldman is predicting a mid-2012 housing bottom,Keith Jurow doesn’t see prices rebounding anytime soon. Prices will remain depressed by the huge number of delinquent homes that remain to be foreclosed in markets such as New York, he asserts, and also by the inability of many homeowners who used their home equity as collateral to make payments as rates rise.

    The holiday season has started better than expected,retailers are telling American Express (AXP) CEO Ken Chenault, with online sellers feeling "very good" about their results. However, unemployment and economic uncertainty could still put a dampener on matters. 

    "We shouldn’t underestimate the market impact of fig-leaves in the near-term, even if the economic impacts are likely to be limited," writes Strategas Research of the upcoming EU summit. The group notes the impact the elimination of mark-to-market accounting had on U.S. shares in 2009. "Extend and pretend" can work.

    Dow Jones reports sources saying the eurozone is considering raising or eliminating altogether the lending cap on the EFSF. The Fed, the ECB, and the IMF are being thrown about as well. Stocks and the euro actually get a bit of a bid on the news. To review: At the last sale, the EFSF was barely able to raise €3B, likely having bailed out its own auction.

    Bernanke rebuts "wildly inaccurate" news reports (IIIIII) that the Fed was aiming to help big banks’ profits at the expense of taxpayers during its emergency lending in 2008. Banks reportedly reaped ~$13T after the Fed committed $7.7T in funds; the correct amount, he says, was more like $1.5T – "necessary" to prevent the collapse of the financial system. 

    Timothy Geithner plays down chatter that the Fed could help boost IMF funding to assist in resolving the eurozone’s debt crisis. "The reports I’ve read in the press about what the Fed can do are not accurate," Geithner tells a news conference with German finmin Wolfgang Schaeuble. (previous)

    The model the austerity team wants all to follow:  Ireland completes the announcement of its 2012 austerity budget with a slate of tax measures and budget/benefit cuts. Among the items is a 2 point bump in the VAT to 23% and the elimination of capital gains tax on homes purchased over through the end of 2013 and held for at least 7 years.

    The top holding in the 50 biggest U.S. stock mutual funds at the end of Q3 was Wells Fargo (WFC), followed by Apple (AAPL) and Merck (MRK), a new Citi report says. Apple, Google (GOOG) and Microsoft (MSFT) were top hedge fund choices. Home Depot (HD) and Merck were most "over-owned" by mutual funds; Qualcomm (QCOM) and Google were most over-represented by hedgies.

    Attempting to boost its Tier 1 capital level, Barclays (BCS -1.1%) offers to buy £2.5B of its debt at up to a 30% discount to face value. Owners of the paper have until Dec. 16 to decide what to do, with those who tender earlier receiving a better deal. (previous)

    Barclays’ Raimo Lenschow launches coverage of U.S. software stocks with a bullish stance, arguing the industry remains a bastion of growth in an uncertain macro climate. Like others, Lenschow sees vendors exposed to cloud computing, SaaS, and big data performing well, and names CTXSVMWCRM, and PMTC his top picks. However, he’s wary of MSFT and SYMC, citing weak growth prospects.

    ROFL!  Jefferies (JEF -3.4%) receives a generally positive credit report from Fitch, which says the firm has "clearly established that it has sufficient liquidity" to navigate "a challenging market environment." Unlike MF Global, "none of [JEF’s] sovereign exposures are off-balance sheet nor based on significant proprietary positions, and the firm does not use credit-default swaps to hedge."

    Bye bye jobs:  Merck (MRK +0.7%) says it will establish a new Asian research and development headquarters in Beijing, and plans to commit $1.5B to conducting R&D in China over the next five years.

    Eli Lilly (LLY +3.3%) gets a boost when Sanford Bernstein analyst Tim Anderson notes that the company’s shares could rise50%-100% if it scores a success with its Alzheimer’s drugs. Though he rates the chances at only 10%-20% of the firm hitting the lottery with solanezumab, Anderson says if it does it will make Lipitor look like a "mid-sized product."

    Sanford Bernstein analyst Tim Anderson’s take on Eli Lilly (LLY +3.3%) offers a surprisingly candid view on the roulette-like risks involved in betting on drug company stocks with his estimate that LLY could clear $9B in sales of solanezumab by 2020 or misfire completely with its investment. Anderson on the sector: "Eli Lilly and several of its competitors are willing to spend hundreds of millions of dollars on what is essentially a massive lottery ticket."

    Ow, my wrist!  Chevron (CVX +0.7%could be fined as much as $84M by Rio de Janiero for environmental damage due to the oil spill at the company’s Frade project off the country’s east coast. Operations will be monitored by the Brazilian government for two years through satellites, helicopters and vessels, the state’s environmental agency said in a statement.

    Halliburton (HAL -4.8%) dips on BP’s (BPclaim late yesterday that the company destroyed evidence which demonstrated the cement formula was flawed.

    Dandreon (DNDN -2.1%) resumes trading, giving back most of its gain following the announcement of the sale of its royalty interest in Victrelis for $125M. The sale appears to be a move to raise cash as sales of its prostrate treatment Provenge are running slower than expected.


  120. Pharm - wow, thanks for the rich reply.  I’m going to run with it with tight stops; comparing it to DEPO makes me nervous, I’m sitting on that dog and it’s going nowhere…



  121. Shares of bankrupt AMR (AMR +70.8%) rocket higher, possibly stemming from an SEC filing in which AMR appraised its $1B 7.5% Senior Secured Notes Offering and determined a value of collateral at ~$1.52B, 50% above the value of the Notes. While shares soar today, AMR has warned against assigning any value to the common stock. AMR also announces leadership changes. (also)

    Price wars!  Starting on Saturday, Amazon (AMZN) is launching a promotion in which consumers will receive up to a $5 discount on Amazon merchandise if they compare prices at a store using itsPrice Check app, available for iOS and Android. As Tricia Duryeeobserves, the promotion is not only useful for boosting sales, but for letting Amazon’s customers provide it with mountains of price data about competing retailers.

    More price wars!  U.K. supermarket group Tesco (TSCDY.PK -2.3%) drops on a report that the company lost market share to rivals after launching a price-cutting campaign in October, according to data from researcher Kantar Worldpanel. The British supermarket chain was the only one to see its share decline. Sales growth also dropped to 3.8%, behind overall market growth of 4.2%. 

    File under "Build a Berkshire Workshop": First American Financial (FAF +7.5%) says it will no longer pursue an acquisition of CoreLogic (CLGX +0.1%), according to anSEC filing. FAF had suggested CLGX sell certain non-core businesses, which it offered to purchase, and said it could purchase the company if the real estate processor and data service provider deemed it best to sell itself entirely

    Execs with privately-owned U.S. Digital Gaming – a provider of online gaming platforms – make the talk show rounds as an undercurrent of momentum for legalized online gaming slowly starts to build in Washington and Las Vegas (III). With estimates for revenue ranging as high as $73B by 2015 and cash-hungry politicians eyeing the continuous drain of funds past taxing authorities to offshore betting sites, the question for online gaming seems to be shifting away from if to when? Waiting in the wings for legalized online gambling: LVSMGMIGTBOYDWYNN

    Verizon Wireless (VZVOD) once again received the highest rating among nationwide carriers in Consumer Reports‘ annual customer satisfaction survey. Sprint (S) finished a close second, while AT&T (T) received the lowest marks for yet another year. However, it’s added the happiest subscribers tend to be those signed up for prepaid plans, and/or with smaller service providers. (yesterday)

    Bloomberg reports that (video) the 83% penetration rate of traditional TVs in households could fall as the phenomenon known as "cord cutters" now has a sidekick with a new group called "cord nevers" comprised of new homeowners (mainly young) who never signed up for traditional TV service. Demonstrating the point, Credit Suisse reports that of the 1.8M new household formed last year, only 17% signed up for cable or satellite services – a trend that if it continues could hit TV-related stocks such as CHTRCMCSATWC,DTV, and DISH squarely in the gut.

    One of the reasons why Apple’s (AAPL -0.5%) share price is cheap is because it’s a megacap, Felix Salmon writes, and "the entire market for megacaps has been utterly miserable for the past decade." It therefore stands to reason that "Apple’s p/e has naturally shrunk as it has joined the ranks of the dinosaurs." 


  122. Whee, all these years waiting for my own color, and suddenly my post turns green…



  123. Weird, for a moment my post was green text….


  124. That happens when a comment blows out the boxes (usually something I do when pasting news).  


  125.  woh, did you break something Phil, your comment stops half way through and then MrMocha’s comment is in green.


  126. DAX has been leading, double Blacks and a spinny thingy !!


  127. I like Smithfield Foods (SFD) into tomorrow’s trading day. Company has been on a tear and should see some more buying and short closing into earnings. They perform very well in December earnings, and the company has very low expectations. Would not hold into earnings, but we bought a 50% position to hold for today and possibly tomorrow.


  128. Here comes the break-through attempt; going long !!


  129.  Sweet, JRW — nice Christmas colors — those Germans are a festive bunch.  Now if those Germans would just write the damned check they owe to France, Italy and Spain for all those overpriced-products [in Euros]they’ve been selling them, paying no import duties, running up their deficits and then demanding mass layoffs and "austerity" so that all those nice German bank balances don’t fall in currency-adjusted value.  


  130. Where’s Jabo?
     
    Jefferies (JEF -3.4%) receives a generally positive credit report from Fitch
     
    FU Fitch! :)


  131. Phil…./ ……   I use multiple computers during the day but one at-a-time.   I move about a lot, so I may be in and out of 10 different computers in a day.  I need to set things up so that it’s easy in that regard.  And yes, I’ll certainly work with StJ on setting up spreadsheet, etc. if OK with him.    


  132. Oil rallying into the close – $101.33.  Dollar 78.68, gold $1,728.  

    Feels like an anti-stick to me but too scary to fight the Fed still.  

    BRK.B/Jerconn – That was selling 2014 $50 puts for $4.20 and buying the 2014 $70/80 bull call spread for $5.60 for net $1.40 on the $10 spread.  That’s still makeable and, with just $5K in margin on 10 contracts, it’s a nice way to play for a $8,600 profit.

    AMZN/NF – Too volatile to play with in a volatile market.  Any day they could announce good or bad numbers that can move them 10% and that’s without nonsense from analysts.  

    CROX/Advilla – I’m not Opt but I like them down here.  I’d sell puts to start, like the March $15 puts for $1.80 for a net $13.20 entry.  

    Volume/Pharm – What volume?  Not as bad as yesterday but still just 80M on the Dow at 2:30 is pretty sad.  

    EDZ/490 – Interesting combo.  Jan $25s are down to $1.30, would have been nice to do something earlier.   You sold $5.40 against them, however so pretty much free so why not spend $3 to roll along to the April $19s ($4.30) under the assumption that, after the current batch expires, you should easily be able to sell something else for $3 (currently the $30s are $3) and you will continue to have a nice, free spread.  Meanwhile, you have no worried about EDZ taking off while you wait for the short calls to expire although, for .10, you could take out the $75s already rather than burn margin if you need it. 

    And up we go!  No reason that I see – just because they can.  Dollar failed 78.60 and we take off disproportionately like a rocket – Dow at day’s high…


  133. SFD/David – Hard to get into them at $25 as we were both liking them in 2009 when they were below $10.  

    78.55 holding – not sure how much this rally will last but a fun move nonetheless.  

    Oil not moving up so you know it’s BS. 


  134.  supposed second fund being talked about..


  135. Pretty impressive bot softshoe.


  136.  Bailed out TNA with a few shekels, takes some of the sting out of a crappy day.


  137. Markets Are Rallying, And There Are Reports Of New Funds And ECB Involvement In Europe

    Read more: http://www.businessinsider.com/markets-are-rallying-and-there-are-reports-of-new-funds-and-bailouts-in-europe-2011-12#ixzz1fmodfHlx
     
    Timmy was right, the reports were inaccurate. The Fed will probably use the ESM (European Stability Mechanism) not the IMF!


  138. 50k acct  AAPL    First trade!   But 10 Jan 390s for 18.70 or best price you can get.  


  139. Thanks Phil (for the BRK.B play)!


  140. ttp://www.ft.com/intl/cms/s/0/839e6eac-202e-11e1-9878-00144feabdc0.html#axzz1fmoHWtld


  141. If you can’t dazzle them with brilliance, baffle them with bull. — W. C. Fields.


  142. Monster move by SLW today. Usually it peaks around 1pm so each day I sell calls there and buy them at MOC.  May not work out today, it’s still running…


  143.  its comical how every time geither gets involved a more debt to solve a debt crisis solution magically appears


  144. AAPL 50k   You should own 10 Jan 390 calls.


  145. Problems?
    After following JRW’s link at 1:52,"What do bars mean?", my main computer locked up. On the laptop debuging the other. It may have been something else but be careful!


  146. Isn’t TA great !!

    Translation: Isn’t fishing easier with a fish finder !!       Other translations of interest:


  147. Good Afternoon—
    Iflan —I am in on your AAPL trades—thanks
    Phil—short oil /CL?


  148. AAPL 50 k   Sell 5  Dec 9 (weekly) 390 calls for about 4.85


  149. Looks like they are going to squeeze this lemon for all its got…1.3422 shouldn’t be a problem considering the large short interest…otherwise its BS


  150. english – puts etc getting hammered. time to start buying jan?


  151. Phil.
    For a short oil play now, does this trade make (any) sense to you?
    Buy Jan12 $36 / $43 BCS for nett $2.50
    Sell Jan12 $36 Put for nett $2.65c
    Nett $0.15c


  152. OUT of TNA on rumors:

    • EU WEIGHS PULLING GOLD FILLINGS FROM CITIZENS TO BAILOUT GOLDMAN SACHS AND OTHER BANKS
    • EU OFFICIALS HAVE REACHED OUT TO ALPHA CENTAURI FOR PREFERRED SHARE INVESTMENT; INITIAL RESPONSE FAVORABLE
    • FITCH PLANNING TO RAISE EUROPE CREDIT RATING TO AAAA+
    • EUROPE PREANNOUNCES MASSIVE EPS BEAT ON BLOWING OUT CDS SPREADS

  153. ROFLMAO JRW….that is funny…if they were not true!


  154. Pharma is going into China b’c they need to sell their drugs there…..we will see how long that lasts!


  155. If anyone is interested, Michael Moore will be on Piers Morgan for an hour tonight.


  156. Phil,
    That would be a SCO trade.


  157. LULU – well that just goes to show me! couldn’t catch it on the way down. will just have to see what tomorrow will bring.


  158. whoops. wrong page for last couple msgs. sorry.


  159. Should be interesting. Morgan is capable of some good interviews if he puts his mind to it.


  160. How is this not a conflict of interest and hence illegal?  From Dow Jones Newswire:
    "LinkedIn netted a pair of stock-recommendations rating upgrades from Morgan Stanley and J.P. Morgan Chase & Co. Tuesday, while Bank of America Merrill Lynch raised its 2012 and 2013 earnings and sales estimates.

    All three banks served as underwriters for LinkedIn’s initial public offering in May. Morgan Stanley Investment Management Inc. holds nearly a quarter of LinkedIn’s shares valued at roughly $1.6 billion and is LinkedIn’s largest shareholder, according to FactSet."

    I remember the same thing happened in 2009 when underwriters who were also analysts would change their ratings on Commercial Real Estate stocks (from Sell to Buy in one case that Zero Hedge covered really well) they were issuing new shares in…..sending the price up.  Even though shares were being diluted, they would rocket up like crazy….killing my SRS positions and completely wiping me out.  Yes, completely.


  161.  Are we looking at a gap up tomorrow, now that Europe is "solved"?  Phil, where’s that crystal ball, brother?


  162. iflan/AAPL – whats ur expectation on the dec w 390 short c?   You think we’re coming in under that this week?


  163. AAPL Portfolio / Iflan – I have added a tab on my spreadsheet to track your portfolio – both the list of trades and the current position.

    I have added the prices that you mentioned in your post, not what you traded. Let me know if this is what you traded. If you shoot me an email at stjeanluc at gmail dot com, we can setup access for you to the spreadsheet. 


  164. Another $500Bn and this is the move?  

    Geithner/Angel – That’s because he comes with a suitcase full of plates for printing up $100s!  Notice he shows up and, a few days later, suddenly there are hundreds of Billions of Dollars available.  People who don’t think we’re hyper-inflating our way out of this thing are going to be very surprised!  

    Oil/Savi – Not behaving too well today. We did better pre-market.  Now it’s just bopping around the $101 line and only good for scalping nickels (not even dimes).  

    Oil/Ceegee – I assume that’s SCO?  Sure I like it but the put sale is a bit aggressive.  

    LOL JRW! 

    Moore/Rustle – Thanks.  I gained a lot of respect for Morgan watching The Apprentice.  He’s a really good all-round guy.  

    Conflict/SellP – Oh aren’t you just the cutest little thing, still believing in integrity and stuff?  

    Solved/ZZ – I think not.  They needed a bigger number, that’s why we’re selling off now.  $500Bn is not $1.5Tn and it’s just kick the can money….

    78.58 shows what the Forex markets think of it.  


  165. AAPL   50 k   Buy back the Dec 9 390 calls for 3.85


  166.  They cant get the NAZ to stay green which has been the leader of the pack. Im not seeing the commitment needed to move the EUR higher as well.

    Pharm mentioned earlier they needed to get retail in…mission accomplished.

    JRW..hahaha


  167. Keep in mind guys, this (last 2 weeks) is all we got out of MASSIVE, coordinated Central Bank action – That’s not really good.  We’re barely back to the November highs and the October highs – not busting over them and back to AT LEAST July highs on such "good" news is LAME!  

    Of course, this is still consolidation and we just need the right catalyst to break out but next week they have TBills to sell and it would be a far worst international crisis if the US has a bad 7 or 10-year auction than anything that’s happening in Europe right now so I would not be surprised to see a "surprising" dip next week, into the auctions, that chases money back into bonds until Timmy’s next sale is filled and THEN we can get an all clear for a Santa Rally.  

    How’s that for a look ahead?  


  168. Kust…that was not retail…..that was nothing but hot air.


  169. Great chart by Barry says it all:  

    Also to be filed under NOT GOOD:


  170. Remember….the EU needs to sell bonds as well..I just can’t find the dates…


  171. iflan/AAPL – oh, i see.  You were in and out of the dec w 390.  Is that part of the program?  day trading in real time? 


  172. lflan:
    How active are your AAPL trades?  It looks like I have to baby-sit in front of the computer during the day?


  173. Funny vid..
    http://www.youtube.com/watch?feature=player_embedded&v=WA7rGotO-oI#!

    And down she goes, where she stops only Blankfein knows…
     


  174. 10 and 30 yr bonds are holding up pretty well……


  175. Phil/Next Week Dip,
    Any of your TZA or USO or GLL still valid to take advantage on the next week dip?
    Thanks.


  176. StJ…..The trade prices you listed are correct, and the Dec 9 390s were bought back at 3.85 for +$500  = 20.6%.   I will send you the email this evening.   Thanks.


  177. Phil-  I’m surprised at how open they are about doing this stuff….not having any fear for the SEC.  Oh Elliot Spitzer, how I wish you had paid for your hookers with cash instead of Visa and would still be around to at least strike some fear in the heart of these corrupt bastards.
    How is what these banks doing any different from S&P buying a ton of EDZ puts and then raising the debt ratings of all emerging markets by 2-3 notches?  I doubt that would fly so why is this being allowed?


  178. Italian bonds are Dec 14 for 5 yr bonds


  179. A little humor from SOH…
     
    http://www.sinfest.net/comikaze/comics/2008-09-25.gif
     
     
    :)


  180. Iflan, here is the complete spreadsheet with the completed trades and current position. I had updated your last trade already.

     


  181. Not a pretty close!  

    Hedges/Pat – Sure, still like SCO and TZA – done with GLL though.  

    Cash/SellP – I know, what a dumb-ass!  They don’t do anything different at all, it’s completely evil.  So pay attention to what they are doing, bet with them and make some money!  

    Next week’s lows posted today:  

    Tuesday Dec 13

    Treasury Budget
    [djStar]
    2:00 PM ET

     

    Retail Sales
    [Star]
    8:30 AM ET

    Redbook
    [Bullet
    8:55 AM ET

     

     

    Weekly Bill Settlement

    Jobless Claims
    [Star]
    8:30 AM ET

    Current Account
    [Bullet
    8:30 AM ET

    Money Supply
    [Bullet
    4:30 PM ET

     

    Quadruple Witching

     

    Equity Settlement
    12-15-11
    Equity Settlement
    12-16-11
    Equity Settlement
    12-19-11
    Equity Settlement
    12-20-11
    Equity Settlement
    12-21-11

  182. Well, a 4% day, 2% each way; not bad for being on drugs !! See you tomorrow.


  183. Fraud – Just reading Bill Lerach’s bio (I think he’s out of prison now.)  I’ve done work with his former firm in San Diego, but am not a cheerleader for plaintiff-buying.  Still, when I saw PD’s Wired reference today, it reminded what pigs John Doerr and his pals were when Milberg Weiss was punishing the likes of the creeps in the list above (all of whom – with other secondary players – helped AAPL et al perpetuate massive shareholder frauds then and going forward.)  Wired had this to say back in 1996: http://www.wired.com/wired/archive/4.11/es_larach.html.  
     
    Doerr and his merry band of paternalistic thugs in Silicon Valley spent (and spend) oodles of money lobbying for what were then called "Anti-Lerach Laws." (Which, as an aside, opened the door wide for Enron et al, the collapse in 2008 and the fraudulent manipulation of share prices and markets that persists now.)
     
    Whether we like P-side atty fees in these cases or not, over the last 20 years, the SEC has "recovered" about 25 cents for every $40 won for shareholders by Lerach, et al.


  184. FAS Strangle Experiment – With no movement today, the premise for my current strangle is intact so I will keep it open – no strike is in real danger just yet. Since both legs were underwater yesterday, I kept them open and let decay do it’s job. This is not what I had planned on doing, but that’s the purpose of the experiment – we adapt…

     


  185.  Pretty funny JRW! Be careful, you don’t want to give them any ideas!


  186. Falling pretty good after hours. 

    Giving back all the BS gains.  


  187. AAPL traders:   Yes, my AAPL trades may come at any time.  I will be holding positions from a few minutes to several months.  I don’t expect that everyone will be able to follow the trades exactly, but even if they get close, profits will come.  For example, on the Dec 9 390 puts sold and bought back this afternoon, it would not be at all unreasonable to hold them overnight.   I set the trades up to take profits as AAPL moves up and down.   The long Jan 390s will be held most likely for several weeks (unless they scream upward) and I’ll sell and buy back calls against them.  But, no, you don’t have to do the exact trades to make the methodology work for you.  It’s the system that’s important to learn, not so much the exact trades.   Make sense?


  188. PD/Website – Thanks to you and Greg, btw.  Just signed our first agreement with your web folks today. 


  189. iflan/AAPL – thanks for the clarification.  and, duh, it was $390 puts – not calls.  Hence the stupid question earlier.  


  190. Falling AH, you know they dump at the close just to have ammo to jam it up all night into the open..


  191. S&P 1500 Intraday Spreads / St Jean, Phil – I did some work on the list which was shown earlier. It lists the Mkt Cap and Beta for each, so maybe this can help identify those with highest probabilities of creating excess returns when large market moves are expected. The data comes from Yahoo Finance. I’ll try posting here but if it doesn’t look right may need help from one of you to make it more web readable. I can email the file.
     
    S&P 1500 Stocks Above $10 with Largest Intraday Spreads 12/5/11
     
     

    50-Day Average Rising


    Mkt Cap
    Beta
    Spread

    LZB
    La-Z-Boy
    612
    3.44
    6.6%

    SGY
    Stone Energy
    1,340
    3.41
    6.3%

    TEX
    Terex
    1,830
    3.07
    6.7%

    ASGN
    On Assignment
    390
    2.61
    6.3%

    GPOR
    Gulfport Energy
    1,720
    2.49
    6.3%

    ROCK
    Gibralter Industries
    427
    2.48
    6.5%

    LAD
    Lithia Motors
    614
    2.30
    6.8%

    BELFB
    Bel Fuse Inc
    219
    2.26
    6.0%

    NBR
    Nabors Industries
    5,370
    2.19
    6.1%

    HAYN
    Haynes International
    695
    2.17
    6.7%

    NOG
    Northern Oil and Gas
    1,580
    2.06
    6.8%

    ZEUS
    Olympic Steel
    276
    2.03
    6.3%

    PETD
    Petroleum Development Corp
    847
    1.87
    7.3%

    HNI
    HNI Corp
    1,140
    1.77
    6.0%

    GEOI
    GeoResources
    761
    1.65
    6.9%

    NILE
    Blue Nile
    518
    1.59
    6.0%

    CAS
    Castle & Co.
    303
    1.44
    6.3%

    KND
    Kindred Healthcare
    668
    1.43
    6.0%

    RTI
    RTI International Metals
    771
    1.27
    6.3%

    EXH
    Exterran Holdings
    715
    1.22
    6.9%

    FST
    Forest Oil Corp
    1,810
    1.19
    6.8%

    CEVA
    CEVA, Inc
    672
    1.17
    6.0%

    GNCMA
    General Communications
    451
    1.06
    6.5%

    BKS
    Barnes & Noble
    910
    0.88
    8.3%

    STMP
    Stamps.com
    385
    0.80
    7.2%

     
     
     
     
     

    50-Day Average Falling


    Mkt Cap
    Beta
    Spread

    CENX
    Century Aluminum
    910
    3.79
    6.9%

    PCX
    Patriot Coal
    931
    3.37
    8.4%

    VECO
    Veeco Instruments
    991
    2.64
    6.2%

    BAS
    Basic Energy Services
    755
    2.60
    8.2%

    X
    US Steel
    4,060
    2.41
    6.2%

    CIEN
    Ciena
    1,120
    2.39
    6.1%

    PDC
    Pioneer Drilling
    684
    2.35
    8.5%

    SFY
    Swift Energy
    1,330
    2.33
    6.0%

    TXI
    Texas Industries
    827
    2.15
    6.0%

    ANR
    Alpha Natural Resources
    5,480
    1.84
    7.5%

    COHU
    Cohu, Inc.
    266
    1.84
    6.0%

    JEF
    Jefferies Grp
    2,770
    1.78
    6.6%

    MTRN
    Materion Corp
    509
    1.72
    6.3%

    ACI
    Arch Coal
    3,490
    1.71
    6.1%

    DGIT
    Digital Generation
    335
    1.67
    5.9%

    FSLR
    First Solar
    4,030
    1.56
    7.9%

    CRK
    Comstock Resources
    929
    1.36
    6.1%

    OSG
    Overseas Shipholding Grp
    317
    1.32
    7.2%

    MS
    Morgan Stanley
    3,213
    1.18
    6.1%

    CRR
    Carbo Ceramics
    3,230
    1.05
    6.2%

    AMED
    Amedisys
    344
    0.86
    7.5%

    GMCR
    Green Mtn Coffeee Roasters
    8,790
    0.62
    8.7%

    HFC
    HollyFrontier
    4,890
    0.46
    6.3%

    DMND
    Diamond Foods
    622
    0.35
    6.1%

    NFLX
    Netflix
    3,580
    0.08
    6.6%


  192. Not how it was s’pose to come out! Layout looked fine before I submitted.


  193. NF**X  AAPL          They were in fact calls.  Sold 5 for 4.85/   Bought 5 back for 3.85.




  194. Iflan. Love your idea and think it would be a great way to follow along and learn with my virtual account…for now. However, would your strategy require me to be “tuned” in to the chat at all times? I’m really only able to check in hourly or so with my busy day job. I can regularly check stj’s portfolio updates to see where we are. Thanks very much. I’m learning so much already from all of you guys.


  195. iflan/AAPL – ignore me, plz.  rough day.  time for a drink.   might as well be less than lucid for a reason.


  196. Verizon – Hmmm.  Isn’t FIOS already a kind of streaming?  I don’t sub to any NFLX service now – nor AMZN (even tho I’m a Prime member, free crap is still crap…) – but I guess since NFLX still eats up so much prime time bandwidth, Verizon may as well do something.  Seems like they’re swinging at a paper tiger tho in NFLX’s case.  And if they try to compete on price and content with AMZN/NFLX (free or less than $20 per month in exchange for weak content) – aren;t they cannibalizing the heavy cable-based fees they already corner?  Tho maybe that’s part of the push: they capture some of the low-end market that NFLX, AMZN and HULU have – folks that don’t have cable or premium channels because of the cost.   Doesn’t look like the news hit NFLX’s price yet tho.  


  197. http://ransquawk.com/!#/headlines/190449
    -API Crude Oil Inventories (Dec 2) W/W -5035K vs. Prev. 3439K
    -API Gasoline Inventory (Dec 2) W/W 5966K vs. Prev. -173K
    -API Distillate Inventory (Dec 2) W/W 1680K vs. Prev. 1347K
    -API Cushing Crude OK Inventory (Dec 2) W/W -1223K vs. Prev. -426K
     
    Basically they produced gasoline and people don’t buy it.
    Looks quite bearish for me, but futures still go up :(


  198. Iflan. Actually, I see an answer to my question in one of your earlier posts, pardon me for not reading more carefully. Thanks for that explanation.


  199.  Phil, belated kudos for your strong defense of Hilary Clinton the other day.  I am also an admirer, and she has done yeoman’s work as SoS.


  200.  Phil – The Pragmatic Capitalist article you posted at lunch on why Europe won’t be fixed this weekend was excellent.  It affirms why I am holding a lot of cash in my account. I hate missing all the moves, but can’t find a reason to get bearish or bullish since I don’t day trade.  I would be interested to see a strategy article that is the equivalent to the business plans many companies are making in case their is a big free fall.  Right now my plan is mostly cash and corporate bonds, and a few long and short positions in case something happens either way.
    http://pragcap.com/why-the-e-u-wont-fix-anything-this-weekend


  201. RevTodd – that was me…but I know that there is some speculation that Phil is me and I am Phil……and JRW….and ….. :)


  202. Verizon / NF – Apparently, they realize that the writing is already on the wall with cable services. I just read an article that the majority of new young households didn’t subscribe to cable at all and just got Internet services! 

    Look at what Microsoft is doing with the Xbox – you get games, DVD, streaming services and music from the same box. Now Verizon will also allow some channels to be streamed as long as you have cable services. Maybe one day they’ll let you choose the channels you want without cable service. So Verizon is really playing for the future.

    BTW, that Xbox deal is really one thing that MSFT is doing well! They beat Apple and Google to the living room! Don’t know if that will continue, but it’s a good start. They sold 1 millions of these suckers over the Black Friday weekend…


  203. APPL/lflantheman

    Hi and thanks for the input today on APPL. I said I’d give it a whirl and bought the Jan 390 calls for 17.70, but sold the weekly Dec 9 calls for 3.90 — unfortunately just before your post to buy them back. Oooops! Only in for 2 on the Jan calls and 1 on the weeklys so not in that much hurt.

    I’m guessing the long calls should work out fine between now and APPL earnings, but I’m curious about the methodology behind the short calls. You say it "would not be at all unreasonable to hold them overnight" — meaning, I’m thinking, you would expect them to drop a little further during the day tomorrow or Thursday. However with APPL on its typical annual trajectory upwards until Q1 earnings, wouldn’t it have been safer to have sold puts? Or are you expecting further drops between now and Dec 9 expiration so the caller expires or can be bought back at a profit.

    Overall, it would be great to get an overview of the system as I kinda got blindsided by the speed of the weeklys transactions today. Is the plan to buy long ITM calls and sell weeklys on a day-trade basis against them? Or something totally different…

    Thanks. I’m sure I’ll get the hang of it as we go on.
     


  204.  Pharm:  Well, there PHil Davis, and PHil Klein, and PHarm, so only JRW’s true identity is shrouded in mystery….that, and the secret of how this amalgamate personage manages to only sleep once per month.  If "he" were to sell his secret, none of "them" would ever need to work again, but don’t tell "them" that, or we would all then be sentenced to wander aimlessly through the option wilderness for all time.


  205. If you can’t sell puts naked to off set a call spread, but can do a bull put spread is that less attractive becauce you lose out on some of the premium?  Or is it better still as a partial off set still selling premium? 


  206. Sellpremium:  And I thought I was the only one nostalgic for Spitzer!!  Not politically correct, I know, but there are worse crimes than consensual sex for hire.  Most of them, actually. 


  207.  Pharm – well I am glad no one suspects me of being anyone else.  I’m glad you posted the article and I like reading pragcap.com too.  I realize that lately I’m reading more about European politics in the Financial Times than I’m reading US politics in the New York Times.  Since it is after hours I’ll share a couple of interesting articles on OWS, that shows an enduring strength and adaptability of the movement.
    Paul Farrell makes the point on Marketwatch that you kind expalin OWS through normal political categories of Democrat and Republican.  It is about inequality and the way the system tilts against the middle class and poor.  Democrats do not control it and there is no Soros-like figure behind it.  Frank Luntz, for one, is scared of the movement:
    http://www.marketwatch.com/story/super-rich-vs-99-class-war-will-explode-2011-12-06?link=home_carousel
     
    Alternet reports that some groups are starting to block foreclosures and occupy foreclosed homes.  They are looking at tactics already begun in Spain.  I don’t think most pundits understand that this is part of a global social movement where people are fighting against both political and economic tyranny.  A cold winter and knocking down some tent cities is not going to make this go away.   Much like the Civil Rights movement, this movement may continue to be the focus of political and cultural battles for the next decade, rather than the election year sloganeering with no substance.  
    http://www.alternet.org/story/153318/occupy_our_homes%3A_from_the_streets_to_foreclosed_homes%2C_ows_finds_a_new_frontier/


  208.  I hope you’re right, Rev


  209. OWS – At the risk of being pilloried by Phil again, here’s a good means test for whether OWS has legs and whether it’s part of a real global social movement: What percentage of the OWS “base” is of color and-or from the working poor “class”? The answers are recently examined and published: almost none on both counts. Does that make it any less important? I don’t know. Frankly, Wall Street should appreciate tent cities versus Jay Gould having the shit kicked out of him just walking down the street. Frank Luntz is not afraid of OWS. But it’s good business for him to make others afraid.


  210. stjean/Verizon – good points. Actually, I only have FIOS for Internet. But may not be in the sample group since I pay through the nose for DirectTV.


  211. Australian Q3 GDP +2.5% YoY, +2.1% expected
    AUD getting bid up..may see commodities perk up a bit also.


  212. Well the futures turned back up again so all is forgiven at the moment. 

    At the close: Dow +0.43% to 12150. S&P +0.11% to 1258. Nasdaq -0.23% to 2321.

    Treasurys: 30-year -0.13%. 10-yr -0.05%. 5-yr +0.015%.

    Commodities: Crude +0.1% to $101.18. Gold +0.09% to $1733.15.

    Currencies: Euro +0.02% vs. dollar. Yen -0.01%. Pound +0.01%.

    Market recap: Stocks closed mixed but bounced off their worst levels after a report du jour that EU officials are considering two separate bailout funds instead of bulking up the standing EFSF by itself. But as another rally fizzles amid weak volume, the marketlooks tired, in need of reassurance to move up much higher. Declining issues led advancers on the NYSE seven to five. 

    A bit more color on an earlier story about creating a bigger EU bailout fund: The FT reports on a 3-pronged approach using 2 rescue funds (the existing €440B EFSF and the hoped-for €500B ESM, expected to come into being in mid-2012), along with treaty changes requiring tougher budget rules. Also discussed: Giving the ESM access to the ECB window, an idea rejected by Germany and the bank in the past. Sounds like a plan.

    Japanese stocks are higher in early trading, buoyed by strength in global markets overnight. The Nikkei Average gains 0.64% to 8,615, with financials leading: Mizuho (MFG +2%), Sumitomo Mitsui Financial Group (SMFG +1%), and Resona Holdings (RSNHF.PK +1.2%). 

    Nomura sees a big dive ahead for the euro – to $1.20 with downside risks – the catalyst being an ECB "forced into a delayed and reactive large-scale QE." The bank suggests the immediate effect of such an announcement will be a surge in risk assets, taking the euro with it, but eventually the effects of a mass monetization are sure to drive the euro far lower. 

    The exodus of deposits from the French banking system is showing up on the Bank of France’s balance sheet – with liabilities rising to €98B in September under the ECB’s "Target2" scheme, with the Bundesbank mostly on the other side of the ledger. Add in Italy, Spain, and Ireland, and the number nearly quintuples. Just another signal of "grave" EU imbalances. "We are in unknown territory in terms of monetary theory," says Eric Dor.

    The Australian Bureau of Statistics reports the economy grew by 1% in the September quarter. The Q3 rise follows a revised 1.4% Q2 expansion, while on the year, GDP is up 2.5%. 

    A tale of two resource-based currencies: Last night the RBA announced its 2nd consecutive rate cut, this morning the BOC held rates steady and sounded somewhat less than dovish in its statement. The short term result sees the loonie gaining nicely against the greenback as the aussie falls. Longer term it remains to be seen if these 2 "risk" currencies, tethered tightly together, will diverge. 

    The U.S. is a bigger problem than Europe because of our mountain of debt, and could go into a depression by 2013, says Jim Rogers. Our borrowing is still going through the roof. The markets may rally on short-term fixes, but we’re the largest debtor nation in the world, Rogers says, and until we can find some resolution to that problem, no rally will last. (video)

    "The rating agencies are getting this one really wrong," says Jim Chanos, curious as to why the U.S. and Europe face downgrades while China and its banking sector get a pass. Profitably short "anyone involved in the China real estate boom" – from Mainland banks and developers to Australia’s miners – Chanos believes the crash is upon us. 

    Citigroup (C) CEO Vikram Pandit states at a Goldman conference his company plans to cut 4,500 jobs - a larger cut than was previously reported - and will take a $400M charge related to the move in Q4. Citi shares are down slightly AH.

    How to take advantage of year-end window dressing: Be prepared to step up in coming sessions to buy stocks that are both heavily owned by mutual funds and have suffered large YTD losses. Mark Hulbert says these stocks are most likely to comprise most of fund managers’ window dressing – and stand a good chance of bouncing back in January, even if long-term prospects are questionable.

    The largest of the large-cap stocks have generally underperfomed over the past decade for reasons David Merkel explains, but Merkel still owns many of these for himself and clients, as he expects value drivers such as unit spinoffs. Analyze the management teams, he advises, and "see how willing they might be to take actions that will enrich shareholders." 

    Five big companies ripe for spinoffs in 2012: BPPGPFEAAPEP. Benzinga believes these spinoffs would create value for shareholders and bolster their balance sheets in the process; a BP spinoff probably would help investors warm to the embattled stock, it says, though PepsiCo might be the most "legitimate" candidate on the list.

    Darden (DRI -12%cut its outlook for FY2012 sales and earnings, but it’s not the only restaurant chain suffering these days, as customers eat out less often and little hope for a pickup next year, NPD Group predicts. Diners who do go out are spending more, due in part to rising food costs, shelling out 1.3% more in Q3 Y/Y, according to NPD; even specials have been less effective in luring customers.

    Observers may differ on the details, but there’s widespread agreement the solar industry is due for a shakeout, as weak Euro sales and weaker pricing put the survival of many names into question. The Chinese government, already under fire for the support it’s given to local solar vendors, is weighing a proposal to consolidate the country’s production around 1 or 2 big producers, and 8-10 medium-sized ones. (also)

    Lowe’s (LOW +1.7%) moves up after affirming its FY12 outlook, now expecting to earn $1.37 to $1.40 a share. Comparable-store sales should fall 1% while total sales for the year should rise 2% to 3%. 

    Toll Brothers (TOL +2.7%) finishes higher after its FQ4 results beat expectations earlier today, as the luxury homebuilder posted better revenue on more homes deliveries. Looking to the new fiscal year, the company estimates it will deliver between 2,400 and 3,200 homes at an average price between $550K and $575K per home.

    "The competitor we fear most is HBO Go," claims Netflix’s (NFLX -2.8%) Reed Hastings. While dismissing competition from Amazon (AMZN), Hulu, and Verizon (VZ), Hastings is impressed with HBO’s online video platform, and sees it becoming the core of its offerings. Separately, Time Warner (TWX) CEO Jeff Bewkes says HBO Go users view 30%-50% more content than non-users. (earlier)


  213. HBO Go / Phil – That’s a good point and a good platform. It’s on everything now – iPad, Android, Roku and coming to the Xbox as well. Good selection of shows… I am sure they will soon have an online only membership for the non-cable people (you still need a cable subscription to access it – for now!)… Good stuff! 


  214.  NF – Good points worth raising about OWS in the US.  John Stewart did a great take on the class division at Zucotti Park a few weeks ago.http://www.thedailyshow.com/watch/wed-november-16-2011/occupy-wall-street-divided  The civil rights movement was by nature a movement of people of color, but I’m not sure if any other US movement has really drawn on or included people of color.  The working poor are mostly too busy working the 3rd shift to join in.  While it is important to look at the diversity of a movement, many successful movements are not that broad, from either the right or the left.  The various Christian Right groups, Tea Party, environmental groups, anti-war groups and so on are all relatively narrow bands of society and yet often gain a reasonable amount of success on various issues.  You have made me curious and I am going to keep my eyes open to see the diversity of how OWS is shaping up.  I would guess it is a little more diverse than other recent comparable US social movements, but I don’t know.  
     
    The reason I see it as a more global movement is that I think it did not really begin in the US.  I think many people were inspired and encouraged to see people toppling dictators without civil war.  I think the spark was lit abroad and hit the dry tinder here in the US.  So if you look at OWS as just one manifestation of a global movement against economic tyranny, it is a very diverse movement, though not as much yet here in the US.


  215. zipla….re your 6:38 post.    Yes, some of my trades on AAPL come fast and furiously, and my techniques vary greatly in real time.   This is because opportunities for profiting can come and go rapidly.  And this is what I want to try and teach those who want to make money investing in AAPL.  My trades today were:   At 2:56 pm  I was sure that the stock was trending upward.  Thus the purchase of the Jan 390 calls.  At 3:20 pm  I noted a reversal, but because AAPL is generally uptrending and because the Jan 390 calls move slowly with the price of the stock, I chose to take advantage of the reversal by selling weekly 390 calls.  I only covered 1/2 so as not to lose the opportunity for profits should be stock go back upward on a stick.  But the reversal continued, so  bought the 1/2 covers back at 3:50  pm for a $500 scalp on the day trade.  So now I’m left with the Jan 390s and I’ve already made $500 with one day of trading.   And of course I want to use the long calls to sell short calls against when the opportunity presents itself.  You must sell premium in order to make significant profits.   I will often hold calls just so that I can sell premium against them.  I’ve found that I can make more by coming in and out of the covers as opposed to just doing spreads.  It can seem very complex at first glance.   Now you are fine with your present holdings.  If AAPL ramps up tomorrow you are 2 to 1 longs to covers and you will do fine.  If it drops, then you can buy your cover back at a lower price than I did. 


  216. rev/OWS – good stuff. And ur such a good and even-handed person here. Being a firm believer in our adversarial style of “justice” – and being an Italian by birth, debater by education and lawyer by trade – I too often throw a blow first. But almost always meant to elicit, as here, a better argument coming back. I actually do learn a lot this way. Sorry for imposing it on others sometimes.


  217. HBO Go – Nice catch, PD. And right on stjean: it’s a killer, very well done app.


  218. iflan – nice rap on ur tactics today. And re holding calls to sell premium. After my NFLX march 155 Cs long ago were obviously going to never recover – now at around 10 cents – I just use them to write weekly calls. Tho I’ve moved on and don’t feel the need to “make back” those errant longs thru NFLX, I can still write against them for a few more months.


  219.  NF – My best friend always take the opposite side of an argument whomever he is with to see what it would be like to think differently.  he gets me all worked up and then backs off.  We find this works best over beers watching football in a bar.  He manages to drag others in, including the waitresses into the mix and ask them what they think too.  Never a dull moment, though we miss lots of big plays.


  220. Yes…. learning humility can be a real bitch…………….


  221. I…will roast this but need to get some sleep.
     
    Would love some back up fro you Phil if you have any time, please… 
     
    http://online.wsj.com/article/SB10001424052970204630904577062661910819078.html?mod=WSJ_Opinion_LEADTop


  222. Good morning!

    Very impressive bunch of contributions to our "Build a Berkshire Workshop" – make sure you get your name on the list if you are interested in participating (see comments below post).  

    Futures are up a point from the close with the Dollar down to 78.40 but that line’s holding.  Essentially, we’re back at Monday’s highs again so we’ll see if they can make it stick this time.  

    There’s really no news other than the EU doubling down on their rescue fund (assuming they follow through).  

    Oil is back to $101.80 and gold is $1,734.  Silver unchanged at $32.68 and copper $3.60 on the button.  

    Wednesday’s economic calendar:

    7:00 MBA Mortgage Applications

    10:00 Quarterly Services Report

    10:30 EIA Petroleum Inventories

    3:00 PM Consumer Credit

    French-German Plan Gets Geithner Backing. A German-French push for closer economic ties in Europe won the backing of U.S. Treasury Secretary Timothy F. Geithner, who urged governments to work with central banks to erect a “stronger firewall” to end the debt crisis. Geithner, speaking in Berlin yesterday after talks with German Finance Minister Wolfgang Schaeuble, praised the commitment to fiscal programs put in place by new governments in Spain, Italy and Greece, and said he was “very encouraged” by recent efforts to buttress the euro area.

    Spain Weighing a Fast, Costly Cleanup of Banks. Spain’s incoming prime minister, intent on curing the country’s ailing banking sector, is considering cleanup plans that could dwarf the cost of previous efforts, including the creation of a state-funded "bad bank" to acquire toxic assets or a move to force banks to dramatically boost loan-loss reserves, people close to the situation say.

    Bank of France Debts Jump Tenfold on Capital Flight

    Germany Says Private-Sector Role in Stemming Crisis Ensured by IMF Rules. Germany rejected comments by French Prime Minister Francois Fillon that Chancellor Angela Merkel agreed to drop demands on investors to accept losses in any sovereign default, saying that International Monetary Fund rules will ensure private-sector involvement.  

    Responding to Bernanke’s rebuttal of news reports ("wildly inaccurate") about the Fed’s lending programs, Bloomberg calmlygoes line by line through each of the Chairman’s points. The quick take: A TKO for Bloomberg.

    Goldman Sachs(GS) On The One Massive Area Of Disagreement Between Merkel And Sarkozy. Our bottom line is the following: the ‘clean’ solutions that would have seen clear resolution of that impasse appear to have been ruled out following Monday’s German/French meeting. That makes something altogether fuzzier likely to emerge from Friday, and this risks falling short of market expectations. The sequencing that we believe is being followed will be delayed further into the new year.

    Exclusive: Kiss the MF Global Money Goodbye, Sources Say. Investigators looking into the disappearance of customer funds during the implosion of MF Global last month are coming to the conclusion that the money is likely gone for good, sources with direct knowledge of the matter tell the FOX Business Network.

    Chanos: Moody’s, S&P Wrong on China. Hedge fund manager James Chanos, who has been a long-time skeptic on the Chinese growth story, is sticking with his gloomy view of ratings agencies Moody’s Corp (MCO.N) and Standard and Poor’s, saying their rosy outlook on China’s debt only bolsters his bearish bet.

    China Export Outlook Darkens, Officials Say. China’s annual rate of export growth slowed in November versus October, vice commerce minister Chong Quan told reporters on Wednesday after an official media briefing. "Export growth in November was even slower than October," Chong said.

    JPMorgan(JPM) Forecasts China Property Gloom. Flat prices in first-tier mainland cities may plunge as much as 30 percent next year and investors should consider shedding related equities, JPMorgan warned yesterday.

    Brazil’s Rapid Growth Shudders To A Halt. Brazil’s economy stalled in the third quarter of this year, demonstrating the vulnerability of the world’s emerging market growth engines to the eurozone crisis and the slowdown in the developed world. Gross domestic product contracted 0.04 per cent in the three months ending on September 30 compared with the previous quarter as weakness in the industrial sector spread to Brazil’s once vibrant consumer.

    Saudi Arabia’s Crude Production Rises to Highest Level in 30 Years. Saudi Arabia, the world’s biggest crude exporter, boosted output last month to the most in more than three decades to meet customer demand. “We produced 10 million and 40 barrels in November because that’s what the customers wanted,” Ali al-Naimi said in an interview in Durban, South Africa, where he is attending a climate conference. 

    Presenting How Wells Fargo(WFC) Nickel and Dimes Clients To (Account) Death.

    8 Rallying Biotech Stocks Being Bought Up By Hedge Funds.

    Massachusetts Picks 10 More Hedge Fund Managers. Massachusetts, already a big investor with hedge funds, hired 10 more managers on Tuesday as part of its push into direct investments with these types of portfolios. Trustees for the $48 billion state pension fund picked a hometown hedge fund, some funds based in London and others from New York to jointly oversee $245 million. The state pension fund, which began putting money into hedge funds in 2004, will soon have 10 percent of its capital, or $5 billion, invested in these kinds of portfolios.

    On the whole, this is not the kind of news that would make me want to buy the futures up 1%…



  223. Phil- How does the European banking system which was already stretched due to their leverage stand the capital flight that has and is taking place. Without sufficient cash- does all this posturing not amount to nothing more than possibly putting off a calamity? I understand everyone is hoping for a solution- which I do not believe there is one- but is not everything going to end up being nothing more than an unachievable plan, which does nothing more than temporarily placate the markets, only to eventually fail? It would seem similar to one who is forced to use predatory lenders due to lack of assets and a poor credit rating- they could not survive in the normal banking system and will eventually sink in the system that forces them to pay much higher rates and be extended much less ( if any ) credit. I know I am hard headed but I just do not see how any solution works in the long run now that their credit worthiness has been seriously questioned and funds have fled.


  224. And I was right to go back to bed last night – we’re right back down now!  

    The Dollar did hold that 78.40 line and is now back to 78.71 and that’s got oil back at $101.20 after kissing $102 again last night (4am) and gold is back to $1,728 after topping out at $1,740. 

    At least it’s not stagflation: The U.K. job market deteriorated in November at its fastest pace in two years, according to two private surveys, and store prices eased as consumer confidence crumbled.

     Swiss unemployment held steady at a seasonally-adjusted 3%, the lowest in almost three years, suggesting continued strength in the labor market despite an overall weakening of the economy.

    After its disastrous bond auction a couple of weeks ago, Germany puts on a better show today, receiving bids for €8.67B ($11.6B) of five-year notes at a sale, more than the maximum target of €5B. The paper was sold with a yield of 1.11%. Bund futures rise 15 ticks in response. 

    It’s not just Wall Street players getting hit by the MF Global (MFGLQ.PK) bankruptcy debacle; farmers who used MF as their broker are waiting to get their money back, and in the meantime are missing deadlines for buying next season’s seeds and are delaying equipment purchases. The cash crunch could cause a major revision to the outlook for U.S. crops.

    Members of Congress can trade stocks based on information they gather in hearings, and apparently there’s enough legal wiggle room that the SEC might not be able to make an enforcement case against a lawmaker stick. To close this glaring loophole, a House vote is scheduled for next week to ban insider trading by Congressmen

    Germany’s dramatic transformation away from nuclear energy worries experts who see the potential for blackouts and brownouts as replacement energy sources are slow to be developed. "If Germany succeeds, this could be a role model to economies all over the world. If it fails, it will be a disaster — for Germany’s politicians, society and economy."

    Source say MidAmerican Energy Holdings (BRK.B) hasagreed to buy First Solar’s (FSLR) 550-megawatt Topaz Solar Farm power plant in California. No word on the deal’s price tag. The plant, which will be one of the largest ever, is expected to cost more than $2B to build.

    A survey conducted by EIU reveals a drop in the percentage of execs at multinational firms who see China as "critical to global strategy," while the importance of emerging market such as Brazil, India, Indonesia, and Vietnam rose. Close to half of the respondents said concerns over China’s intellectual property rules and tough regulatory environment weighed on them.

    Now factoring in an EU recession, Barclays cuts its 2012 GDP growth forecast for China to 8.1% from 8.4%, with growth slowing to 7.8% in Q1 before picking up later in the year. The group also sees inflation, currently tripping along near 6%, sharply dropping to 3.2%.

    The IATA warns the airline sector could makes losses of $8.3B next year if a failure to resolve the eurozone debt crisis causes economic turmoil. The organization’s main prediction for 2012 is for a profit of $3.5B, down from a prior forecast of $4.9B. (PR)

    Bowing to intense domestic pressure, India’s governmentsuspends a controversial decision, pushed by PM Manmohan Singh, that would have allowed Wal-Mart (WMT) and other foreign companies to own supermarkets in the country.

    Greece’s parliament signs off on the 2012 budget, which aims to nearly halve the deficit shortfall and keep Greece in the eurozone. The plan forecasts a deficit of 5.4% of GDP and sees a fifth year of contraction. Says PM Papademos: "The economic crisis in our country is not a passing storm. It will be lasting because it’s the result of imbalances which swelled over a number of years." 

    Ex-Soviet leader Mikhail Gorbachev calls for new elections in Russia, saying the nation should annul the previous disputed results. "The country’s leaders have to admit that there were numerous falsifications and rigging and the results do not reflect the will of the people." - Maybe the next revolution will be another Russian one...

     


  225. "concerns over China’s intellectual property rules and tough regulatory environment weighed on them."
     
    Whaaaaaa?


  226. How/Jthom – Short answer is:  MORE FREE MONEY!!!  How much capital has been withdrawn?  0.01%?  0.1%? 1%?  If there are $100Tn Dollars floating around then there are about $40Tn Euros and how much "capital flight" has there been?  The newspapers love to print sensational numbers because 1% of $40Tn is a pretty shocking sounding $400Bn, which would be $32Bn a  month in outflows – SHOCKING! – but not a big deal.  Meanwhile, the EFSF is now putting about $800Bn back in and, as we know from the Fed’s Tarp games, that can be jacked up 10:1 behind closed doors anyway.  Globally, the charade will last until one of the countries stops the music and they all scramble for chairs – only right now, we have the G7 dancing around what looks like one very rickety-looking chair and NO ONE wants the music to stop…


  227. Concerns/Kinki – That’s funny, I took it to mean LAX IP rules that make it ridiculous to bring products to China because, by the time you get your first shipment releases from customs, there are already knock-offs on the shelves in the stores you try to sell to.   


  228. I would be interested in how Germany intends to replace nukes in their energy mix. There’s a wind turbine visible almost everywhere in Germany, but their resource is marginal – 5.5 meters/second, which is the bare threshhold for commercial use. Solar? In Germany?

    H’m, now that sounds reliable. And – this may come as a shock – you have to duplicate the baseload generating capacity of each because, oddly, you only get electricity when the wind is blowing adequately (35% would be a generous estimate) or the sun shining (probably less, given the latitude and that pesky nightime thingy). So they’re going to have to build a lot of coal burners, which will probably kill more people than nukes ever will (unless they hire TEPCO to build them).

    Bottom line: ain’t gonna happen, it’s just the sound of politicians pandering.


  229. Phil, I owned shares of TASR via option assignments a while back. I am waiting to sell some calls when its value recovers. What’s a good strategy right now? Sell calls or wait? thanks