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Four-Dollar A Gallon Thursday – Gas Hits $4 Overnight

Wholesale gas prices jumped 5% last night.  

Goldman Sach's head of energy research, David Greely, has been banging the oil drums all month and has helped engineer a 10% rise in crude, costing Americans an extra $10Bn a month at the pumps and in their energy bills (not even including the rise in food and transportation costs) in order to make his masters another Billion on their trades but he's not done there.  Now he is celebrating Brent Crude crossing it's 2008 highs of $124 a barrel by recommending long positions on September WTI contracts at $107.50:

Greely's main bullish premise for WTI is that one way or another, as Keystone was meant to do, they will find a way to reverse the flow of oil into Cushing, OK, where we measure our national inventories each week, and begin draining that facility dry at will.  This will give the commodity manipulators total control over the price of oil by enabling them to add or subtract millions of barrels of oil each week and, if the Keystone project gets rammed past the White House – millions more can be drained from Cushing at the will of a single company.  

It has long been the dream of the US Energy Cartel to force Americans to pay the same ridiculous prices as Europeans for oil, despite the fact that the US produces over 10Mb per day right here at home, more than twice as much as Europe.

Concerns of potential supply disruptions have increased as tensions between Iran and Western nations escalate, Greely said in a report today. Spare production capacity among the members of the Organization of Petroleum Exporting Countries has fallen to “dangerously low” levels at a time that the world’s demand is recovering, Greely said.  

“We believe that stronger-than-expected demand against limited inventory and scarce excess production capacity leaves the market vulnerable to price spikes in the near-to-medium term,” Greely wrote. “Oil looks increasingly compelling from the long side both as an outright position and a hedge.”

If this is giving you flashbacks to 2008, when Goldman Sachs stampeded their sheep into $140 oil contracts on the promise that the same conditions would lead to $200 oil – you're half right.  The reality is that it's even more asinine now to make these statements than it was then as we had a much more robust economy in 2008 and we had far less production capacity in 2008 and we had far less of an inventory surplus in 2008 but don't let that stop David Greely from destroying America to enrich his masters – just like Arjun Murti, who came out with Goldman's last massive pump job – Greely will soon be a disgraced footnote in investor history while his superiors decide what color Ferrari to buy this year with their bonus money.  

Prior to joining Goldman in 2001, Greely worked as a research economist at the FDIC so he really knows his stuff.  I poked holes in Goldman's 2008 call in my article "$200 Oil – Who's Going to Pay For It?" based on purely economic reasons.  Not only is the economy weaker now and less able to pay these excess fees but the rest of Greely's premise is nothing but pure and utter BS as well.  For one thing, there are 100,000,000 more barrels of oil in storage in the US than there were in 2008, that's 12 days worth of imports in addition to the 204 days of imports we already had.  Of the 8.5Mbd we import, 5Mbd comes from Canada and Mexico and Iran isn't going to be cutting off the Gulf of Mexico, are they?  Another 2.5Mbd comes from South America and I'm pretty sure Iran doesn't control the Atlantic yet – despite their "surprisingly strong" navy that CNBC keeps featuring – as if they are going to last more than 24 hours against our 5th Fleet, which is deployed in the Gulf.  

Weekly U.S. Ending Stocks of Crude Oil and Petroleum Products  (Thousand Barrels)

So, for the 1Mb of oil that we actually import from OPEC, we have a 1,750 day reserve to draw down on in case Iran is able to cut off 100% of the supply.  I promise to get concerned sometime around year 3 of the blockade – really I do!  If Iran is unable to affect a 3-year blocade of the Straight of Hormuz – total disaster for oil longs as Opec Production is already at 30.9MBd, back to all-time highs and Saudi Arabia alone is putting out 11Mbd, which is the highest level since the Iran-Iraq war, when oil was below $40 a barrel (despite the war and Saddam setting oil fields on fire).

Not only that, but we're already getting a glimpse of demand destruction at $4 per gallon and Kevin Book, Director of Research at ClearView Enerrgy Partners says that, between $4 and $5 per gallon, we can expect to see a 2.5Mbd destruction of demand.  That's more oil than Iran produces!  As Book points out:

"Most of the world’s elective, GDP-linked petroleum consumers are in the OECD, and most of them are here in the U.S. Most of us are still driving yesterday’s cars at today’s prices without yesterday’s bank accounts and yesterday’s access to credit (to say nothing of yesterday’s home valuations).

OECD demand includes a significant price-driven “shock absorber” in the form of demand compression, but we don't think subsidized economies should be overlooked, either. In subsidized economies, end-users drive almost as much at high prices as they do at low prices, and governments are the ones who get the sticker shock. When that happens , investors shouldn’t forget about the “crumple zone” in global demand that comes from governments pulling back on those subsidies."

There is already such a glut of supply in North America that a barrel of Canadian crude from the oil sands in Alberta fetches just $63 a barrel and THAT is the trend.  This is why GS and the other manipulating bastards that have taken over our country (not to mention most of the "Free" World) are desperately trying to drive people into oil now – they have tens of billions of Dollars worth of contracts to dump before this charade – like the Great Charade of 2008, blows up in their faces and sends them running back to the Government for another bailout.  As noted by Al Fin Energy and Robin Mills of Manaar Energy

Oil producers are deathly afraid of oversupply in the oil market — an oil glut. Such a glut is happening in the North American natural gas market, shaking the energy globe from Russia to Iran to Venzuela. Since oil dictatorships derive their political power from energy sales, they cannot afford to tolerate an energy glut. Such a thing is far more a threat to them than contrived and ghoulishly elaborated rumours of "peak oil."

The advent of shale oil and gas production has reversed declining US production, is now spreading globally, and can be commercial at an oil price of just US$30 a barrel.  This breakthrough seems completely to have passed by peak-oil advocates. They claim the end of "easy oil", without noting that technology continually makes unconventional oil into conventional.

Peak oil cultists are compelled in their belief — they no longer have a rational choice whether to "believe" or not. They lurch from one doom projection to another, compulsively feeding on a ghoulish doom that can never satisfy their ineffable hunger.

Last year, in June, I laid out a plan for traders to break the backs of the oil speculators and the trades I outlined at the time led to many Billions of Dollars worth of potential profits as oil fell form $114 to $75 despite all of GS's predictions to the contrary.  Today we're back at $106.95 in the Futures, which was the spike high of last March – and they were able to keep up the nonsense through the end of April, when both oil and the markets collapsed.  

I don't think investors are either rich enough or dumb enough to get screwed like that twice in less than a year but, then again, I often underestimate how many idiots fall for Goldman's crap time after time.  Even when Goldman Sachs is harangued on National TV for steering their own clients into "shitty deals," GS seems to always be able to round up another herd of sheep to lead into the next slaughter.  

Oil is now up 52% since October and is up 165% since March of 2009 so only a little bit ahead of the trend that takes us to Goldman's promised land of $140 oil again (up 250%) by late Summer.  With Global consumption at 86M barrels per day, that's $8.6Bn a day sucked out of the Global economy and $3Tn a year that goes into paying for a commodity that literally goes up in smoke – leaving nothing in its wake but a mountain of debt (see "Goldman's Global Oil Scam Passes the 50 Madoff Mark").  

Thank goodness the GOP stopped Al Gore from charging us 10 cents a gallon to funnel into alternate energy research back in 1992 – at the time, they said that 4.3 cents a gallon extra would destroy the US economy (gas was $1.10 a gallon at the time but Gore warned it could go much higher if we didn't take fuel conservation seriously).  

We don't know WHEN this oil scam will collapse but we have been shorting oil with the intention of rolling our short plays up (in strike) and out (in time) as prices climb higher – a strategy for which we were richly rewarded in 2008 (after much stress as oil hit $140 before falling back to $40).  At this point (over $105), it's now a race on which will collapse first, oil or the economy but one will bring the other down in any event.  

So, unfortunately, we will still have to be careful out there – at least until we get the technical signals we've been waiting for.   

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  1. Manipulated oil lines

    R3 – 107.66
    R2 – 107.19
    R1 – 106.55
    PP – 106.08
    S1 – 105.44
    S2 – 104.97
    S3 – 104.33

    Yesterday's high and low – 106.72 / 105.61

  2. And once again, last night, more threats of a war with Iran from our GOP candidates. That would of course help the price of gas… If I didn't know better, I would think that they are doing their best to make sure the economy doesn't do well this year!

  3. Today’s inventory reports should be interesting

  4. Interesting article on why it matters that our politicians are all rich….


    Politicians would like us to believe that all this money doesn’t matter in a deeper sense—that what matters is ideas, skills, and leadership ability. Aside from a little extra business savvy, they’re regular people just like the rest of us: They just happen to have more money.

    But is that true? In fact, a number of new studies suggest that, in certain key ways, people with that much money are not like the rest of us at all. As a mounting body of research is showing, wealth can actually change how we think and behave—and not for the better. Rich people have a harder time connecting with others, showing less empathy to the extent of dehumanizing those who are different from them. They are less charitable and generous. They are less likely to help someone in trouble. And they are more likely to defend an unfair status quo. If you think you’d behave differently in their place, meanwhile, you’re probably wrong: These aren’t just inherited traits, but developed ones. Money, in other words, changes who you are.

  5. Bllomberg actually created a graphic on stock market returns based on the Kudlow timing – get out of the market when a Democrat is elected and get back in when a Republican is elected:


    It has not worked that well though! But a Kudlow contrarian theory seems to be one of the best timing mechanism I know.

  6. Headlines:

    Data Suggests Euro Zone May Slide Back Into Recession
    German Manufacturing Slows as New Export Orders Fall
    China’s Factory Activity Shrinks for Fourth Month
    ECB Preparing to Close Liquidity Floodgates
    Ford Pours $3.8 Billion Into Pension Plan
    Oil Could Turn to Headwind as Dow Flirts With 13,000
    UBS to Issue More Loss-Absorbing Capital
    Iran ‘Winning’ on Oil Sanctions: Top Trader
    Greek Bailout Puts Focus Back on Credit Default Swaps
    Iran Fuels Oil-Price Rally—And Prices Could Keep Rising

  7. Phil/AAPL
    Good morning!
    Thanks, and yes it makes sense.
    But what do you do with the March $525 short calls if AAPL ramps up above that before March expiration? Roll them?
    Next question, so why doesn’t everyone utilize this strategy? A lot of people own the actual underlying and have never considered the strategy you outlined, including brokers, financial analysts?
    I will certainly look hard at it now…get comfortable with the possible drawbacks

  8. Phil/AAPL
    And if AAPL were a dividend paying stock, let’s just say at 2%….would you then hold the stock? Do buy/writes instead of the straight BCS?

  9. Oil / Phil – This is an older article so perhaps already familiar here, but worth repeating in light of your comments. It reports on an EIA study of higher oil prices on GDP with the obvious conclusion, their bad for the economy.

    Also, in light of the fact that our administration and intelligent people everywhere want to settle the confict with Iran without going to war, we shoud do everything we can to support the effort to bring about the desired results through the tough sanctions in place (since scolding them doesn't seem to work). Iran in turn is doing everything it can to make life difficult for the west and weaken our resolve by pushing up the price of oil. Therefore, it is AGAINST the national interest to aid there efforts by talking up war to frighten voters in an election. It is in my view a treasonous act! We are waging war on Iran's economy and they are waging war on ours. Whose side are you on?

  10. stjean/rich politicians
    It is certainly true. I am not actually rich,  but compared to many people here in the Dominican Republic I suppose I am rich, because I can buy an ice cream any time I want or pay $5 for a cooked breakfast, and mostly  they can't. But it is hard to be rich. For example I have a taxi driver who takes me to and from the supermarket, shopping, dental appointments, airports, etc. He has a beaten up old Hyundai van and the windshield is badly splintered and patched with tape, so I don't think he is exactly rolling in cash. The van runs on diesel. He is the nicest guy you would ever hope to meet, always polite, helpful, friendly. He says to me: "Just give me whatever you want each Saturday and I will take you where you want." So I give him 1500 pesos (US$40) each week, so US$160 per month, which is a bit more than I would pay for motor bike taxis if I wasn't using his services. However I also pay him $100 each time he takes me to Santiago airport at midnight and picks me up at 3:00 a.m., which is a 2-hour drive across the mountains.
    Here's the dilemma. Is he nice on the surface, but secretly calling me a cheapskate bastard for paying him so little? Or is he willing to subsidize ferrying me around so as to get the big pay days when I go to the airport? Or does he have so little business that he is grateful for anything? Or is this just a mutually satisfying business transaction and no cause for concern? Hard to say.
    Now imagine you are a wealthy politician. Can you take anything anyone offers you at face value, or do all the people you deal with and act nice only want to deal with you because you are a politician, and not because they give a fig about you or your family? As Lord Acton said: Power corrupts and absolute power corrupts absolutely.

  11. PP – follow 'em.  The Bots seem to like 'em.


    Fast Times on 'Fast Money'

    Feb 23, 2012 | 8:11 AM EST
    I started by expressing that there was a lot of optimism eight weeks ago on my last appearance on "Fast Money" when I was of the view that the S&P 500 Index could approach its 2007 high sometime in the second half of this year.
    At the time my view was an outlier. Less so now. Much less so.
    A lot has occurred since then, including an 8% rise in the S&P — unfortunately, to me, the near-term reward-to-risk has turned unfavorable, but my concerns run far deeper than just the fact that stocks have risen smartly.
    I then broke down my concerns into the technical and the fundamental.
    The Technical
    First, back in December investor sentiment was sour. There has been a huge change coincident with rising prices as sideline retail cash has come in and hedge funds have expanded their net long exposures. It rarely pays to buy stocks when 85% of the S&P 500 Index trades above its 50-day moving average, as is the case today. Taking the opposite tack, only 3% of the S&P 100 stocks are oversold using 14-day stochastics. Since 2004, the five prior times this happened the market has had, on average, a drop of 4% to 5%.

    S&P 500 vs. RSI
    Source: BTIG
    View Chart » View in New Window »

    Second, in a sharply advancing market (like we have witnessed), we must be alert to divergences. There are good advances and there are bad advances. And I see divergences aplenty. I see this as a "bad" advance, as it has been accompanied by a lower number of new highs, and I took issue with something JJ said the previous evening on "Fast Money" — we are seeing, on each leg higher in stock prices, volume declining as prices rise.

    DJIA and Volume
    View Chart » View in New Window »

    That's a technical warning signal that the advance is growing more selective and that it is maturing — it is not a sign of market strength.
    Finally we have developing weakness in financials The SPDR Financials (XLF) closed at Wednesday's intraday low and, importantly, the lagging transport index (something that Steve Cortes has highlighted recently) is another worrisome indicator.

    S&P 500 vs. IYT/SPY
    Source: eSignal
    View Chart » View in New Window »

    To me, all of these technical observations are examples of classical divergences in an advancing market.
    The Fundamentals
    We had little time to discuss the important fundamental issues that have caused me to make the shift from net long to net short – but I will expand here in today's opening missive.
    For the markets to rally to new all-time highs this year (as Dr. Jeremy Siegel and others have recently opined on) a lot has to go right. It will require a revival of animal spirits driving valuations back to over 15x earnings, in line with history. It's not an impossible feat, but not likely based on the residue of issues from the last cycle that has produced a fragile recovery, our fiscal imbalances (local, state and federal) and the structural disequilibrium in the jobs market (among other factors). In addition, over the past six weeks the economic, geopolitical and political footings have weakened:

    1. The price of oil is now over $106 a barrel — this is a tax on the consumer and a potential threat to corporate profit margins and profits. (The breakeven on 10-year TIPS are now at a seven-month high, indicating increased inflation concerns).
    2. Broadening geopolitcal risk in the Middle East.
    3. Emerging markets are slowing down markedly: Tuesday night's China HSBC flash PMI was not encouraging and indicates below-trend-line growth for that region.
    4. Europe is slowing — again. Tuesday night's Eurozone PMI manufacturing shrunk to 49.7 in February after a rebound to 50.4 in January (that was well below the consensus of 50.8). Today the EU lowered 2012 real growth forecasts for the region.
    5. Continued reliance on monetary policy (and more cowbell) to solve our problems, meanwhile more effective and enduring pro-growth fiscal policy is neglected (as the word "compromise" has apparently no place in Washington, D.C.).
    6. The administration has offered an unrealistic U.S. budget that is dependent on assumptions that would embarrass the Tooth Fairy.
    7. Finally, the Republican party has appeared to snatch defeat from the jaws of victory. Investors understandably view Republicans as market- and business-friendly. Mitt Romney's odds of getting the Republican presidential nomination has dropped from over 90% to close to 70% while Obama's odds of regaining the presidency has moved from only 50% to 60% since year-end.

    Pete "X Man" Najarian asked me about the relevance of exchange-based volume, as the options market (based on his analysis) has increased in volume. I told Pete I was not willing to dismiss the importance of exchange-based volume and I would reemphasize the first chart above, which highlights my concern that volume has receded on each of the recent three major rallies since 2009.
    My old buddy/pal/friend Ron Insana said my big-picture issues might have a bearing on a larger market drop over time but not on the near-term outlook. I think he misunderstood my points, though. Remember the show is "Fast Money" (not "Slow Money") — viewers are more interested in the short-term market outlook, which I was addressing. In addition, my intention was to say that the market could decline at least 4%-5% based on a combination of fundamental and technical considerations. I explained that my reference to the big-picture problems (fiscal imbalances, disequilibrium in labor market and the residue of other issues from last cycle) was an explanation why, unless fundies were perfect (they are not!) historic valuations of 15x seems possible but improbable. They were not reasons or references to a near-term correction.
    Moreover, I would say to Ron that I don't view a 4%-5% drop in the Indices as trivial. After all, in that magnitude of a decline, many stocks will fall 10% or more!

    Position: Short SPY common and calls.


    Douglas A. Kass
    Seabreeze Partners Management Inc.

  13. Politicians / Jmm – I think that the biggest indictment in the piece is the part about dehumanizing those who are different and you can hear it every day when you hear the fact that poor people are poor by choice or by lazyness… I think that it's right on!

  14. Cramer was mouthing off about how oil will not affect the economy at all because Red Lobster said it shouldn't affect their business.  How is Goldman getting him money?  Are they sending girls to his house daily (he is divorced now)?  Do they have pics of him in compromising positions or a file like J Edgar would have on someone he wanted to influence?  He is their whipping boy on that show.

  15. Good morning, still nothing new,


    IWM     81.06,  81.41,  81.69,  82.00,  82.43,  82.87,  83.07,  83.38  and  83.75

  16. Phil / SCO stock
    I have 2000 SCO stock at net 38.5 from assignments.  SCO is now trading at $33.40.  I really DON'T want to own SCO ETF.  I'm thinking of getting out, just taking the loss as I don't want to sell puts on it, and I think oil at 106 is a prop-job, so not really excited about a bull call spread.
    Any other options?   

  17. Phil / TASR
    You're stock of the decade missed:
    TASER International (TASR): Q4 EPS of -$0.11 misses by $0.13. Revenue of $21.3M (-7% Y/Y) misses by $3M.

  18. TSL didn't do well on earnings….

  19. FU PCLN and CMG!!!

  20. Well, top of the morning to you Jabo….  And FU oil!

  21. Good morning and wheeeeeeeee! 

    Nice, sharp dip after another attempt to fake joy in the futures.  Oil is down $1 to $105.75 and let's watch yesterday's index lows and see if they hold (1,352 on S&P).  Don't blame the Dollar, it's only 79.10 while the EUR is back to $1.3281, Pound $1.569 and 80.28 Yen to the Dollar.  

    Are they reacting to the announcement that Europe is in a recession?  Damn, we've been talking about that for a month!  Maybe it's this zinger (ahead of today's 7-year auction, of course):

     "Our job is not to prop up the Street," Dallas Fed chief Fisher tells CNBC, saying he sees no need for QE3. The economy appears to be doing much better, but unlike this time last year, Fisher is not musing about rate hikes. ZIRP, he says, should continue while unemployment remains elevated. Fisher is not a voter on the FOMC this year. 

    Initial Jobless Claims: Unchanged at 351K vs. last week's revised figure and 355K consensus. Continuing claims -52Kto 3.39M.

    Nomura pokes a small hole in the recent improvement in jobless claims, noting seasonal distortions are skewing the read. In recent years, claims have peaked in late August/early September and bottomed in February as Labor Department statisticians may be off in their adjustments. 

    Germany is down 1%, France down  0.25% and UK flat but all trending down and probably getting worse on our open.  I wish I could say this is funny but it's kind of tragic when you look at the blatant manipulation that is going on – on the part of the IBanks and the Governments.  

    Other news of note as we once again watch and wait to see what sticks (and now we're heading into the weekend so not getting bullish until next week no matter what):

    Thursday's economic calendar:

    8:30 Jobless Claims

    10:00 Mass Layoffs

    10:00 FHFA House Price Index

    10:30 EIA Natural Gas Inventory

    11:00 EIA Petroleum Inventories

    11:00 KC Fed Manufacturing

    1:00 PM Results of $29B, 7-Year Note Auction

    4:30 PM Fed Balance Sheet

    4:30 PM Money Supply 

    At the open: Dow -0.11% to 12925. S&P -0.04% to 1357. Nasdaq +0.06% to 2581.
    Treasurys: 30-year -0.2%. 10-yr -0.08%. 5-yr -0.02%.
    Commodities: Crude -0.3% to $105.97. Gold +0.44% to $1779.15.
    Currencies: Euro +0.32% vs. dollar. Yen -0.03%. Pound -0.23%.

    Market preview: Stock futures hold slight gains (S&P+0.1%) after weekly jobless claims came in a bit better than expected, with the four-week average near a four-year low. European markets were mostly lower after the EC forecast a mild recession. Sears+15% on its plan to sell assets. H-P -3.8% as PC sales plummet.Later: EIA nat gas and petroleum inventories. 

    The European Commission now forecasts a mild recession for the eurozone, with the region shrinking 0.3% this year. As recently as November, the EC had expected 0.5% growth this year. One of the sharpest country revisions is for Spain, now expected to contract 1% vs. prior forecast of +0.7%.

    The average 30-year fixed mortgage rate climbed 6 basis points to a one-month high of 4.16% last week, according to Bankrate. Other benchmarks rose as well, the 15-year up 3 bps to 3.38% and the 5/1 up 9 bps to 3.12%.

    Crude oil hits more multi-month highs, with the U.S. benchmark WTI at $106.36, a price not seen since May. The world benchmark, Brent crude touches $124 – priced in euros, Brent has taken out its epic 2008 high

    Art Cashin turns his eye to oil, noting Rich Yamarone's observation that every U.S. recession since 1971 has been proceeded by an advance in the price. Currently up 7% YTD against an economy already barely moving forward, oil and gasoline prices may not yet be crippling, but they're headed in that direction. (earlier)

    More on oil: The correlation between oil prices and equitiesis melting away, notes Scott Barber. Since the financial crisis, the oil price has been demand driven – with crude moving higher along with stocks. Of late, price moves are more to do with supply worries which could presage something less than positive for the equity markets.

    Investor sentiment is little changed from last week, according to the AAII survey, with about 2% getting off the neutral fence – half going to the bulls and half to the bears. Bullish sentiment is at 43.7% against the long-term average of 39%. Bearish, 27.5% against the long-term average of 30%.

    Greek parliament passes a law enabling the debt swap for private bondholders, reports Reuters, checking off one of the to-do items on its list before final approval of the bailout. 

    The Greek PSI is "about as voluntary as a confession was voluntary in the Spanish inquisition," says Commerzbank CEO Martin Blessing. In the meantime, Greek finmin Venizelos admits CDS could be triggered when Athens votes on a collective action clause, but says it's not a concern of his.

    "We have to be realistic. It's not yet in the bank," says a senior IMF official warning of "huge implementation risks" for the Greek bailout. Translation: It's easier to cut a check allowing Greece to pay its creditors (while taking on new ones) than it is for extra-national officials sitting in a room to remake an entire country.

    The SEC considers fees aimed at slowing down high-frequency trading after criticism over the influence of the computer-driven trading and its potential to create out-of-control flash crashesmounts. One remedy on the table is requiring high-frequency traders to pay for the canceled trades that make up 90% of all orders.

    Though a judge in Houston rules that BP and Anadarko Petroleum (APC) are liable for civil damages from the Deepwater Horizon oil spill, Transocean's (RIG) liability is still up in the air after it wasn't named a "responsible party" in the decision. Premarket: BP-0.2%, APC +0.1%, RIG +6.7%.

    IMAX (IMAX): Q4 EPS of $0.14 beats by $0.01. Revenue of $66.7M (-3.6% Y/Y) beats by $3M. (PR)

    Universal Display (PANL+4.7% after KeyBanc lifts its PT to $60 from $45 following checks in Korea (where licensees Samsung and LG operate). The firm is bullish on OLED technology adoption, and thinks Universal could exceed its 2012 sales guidance. It thinks a guidance hike could arrive during Universal's Thursday Q4 report.

  22. More on Kohl's (
    KSS) Q4: Comparable store sales -2.1% Y/Y. E-commerce business crossed $1B mark for full year. Sees EPS of $4.75 in FY12, based on a total sales increase of 4.5% and a comparable store sales increase of 2%. Shares -2.4% premarket. (PR)

    More on Sears (SHLD +10.4%): Shares are sharply higher despite an ugly earnings report as Eddie Lampert looks to have pulled one on the bears again with the asset sales and rights offering. The company moves through a rare conference call - CEO Lou D'Ambrosio promises more cost reductions and unlocking of the value of the portfolio.

    TASER International (TASR): Q4 EPS of -$0.11 misses by $0.13. Revenue of $21.3M (-7% Y/Y) misses by $3M. (PR)

    Trina Solar (TSL): Q4 EPS of -$0.93 misses by $0.51. Revenue of $435M (-32% Y/Y) beats by $63M. Shares -7.5%premarket. (PR)

    A coalition of Internet companies including Google (GOOG), Microsoft (MSFT) and Mozilla agrees to support a do-not-track buttonto be embedded in most Web browsers. The reversal will be announced as part of the White House's call for Congress to pass a "privacy bill of rights" to give people greater control over the personal data collected about them.

    JPMorgan lines up a $45 price target on Vivus (VVUS) in the wake of the company's FDA panel recommendation for approvalfor its weight-loss drug. Analysts with the firm keep an Overweight rating in place, saying "we would still be buyers here given the magnitude of the vote." Shares +115.7% premarket to $22.75.

    Amazon (AMZN -1.4%agrees to collect and pay sales taxes for purchases made from online retailers with a physical presence in Virginia as part of an agreement with the governor's office. It's been a two-front war from Amazon on the online sales tax issue, as it supports a national online sales tax bill seen as potentially crippling to rival EBAY and fights states one by one on collecting taxes.


  23. S1 on oil is at 105.44 so let's be careful here….

  24. stjean/les miserables
    …when you hear the fact that poor people are poor by choice or by laziness…
    Oh, that is just dog-whistle code for "white people good-black people bad". See Animal Farm by G.Orwell.

  25. maya1……I can't resist jumping in and answering one of your questions … that Phil may not answer in a straightforward way…….It is….."so why doesn’t everyone utilize this strategy? A lot of people own the actual underlying and have never considered the strategy you outlined, including brokers, financial analysts?    Well, the reason they don't use some of Phil's strategies is because they are not as smart as he is.  Just that simple.  They cannot conceptualize and relate them.  That's one reason.  There are others, such as their goals and their relationship to you…….brokers churn your money for profit, for instance.  But Phil is one extremely smart mother#%$&^@ whom we pay for the  privilege of allowing us to present questions and problems,  and whose hypertophied brain then regurgitates solutions that no one else can imagine, or sometimes even understand…..all the while with entertaining international political commentary.  I use Phil's thought processes to keep me focused on my trading strategies, as in yesterday when he posted a short AAPL trade around the board meeting.  This alerted me to the fact that this is an EVENT, and reminded me that events move stocks more than anything else.  So now I have to rethink my short-term trades in order to protect the portfolio, and etc.  He trains us, he keeps us focused, and he entertains us.  Reading Phil is like listening to the trading equivalent of Bach's Fourth Symphony in E minor.  So Phil, just mail me the check now.   ::) 

  26. Hi Phil SHLD why is earning post more than 2 billion loss is a good thing for stock up 12% donot get the fundamental behind it or is this what they call short squeeze.  I have 10 March short call 50 sold  at 6.72 and 1/2 cover with april 50 call bot at 6.10 what should I do thx

  27. Good morning, but I disagree calling any move less than half a percent down a wheee.  There just isn't enough bang there to think it's major and they can turn it around by noon.  So careful.

  28. lflan – well said!

  29. jmm1951, Sounds like a good busines transaction for both.

  30. APPL / Iflan – So you are not going to trade today waiting for the event? 

  31. AAPL portfolio:   I've closed the 10  April  490/515 bull call spreads at 14.40   =   39.18/24.78   What I'm doing here is starting to reduce my overall exposure prior to today's event….Reducing exposure is one way to lessen risk. 

  32. So, the market just went up 70 points because of what?  Did something good just happen?

  33. just got back--why did the mkt just recover???

  34. that sell off looks to have lasted all of about 30 seconds so i am glad i stuck to my analysis and got it right with weak ec an obvious along the timing shorting Italy's ITA40 and Spains ESP35 yesterday early so 400 points on the ITA and 200 on the ESP35 x multiple lots.
    beats picking up nickels and dimes off the railway tracks trying not to get run over by the train

  35. long the EUR/CHF at 1.2050……..not a bad day so far

  36. LFLAN
    Thanks for your thoughts… By nature I am sceptical….so, anything good like Phil’s ideas etc…I look for ‘chinks in the armor’
    Have YOU ever owned the unrlying? If so, why?, given Phil’s reasoning.

  37. forgot to mention i went long AUD/USD last night at 1.0625 and bailed this morning at 1.0690 (wife's acct – she likes it)

  38. Maya – some ppl might be wanting to own the underlying now in anticipation of a special dividend.  The stock will go down the same amount as the dividend when it is paid, but will soon after that go back up again…so some ppl may see that as reason to own the underlying.  Other than that, not everyone wants to deal with options and constant watching a portfolio, so much easier to buy the underlying, "set and forget"…

  39. at least you can count on the European indexes to give a decent move that last more than 2 minutes before retracing completely……….you know, time to click the mouse.

  40. DOW move is all IBM

  41. FU BTFD!

  42. Iflan – today AAPL seems to bouncing in a range, 514 to 515, so I sold off yesterday's calls (the April 490's) – wanting to reduce my risk (I missed your call to cover yesterday) – do you think it wise to get back in a little lower?  

  43. Earning strangles – Yesterday there was 2 candidates – GDP and ESRX. Here are the results:

    GDP Mar 15/20 – Sold $0.60 now $0.52. The calls could be bought back and the put held to expiration. There is still a 10% cushion with 22 days to go. And the can be rolled to the Apr 12.5.

    ESRX Mar 47.5/57.5 – Sold $1.50 now $1.25. It could be closed for a 16% win. The position is still pretty good with over 10% protection on either side. Each side can be rolled 2.5 away in April for a credit.

    If you played the 45/60 strangle on SHLD, it has not worked well. That's one crazy stock to play and was high risk. The puts are obviously toast. And the weekly 60 calls can be rolled to the Mar 62.5 for a credit and wait for the insanity to stop….

  44. lflan
    I understand your reasoning that "events" like to day are unpredictable however, in my opinion every Apple Computer event that I ever attended and heard about left nearly all attendees more enthusiastic when it was over than when it started. Do you feel that a significant portion of the current share price is in anticipation of a dividend announcement or stock split announcement.
    Thanks & keep up the great commentary

  45. So here are my thoughts about AAPL and this board meeting today.  The biggest topic I'm reading about that may come up is the possibility of dividends being issued.   AAPL has not issued dividends for many years ( they did at one time).  If they decided to do so there would probably be an influx of institutional money, since they like stocks that pay the divs.  So that might drive the price up.  If they don't issue a dividend it might have a negative on the stock price short term.  The other issue out there is that of working conditions overseas for those who make aapl components.   Seems this is being dealt with by way of wage increases, etc.  But we all know that workers in other countries do not have easy jobs at high wages like many in U.S.  So this is not a new topic and I doubt it will move the stock.   But this is an EVENT, and events move stocks.  Now we've had a big and profitable run in our portfolio.  So we need to be cautious.  So I'm reducing exposure to the event by closing some and maybe all positions today.  And, I may purchase straight up stock into it.  That way if we get a drop, the portfolio would certainly not lose any more than 10%, and if we get an upward movement then we will continue to profit.  So that's my plan:     Reduce exposure, maybe buy some stock to hold through the event.  Not very fancy, but very protective.  Actually, I would like to see a retracement.  I would LOVE to be able to load up on AAPL again at about 480.  So watch for porfolio posts as I move out of the options, if you are following the trades.  

  46. Maya – Just to add, there are two main types of brokers: those with discretionary trading authority and those without.  Those without cannot place any trades without a client okay, so options trading is not usually done from my experience.  Those with that authority are still required to document a client's risk tolerance and stay within those bounds for fear of legal action in case money is lost for going beyond those boundaries.  Most brokers I know that are doing options trading for their clients are only doing CCs and PPs as these are not considered high risk by firms and don't require a lot of time and/or energy to manage.  I think that for most brokers, it is just not practical to actively trade and/or take a risk with anything other than CCs and PPs.  Just my two cents. 
    By the way, I do agree that Phil is very, very smart. 

  47. Hello All
    New to philstockworld.  Is there a link to Phil's recommended SCO trade(s).  Or would someone kindly outline a new position for me….

  48. Jerconn, Inkarri/ AAPL
    Thankyou for your inputs.

  49. AAPL – i just noticed something very interesting.  I can't say i've seen it before.  Has anybody else seen this?  Divident History on their website.

  50. There might be tough sledding ahead for HP:

    The printer business which has long underpinned Hewlett-Packard’s finances is facing structural problems that threaten its position as the company’s cash cow, Meg Whitman, chief executive, has warned.

    Toner is probably more expensive than gold in these toner cartridges… It has long been the main source of profit for these guys.

  51. LFLAN
    Now why would you go and buy the stock today?
    So, if they do declare a dividend, your stock profits..but can you not get more bang for your buck with your own strategy of owning ITM calls, a month or two out? Less capital outlay, less risk?…what am I missing?

  52. LFLAN
    And forget $480, unless we see a 10-12% drop in overall market…although we can both ‘hope’!

  53. There are poor people who are that way by choice and many who are not. In San Francisco a group lives under a freeway over pass. One off them jumps in a wheel chair and meets the incoming BART (Bay are rapid transit)  traffic. During the day he plays touch football and smokes Mary Jane with the other homeless people. The group barbeques and they have  a great time until they go back to catch the out going BART traffic.  One of them does one handed pushups and other feats of strength during the day for money as well as beg in the evening. He has an old car, a girl friend and a baby.
    These people love what they are doing and are there because they want to be.
    Nothing is worse than a parent who wants to support their children and cannot. Wonder what the ratio of these people to actual people who choose to be homeless looks like. A single mother trying to support her children deserves a safety net but not the first group. A parent  who loses a spouse is deserving of help. Should a single woman who chooses to have children without a spouse get the same support as one who has lost hers.
    It is not that simple to determine who deserves help an who needs a kick in the butt. Most people I know will buy a homeless person a meal before giving them money because they are afraid the cash will be spend  on drugs. Paying to support people needs to be support and not incentive not to work. Not an easy task.
    We cannot entirely depend on government programs and need to need to do some of this ourselves. There is a great website that lets you give to a specific person in need. They screen the people to make sure they are legitimate, you see a picture and a bio so you know who your helping and why. You pick who you want to help and send them $5 or $1000 toward their goal. If government programs did differentiate between the people who need help vs those that need a kick in the butt more people would support them.
    I encourage all of you to check out the web site. People on often do not always meet their goal. In our office we vote for a person of the month and try to make sure they get what they need. Every little bit helps.
    Sorry for the rant.

  54. Good Morning!   Haven't been around to trade for a couple of weeks….did I miss anything? (:))    My two cents on the aapl meeting today:   they announce a modest share repurchase plan rather than dividend issuance.   The result of this I would expect to be a reason for more to sell than buy, and thus I've picked up some weekly 495's at .60 on pure speculation.   This is becoming more fun than vegas!

  55. What's propping up the Nasdaq?  It's not AAPL today…

  56. Macro views from Barry's site:

    This is an investment letter from Macro Tide. And here was their recommendation on Feb 15 – FWIW


    Aggressive investors were advised in the February 1 Special Update to establish a short position in the S&P by buying the ETF SH, if the S&P traded above 1328, and to add to this position if the S&P traded above 1344. The S&P may have one more pop left that will carry it above 1355. If it does occur, add to the short at 1364, using a close above 1374 as a stop on the whole position. Cover half of the position at 1325, and the other half at 1313.00.

    Bonds – In our November letter we suggested buying TLT, which is the ETF that mirrors the yield on the 20-year Treasury bond. On February 9 it closed at $115.49, which is the only day it has closed below our stop of $115.80.  We think it will trade above the October high $125.03 before year end. Buy one third now, one third on a close below $115.49, and another third at $112.85, where there is a gap.

    Dollar – In our May letter we recommended going long the Dollar via its ETF (UUP) at $21.56, and in our July 31 Special Update, we suggested adding to the UUP position below $20.91. The stop at $21.90 was triggered on February 7, when UUP closed at $21.89 and the only day it has closed below our stop. Repurchase UUP, using a close below $21.70 as a stop.

    Gold – We recommend selling 65% of GLD purchased at $154.00 on the opening on December 30, which was $155.48, and to sell the remaining third on the opening of January 17, which was $161.17.  If gold closes above the November high at $1804.00, it will likely run to the September peak near $1925.00. Buy a one third position in GLD if it closes above $175.55, using $160.00 as a stop. We are more comfortable waiting for a pullback later this year, especially if Europe’s sovereign debt crisis reignites as we expect.

  57. Maya – AAPL almost always goes down considerably a few weeks after earnings, in this case it's four plus weeks after earnings.  Plus, we're just after a parabolic rise which never went all the way back down.  So, 480 at this point is more likely than unlikely some time in the next few weeks.  And there's room for AAPL to go down further as well, before ramping up into next earnings season…

  58. Maya1…….I'm more worried about what would happen if they do NOT announce a dividend.  Buying stock (or just holding cash) would hold my losses with a 10% drop in the stock price to 10% or less.  If I hold ATM or ITM calls and they announce no dividend, with a resulting drop of 10% in the stock, then I would stand to lose much more than 10%.  So the safest play with this is event is …    The second safest is……own stock       The most risky is to own calls, or puts for that matter.  And yes, if they give out a dividend and the stock kicks up 20 points, then we will have 'missed' making some cash.   But remember, my rules are:  1.   Protect your portfolio   2.   Grow your portfolio.     They are in that order.

  59. Anyone notice, silver seems to be breaking out….hi ho silver…over $35…maybe time to jump on the AGQ wagon…

  60. One more thing on aapl – I wouldn't be surprised to see a 10 for 1 stock split soon, which would be bullish for the stock.  Most companies who serve the general consumer prefer to have their stock widely distributed, ideally in the hands of their customer in order to enhance brand loyalty.   

  61. And now oil after bouncing off the S1 line is at the PP line so we go up or down from here!

  62. lflan – do you hold any of the underlying stock now?

  63. Lflan/Maya – did you guys see this?? The DIVIDEND HISTORY on Apple's website.  Or was it always there before?  I just noticed it this morning.

  64. AAPL  portfolio:   I've bought to close the 30   april 540 covers at  14.10

  65. assie    not yet

  66. IFlan, if apple has been doing so well in their stock price without a dividend why announce one now? Can giving out money be looked at as an act of desperation?

  67. TASR:  I have to say, I'm loving what I'm hearing from TASR on their call. Their two new products are generating a lot of interest and their new AXON video product / glasses gives them an angle into "the cloud" in law enforcement in storing / itemising evidence, etc.  No debt, their 'miss' today basically a one-off inventory adjustment of old models, and what sounds like a pretty good 2012 lined up.  Very compelling return profile on a buy-write of the stock at $4.07 and selling June $3 calls and June $5 puts for combined $2.60.  I calculate that as a $1.47/$3.24 effective price.  Too bad they don't have 2013 or 2014 options.

  68. Now I have 30 April 490s left.   I've place a 39.00 stop loss on these and will trail with a .25 trailer. 

  69. What is making this market run up today???

  70. Guess that answers that question.

  71. Phil/any thoughts on this play
    Trading in an IRA makes selling puts less economical because of the cash/margin issues, but one way around is to sell put spreads with the long leg of the spread being at a strike where the cost of the put is negligeable. For example ABX trades at around $50 and, if bullish, one might sell the $50 put, buying the $25 put, thus using $2500 of cash margin instead of $5000, almost doubling  the potential return.
    An idea came to me that it might be a good idea to buy the long puts for stocks I would like to own separately while put prices are low and stocks are high an then wait for the stock to fall and the VIX to rise before selling the short puts to complete the spread. This would also have two potentially beneficial effects of 1) reducing the spread necessary to make the trade, perhaps, for example from $50/$25 to $40/$25,  thus saving on cash margin, 2) providing an interim disaster hedge as in a falling market and rising VIX,  these far out of the money puts would rapidly appreciate. Obviously the downside would be that if the market stays up, those puts become worthless, but that would be compensated by
    Any comments?

  72. pharm??

  73. TASR / Neverwork – There is something to be said that TASR is probably a better investment than gold if you expect major economic problems!

  74. The 30 are gone for 39.00 even.  We are in CASH!    

  75. WTF? Little early on the stick, no?

  76. Sorry, meant to say compensated by bull call spreads in positive territory. (Having a 3-year-old research assistant on the computer keyboard leads to unpredictable outcomes.)

  77. dmoroz…..that's a good point.  The stock is doing fine without the dividend.   So who needs it?  Certainly not us.  But a lot of people do like dividends, and one of those is institutions, as above. 

  78. lflan – cash here as well, except for a small speculative $495 this weekly put position as per lvmoda's post (vegas!) :)  Cheap play at .48 now!

  79. Wow, market is playing peekaboo today!

  80. Jerconn/Silver — I'm noticing…silver at the top of the usual range…lows around 26 and up to about 35.50 (on the futures)…kinda feels like last year, at this point.  I have a small position in AGQ.

  81. So inventories are good or bad? 

  82. MAYA,
    to add to the great comments above, I worked in a top office of a top brokerage firm. 
    IF we had ever been exposed to ideas like Phil's, and that is a huge IF (never happened, never would happen), most brokers have too many clients to practically apply and manage these trades.  Phil's trade ideas are so unique and on occasion I have run some of them by an old broker buddy – they often scratch their heads, and when they do see the value of the trade, they simply do not have time to implement and/or teach their clients how to do these types of trades.
    Further, the entire architecture of the industry revolves around two main functions:  one, have retail brokers sell to their clients whatever corporate finance (this is where the big money is made) dreams up.  Two, the retail broker is constantly under pressure to bring in more assets, which again impacts their ability to manage complex trades for their clients.
    Sadly, the entire purpose of the industry, to manage peoples money and  help it grow, is about the last thing on the brokerage company's radar screen.
    And keep in mind, this is my experience at a tier 1 well respected office.  I can't imagine what happens when you go down the food chain.

  83. jmm / peekaboo — Sure that's not the 3 year old again?

  84. Pitty the fool that bought VVUS at 22 last night.  I will be shorting them come April.  Didn't have the nerve with the PDUFA.

  85. Phil you have been awfully quite today. Whats up? Meditating?

  86. aussie…I must admit that is a FUN play, a bit of play money on an AAPL short for the rest of this week..   Hmmm……..

  87. dpast..Weekly stocks up 1.63m barrels vs +0.5m expected. larger build

  88. A couple of more generic points on dividends vs share repurchase:   dividends are tax-inefficient use of cash, subject to double taxation at the corporate AND investor level.  Share repurchase is preferred by many companies and institutional investors (who don't need cash like small investors) and is a better theoretical use of cash.  Second, the announcement of a dividend is also seen as the announcement of converting from a growth play to a value play by many investors, thus putting a discount to the PE.  Not necessarily what aapl wants to do right now.
    All this comes from the classic playbook/old school thinking.   Prior to the last couple of years most companies used share repurchases to redeploy excess cash, however studies have shown that these repurchases have not had a great effect in increasing valuations.   Recently, demand has increased for income plays, due to low interest rates, and thus the new thinking is that dividend issuance stimulates more demand for the stock by attracting new classes of buyers, thus adding a demand or scarcity premium to the PE.     
    The net of all this means it's still a coin flip as to what they announce!   But I think they will announce one or the other cash redeployment.  I can't find any reason why they would continue to hold increasing amounts of cash.

  89. XRT is running up again today…

  90. Canuck – Going down the food chain means clients are sold A-share, C-share mutual funds or anything else that is as hands off as possible so that more assets can be acquired.  There are also companies that offer "managed" accounts that charge 1-3% per year but the funds are fit into models run by other companies/analysts.  To your point, the goal is to acquire as many assets as possible and just automate the process. 

  91. EIA Petroleum Inventories: Crude +1.6M vs. consensus of +0.5M. Gasoline -0.6M vs. consensus of -0.1M. Distillates -0.2M vs. consensus of -0.9M. Futures -0.2% to $106.08.

  92. xlf +12.3% ytd with Bloomberg European Bank/Financial Services Index -1.4% ytd…wow

  93. SWY down to 20.33 –  10% on earnings miss mainly from tax charge on Canadian dividend. Total Sales up 6% Gross profit down 1.37%. Net income down. I am following the downgrade police. They fell a lot July, 2011 $25 to Sept. $16 and a good entry then. 

  94. YMI – buying stock.

  95. Pharm – Sorry if this is repetitive but any reason in particular you like YMI?

  96. I've been getting out of AAPL too. The VIX has been going down as fast as AAPL has been going up, so the option prices haven't climbed nearly as much as they should. Annoying…

  97. Pharmboy,
    I took  profit on VVUS @ $21.88 and short OREX instead.

  98. YMI – Their cancer drug is better than Incyte's, and INCY is on the market.

  99. Not a big volume sell-off but technical weakness where there wasn't any before.  

    Iran/StJ – Hey we can certainly go toe to toe with Iran when it comes to dogmatic religious fanatics who seek to hold power by making constant threats against their enemies to prove their manhood to their sycophantic followers!

    Rich people/StJ – Good point.  Seen it happen all the time.  Kudlow thing funny – typical of his "analysis."

    AAPL/Maya – (and, by the way, I had what was effectively an AAPL Money trade idea in last night's chat).   It's the same as the Money trades, you roll them and/or add more longs (detailed in the trade set-up) if it goes too high.  AAPL is now a $500Bn company – even in this insane market – it's simply not that easy to add $50Bn in market cap (AMZN is $80Bn, CMG $57Bn, HPQ $53Bn).  You can't let your trading be based on fear of "monsters under the bed."  As to dividends, I'd say around 4% it would start to be an attractive place to park $500 on the stock.  

    Klein/Pak – He's far too rational for anyone to listen to. 

    Wow, back to even already – that was some pretty impressive Bot action – 20M shares traded down and 5M shares up on the Dow – ready for the next round of bag-holders to buy those F'ing dips.  

    Noblesse Oblige/JMM – Very good point and most of us have experienced it in spades.  Friends, relatives, neighbors, service people – you do have to have a sense of detachment (or develop one) because the wealth disparity is so great that half the people you come in contact with in a regular day are essentially "poor" by comparison.  Tina's friend was up from West Virginia for the weekend and told Tina the reason she hadn't Emailed her back was that he laptop died and she was saving up for another one.  I overhead this and stopped by the store and bought a new laptop for Maddie (11)  I had been putting off and had Maddie give Tina's friend her old one, which was better than what she was saving up for.  I did it that way as it was less embarrassing for her to accept Maddie's used laptop as a gift than if I tried to buy her a new one directly. 

    We have to make decisions like this every day because we certainly CAN help most of the people we meet financially and you can embrace the role that circumstances have placed you in (noblesse oblige) and occasionally suffer the occasional person looking for a handout, or you can build a wall between yourself and those in need – keeping more for yourself and helping no one – even though it's almost no effort to do so.  All I know is, behind that wall – I wouldn't be able to live with myself…

    Great stuff Rustle!

    Best of all:  

    The administration has offered an unrealistic U.S. budget that is dependent on assumptions that would embarrass the Tooth Fairy.

    Cramer/Rustle – The master of anecdotal BS.  

    SCO/Burr – I'm missing why you DON'T like a bull call spread with SCO down so low.  You are down $10,000 and you can buy 10 Oct $28/38 bull call spread for $4 and sell 10 $28 puts for $3.80 for net $200 on the $10,000 spread and your worst case is being back in 1,000 shares at $28 (26% below your current basis) while your best case is getting your $10K back if oil is back below $100 by October.  If you don't believe in that trade, then of course take your loss and walk away.  

    Good draw on Nat gas but pretty normal (166Bcf) for this time of year.  We're still bursting at the seems with inventories despite CHK cutting 10% of US production.  

    TASR/Burr – I know, shocking!  They've been a lousy trade as the strikes don't match well with the stock and I was hoping they'd get back to $5 so we could make a trade out of them but there's no play here at the moment, other than accumulating the stock, which is kind of a waster as they don't pay a dividend and don't have good premium to sell.  Fortunately, it's only early 2012…

    AAPL/Bob – That was both surprising and quick.   Good for China (and AAPL)!  

    FAS Money – Watch and wait 

    IWM Money – Watch and wait

    $5KP – So glad we covered that TSL trade!  They beat on revenues but missed by a mile on the bottom line.  Gross margins were off 30% to 7.1% from 10% expected and that's not good.   They do predict margins going back to the mid teens and that's back on track if we believe them.  As the March $8s are still $1.30 and the April $7s are $2.35, I think it's worth spending $1.05 to buy $1 of intrinsic value plus a month of time.  We'll let the caller expire (or if it goes over $10 we'll be quite happy too) and then hopefully get another $1 for the April $10s (now .70) to keep us under $2.50 on the $3 spread.   Also notice that TLT only shows a $100 net profit with TLT at $116.19, which is $1.19 over the point at which we make $430 if we expire over $115 – you have to get used to this with bull call spreads, your current balances do not give you a good picture of how you are doing.  


    • DMND – Long Term
    • XRT – $58.39 is getting better, was $57.78 this morning.  
    • GLL – I think it's worth spending $1,300 (.65) to roll the March $16 calls to the April $15 calls.  We can recoup that by selling the April $16 calls for .65 or better (now .45) on a move down but hopefully we'll be able to sell the $17s (now .25) for that much if gold gets real.  
    • FAS – At $89.22, the $88 short calls at $5.20 are are 80% premium.  Tempting to sell more but let's just be happy to get a win here.  
    • TZA – They were $2 this morning and now $1.60 and if we DD with 5 more for $800 we reduce the basis on 10 to $2.63, which is a very reasonable target with 22 days left to fall.  Problem is, we're so damn bearish already.  Solution is, let's do this and add an offsetting bull trade.  
    • SQQQ – At $13.18, we're on the Rawhide program for these short puts (Rollin', rollin', rollin') but that's OK as the June $14 puts are $2.40 (+.40) so we can pocket $400 to roll to a $1 lower strike – that's something we're willing to do 13 more times ($5,200) while we wait for a period where SQQQ goes up $1 instead of down.  
    • USO – We have 40 March $39 puts at .8375 and they re now .58 (down $1,030) and they topped out at .65 on the dip to $105.50.  If we sell the $39.50 puts (.75) and roll to the April $40 puts ($1.75) it will cost us $680 to buy $1 of strike and a month of time.  We're not there yet but we need to do it before it costs us $1,000 so we'll keep tabs on that roll.  
    • FAS – This set is bullish and looking pretty safe for the full $1,700 potential profit and currently reading up net $835 so we're certainly going to wait.  I said we'd need another long play and FAS is still my favorite so how about adding 10 $85/89 bull call spreads at $2.50 ($2,500), which make $1,500 if FAS maintains $89 (now $89.81).  With this one, if the $85s drop to $5 (now $7.50), we'll be rolling those out to April and letting the short calls die.  
    • GMCR – Gotta spend the .90 ($900) to roll up to the $65 puts.  They were $4.60 last Wednesday and we have 22 days to play!  
    • TLT – On track
    • AAPL – Testing $515 again, that's my top call (but doesn't mean it can't spike over).  We gapped up from $420 to $450 on earnings and now $515 is an overshoot of a 20% move over $420 ($504) and a 20% retrace of the $95 move is $19, back to $496 and those two average right out to $500, which is a nice, psychological level and, of course, a sensible 25% move off the $400 line that was good consolidation from last July until January.  So that's our goal – we don't expect to see $495 but a $15 dip should be good for $2.80 (price of the $510 puts) but these puts expire tomorrow and are not likely to get us to that promised land and it's not worth chasing and the S&P is over 1,360 so I guess we'll take the loss at .45 – but I do expect that pullback…

    Meanwhile – WOW, what a pop.  Was that a blow-off bottom to flush out the longs?  If so, our short positions are in for a nasty time.  Keep an eye on those long trade ideas from yesterday – we're going to need them if these levels hold this afternoon.  

    11:00 AM On the hour: Dow +0.36%. 10-yr -0.15%. Euro +0.50%vs. dollar. Crude -0.21% to $106.05. Gold +0.8% to $1785.95.

    EIA Petroleum Inventories: Crude +1.6M vs. consensus of +0.5M. Gasoline -0.6M vs. consensus of -0.1M. Distillates -0.2M vs. consensus of -0.9M. Futures -0.2% to $106.08. 

    Dec. FHFA Housing Price Index: +0.7% month-on-month, vs. +1% in November. Year-on-year, prices are -0.8%.

    Ultra-low interest rates can't last forever: The Atlanta Fed's survey (.pdf) of business leaders indicates a higher level of concern over long-term inflation than seen from the projections of FOMC members. Respondents on average predict inflation to run up 2.9% over the next 5 to 10 years, while a healthy 29% see prices kicking up between 3.1% and 5%.

    Jan. Mass Layoffs: 1,434 mass layoff events (at least 50 workers), resulting in 129K job losses (seasonally adjusted). +50 events from December's mark

    February KC Fed Manufacturing: M/M composite index13 vs. expected 9, and up from 7 in January and -2 in December. Future composite index to 20 from 12; future production, shipments, new orders also up. Future employment at highest level in a year.

    Experian claims the automotive loan market is in good shape with rates on new and used vehicles at their lowest levels since 2008 and more lenders willing to extend loans to 6 or 7 years. The company also says delinquencies on 30-day and 60-day loans fell off markedly in Q4 compared to last year

    A chart of the European Commission's growth forecasts gives a graphical view of the size of today's revisions. Even then, one wonders if they're large enough. For Greece to contract just over 4% this year will require a sharp improvement over the 7% annualized contraction in Q4. 

    The G-20 is nowhere near a consensus on providing additional resources to the IMF so it can contribute to the Greek bailout, according to a senior Canadian official. The statement seems to be part of an international push to get Germany to agree to a far larger permanent rescue fund. The G-20 meets this weekend.

    "Intensely displeased" with the EU's trade investigation into its steel products, China threatens retaliation in the form of pulling back from assisting with the debt crisis. It's the most explicit move yet that China will demand trade concessions in return for buying EU paper. 

    Solar stocks (TAN -5.7%) take a beating after Germany announces it will reduce solar power incentives sooner than expected. The government will cut incentives to 19.5 cents per kw hour for small plants, to 16.5 cents for plants up to 1,000 kw, to 13.5 cents for plants of up to 10 mw. FSLR -6.3%TSL -9.9%SOL -7.6%STP -5.4%,JASO -5.3%YGE -7.6%SPWR -3.2%

    Don’t look to short covering to add any more zing to the recent rally, as the level of outstanding short interest among S&P stocks has dropped to its lowest level in more than a year. “While short interest could certainly go lower, current readings suggest some of the extra fuel for the market’s rally since October has been used up," Brown Brothers Harriman says. 

    Safeway (SWY -8.5%) is S&P's biggest decliner, on concerns the grocery chain is being hampered by rising gas prices and other macroeconomic factors. Though SWY reported Q4 earningsthat topped consensus, gross margin fell to 26.7% from 28.1% in the year-ago period, and same-stores sales rose just 1.5% excluding fuel sales. 

  100. neet – very good.  Lucky move for VVUS…..very lucky.  FDA and Obama's mandate for diet and exercise will make things a bit more difficult for VVUS.

  101. Look at those 530 this weekly AAPL calls at .90 plus.  Those are tempting to sell!

  102. Inkarri,
    by going down the food chain I meant when you go to less reputable and less trustworthy firms – think of the old VSE firms.
    However, your other point is spot on – the firms want clients in proprietary managed accounts for two main reasons.  One, it makes it much more difficult for brokers to switch firms and take clients with them. Two, it stabilized cash flow and makes predicting earnings much easier.  The main focus is bring in money and make it stick.

  103. In AAPL weekly 515   104 contracts.

  104. stj…..I got in those at 5.90       players…..put a stop loss at 6.20 and trail!!!

  105. SPX up .26% but the Russell up 1.10% !!

  106. Iflan was it short weekly aapl thx

  107. Out of the 615s at 6.20 for a quick  $3,000 for the portfolio. 

  108. lflan – can you please clarify that last trade?

  109. Gucci/Aussie – if it doesn't say "puts", then they are always calls.  That's how phil does it too. 

  110. llan – makes sense now – moved so fast, I saw 6.30 by the time I read your post!

  111. I may do that again.   It's so quick I can barely post the trades.  The trade was completely over in 5 minutes.  You guys will have to do it on your own if I've taught you well enough by now.    

  112. Don't try this at home    :)  

  113. Keeping an eye on silver, up almost a full $1 today…

  114. I caught that move by studying the one hour and one day candle charts on AAPL, and watching the markets moving up in the background.  Now the candles are black again, but we could get another move up. 

  115. On the hourly chart AAPL likes 517.  I'm watching the markets.  If they move up AAPL may make another surge.

  116. Headline for later
    Europe Shares Close Down on EU Growth Forecast and US Shares close up on HFT BS.

  117. Phil/TSL. I am in the TSL APR8/10 BCS after this comment yesterday :
    “$5KP – Yawn.  TSL at $9.89 and not looking very exciting at $1.50.  Time to sell the $10s for .95 and roll down to the April $8s, now $2.40 so we net .05 (enough to pay for cost of moves) and end up in the $8/10 bull call spread at about the same net $3 with a month advantage over our caller.  ”
    Based on today’s comments do you suggest rolling the 8 down to 7? Thanks.

  118. Going offline for a couple of hours.  All cash in the AAPL port.

  119. IBM racing to $200 ATH!   Good for 45 of the Dow's 54 points today.  

    Knessit/Jomp – Santorum wouldn't last 10 seconds over there.  You think our Congress is bad, try alternating Israeli and Arab politicians at the podium.  

    DMND waking up.  

    I cannot find a reason not to sell PCLN Next week $605 calls for $20.  Put a stop at $10 and get away with that 1 out of 3 times and you're in good shape.  

    PCLN/Jabob – Speak of the Devil!  Well, it's very much a momentum market and that's why there are people willing to pay a 5% premium to PCLN's current $590 (ignoring the natural resistance at $600) to bet they hit $625 next week, a growth rate of 250% a year.  Articles like this are what justify the investment to the beautiful sheeple, who make our glorious profession of selling premium possible so God bless the guy for herding the lambs into the slaughter – especially for having the total lack of morals that is required to purposely omit any mention of Google Flights, which is officially rolling out on mobile devices this week and may completely cripple PCLN and other travel site's model.  

    If you want to be short on PCLN but don't mind owning them for $330 (44% off), you can sell the 2014 $330 put for $26 and buy the April $650/600 bear put spread for $33 so risk of $700 with $4,300 upside if PCLN fails to make $600 for the next 57 days – and goes on to hold $330, of course.  Great for PM accounts as margin is almost zero.  TOS wants $33 for ordinary margin account. 

    LOL Iflan – thanks for the commercial.   Makes me think I should wear a helmet next time I go skiing!  8)   

    SHLD/Gucci – Speaking of clever MoFos – Eddie screwed the bears over with asset sales and a rights offering along with promises of cost cutting and some positive spin in the CC.  It's a company owned by a hedge fund manager, they'll screw you every time.  I had noted back at the time of the big dip that he was only flushing out the longs so he could gobble the stock back up on the cheap – now it's already a double.  My comment from 1/23:  

    HLD/Angel – SHLD, I take it.  As I said above, GS clients are hooked for a $1.75Bn loss so I imagine there's going to be a lot of effort to raise them.  Also, was my theory that the whole takedown thing was just a way to cheapen the shares ahead of Eddies taking them private or selling them off for parts.

    From 1/16:  

    Shatner/BDC – I like the way one of his background singers has a Star Trek shirt on.   I'm not sure the whole crew of the Enterprise can save planet Sears at this point.  Eddie refuses to spend money to update the stores but it is possible that he's flushing all the suckers out so he can take it private before the real estate market comes back while the poor store performance gives him a good excuse to begin the process of selling of the bits and pieces of this American icon and firing 300,000 people without tarnishing his image too badly.  The company still has $43Bn in sales and lost about $1Bn this year but that's a tax write off for taking them private with a $3.5Bn current value against $11Bn in inventory and about $15Bn in payables and Debt they can used to go BK, take it private and then sell off the land and inventory for a very nice profit.  VC at Eddie's level is like a Long Con – you have to think years, not quarters as you analyze the plan.  Meanwhile, the company has been buying back $1Bn worth of stock over the past year out of cash flow you would think they couldn't afford (and, in fact, borrowed $1Bn to do it).  Lots of evidence to support my evil theory…

    I know I say stuff like this and it sounds like a conspiracy theory but evil bastards like Eddie used to pay me a tremendous amount of money to come up with evil plans just like this one so you have to forgive me if I tend to think the worst of the average Corporate Executive as I ran into far too few who ever said – "Don't worry about me, let's do what's best for our shareholders and our customers."

    As to your short March $50 calls, Gucci – Ouch!   They were $4 yesterday and you weren't happy with taking a 40% gain off the table ahead of the obvious risk of earnings and now you are down 100% instead.  I'd say the obvious move is to roll the $50s ($13) up to 2x the $60s ($4.90) so you end up in 20 short $60s at net $1.76 and you're down about $2K at $62.62 (sans premium), which is better than down $6,300 now.  The April $62.50s are $4.70 and the June $70s are $4 so that's your future if SHLD doesn't calm down so I'd consider selling 10 June $47.50 puts (now $4.90) if SHLD crosses over $65 to help pay for the next roll but, other than that, $60 should be a good top as it's 100% off the Jan floor.  

    Wheee/Jordan – When you play the futures, a $2 drop in oil is a big wheeee!  (all the way back to $106.50 again)

    What/Weasle – Just time to turn the bots on, I think.  Dow volume still just 49M at noon.   IBM now 100% of the Dow and IBM and AAPL over 100% of the S&P move.  

    European shares close moderately lower after giving up big early gains. It's the 3rd consecutive red close since the Greek rescue deal was inked. Stoxx 50 -0.5%, Germany -0.5%, France flat, Italy -1.4%, Spain -1.6%, U.K. +0.4%. The euro continues to grind the shorts, hitting a new 2012 high and now at $1.3315. 

  120. DIA March $128 puts at $1.11, 10 in $25KP.  

  121. the RUT and financials are flying?? Is IBM and AAPL in the RUT and did they become a financial too???
    I think I might short myself…

  122. Just the random work of thousands of individual investors !!


  123. So weird… hour after I make my post on aapl actions, some guy published his article on SA, making the exact same points.

  124. Phil-I am holding USO march $38 puts and was wondering how I can offset the pain. Can I sell
    Other strikes on uso weekly puts ?

  125. lvoda – I did even better than the guy on SA.  I used your ideas and picked up some $495 puts, working out nicely!

  126. Was there already an announcement from the AAPL meeting?  It's sinking like a rock…

  127. Good AAPL plan Lflan – no reason to take chances into a wildcard event.  

    SCO/Star – Welcome!  See trade idea from 11:22 comment (cheaper now).  

    ICE making new highs as they jack oil to extremes – when in doubt, buy the manipulators.  

    Poor/Rip – Well it sounds like your BART people have jobs.  They put in time begging and entertaining for money.  I guess there's some logic in refusing to fund a safety net for him that would cost the taxpayers $20,000 a year, which would be roughly one tenth of a penny from each of the 50,000 people a day that pass him by.  We assume that if he were, in fact, given money and not forced to beg for it instead, that society as we know it would collapse and all of us would leave our jobs to get that minimum wage.  The fact that that's not what happened in England or other places in Europe after 80 years of the dole shouldn't influence our thinking on that matter – no sir!  

    I have said before that we need to rethink the concept of work in this country because, the fact of the matter is that it's not necessary or even desirable for everybody to work.  Clearly if all the non-working Women were to go to work one of two things would happen – either there would be 50% more unemployment or we would all get paid 50% less as the supply of labor overwhelms the demand.   Since that is obvious, why is it not obvious that Mr. Push-Up is doing you a favor by not wheeling into your boss' office and taking your job?  I know, you are so much better than him that that can't possibly happen but, in the bigger picture – there's a certain logic to we, as the working aggregate, paying to keep some people out of the labor force so that we can demand higher wages for ourselves.  

    What if we decided we can make do with 25% less people working and we offer $20,000 a year to 35M people to not work.  Let the Moms stay home with their kids and let the hippies play music in the park and let the thinkers hang out in Starbucks and debate the great issues of the day.  We, in turn, would be paid 25% more and taxed that 25% to support the non-workers.  Would you quit?  Would you take $20,000 a year instead of $200,000 a year because you object to $7,000 of your money (the 3/4 remaining workers) going to support the guy that decided not to work?  

    He's happy with less.  He's choosing a life you don't choose but what's wrong with that?  More to the point – where is the harm?  You can kick him in the butt and force him to work but the problem is we don't NEED him to produce $16Tn worth of goods and services.  We've become more efficient and there is no need for EVERYONE to work.  We no longer make our children work in factories, we no longer send them off to apprenticeships when they are 10.  We don't make Grandma spend her waning years doing laundry for strangers or even helping around our own homes while Mom and Dad both work all day.   Are those the good old days?  Is that what you want to kick people's asses back to?  

    Why can't my children kick around in a cheap flop for a few years after college before rushing out and chaining themselves to a desk for the next 50 years?  Would it be so terrible if our kids graduated college and got $1,500 a month for 3 years to stay out of the work-force (creating 12M job openings) and go get some life experience (or go for advanced degrees)?  Sure some would take drugs and play Call to Glory all day but a few million would become well-rounded and become real assets to the companies that eventually hire them. 

    Who are you or I to decide who is deserving of help and who isn't.  Maybe working for a living is simply not for everyone.  Does that unravel the fabric of society?  If so, we'd better round up the rich folk – half of them wouldn't last a day waiting tables…  

  128. Phil – great post!

  129. AAPL Traders : Live Blog: Apple Shareholders Meet

  130. Phil / SCO Trade
    Thanks for the trade idea.  I'll try it out to make up the loss.  Question : Would you hold onto the 2000 shares of the SCO stock?  In your worst case it would drop down to $28, but if I still held 2000 at $38.5, I would take a potential $21K loss on the stock.

  131. AAPL/LV – Buying their own shares at $500?  I'd be shorting the crap out of that idea.  

    Rick having orgasms over the 7-year note auction.  3.11 bid to cover 19.3% direct (12% average) and 1.48% for lending the US Government your money for 7 years.  

    The Treasury sells $29B in seven-year notes at 1.418%(.pdf), a significant bounce off the last auction's record low yield of 1.359%. Bid-to-cover ratio of 3.11, vs. a recent average of 2.81; indirect bidders take 41.9%. Direct bidders take 19.3%. 

  132. Phil,
    I wanted to thank you very much for the 5kp portfolio.  I find a great deal of value for us little guys and hope that you will continue a low dollar, no margin portfolio for new folks to learn with.
    That being said, I screwed up and did not cover the TSL roll from yesterday.  I currently own 5  x APR 8 calls @ 1.62
    What do you suggest doing?  I am not sure what  happened there, but I will certainly be more cautious in the future.
    thanks again for your time and advice :)

  133. Phil/Not working – I think we could easily find people who would not work for $20,000 quite easily.  Just expand the definition of disability slightly, especially for people with a mental illness or substance abuse history, and pay them SSI at $761 per month plus $200 in food stamps and Medicaid and the cost should be under $20,000 per person.  It would get people out of the homeless shelters, which are expensive to run due to security, laundry, etc. and divert some of the saving to more Section 8 vouchers.  By helping this population stay housed and their basic needs met, they are less likely to end up in the hospital, psychiatric units and other highly costly beds per night.  I would love to be put out of business on the homeless shelter side of the business, and lots of surplus housing could also be converted to two or three family rental units, or buildings would start building more apartments to cope with the demand.

  134. Phil,
    When you trade the futures oil, what product are you trading because I subscribe the actual  Nymex Commodity Futures and the oil prices you quote never seem to match the Nymex quotes. What exactly are you trading?

  135. Phil – love your thoughts on the point of working or not working.  Not everyone has to work…that resonates well with a Jewish law that you're not allowed to live in city without at least ten "non-workers" (batlanim) – who are not working because they are supported by the community while they study legal and religious texts.  These "non-workers" give back to the community by teaching and counseling, judging, etc, etc…in our society tho it's not so clear that everyone would give back to the society, tho certainly many would…but as you say there are many who before or after college are not productive for some time and then "land on their feet" and find their calling…

  136. TLT liking the auction….

  137. Russel Phil
    Since where we go from hear is the subject of the day, my 2 cents. I watch and trade IWM and watch SPY and XLF. Last year IWM topped about 87 but held for short times above 83.75, todays high so far. SPY has not held 137 and XLF is in the dumpster. Russel made excellent points, hope there is a link to his latest Fast Money. I still see oil having problems over $100 and by my measure the economy is tanking. For the short term my bet is a correction in line with russel's 4 to 5%. What I wonder is there enough suckers left to make the all time high, NASDQ excluded, without the rest of the world with us? Then there is a 20% drop or more as the drop feeds on itself?

  138. FWIW, silver just broke up past its Oct. 28th high…

  139. Strange day, DXY is getting punished (EURUSD slowly marching up), TLT is turning green and the markets are flattish. Something has to give right?

  140. Are they trying to take  the dollar back to 76 v euro

  141. revtodd64
    Not working, Yesterday some were crying that the Greeks have to work for 900 a month. Now you saying pay the homeless 20,000 a year for doing nothing possible to buy some more liqueur or what ever. Am I hearing this right. If they would get nothing from the Gov. possible they would get off their ass and do something.

  142. Phil – believe it or not, I'm still holding some AGQ March $75 calls that you suggested a few months ago, they're just coming right (breaking even) today…what would you suggest going forward?  

  143. cnbc has an oil trader on saying refineries are running at capacity…hahahahaha

  144. Phil Revtod Jerconn yodi
    As a disabled person who owns a home, only taxes and insurance, I have a couple of points from experience.
    Supporting people regenerates income through velocity spending.
    There are more people than is known that would love to work, miss the social interaction, popular accepttance, and feeling of contribution.
    Like long term need not apply, disabled, been in jail, age, and whatever just forgetaboutit!
    I personally try to help for free, but mostly I'm rejected for that also, am I the only one?
    Now lets take my tiny monthly pay, add insurance, and taxes. What would I have to get for pay to just go sideways? $36,400 per year, $3,033 per month, or $17.50 per hour and now I have traveling expense and no time to try trading stocks. Where I live $10 per hour is a good job, most are $7.50. Nobody gives a crap about my education and experience never mind my desire for the above.
    Last are you listening to reality or FOX News!

  145. Phil / AGQ – any good ideas for a bull call spread on this one?

  146. angelcur
    What are the plans for the Canada pipe line without capacity, BS! Get that thick crap loaded on the empty tankers unloading light crude in the gulf that we want  and sending it where the air doesn't matter. Big oil control of the world and our politicians can't say no.

  147. Shadow – you're a good example of what I mentioned, one who has something to contribute.  It's a shame that finding a way to do so is so difficult…I was thinking of adding to my previous post that there should be a proactive effort to locate and encourage people who have what to offer, and help them to do so…

  148. looks like 4.00 a gallon gas this weekend

  149. Dollar dropping, stock and comodities rising!
    That has to be the answer!

  150. Gasoline is already $4.20/gallon for the cheap stuff here in Los Angeles.

  151. I cant handle this sh!t, Im shorting oil here at 107.70…Of course they probably will ram it up to 108.20 and it will close at 108….I cant take it anymore….What a crock!

  152. Holy Crap.  Oil at 107.80!  

  153. I guess the CNBC pump job is really working on the oil prices… just going by R3 at 107.66! Unreal… Of course USO is also over R3 now.

    Of course, they drove oil to 107 last March and 114 last April so maybe it's seasonal!

  154. Shadow This is a typical example of a screwed up system like being between a rock and a hard wall. You damed if you do and damed if you don't.

  155. AAPL looks like some info is leaking out of the back door from the meeting from 510 to 513 again

  156. Well we saw what happened last year when oil spiked, Egypt overthrown, Syria overthrown, emerging markets got hit hard with inflation and we fell almost 2000 points off the Dow and 500 off the Nasdaq.  Be curious to see what consumer spending is this weekend.

  157. GS had a long oil call yest. target 107.55


  158. jromeha – Whenever I see stuff like oil at ridiculous levels and, I want to "logically" short it,  "the market will remain irrational longer than I will remain solvent" kicks in. FWIW, I'm already losing lots on oil shorts but I'm willing to wait. You make it out of Kandahar yet? My kid left Thursday morning (your time) and will be in Cyprus by now, drinking heavily I expect.

  159. First gold, then oil.. every trade is going against me. Need a break or will go broke.  Pls pls Lloyd spare me…

  160. Phil, Thanks for your comments you give me a lot to think about especially the part about taking people out of the labor force is very interesting. 
    Yes I am very cautious and skeptical. My life experiences give my view a different paradigm. Never made $200k and rarely $100K. My mother passed away recently but for the last 20 + years she was in a lot of pain and needed 24hr care. The state paid her medical care and wanted to put her in a nursing home. Mom had all here faculties and would have not lived long there. My sister and I paid for her room and board and 24 hr care for her to live in a cabin in the woods where she was happy. My share was $4,500 a month and am very glad to have been be able to pay it. Now it is time for my wife and I to actually be able to go on vacation and out to dinner and save for retirement. We are lucky as we have some money saved, a paid for home and great friends and family that help each other. With our savings, social security and medicare we should do fine. My concern is with the government devaluing the dollar every time they print money my savings is shrinking faster than I can replenish it. I am thankful for what you do and the help you are giving me to preserve what I have.
    I saw friends contribute money to a local charity to help families who were struggling. He even had teenagers going around with the cans with the fake flower veteran groups used to collect money. Turns out the teenagers receive 25% of what they collected and he kept the rest. The families he was helping was his and some of his relatives. He wisely collected on his life insurance before we could buy a rope to hang him.
    Had a friend with 5 kids and almost homeless. My wife and I borrowed money $5000 at 13% interest to help them. Six months later they inherited a lot of money and bought a cabin cruiser and a house. That was in the early 80's and we are still waiting to be paid back.
    Just this week we found out this week one of our 8 partners helped himself to about $80K and the rest of us won't have a pay check for a couple of months. That pissed me off and probably why I am ranting.
    My heart is not closed to people in need but hard earned money needs to count for something and I do not trust our government to spend it wisely.
    Your are very honest and I appreciate and respect your opinion. Thanks for your help.
    I wonder if we are not all suckers who let politicians of both parties divide us and by pitting us against each other to divert attention away from their greed.
    Thanks for the therapy

  161. Yodi – AAPL meeting over already, nothing spectacular…not sure what AAPL stock is doing…

  162. Who are you or I to decide who is deserving of help and who isn't.  Maybe working for a living is simply not for everyone.  Does that unravel the fabric of society?  
    Yes it does.
    Sure the 200.000$ a year wouldn´t quit work to become 20.000$ a year state dependents. But the 25 and 30.000$, that, by the way, have the less atractive jobs, would consider it very unjust that they have to work (hard) when they could be at home, and, work expenses considered, receive almost the same.
    In time they would become less and less atracted to working and drawn to dependency.
    When their numbers increase you have to overtax the productive ones to maintain the status quo because those pools of state dependents make good voters too.
    You can see it live in Portugal if you want.
    Oh! And people will come from farway places, like  Romenia and Morocco, to admire, (and participate), the great social state.

  163. 25KP / Phil – The AAPL puts dropped like a stone at 1:50, going from $0.53 to $0.24 in 2 minutes…. They are now $0.22!

    Also, the USO puts are now $0.39. The 36.5 puts are now $0.52 and the April 40 are $1.44.

  164. STJ…thoughts on DECK, CROX, CRM for earnings?   CRM 145/115 for 1.82 cr weekly)(    DECK 110/75 for 1.50 (march)
    CROX 22/17 (march) .82  

  165. Any thoughts on the plummetting VIX (VXX)?  Lowering premiums to load up for a "crash" tommorrow (a couple of weeks ago I think VXX shot up something like 12%+ in a day when the dow dropped less than 100 pts and that would still leave us at about todays low/support ~12,880) or just a sign that markets will laze around current levels for a good while?  Will GDP and Sentiment even matter?
    Thanks for everyone's input--I learn a few new things every day.

  166. Silver/Jerconn – It's a runaway market, not worth getting in front of these trains unless you plan on rolling and doubling down for about 3 months.  

    AAPL/LV – A stock split is another thing I really hope they don't do.  Might be good for the stock but will turn the company into another toy of the Banksters, especially with their position in the Nasdaq.  

    TASR/Never – It's $2.50 calls, not $3 otherwise I would love that trade.  As it is, may as well just sell the $5 puts for $1 to make $1 at $5 but, then again, may as well buy the stock for $4.18, which is why it's a no play at the moment – no fun way's to sell premium.  

    Puts/JMM – Makes good sense.  If the stock goes up, you win and if the stock goes down, you sell puts for better money.  We had a good conversation last week about structuring the IRA to set up an LLC that can then trade on margin – seems like a good idea to me!  

    Tier 1/Canuck – That is just sad.  Also, these strategies do not encourage churning – also a big no-no in the brokerage world.  

    Quiet/Dpast – Just a bit behind as I decided to do a detailed run-down of the $25KP.  

    AAPL meeting not going so well I guess.  

    TSL/$25KP, Hemas – Yes, to the April $7s, not the March!  

    Random work/JRW – ROFL!  

    Seeking Alpha/LV – Happens I lot, we seem to be a constant source of ideas over there.  I don't mind so much as we get it first but it would be nice to get some recognition.  

    USO/Celest – Keeping in mind this might not stop until USO is at $48, you want to always be rolling up in strike and out in time so the $38s, now .28, are fairly done for but you can roll to the April $40 puts at $1.55 for $1.27 and you can sell March $39 puts for .45 to pay for some of it but I wouldn't as I'd rather see if USO holds $40 for a day and, if so, then you can sell April $41 puts (now $1.97) and spend $2.50 to roll up to the $44 puts so you will have spent net $1.77 to roll into a $3 spread plus what you already spent on the $38 puts originally.  If you get more bullish, you can buy back a couple of the lower puts or add some higher puts or spend a little to roll one side or the other and widen the spread.  

    Thanks Aussie.  

    SCO/Burr – No because it's an ultra and will decay over time so no fun to hold long-term.  Oil may go to $140 and SCO lower than $28 but easier to roll the short puts with your sidelined cash than sit with stock that's down $20K.  

    Household debt/Kustomz – Scary

    TSL/Scott – The Apr $8s are down to $1.45 and not looking pretty but you can sell the April $9s for .95 and roll down to the July $6s at $3.15 for net .75 and that's a total net of $2.37 on the $3 spread that's $2.69 in the money and hopefully you'll be able to sell another $1 in premium to give yourself a potential double at $9 down the road but, as you are only down .17 ($85), no real reason not to just take the loss and wait for a better short-term opportunity rather than tying up $1,185 for 6 months.  

    Work/Rev – Not to mention that the money pumped into that concept would all go right back into the economy and "trickle" up to all of us workers, who will have millions of more people to sell stuff to. 

    Oil/Ging – I use the /CL contract on TOS.  It's a little off the NYMEX but lots of people trade futures on TOS and anyone can get a paper-money account and learn to follow for free so I stick with that one.  

    Batlanim/Jerconn – We have simply lost the value of liberal arts.  Even the phrase "liberal arts" makes most conservatives sneer.  We celebrate the ancient cities like Florence and Rome and Paris and London but they were literally teaming with n'er do wells like DaVinci or Michelangelo, who preferred to sit around drawing and painting and sculpting all day to punching tickets down at the laundromat.  Sure they HOPED to get patrons (and we don't have many of those anymore) who would support them, as did many poets and authors but, in general, they were Bohemians who didn't mind living with less while they pursued their interests.  Einstein took a job as a patent clerk because the tedium of the low-wage job left him a lot of time to think about the Universe.  If he had to take a minimum wage job these days, perhaps he would have chosen to run quants for Goldman instead and we would all still think atoms are tiny solar systems, etc…  None of the John Galt crowd will ever admit that most of the great achievements of human civilization came from dreamers – not industrialists.  We no longer reward or even tolerate the dreamers – which is why we have 200 kinds of breakfast cereal and kids who look like cows while, elsewhere in the World, 15M children a year die of hunger each year.  

    Suckers/Shadow – I'm not sure we need suckers anymore.  Now it's 2pm and we have 68M shares traded on the Dow, just 10M per hour since Noon.  My daughter could crack her piggy bank and buy some DIS shares and move the Dow at this volume level so how can you trust anything you see?  IBM is up $4, CVX up $1, PG up $1.62 and that's $6.62 times around 8 = 53 Dow points and the Dow is up 36.  Meanwhile, the Dow fell 60 points to 12,880 and then jumped back 120 to 13,000 and is now down 26 at 12,974 and that has led to the volatility index dropping 4% to 17.50, indicating we are at the LEAST volatile market conditions since before the crash.  Somehow – I don't find that comforting…

    Oil $107.83 – Holy crap!  

    Getting off asses/Yodi – You miss the point.  There's no need for these people to work.  Our society produces more than we need with the workers we have.  By sticking to antiquated concepts of work and reward you force our nation to overproduce and overconsume resources while inflating the labor pool in a way that is more detrimental to the workers than paying a little bit of tax to support the non-workers.  Why don't you come home and whip you wife and your children and tell them to get jobs and stop living off your labor?  Would it kill us to consider other people part of our family and be happy to support them as well?  Someone once said: "When you give a luncheon or a dinner, do not invite your friends or your brothers or your relatives or rich neighbors, in case they may invite you in return, and you would be repaid. But when you give a banquet, invite the poor, the crippled, the lame, and the blind. And you will be blessed, because they cannot repay you." Too bad that sounds like a load of liberal crap to the average American… 

    AGQ/Jerconn – I'd take some off the table and keep tight stops on the rest.  Who knows how long this party will last?  

    Refineries/Angel – Oooh that makes me mad!  It says right f'ing in the first paragraph of the EIA Report that refineries are at 85.5% capacity.  They lie right to people's faces and no one does a thing about it – it's sickening!!   Also notice that last year we imported 482,000 barrels a day of Petroleum Products and this year we EXPORT 870,000 barrels a day for a 9.5Mb/week draw on inventories vs last year.  That's in addition to just 18Mbd of product supplied vs 19.35Mbd last year so, IN ADDITION to the 9.5Mb we're shipping out, refineries are producing 9.45Mb less each week.  That's an entire's day supply of lower demand in the US each week and we're STILL net building inventories!  Best of all, we're paying 15% more – exactly enough to keep revenues even on our lower demand.  I'm sure if we use less, they'll just charge us more…

  167. jerconn
    AAPPL meeting not sure just a guess

  168. Well they got oil above 108 wrong side of that trade today

  169. Low volume, high oil prices, ignoring foreign affairs and generally weak earnings, anyone else smelling last July coming around again?

  170. Bertl/ $4.00 gas
    It's already over $4.00 a gallon here in San Ramon Ca. I pay $4.23 a gallon for premium to fill up my Beemer! 
    The outrage is not just the gas price!  It's that I was that close to considering a Toyota Prius!

  171. Greno – lol, Id probably be doing the same thing if I didnt have a little one. Instead I will be loving life at Chuck E Cheese's and the Children's Museums with my 3 1/2 y/o daughter. I wish I was in Kandahar, that place is awesome! I was stuck in Bagram and finally got out of there today. Had to stay up all night to ensure I was first in line for a Space A Blackhawk ride. Didnt want to risk flying to Kabul International and taking a convoy b/c right now it is VERY hard to travel on the road here b/c of our Koran burning habits… The views on the ride were AMAZING though…

  172. You just can't please everyone, it seems.  I would guess that the next round of sovereign debt purchased by European banks will be Latin American.  Let the ECB buy the Euro stuff, since it has nice yields, and apparently bears no risk of loss. I wonder how long they can run out that string.  From FT:
    February 23, 2012 4:12 pm
    German bank chief hits at Greek debt deal
    The deal eurozone leaders struck with private holders of Greek government bonds to impose deep cuts to the value of their holdings was “as voluntary as a confession to the Spanish Inquisition”, the head of one of Germany’s biggest banks has said.
    The comments from Martin Blessing, chief executive of Commerzbank, came on a day that exposed the scale of the damage that Europe’s sovereign debt crisis has done to banks’ balance sheets.

    Echoing ill-feeling among some other private holders of Greek bonds, Mr Blessing expressed dismay at the European Central Bank’s defence of its own €55bn holdings, which have been protected from any cut in value. Banks have said this two-tier treatment risks making investors less likely to invest in government debt.

  173. phil
    I am short the Mar 34  sco's.  would you roll at this point or take the loss or buy a put ?

  174. …so I have been sick as a dog, looks like all the volume was early down then up. Was there any news event or why is this market tolerating being up while gold and oil race for the moon…something has to give, right?
    I also read some yahoo on SA's take on oil, which without knowing his background or ability seemed like a reasonable explanation. It was that there are elections taking place on March 3rd and that both sides are rattling sabers toward the West to appear tough but in fact there economy is in such shambles that they will quickly fall in line after the Khoemeni wins. Of course this may be utter BS but there are smart folks here and I am delirious with this bug…and shortish
    Any thoughts?

  175. Phil
    Why the sudden drop in GLD?  Just curious.  Took some profit on ABX.

  176. Yodi/Phil/Shadow -Work
    I think Phil and Shadow make my main points.  The reason I say expand disability is because there are many people who have serious mental and physical disabilities that greatly limit any ability to get a job, even if they can work at something.  It is also cost effective and saves society money to subsidize people to have decent food and housing.  When someone becomes homeless they end up costing society more in the long run, because they are going to end up in a shelter, jail, prison, a psych unit or someplace that is more expensive than their own apartment.   I run a parole program that saves an estimated $3.80 for every dollar spent.  If you know a better place to make 380% on public money, I'd like to hear the answer.  As Shadow notes there is also a money velocity effect for related businesses, like apartment construction.  Actually who do you think is spending money at Walmart and Dollar General and where did they get it?  If you have stock in those companies, you better be hoping welfare subsidies don't get cut. because it is a big chunk of their sales. 
    This is what gets me when food stamps come under attack.  Do a sort for low Price/Sales stocks to find the best values, and grocery businesses fill a lot of the slots as their values fall.  Imagine what their bottom line would be like if food stamps were cut.  For that matter what would JP Morgan due if they lost some of the $4.5 billion they make from administering food stamp cards.  I would think more jobs are created from subsidies to the poor than to big oil.  And while some money might be poorly spent for drugs and booze, it doesn't even begin to approach defense contractor fraud.  

  177. why is the RUT so strong today???

  178. jromeha – Sorry, meant to say Bagram. You must have got into Kabul just as my son was leaving.

  179. We have not had a meaningful correction in a while…

  180. ETF are also overbought right now:

    Of the 200 or so ETFs across all asset classes that we track in our daily ETF Trends report over at Bespoke Premium, 94% are currently trading above their 50-day moving averages. 

  181. Earning strangles / Sundevil – None of these guys (CRM, DECK or CROX) inspire me that much. The CRM options seem to imply about a 9% move now when on average the stock moves by 8.3% meaning that they are priced somewhat correctly. You mention 115/145, I would actually go to 115/150 to be safe… That gives you about $1 against $13 in margin in the weeklies. But I don't have much confidence… 

    DECK prices about 11% move when they move about 8% on average, so once again, they seem to be priced correctly. And that's one of the old MoMo stocks so I would be careful…  A Mar 75/105 strangle can be sold for $1.90 against $9 of margin. That has a 15% cushion on either side and they can be rolled $5 up or down in April straight up.

    CROX options price in a 12% move when they usually move about 6% so that is more interesting. But this is one killer stock… I have bad memories of this one! An 18/23 strangle pays you $0.77 against $2.00 of margin.

  182.  cnbc has had numerous stories on today about how high gas prices DONT hurt the economy….hahaha

  183.  during this entire secular bear market we are in….even swoon has been preceded by soaring gas prices…but that is just coincidence i guess.

  184. BTO. 30 april 500 calls AAPL

  185. Velocity spending/Shadow – Good point.  Of course you are clearly in the "need" category under any rational definition and, of course, our current safety net doesn't even go that far, does it?  As you say, you'd like to work so let's say the Government benchmarks $20,000 if you don't want to work but also matches $10K to an employer who is willing to pay you $30K or more.  That's a win-win as you are motivated to get 50% more than the Dole and, as you say, most people WANT to work and your employer gets a more qualified person at a price they can still afford.  So many ways we can reinvent the system if we stop thinking inside tiny little boxes…  

    AGQ/Terra – Crazy-assed ETF.  You can play it to go bat-shit crazy (was $191 last year in April) by taking the June $70/85 bull call spread at $4 and selling the Jan $30 puts for $2.55.  AGQ hasn't been below $30 since Summer 2010 and the crash low was $16 so figure silver goes back to $12 and you have to DD at $16 and you have 2x AGQ at net $21 as the worst case, with all that ass-kicking premium to sell.  That's a good way to play silver long.  

    Oil/Jrom – It's on a tear now, very hard to short on day trades (but tempting).  

    AAPL back home at $515.  

    Skeptical/Rip – Hence my quote above.  If you do good deeds with the expectation of being repaid, you will often be disappointed.  There are many bad and greedy people in the World and some of them are poor and some of them are rich.  Of course I have had many people take advantage of me over the years in similar ways but that advantage was mine to offer.  I can also tell you about dozens of people who turned their lives around and who remain a valued part of my extended family over relatively trivial acts like lending them a few dollars, helping them get a job, having them over for dinner once a week while they were unemployed, co-signing a loan…   At the Food Bank in NY, we feed tens of thousands of people every day and about 2,000 meals a day at 116th street alone and sure, you see some of the same people over and over and over again but I'll feed 1,000 drug addicts gladly for the one family that we can help survive a rough time and manage to turn their lives around.  We help people because they're people – it's a simple as that.  I was going to say it's like when you pick up a can of soda on the street and put it in the trash and you don't expect any applause – just a better World but, sadly, how many people even do that?  

    Society/Antbatalha – Other than importing poverty, I don't have a problem with the scenario and the problem Portugal has is that Romania and Morocco don't do the same for their people.  In that case, your logic is that we should all do less than our neighbors to make sure no one takes advantage of us (leading everyone to ultimately do nothing) and there's you building that wall I already told you I refuse to live behind.  You assume the worst in people, that's fine for you, I guess.  As I mentioned, England and Ireland have the Dole and people go on and off it between jobs but mostly they want to work and be productive.  It's a matter of educating and motivating our children but, if your view of our society's children is that they are a bunch of worthless leaches – I'm not going to convince you otherwise, nor will I waste any time saying that is even more of a reason for the Government to be a guiding hand and make sure that poverty is fought tooth and nail to make sure all children in our Nation are well-nourished and well-educated so that they have every opportunity to make a positive contribution to society.  

    AAPL/StJ – Yes, that's why I said to cash them at .45 this morning.  Not sure what you mean about USO, hopefully that roll was made at some point too since this morning.  Are you suggesting taking out the short puts?  Not the way this thing is flying. 

    VXX/Weasle – $24 is nice and low for them and I certainly like selling the March $23 puts for $1.15 and buying the March $20/23 bull call spread for $2 for net .85 on the $3 spread that's 100% in the money so a bet that VIX finishes March over 17 doesn't seem so crazy.  

  186. Stj………paid 33.60 for those. We will be holding these…….not a daytrade

  187. APPL / Iflan – Whats your conclusion from the shareholders meeting? I see you are bullish even with no div /share buyback

  188. @Felipe
    Haven't often heeded your advice and  'taken the money and run', on  a quick gain, but early this a.m. I noticed silver lagging Gold by a significant percentage and jumped in to two contracts and don't you know that by 1:30 pm. that little canoe came in, and I promptly sold for a 5 figure gain.
    And no, I'm not going to donate a part of it to theBamster's campaign, but I might get a buncha cupcakes and bring them down to the Meals on Wheels dispensary.   I'm for sure gonna have some myself and maybe a cookie.

  189. Speaking of earnings, DMND reports after the close tonight…. I wonder what they are going to say! And we have positions in the $25KP and $5KP portfolios.

    Also reporting tonight, FSLR – that could impact the TSL trade. And BTW, the options don't seem to price normal volatility in this stock. The weekly straddle prices in a 4% move when the stock moves almost 8% on average… Would not want to touch that one…

  190. Lflan, just read your post. are you still go for the BTO 500 Apr Call for overnight hold or more?

  191. lflan – any plan to cover the $500 April calls before the close?

  192. 25KP / Phil – You are right, the AAPL puts are gone, but on the USO you were looking at the roll in your 11:22 post. I'll assume that it was made around then in the portfolio.

  193. The meeting looked like a wash to me. No apparent effect on stock. These 500s will be held until significantly profitable…….days?…….weeks?…..

  194. No covers

  195. Phil--is it crazy to not be bullish now???
    betting the other way is chinese water torture

  196. Volume 79M on Dow at 3:30 – really amazing that we can imply a 1% move up in the indexes on the trading of 0.0001% of the shares.  Statistically, it's not a relevant sample.  

    July/Rustle – Now we have the Dollar down 1% with the indexes not up 1% but oil's up 2% so all must be well.  

    SCO/Willie – I think they pay off one day but now we are in defensive move so the March $34s at $1.10 can be rolled to the April $32s at $3.10 for $2 and you are paying $2 to buy $2 in position plus a month to be right.  SCO was $41 at the beginning of the month so figure a 50% retrace to $36.50 is reasonable over the next 60 days and, if you can live with that ($4.50 intrinsic) then spending $2 is a good investment.  Keep in mind though that you may end up in the May $30s or the June $28s before this insanity ends….

    Something/Sage – You would think but all I know is we have to hit our buy list tomorrow if the S&P doesn't tank again.  I think all the stops are being pulled out to get oil to the moon at the moment but the act of pushing oil to $110 itself crashes the market and causes oil to fall back below $100.  Unfortunately, you may have to wait for earnings to tell the tale in April and that's probably why they waited until guidance of the S&P was already logged in to pull this trigger.  Now we can pretend, like Cramer, that a 15% rise in oil in one month won't affect consumers.  

    GLD/Russell – Well geez, you would hope SOMEONE in the trading universe is smart enough to take a profit at some point.  When you see those sudden dips, it's usually a fund pulling the cash trigger to get while the getting's good.  

    Good point Rev – Like that Times article last weekend, the same people who vote against aid are often the biggest recipients.  

    RUT/Jabob – I don't know but they jammed up 2% off the bottom for a 1.5% gain on the day – all on no volume at all.  

    94%/StJ – That is crazy.  

    Gasoline at $3.30 – high of day!  

    Cupcakes/Flips – Good enough, Obama can buy his own pastries.  Congrats.  

    USO/StJ – Thanks.  

    Crazy/Jabob – Have to just go by the technicals now.  Plenty of trades from yesterday at S&P 1,360+ and, when we fill 10 days of those, I'll have 10 more.  I learned that lesson in 2008, the crash will come when it comes, you can't force it.  

    Yay, I'm caught up! 

  197. Phil,

    What is the best vehicle to short oil? SCO? DUG? Or sell calls on OIH? Thanks

  198. Was there an official USO roll in the 25KP?

  199. Oil/Japar – At the moment, I like SCO.  A 10% pullback in oil is a 20% pop in SCO to $38 and you can buy the April $30/35 bull call spread for $2 with SCO halfway up that spread at $32.32 so all you are saying is oil goes no higher than $108 and you have a 150% potential upside to your in-the-money spread.  You can pair it with something but why bother?  If oil goes up 5% to $113, then SCO drops 10% to $29 and you can sell the April $27 puts for $2 (current price of the $30 puts) so be happy with the 150% upside potential and only sell puts if you need to.  

  200. USO/Jrod – Sold March $39.50 puts to help pay for roll to April $40 puts.  

  201. And here comes the selling and the volume into the close. 

    Gotta run – will catch up later. 

  202. Phil / volume — The Dow volume isn't a simple formula. I read about how it is calculated once but can't find the reference anymore. The top 5 volume leaders traded 275M.

  203. I just read an interesting article comparing aapl to amzn. If you are looking for a short to ‘balance’ your aapl holdings over the next few months, study amzn. I hold no amzn positions right now.

  204. revtod Phil
    It delites me to hear your views. I don't have much money left but a friend who helps with shopping and cleaning I can't do I have put asside the health insurance deductable, I hold it so it doesn't get spent. I also buy small things at the grocery store, meat or vetables and don't expect anything and don't get anything for it. Why? It makes me feel good. People whit millions and a least 1 with a billion never do anything. My last business got raped 2 times, a midwest banker and a Texas ???????.
    A older man rolls my garbage can to the street and back on Tuesday now, 15 years ago I gave him $300 worth of underground wire for his oh my god $$$$ custom rock barbeque. I did that because he gave some starving mexicans work building it, as far as I know he has used it twice

  205. So i think what happened @ the aapl board meeting was something like this: Cook says. “We have too much money and we are considering what we should do with it.”. This implied a possible dividend coming, and that was all investors needed to hear, propping the stock up at present levels. For us, it’s full speed ahead.

  206. I guess people don't like shoes anymore – DECK and CROX getting clobbered AH following some lowered guidance on both sides… CRM is up though as they beat.

    If you played the strangles, DECK and CRM should be OK, but the CROX position will need to be adjusted. 

    These plays are just for fun and experience dealing with position adjustments. Like I said in my post, I didn't have much conviction in any of these plays.

  207. AAPL / lflan – Isn't it what they keep on saying though… That cash pile has been around for a while. Even MSFT got around to distribute some to shareholders. And it's not like AAPL is greatly acquisitive like Oracle for example! And I am not saying that dividends are the best way to go, targeted acquisition to help diversify or strengthen the product line could be good as well.

  208. Wow, USO goes to the moon.  Puts are toast…, burnt toast.

  209. stjeanluc/Earning strangles,
    Great calls.  Thanks.

  210. YMI offering more shares….told ya the other day.  Those charts a few days b'f get a good spanking then recover.  IRWD, EXEL, etc…..Buying more tomorrow.

  211. 25K  -  Imagine if Amatta was trading this years 25KP????  At least we'd be getting a chuckle on some days….  

  212. What a bunch of pricks! Really!?!? Oil up 1$ ah!?!?!

  213. Oil going to 114 now.  USO loss was brutal.

  214. Wow how beautiful is that CMG chart.  Its a perfect 45-degree linear line graph. 

  215. Phil, I bought 3x FAZ 27/29 BCS and sold 2x JPM Mar 37 Puts to fund the purchase a couple weeks ago…would you adjust?

  216. Amatta / Burrben – You mean I can un-ignore Amatta now?

  217. Wow, DECK taken to the woodshed after hours for great results and pessimistic guidance, down 10.7% AH (who knew sheepskin prices would go up?)  When is the market going to pay attention to all these companies reducing their guidance?  Last week both Smuckers and General Mills reported big 4th Q sales decreases (caused by price increases), accelerating in January, in everyday staples like Cheerios, Folgers, Crisco, and peanut butter.  Maybe people are giving up their Folgers and PBJ sandwiches for SBUX Lattes, Kcups and $10 Burritos because they're doing so well in the stock market, but I guess they're still not going to be able to afford to drive to those places anymore with $140 oil.

  218. Burrben
    Yes what happened to poor Amatta?

  219. StJ  -   Yes, I think he had a mental breakdown..

  220. Phil,
    Thanks for your AAPL thoughts.
    Last Q on AAPL, as even I am aapled out.
    I have 10 July 500 short calls, sold “long time ago” (6 weeks ago?) for $7, after one roll from Feb $475 calls. (BTW, I own enough stock to cover these if I HAVE to, but why do it if I dont have to?)
    The July $500′s are now $47… How would YOU save this.
    I was planning to sell some puts to offset, roll a few out in time and price, and make some $ back by selling the front month calls…
    Of course, you can come up with a more elegant and faster solution, but I am trying to get there slowly..(9000 repetitions to go)

  221. Maya1
    AAPL Your Jul 500 short call is fully covered by your stock with over 30.50 of premium to burn off.
    Just look at it this way your stock has a delta of 1 and the Jul 500 c has now a delta of .61 meaning for every dollar the stock goes up the Jul 500 c goes only up .61 cents . So until most of your premium has burned off I would sit back and enjoy thew ride. Only after most of your premium has burned off down between 10 to 20% I would look to roll the call to a much further out position. I principal you do not want to buy back premium. My two cents possible Phil has a better idea.

  222. Played DECK and CRM….had the 145 short calls on CRM which may need adjusting…good thing is its weekly so vol crush should help… These earning plays are fun but maybe a little too stressful for me!!! Liking playing the weeklys, anybody have a particular strategy
    that you have had success with?

  223. CRM / Sundevils – I thought that the 150 would be safer… Might still be breached tomorrow. But the 145 roll to next week's 150 and Mar 155. Although a down day (not sure we will see another one though) would fix that. 

    Did you play CROX? The 18 puts will need to be rolled back if someone played that – although still all premium as of now. DECK should be fine.

    These plays should really be done with a couple of contracts at the max… walking around money. 

  224. Amatta / Burrben – I guess it was entertaining at the beginning, but gosh, watching the guy make the same mistake over and over. That was brutal…

  225. And I am not updating the portfolios tonight… I am hoping for better news tomorrow morning!

  226. It used to be that Dems were tax and spend… now the GOP is "no tax and spend anyway"


    CRFB’s estimates indicate that Ron Paul’s policies would reduce the debt by about $2.2 trillion by 2021 under an intermediate-debt scenario, which interprets the candidate’s policies in a way that assumes neither extremely aggressive nor particularly lax policy and implementation choices. Under the same scenario, Rick Santorum’s proposed policies would lift total federal debt by $4.5 trillion. Newt Gingrich’s plans, taken all together, would hike federal debt by about $7 trillion.

    Mitt Romney’s headline numbers are better than those posted by Gingrich and Santorum, but only in the sense that they are less bad: CRFB estimates that the former governor's policies would lift the debt by $250 billion by 2021 relative what it would otherwise be.


  227. And more about the deficit:

    These plans don't accidentally raise the deficit. They just don't care about the deficit. Deficit reduction isn't hard to do, arithmetically. You raise taxes over time. You control discretionary spending. You clear the way for health care cost innovation while introducing policies that will limit health care in the future. It's not rocket science, it's math. The hard stuff is getting Congress to agree to your math. But how is that supposed to happen if pols refuse to do even the basic addition and subtraction when it's just them and a blank sheet of paper? What does it say about a party that believes "deficit reduction" is a worthy phrase, but not a worthy goal? And what does it say about our political system, and the GOP candidates in particular, that we're normalized to the idea that politicians offer debt-reduction plans that can't even live up to their name?

    Screen Shot 2012-02-23 at 10.25.01 AM.png

  228. lflantheman/comparing aapl to amzn, can you post the link for the article?  Thanks.

  229. Phil, Had to run but am back and reading your comments now. The British labor model sounds  interesting and I intend to research that. If you have any recomended reading I will take it. A few months ago I read a piece about how we can argue but people usually do not listen but simply defend their position and rarely change their mind. People are simply built that way. That hit me hard and since then I have tried to take the Steven Covey approach and understand both sides but their still is a lot of  devils  advocate in me. My friends get upset when I take opposite sides of an argument on purpose. 
    Much of what you say rings true with me but it is hard to thow out my past conservative ideoloogy entirely. As I grow older I become more liberal. You talk about giving without expecting back and I agree. The friend who begged us for $6,500 lost all had in the market. We didn't have it to loan and had to borrow it. He signed a note and promised to pay us back over 12 months no interest. Yes it hurt when he came into money and did not pay us back. The good that came out of it is that I do not loan money to friends or reatives. If I have it to give I give it to them no strings attached.
    Still It is hard to go against old feelings but I am trying to open up and see the world more realistically. You are much smarter and better educated than I am and you feel passionately about how labor and the economy should work. Instead of calling you a socialist like I would have 5 years ago I am trying to wrap my brain around what you are saying without pre judging.  
    Feeling that people need to be challenged to grow is hard to let go off. The universe seems to be built that way. A baby cannot lift its head without struggling against gravity, you have to spend time studing to learn and on and on. Conservatives think that people are strengthened and grow by making their own way when possible. Growth has a cost and conservatives believe people are better off when they achieve that growth on their own. That is not done out of meaness but belief that is the best for everyone right or wrong.
    It bothers me that conservatives are labelled baby killers by liberals and liberals are called idiots and worse by conservatives. We will never have a conversation if both sides are using each other for whipping boys..
    It is becoming clear to me that conservatism is hard on people who through no fault of their own are down and out. Their are people who cannot  make it on their own and deserve help. However It is hard to accept that it is ok to not work if you do not want to so I am going to beat my wife and grand kids and make them go to work. Just kidding, when you gave that example it made me understand some of  what you are saying.
    Maybe if I knew my kids and grand kids would be taken care of I would take the $20k a year and retire.  A lot to think about for a sceptic
    Have a good day.

  230. Talking their book — A Note on Japan from GS: :
    The article discusses Japan's bond market.  Japanese bonds, as everyone know, are mostly owned by Japanese citizens through their Postal Office.  Unfortunately, the proceeds from those bonds have long been spent, leaving only a debt-to-GDP ratio of 230%, which the cited article reminds us is considerably in excess of Greece's 120% ratio.
    Consider this alongside Japan's very poor demographic profile — 127 million aging residents, and only 15,000 naturalized Japanese citizens permitted per year — plus its reduced industrial competitiveness and the fact that January 2012 data indicate that their trade surplus has moved into deficit year on year for the first time. Rising energy costs have the potential to turn the current account surplus to deficit, and Japan would become a net importer of higher-priced capital.
    The Japanese 10-year yields .97, the 20 yr. 1.76%.  The Yen has dropped 10% since it peaked out @ 133 in Nov. 2011, it's now 124.  That run started at @ 85 in 2007 and ran up in a pretty straight line for the last five years.    So if anyone has ideas regarding a short strategy related Japan, I'd be glad to hear them. I need something to do besides watching the dollar & Euro fibrillate against each other in their dance of competitive devaluation.

  231. The Association of American Railroads (AAR) today reported a decline in weekly rail traffic for the week ending February 18, 2012, with U.S. railroads originating 281,989 carloads, down 5.2 percent compared with the same week last year. Intermodal volume for the week totaled 221,003 trailers and containers, down 5.6 percent compared with the same week last year.
    The majority of the reason for the contraction is coal movements – which only effect the profitability of railroads, and not an economic indicator as coal is an alternative fuel.  HOWEVER, intermodal is an economic indicator – and, a contraction of this data bears attention.

  232. bonds are bullshit, Zero………..
    the ECB just told everyone that. plain and simple. whatever you think about bonds forget it.
    when you think about bonds Zero think James Bond
    not just Euro bonds, but soon all bonds ………rewrites coming to a theatre near you………..soon!
    Hollywood has rights to all bonds
    get long and love it………….get your mind right

  233. Ripcar:  Well said.  I would comment that there is no textbook definition of "conservative,"  Conservatism of the W.F. Buckley variety is, I believe, somewhat the heir of a European tradition regarding wealth.  There are many aristocratic and wealthy families in Europe, often both, and they are naturally protective of their wealth and position. But, at the same time, many European governments over course of the 20th and 21st centuries have had a distinct socialism cast.  The net result is that wealthy families in Europe are both taxed at higher rates and much less conspicuous in their consumption than I have witnessed in the United States. 
    Perfectly egalitarian societies are just as obnoxious and unworkable as highly unequal ones.  People differ both in capacity and position, and one doesn't need to create an ant colony to have a fair and workable system with acceptable levels of social justice.  Europe, for all its kinder and gentler approach to income disparities, has a lack of social mobility, something that the the U.S. enjoys to a greater extent -the founders of Apple, Microsoft, Google, Facebook, Yahoo and much of the Forbes 100 being first or second generation wealth.  And one would hardly go looking for alternative models in Asia, Eastern Europe, Arabia, Africa or Latin America.  Creating and maintaining a fair and prosperous society has ever been an easy task.
    And as for aging and creeping liberalism, Hillel purportedly said "We come into the world with a closed fist, and leave with an open hand."

  234. gotta love that channel for the S&P………..just keeps chugging…………but, i suppose once the ECB told everyone to get out of bonds.

  235. what do you think?…………S&P 1400 for next week……….looks possible from here

  236. when it comes to liberals or conservatives i really have no problem with either as long as neither gets their head stuck up their ass…………..
    which seems to be often or most of the time
    maybe this calls for a survey?

  237. the S&P500 looks like a Choo Choo Train……………….just keeps chugging on that track up the channel.
    the LTRO 2 looks cool, but the FED has still holds the Atomic Money Bomb
    Greece is just  a lab experiment in social engineering, and why not let the Germans run Europe and clean up the mess.
    in the long run everyone will be better off. besides the Germans always had a reputation for organizing garbage in a way that benefited society.
    so, it looks like a shift in the power structure and we are back to the Russians and the Germans.
    that kind of thinking might inspire a long trade for the Euro…………technology, industry, resources and geography.
    what do i know?
    good night

  238. Your "Germans always had a reputation for organizing garbage" statement can be interpreted in a number of fairly unattractive ways.  I assume you didn't intend any of them.

  239. actually it was something i overheard in an 'innocent' context one time from someone who had lived in Germany and was remarking about how organized Germans were in the sense of being responsible.
    does that answer your question?
    how about a good lawyer joke……… a few?

  240. aside form the 'garbage' you so nicely raised and out away in one fell swoop, Zero………what i am really wondering is whether or not this S&P steady is about to keep climbing and my best guess from looking at the 'steady' channel it is in along with its 'steady' rate of ascent the answer is a BIG, yes.
    there are NO signs of a top here as far as i can see so for the record i have taken 'safe' positions against the USD with appropriate stops………riskin 1 for 3 to 4…………i like the odds.

  241. if i am wrong i will reverse and get BIG short on equities………simple……….lots of cash for that too.

  242. and, when it comes to $4 for gasoline then ask nancy pelosi what she thinks………..if you can afford to the price of a ticket to ask in the first place.
    my bet is her answer will be, "how about $8"

  243. Phil,
    it has been a slice. thanks.
    here is one for the record books;
    i see said the blind man……….you're a liar said the dummy

  244. Volume/Rain – I'm not sure what volume exactly the Etrade thing measures but it's internally consistent and matches with other figures I see (as far as strong and weak) so I use it because it's in my face all day.  

    Shoes/StJ – Not a real necessity so it gets put off.  

    FAZ/BBates – Obviously, the March calls not great but JPM $38 so it's free insurance, which was the point.  If you want to turn it into $1.40 insurance, you can roll down to the $24 calls ($2.20) and, if it is helping to lock in bullish gains, then maybe worth it but, if you are just tossing money in because you hate to lose – even in insurance plays that are supposed to lose – it's a slippery slope.  

    Sheepskin/Rdn – I think the over 20 p/e for shoes was more of an issue.  Deck was one we were shorting in the White Christmas Portfolio at $105 back in November (short calls that expired worthless).   You're right, overall guidance has not been impressive and, looking at EU numbers, they might still be too optimistic.  

    AAPL/Maya – So I guess you have 1,000 shares of AAPL and you sold July $500 calls for $7 and that means you get net $507 when the time comes.  If that time were today, the March $500 calls are $24 and they can be rolled to the Jan $610 calls at $25 – so you pocket $1 and roll the caller up $110.  I suppose you can see how I fail to see your problem (other than impatience).  There's nothing to save, you have protection from a dip in AAPL and, if no dip, you roll the calls up to whatever seems reasonable in January.  The worst upside thing that happens to you is you sell AAPL for net $507 which is $32 more than you bought it for. 

    And what Yodi said!  

    Gingrich/StJ – WOW!  

    Benefits/Rip - Good Wiki on various systems here.  As to your thoughts:  Do people need to be challenged to grow?  Lions don't, do they?  Aren't we also on top of the food chain (certainly below a lion without our tools)?  What is growth and what is challenged?  If we are supposing that you can only "grow" if you are a "winner" and we view human society as some sort of ascension rite of the strong over the weak, then sure, we better shove those babies heads down until they build up some neck muscles.  Do people need to learn to make their own way or would society be stronger if we learned to work as a group?  Is it possible that rampant individualism actually destroys the group dynamic that allowed us to rise to dominance on this planet in the first place?  

    I think you touch on an interesting point between Conservatives and "Liberals".  Conservatives believe they, as individuals, can win.  What it is they win, I don't know – but they don't care if we destroy the air and the water and the land or if 99.9999% of the people on this planet die in agony as long as they have a nice, air-conditioned shelter they can crawl into with their 2nd wives and mistresses and, when they emerge after 20 years to once again live on the scorched earth, they will be proud to know that they have prevailed.  

    Liberals, on the other hand, feel that not only are the starving people in Bangladesh part of our extended human family but that the Earth itself is a living thing we share space with – a think that needs to be cared for and protected with the same fervor we would protect our own families because – after all, lose the Earth and what's the point of everything else?   This concept is so alien to Conservatives that they heap scorn upon those "soft" enough to care about such silly things.  

    Either God will sort it all out in the end or the fit will survive – whatever rational that can be used to justify essentially amoral behavior seems to work just fine for non-Liberals.  If you don't understand why someone would chain themselves to a tree to protect a forest – you're not a Liberal and probably never will be.  I don't think Liberals label Conservatives "baby killers" or anything for that matter as Liberals don't label – that's something Conservatives don't understand because they do tend to label everything.  The Conservative brain is generally more rigid and needs things to be either black or white – grey is not very popular with Conservatives, is it?  

    I guess that's another problem, when Liberals do say things like "baby killers", they mostly say it to get a rise out of the Conservatives but, since Conservatives tend to have no sense of humor (and no, Larry the Cable Guy is NOT funny!) and even less sense of irony – they tend to take it literally.  George Orwell touched on this problem talking about science as a "practical" education:  


    But does all this mean that the general public should not be more scientifically educated? On the contrary! All it means is that scientific education for the masses will do little good, and probably a lot of harm, if it simply boils down to more physics, more chemistry, more biology, etc., to the detriment of literature and history. Its probable effect on the average human being would be to narrow the range of his thoughts and make him more than ever contemptuous of such knowledge as he did not possess: and his political reactions would probably be somewhat less intelligent than those of an illiterate peasant who retained a few historical memories and a fairly sound aesthetic sense.

    Clearly, scientific education ought to mean the implanting of a rational, sceptical, experimental habit of mind. It ought to mean acquiring a method — a method that can be used on any problem that one meets — and not simply piling up a lot of facts. Put it in those words, and the apologist of scientific education will usually agree. Press him further, ask him to particularize, and somehow it always turns out that scientific education means more attention to the sciences, in other words — more facts. The idea that science means a way of looking at the world, and not simply a body of knowledge, is in practice strongly resisted. I think sheer professional jealousy is part of the reason for this. For if science is simply a method or an attitude, so that anyone whose thought-processes are sufficiently rational can in some sense be described as a scientist — what then becomes of the enormous prestige now enjoyed by the chemist, the physicist, etc. and his claim to be somehow wiser than the rest of us?


    Unfortunately, as with many things Orwell warned us about – we have instead done exactly what he said NOT to do and embraced the "hard" sciences and marginalized the soft ones.  You are looking at things philosophically, which I admire but, sadly, we no longer have any philosophers as the entire course of study has been basically expunged.  

    That's a shame because Locke himself, upon whose theories our Founding Fathers crafted the Constitution itself, expected the State to step in and prevent the accumulation of "unused" wealth, which he considered an offense against nature.  We've had discussions here as to the propriety of wealth accumulation.  It's difficult for me to have a discussion with people who, on the one hand, seem to understand that when the Fed prints money it devalues all of what we have by increasing the supply but, on the other hand, seem to believe it is perfectly acceptable for one person to decrease the supply available to everyone else by hoarding a disproportionate amount of it.  

    Money is finite – unless you create so much of it as to make it worthless.  Then you can go on the gold standard and tell me how fair it is when you realize there are 4M tons of gold in the world and the top 1% have 3.2M tons in their vaults and the other 99% can scramble for the other 800,000 – until that too gets transferred to the top 1%.  Maybe that's what it will take for people to wise up.  

    The world too, is finite.  Another thing Liberals tend to accept with ease that Conservatives reject.  There are only so many trees and so much land and so many snail darters and we've only been here 100,000 years so who are we to decide which species should be made extinct so a new dam can be built?  Anyone who lives where those Asian carp are wiping out the local fish can tell you how badly we can screw up our environment in a very, very short time.  

    Global warming is another one of those "Liberal" issues.  Maybe it's real, maybe it's not but, for my money, I'd rather error on the side of caution.  Will it cost me some money and cost a few jobs if we make it a priority to reduce greenhouse gasses, even before we're "sure" it's a danger?  Yes.  The alternative is doing nothing and, if we're right and it doesn't matter – then we didn't waste any money worrying.  Of course, if we turn out to be wrong and the Earth is destroyed – oh well – at least we kept our money and weren't bothered by the "Nanny State," right?  

    But back to the main point – we need philosophers, not politicians to hash out some of these issues but then we would need people who respect philosophy and we're about 40 years of revamped schooling away from that one.  What if we automated production to the extent where only 100 people in this country needed to work (using an extreme example) and everyone else could do nothing and be well fed with clothing and shelter?  Would the other 299,999,900 people be slackers?  As I pointed out before, 140M people working in this country make enough for the entire US to have one of the World's highest standards of living.   

    What point does it make to force another 10M people to work.  Is that a benefit to the 140M people who do want to work?  You speak of competition, well it's more competition for your job and we already have about 30M "losers" in this country who have been trying to get jobs but can't so kudos to the 140M who won that contest – now what do we do with the 30M?  They want jobs – you just beat them out for it.  So what – kill them?  Don't kill them but let them lose their home, their health, their food, their lives slowly instead so we can say it was God's will and not ours that we beat them out of a job and then showed no compassion?  If you had lost out instead of them, I'm sure they would have done the same to you so it's only right you act just as ruthlessly as you imagine they would because, that too makes you feel better than facing up to the fact that you're a sore winner, right?

    We all have to draw lines.  I'll support my wife and my kids and my Mom and my Mother In-Law and my sister and her kids and I'll help out my brothers and I did a few favors for my cousins and a couple of nieces and nephews and friends and neighbors but I'm not going to help THAT guy!  Of course, I wouldn't have to help that guy if he were somebody's Father or brother or cousin or friend or neighbor who felt the same way as I do about helping someone in need.  Hell, if everyone felt that way, there wouldn't be many people in need left.  Or, we can all look out for ourselves and let the poor fend for themselves.  

    It's really a black and white choice in the end – what's the World you want to live in? 

  245. jmm1951
    Dominican / taxi
    after hours post
    I found your post this morning quite fascinating. I have not read most of today's posts yet, so I don't know if this subject was discussed further or commented on by others. Not sure if you were being purely rhetorical, or actually asking for comments….but here goes…..
    It sounds like you have an extremely reliable and high performance transportation service available to you at nearly any hour on any day. That seems to be a very valuable thing (I've never been to DR).
    I would think it would be relatively easy to find out what alternative taxi drivers are asking for similar services, and then pay your specialist perhaps 25%-40% more.
    I went to Tijuana once, and found a young man to act as my "guide" for a few hours. I gave him $10 US cash when we started walking around. It was probably a lot of money to him, I assume, but it wasn't much to me, and very much worth it to have his local "knowledge". He seemed like maybe he hadn't grown up there, might have lived in the US. But he knew the scene (actually kept me out of danger). His English was similar to many Americans (and better than some!). So it was a good exchange of value for me and for him.
    Decades ago I worked as a waiter, a taxi driver, and more recently have operated my own computer maintenance/repair service for companies and home users. Some of my residential and home office customers have been so happy they have given me generous cash "tips", as well as simply expressing incredible appreciation for what I have done for them. I've even gotten Christmas cards with a couple twenties inside, with a very nice note. You better believe I give those people VERY special service!
    Human nature is that money is only one of our rewards. We also greatly want and thrive on personal praise and recognition. That last bit has been proven in thousands of corporate surveys and studies. Quite often employees express the idea that a few words of recognition from management—some awareness of how hard they are working or how great a job they are doing or their commitment to the business—is as important to them as an increase in pay. Phil probably has some thoughts on that, being a long time and successful entreprenuer several times over.  Knowing the sensitivities of Phil and his world view, I'll bet he is very nice to the waiter when he and his wife are out for a nice evening.
      For myself, I have, in my own career, often been recognized "publicly", within a company, for my dedication and work.  Praise by Management, Awards, etc, and sometimes an envelope with a small but symbolically meaningful bonus. That means a LOT.  As a side benefit, it makes it easier to get things done inside a company or corporation and cut through all the bull**** when everybody sees you as having some "juice" with management. You might be only a peer to them, but even your "peers" will be more helpful in those situations.
    People who are known for being generous to waiters and taxi drivers, and other customized service providers nearly always receive the very best  service possible. The customers who I have who are nice to me, who are very appreciate of the services I provide, and who "give me a little something extra" are the people who I would get out of bed in the middle of the night to help, if needed. I routinely will spend large amounts of time on the phone with them, or log into their system using Remote Control software, to solve their problem, without charging anything. What goes around comes around (usually, anyway). The customers who are always unhappy, bitch about prices (even though mine are unusually low), and are just overly and unreasonably demanding and always trying  to get something for nothing are the customers that are more trouble than they are worth. Not worth my time.
    Overall, my thought is that you would want to compensate your driver significantly above what you would the "average" driver. It seems that you are getting and will continue to get a remarkably excellent level of service and commitment. You don't want to pay so much that the driver laughs at your stupidity after he leaves, but high enough that he thinks of you as one of his very, very best customers. If you have enough money to do that, then you'll benefit for your graciousness and generosity.
    That will lead to the best of possible situations-you're very happy and continue getting great commitment, and he gets very good compensation that he can count on. Maybe he can even get a new roll of tape for his windshield!
    And of course, I'm sure I'm not saying anything that you and everybody else here at PSW doesn't know, but treating EVERYBODY like they are important, giving them "respect", is critical. They say, and I agree with it, that if you are on a date, or if you are out with business associates, and they treat the waitress or security guard or driver like crap, that's a huge danger sign that indicates a lot about their life attitude and their personality. It takes very little to be kind to a waitress, a taxi driver, or a porter at a hotel. The other thing is, word gets around. In both the taxi business and the restaurant business, all of us knew who the generous tippers and pleasant customers were and who the ass****s were. And they got treated accordingly.

    Sorry, I've gone off on one of my usual long winded commentaries again — it's a mental health issue, perhaps  :)

  246. i remember when i lost my mind………
    "heroes had the heart"…………….you have a lot of passion and angst Phil………..i think you are a brilliant thinker.
    and, crazy

  247. newbie…… definitely need to listen to Gnarles…………

  248. newbie……….you are right. doesn't cost a cent to be polite and considerate and thoughtful…………pays in spades though.
    you're smart

  249. STJ…did not play CROX… Definitely agree on risking small
    amounts….these plays can eat your lunch in a hurry

  250. roro/lawyer jokes
    maybe this is an old one, but I just heard it yesterday from my brother….
    What do you have when 12 lawyers are buried up to their necks in sand?
    Not enough sand

  251. roro/Gnarles
    who or what is

  252. To all the people here (who seem to be a minority, thank god, if today's random sample is statistically significant) who have a life long history of thinking in the mode of "put all those lazy ass'ed drug addicts/long hair hippies, drunks/homeless pieces of crap to work at $6 an hour doing something "constructive" so my tax dollars aren't wasted on things like letting them have a load of bread once a week" >
    One of these days I am not going to be able to contain myself any more, my head is going to explode, and I'm going to write a screed here that will singe your pubic hairs and hopefully, in a karmic way;  help you get laid off, not be able to get another job (because, obviously the only reason that anyone would not have a job is that they are lazy and worthless), develop cancer, get in a disabling car crash, and have another dozen horrible things happen in your life such that you will be permanently 100% disabled and can no longer work, after you've spent the last 35 years working 50 to 60 hours a week, so that you can "lay around and live off the overly generous government benefits". Then you'll be able to enjoy all the "comforts" of living on a grand total income of $1200 net per month for the rest of your life. Just imagine all the free time you'll have to watch Fox News and read the Weekly Standard!  If you don't starve first. And of course you won't accept any "charity" or "help" from anybody else, because all that does is create a mentality of dependency.
    I'm too emotionally upset right now, after reading all of today's posts from top to bottom, to even THINK about writing anything right now, but I'll just paste in this phrase that somebody posted above (I think it might have been Phil), which contains more wisdom than nearly any other 13 words I've ever heard in my life:
    "most 200,000k per year vice presidents would not last 2 hours waiting tables"

  253. roro/Phil/angst
    Phil has passion, (and COMPassion) but I don't think I would say "angst". Concern, perhaps. I think he is probably one of the happier people I "know". He just has a lot of sympathy and empathy.  It's the kind of "enlightened" attitude that I think some guy named jesus or something like that tried to encourage. He knows that his position in our society is, Yes, the product of his own very hard life long work, but was also made possible by a lot of other people's work, the prescience of forefathers, and positive intentions by many in previous generations and of other people in our current world -"standing on the shoulders of giants", so to speak. He knows what he believes, he's very comfortable with it, it is an evolved state based on a wide ranging life.  It doesn't hurt that he obviously had one of the most effective and well utilized "liberal educations". I know he has helpers (elves?), but how many people do you know who can quote Lord Acton, Orwell, Huxley, Churchill, Kant, Locke, John Galt/Ayn Rand, and dozens of others, and that is just within the last couple weeks or so. What I would have given to have been his dorm-mate (and don't take that the wrong way!!).
    I've been reading Phil's social commentary for a couple years, and I look forward to it every day. The economics education and the trading education are mere gravy. Here is the one thing that will tell you all you really need to know about Phil (quoted from above, scroll back to find the context):
    "All I know is, behind that wall – I wouldn't be able to live with myself…"
    Unfortunately, all too many are just fine with living behind that wall.
    Phil, when you're writing out the check to iflan………..
    And yes, we do hope you wear a helmet, unless you are better at avoiding trees than Sonny Bono.

  254. Gnarles Barkley, newbie………..posted in the link just above……….Crazy……love the lyrics

  255. Importing poverty was not the real issue. I just mentioned it to illustrate how far the system can be twisted but, like I said, it's not a big issue.
    I don't really agree with the conclusions you draw about my post and myself, but, that is not also a issue. Maybe some day life will arrange that we can meet and discuss it.
    It may come as a surprise but I actually agree with you in the general idea, or idealism. I just wanted to say that we can not look at it through pink glasses and things "in the field" have this nasty tendency to not follow the constructs we create in our minds.
    I don't assume the worst in people nor see them trough a glass wall. I sat, and sit, with some of these people at the coffee shop and I see, what this system has made to them. The system sucked them into a logic trap where working makes no material sense, and these people are shut out of "regular" social climbing mechanisms. They are like the lions in the zoo. They are not real lions, are they? They can not survive in the wild being a lion. They can only hope that the keeper will come tomorrow again with the daily meal.
    But, yes, the system is cost effective and adds great benefit to society as a hole, I just am not so sure if it is fair to many of the beneficiaries.

  256. I meant society as a whole, of course

  257. Euro can't quite close the deal on $1.34 though I doubt the battle's over.
    Phil – Very interesting comment re hoarding currency being detrimental to the public good.

  258. Looks like short sellers are inching back into the oil trade, /CL verging on busting back down through $108. Maybe we don't crash the global economy after all.

  259. Good morning!

    Wow, it's like "Groundhog Day" in the futures – same crap all the time.  As you can see from the flatline, no point getting out of bed for this nonsense.  

    Dollar 78.60 is the only thing moving (down) to keep everything else up.  Gold has had a rough time and is falling off but oil has been spectacular although having a spot of trouble getting back over $108.50 but certainly a short at your own risk thing at this point.  RUT 831 means below 830 is the best-looking short of the morning and yes, I still can't see a long I really like but, don't forget – we MUST add longs defensively at this point.  

    Very good discussion last night, love hearing everyone's views without the rancor.   Antbatalha, I did not mean to draw conclusions about you – I have noticed a cultural issue in that some people (and I do draw this conclusion about you) seem to take rhetorical examples personally.  Clearly I don't know you and have no idea what your history is, I'm only responding to the statement you make in it's own context, much as you seem very free to generalize what "they" would do with your money should it be given to them.  Anyway, so don't take it personally and we can have lots of good discussions!  

    Thanks Newbie for nice words but, as someone mentioned above, we all stand on the shoulders of giants (those of us who are not too proud to admit it) and I was lucky enough to have a hard-working, practical, bigoted (against Germans and Arabs), brilliant, kind and fun-loving Grandpa Max who loved my Grandma Lucy more than any couple I have ever known and, aside from making the best chocolate cake and almond cookies in the World, Grandma Lucy could not do enough for anyone, ever (2nd wife).  She died having a heart attack giving a speech at a fundraiser for a women's shelter (she was President of the Jewish Women's Charity and the whole town came to her funeral and we all stood there in the pouring rain holding hands and saying how appropriate it was for God to be crying.  Grandpa lived for 9 more years because he was a tough old bastard but he died that day at 89 and just faked it to 98.  

    My father, David, was the smartest man I ever met – and I meet many smart people.  He was a top programmer in the UK in the early 60s and my Mom (very beautiful, went to acting school, was in many movies and commercials with small parts) convinced him to come to America to make his fortune but, once he got here, he only wanted to work on projects that had social benefit and my Mom found an ambitious and exciting American guy and left him.  My father wrote the original accounting program for the City of Chicago as well as national systems for Project Head Start, CETA and the Department of Aging and consulted with NASA on many projects relating to the space program (we had a computer the size of a refrigerator that got so hot you could fry an egg on it with a little green screen that we would tie into NASA with the old acoustic modem to play lunar lander and pong when I was a kid).  His firm specialized in non-profit accounting systems and he would consult with firms as well.  He made a decent living but not too much and wouldn't have made a dime if not for his partner, who "handled" my Dad and dealt with all that money stuff that my Father could care less about. 

    My Dad and my Grandfather did not get along.  Dad wasn't manly enough nor ambitious enough for GMax, who thought he was wasting his talents.  Lucy would have none of it though and, whenever Dad visited, he slept there, in the same little bed that I slept in where there was always a bag of Maltesers in the night-stand for me and Smarties for my brother.  Dad would see us on the weekends and he usually went to the library first, where he would get the limit of 5 books every time and would read all 5 each week cover to cover and remember everything that was in them all.  We'd discuss what he was reading in the car and it was Fiction, Science Fiction, Science, Philosophy, History…  my Dad never treated me like a child – something I try to repeat with my own kids – I didn't have to understand everything he was saying but, years later at times, I would have an epiphany and finally understand a conversation we had had years earlier and it was like seeing a flower bloom in my mind – a sudden burst of understanding of a concept that had rattled around my head for years from long-forgotten conversations that suddenly came back to me.  

    That was a great thing about my Dad, they would fly him to Houston to tell rocket scientists what they were doing wrong but he would sit patiently for two hours helping a secretary understand how to format a paragraph in Word Perfect or explaining to a restaurant owner how he might better control his inventory (not as a job, but because he ate there and thought they had an inefficient system that needed to be fixed).  I never appreciated my Dad until I was older but, even so, I think my Mom's divorce was the best thing for me (image in my mind is my Dad throwing a baseball literally like a girl – the first and only time I played catch with him) as my Step-Father was almost the polar opposite of my Dad (and really that meant he was just like my Grandpa Max, who thought my Mom made a wise decision) and the image I have in my mind of him at the moment is whipping a baseball at me and knocking the book out of my hand that first Summer we lived with him – telling me to get my ass off the chair and play ball.  

    More on that some other time but, the point being – we are all a product of those who come before us – which is why I think it is all of our duties to teach our children well…

  260. Phil/library books
    Damn. I was only allowed four books per week. If only I had your advantages. Five books, oh my! The Thirty Nine Steps was my favorite aged 10.

  261. OK, back to work – let's see if we can find some happy news to go with our technically bullish attitude:

    Friday's economic calendar:

    9:55 Reuters/UofM Consumer Sentiment

    10:00 New Home Sales

    10:45 2012 US Monetary Policy Forum

    2:13 AM Asian stocks head for a record 10th weekly advance on signs the global economy may be recovering. Japan +0.5% to 9647. Hong Kong +0.2% to 21417. China +1.2% to 2438. India -0.8% to 17931.

    Now that we're done selling TBills this week:  The price action – stocks up, commodities (especially oil) up, Treasurys up, dollar down - smells like QE3, writes Robert Sinn, although QE3 is nowhere to be found in recent Fed statements. Three Fed speakers are on tap today, including 2 known to be fond of ease.

    German Q4 GDP comes in as expected at -0.2% M/M, a "little setback" according to the government's official release. On a year-on-year basis, price-adjusted GDP was +1.5% for Q4, and +2% in calendar-adjusted terms. (previously

    U.K. Q4 GDP unrevised at -0.2%. Year-on-year figure revised to +0.7% from +0.8%. Full-year 2011 GDP +0.8%. (GDP release) (previously)

    Krzysztof Rybinski – formerly of Poland's central bank -launches the Eurogeddon fund to profit should the worst predictions for the eurozone come to pass. It sounds a bit late to the game, but Rybinski thinks current policies assure worsening conditions. He'll be shorting European index futures and sovereign paper like Italian bonds, while going long gold, greenbacks, and Treasurys.

    Moody's will review Japan's credit rating if the country's plans to double its sales tax are delayed any further, but says it doesn't plan to change Japan's Aa3 rating with a stable outlook for now because the country's current account surplus helped offset its public debt.

    China should accelerate the loosening of capital controls, says the PBOC in a report that outlines the path to a freely tradable currency and more open capital markets. The timing of the report suggests reform-minded officials may be trying to build momentum ahead of a leadership transition announcement later this year.

    South Korean consumer confidence climbed to the highest level in three months in February, in large part because of signs of improvement in the U.S. economy, according to a survey released today by the Bank of Korea. KOSPI +0.6%.

    Rep. Kevin Brady, a prominent House Republican, says he will introduce legislation to focus the Fed on a single mandate to fight inflation and protect the dollar's value, stripping the central bank of its jobs mandate. The "Sound Dollar Act" will be formally introduced in early March.

    After losing funds for the past nine months, stock mutual funds have finally begun seeing some inflows, according to recent data from the investment company institute. The last time this happened, in April of last year, marked a surge that pre-saged the end of the market rally, and ushered in an ugly six-month skid that made sell-in-May-and-go-away the trade of the year in 2011. 

    Bears will be bears. In a new note to clients, SocGen permabear Albert Edwards writes that the stock market rally is beingdriven merely by hope: "Hope still beats in the breasts of equity investors. The market will rip out that hope and consume it in front of investors' eyes. Only then can the [real] bull market begin."

    The USPS announces plans to consolidate or close an additional 223 mail processing plans, and cut 35K jobs in the process. The agency, which has been struggling to cope withenormous losses stemming from declining mail volumes, currently employs 150K workers at 461 processing plants. Any reduction in service quality that results from the cuts benefits UPSFDX, andSTMP.

    The U.S. job market seems to be improving but some economists say not so fast. Some of the gains may be due tounusually warm winter weather; “in recent months, there’s been a lot more construction jobs showing up than usual." Others note that in the last three years, the trend for initial jobless claims has been the same: declining from September to February, then leveling off

    Big banks continue to foreclose on troubled borrowers in error, according to a national survey of attorneys representing borrowers. 80% said they had in the last year represented a borrower who was awaiting a loan modification but a foreclosure sale was attempted or had fees improperly assessed on their home by banks while they were in foreclosure.

    Lloyds' (LYG) £3.5B pre-tax loss is better than the £4B loss expected, and includes a £3.2B one-off provision for the PPI scandal. Core Tier 1 capital ratio +60 bps to 10.8%. Income -10% to £21.1B, and expected to fall again in 2012. Bonus pool cut 30% to £375M. Expects 2012 to "remain challenging," citing "subdued" economy, regulatory scrutiny and market uncertainty. (PR)

    Ford (F) opens its third factory in China, increasing its manufacturing capacity in the country by a third to more than 600K vehicles annually. The $490M assembly plant will "give us the capacity to realize our aggressive growth plans for the world’s largest automotive market."

    Even as oil moves to a 9-month high, volatility on the oil-stock index (XLE) has collapsed, writes Steven Sears, making the purchase of XLE calls a leveraged way to play a further breakout in crude without forking over a ton of premium.

    Chevron (CVX) has started exploring for shale gas in China and expects to start a natural gas processing plant in the country next year. Chevron is following rival Shell in exploring for shale gas in China, which has yet to commercially produce the fuel.

    Calls for more drilling are a "bumper sticker," not an energy plan, Pres. Obama says as he assails Republicans for what he describes as a flawed and dishonest strategy for reducing gas prices. As the president speaks, gasoline reaches the highest price ever for this time of year: a U.S. average $3.57/gallon.

  262. newbie/employee appreciation etc.

    Thanks for your comments. My taxi driver has now revealed that he needs US$150 for a new windshield. The problem with the taxi driver is that I actually prefer to use motor cycle taxis, but he keeps haranguing me about how dangerous it is and how I can call him any  time of day and night if I need anything. Last night we went out at 10:00 p.m. to get a pregnant lady a bottle of hot sauce.
    Actually my original comments were aimed more at the problem of being a wealthy politician and how that must distort your relationships with other people who are not wealthy or powerful, making it hard to read their motives, and how that might lead you to just isolate yourself surrounded by like minded sycophants who laugh at your jokes.
    As regards employee appreciation, you are quite right. One of the things I found really pathetic when I was working for the State of Florida is that we would always be having these events like Paramedics Day or Secretaries Day on which managers would be made to chip in to provide employees with tote bags of useless gifts and slices of oversweet cake with icing and balloons to show them that they were appreciated by the State of Florida. As a manager I found that the key to motivating people was to show an appreciation of whatever qualities they brought to the job and to make them feel indispensable by telling them they were doing a good job, but not just saying: "On behalf of management, I would like to congratulate you on performing according to the standards of Knowledge, Skills, and Aptitude in your job description at a level of at least 4 out of 5 for 85% of the time", but of more subtly indicating that I couldn't do my job right unless I got their input and expertise and that the whole team depended on them and by doing this ad hoc on a  daily basis, and not when scheduled for performance appraisals. The downside was that absenteeism sometimes increased when I was on vacation as employees would schedule their sicknesses to avoid other managers (often politely referred to as "those fucking bitches".)
    Generally I have found that paying verbal compliments when you catch the subject performing the desired behavior is the most effective way to get the behavior you want reproduced, regardless of whether you are dealing with dogs, women, or employees as almost everyone is insecure about themselves (especially the dogs) and constantly requiring reassurance of their worthiness to be your dog, attractiveness as a woman, or value as an employee.

  263. Phil – Fascinating stuff. Main reason I'm here is it's not just about the Dollar$ baby – although we like them, too. Can relate to the faking it bit about your GMax. And I love how in the picture Neil Young, the most musically gifted and creative of them, stands out from the other three mellow hipsters.
    Is there any fighting the Euro right now? it's on a rampage and squishing the $.

  264. Rep. Kevin Brady, a prominent House Republican, says he will introduce legislation to focus the Fed on a single mandate to fight inflation and protect the dollar's value, stripping the central bank of its jobs mandate.
    Does this have any chance or is it just the usual Republican psychosis?

  265. Single mandate/JMM – So funny that the Reps want to take maximizing employment out of the mandate.  It's a market crushing move and doesn't really have a chance but just too funny that they think this is the statement to make in an election year.  Maybe the Reps don't want to win – after all, the Obama rally may even eclipse the Clinton (#3 at 88%) or the Roosevelt rally (#1 at 168% and #2 at 132% in his next term) to become the greatest market of all time if it keeps going like this.  

    Euro/Pak – On quite a tear at $1.3425 and Pound back at $1.58, which is bullish goal line we needed as well.   80.55 Yen to the Dollar so all is well except for Swiss at 1.2046 so they'd like the Euro to pull back a bit.  

  266. Phil/Success
    Interesting that your drive to financial success is perhaps a reaction to the impecunious nature of your father. Many parallels to life story of Charles Dickens whose drive to financial success decidedly did not rest on great expectations of inherited wealth and who never feared to ask for more.

  267. @Felipe
    If we ALL agree to vote for theBamster, will you retire your poltical nonsense to the sidelines? 

  268. Or if that's too much to ask, how about a category like "Phil's Favorites", separate, labeled  " Poltical Rants"??