21.3 C
New York
Saturday, September 24, 2022

Subscribe

Frustrating Thursday – From .EUphoria to .DEspair

SPY 5 MINUTE.DE is Germany's web domain.

So I'm trademarking .DEspair to consolidate all the anti-EU statements coming out of Germany this week as the rhetoric reaches a crescendo and goes up from there.  .EU is, of course the EU domain and .EUphoria is where we will store all the glowing pro-EU rhetoric that makes the market rise (until someone in Germany says something).  

It's a typical case of .DE said, SH.Eu said and all the kiddies can do is hide in their room until Mommy and Daddy stop fighting.   

Things were getting silly enough on the plus side as we rallied for no reason at all that we added a very aggressive short position on the Russell using TZA.  My 3:07 comment in Member Chat was:  

Big RUT move makes TZA fairly cheap at $20 and the July $20/24 bull call spread is $1, which makes for a nice hedge and if the RUT pops, you can offset it with the July $18 puts, now .45, for $1 or better or, of course, there's always the TWIL List

We had no long plays to make yesterday as we added them all when the market was much lower (told you so!) and now it has moved to the top of the bottom of our range and we pick up a short – this is not rocket science, folks.  It's going to be a choppy, terrible market until either the EU saves us by tomorrow or we crash and burn horribly and my comment to Members in the Morning Alert at 10:24 was: 

We still need the Dollar to go lower and this morning it's zooming higher (82.80) and keeping us from a better move up on the indexes.  This will go on for the next few days with each syllable uttered by anyone of presumed authority in the EU so – if you can't stand the heat – stay in cash!  

FXE WEEKLYThe Dollar had worked it's way down to 82.50 into the close but now (8am) it's been jammed back to 82.90 as the Euro plunges back to $1.2426 on whatever silly thing someone just said.  Financials are dragging everyone down as they are DOOMED if the EU can't pull things together.

Financials are also hurting as the NY Times Dealbook Blog is reporting that JPM's Trading losses "may reach $9Bn."  I'm a little skeptical of this as it didn't pass fact-checking muster to make the main paper (and it would be a huge story if it did) and the woman who wrote it came from the WSJ, which also often fails to pass fact-checking muster – that is, if they did actually check any facts. 

This new allegation against JPM comes from "people who have been briefed on the situation" so you know it's good stuff, right?  Let's forget that Jamie Dimon JUST testified to Congress that the losses were $2Bn and that just last week, the positions were supposed to be unwound and under control.  

As the article says "In April, the bank generated an internal report that showed that the losses, assuming worst-case conditions, could reach $8 billion to $9 billion, according to a person who reviewed the report."  A person who reviewed the report?  I love that guy!  That guy makes us a fortune when he panics the sheeple out of positions ahead of big moves up.    

XLF WEEKLYThat's jamming our Futures (8:24) all the way back to where they were yesterday morning, down about 0.6% and led down, as we expected, by the Russell. which is already down 0.8% but we're not buying it (or selling it in this case), as oil is still at $80.50 – so we're not talking about economic retreat here – merely rumors ahead of the facts and shame on the NY Times if this turns out to be nonsense – we'll find out for sure on July 13th, when JPM puts out earnings but maybe sooner now as JPM is already down 3% pre-market and maybe will hit the 5% line around $34.75 and maybe we'll take a long flyer on them around there – or just go with the XLF longs if they re-test $14.  

BCS is down 8.6% as British Politicians are talking jail time for those found guilty of manipulating LIBOR (you know who you are!) and BAC is down 1.5%, MS down 1.2%, C down 1%, WFC down 1%…  U.K. Chancellor Osborne tells Parliament that RBS and HSBC (HBC), as well as foreign banks (apparently UBS and C) are also under investigation in regards to Libor.   Court documents in an unrelated case say hedge fund Brevan Howard asked RBS to alter Libor and the bank "received this request without objection."

As part of our review into Libor and the strength of the financial regulatory architecture, we will examine if there are any gaps in the criminal regime inherited by this government and we will take the necessary steps to address that. 

The FSA report is a shocking indictment of the culture at banks like Barclays in the run up to the financial crisis. The email exchanges between derivative traders and the Libor submitters working read like an epitaph to an age of irresponsibility.

Through 2005, 2006, and early 2007, we see evidence of systematic greed at the expense of financial integrity and stability. They knew what they were doing wrong… – Osborne

To top it all off – it's Health Care Day as the Supremes decide whether or not 54M uninsured Americans should be treated like human beings are in other countries or if they are just poor and therefore should burn in Hell, but not before suffering all the ills of the flesh that shall be vested upon them in the land of nothing is free and there is no hope – unless you have the money to buy it, of course.  

Mitt Romney said that even if the Supreme Court does uphold a law that passed through years of debates in Congress and was approved by both houses and the President – that his first goal in office, "on day one" will be to strike it down anyway – so this thing ain't gonna be over until it's over.  

Nouriel Roubini compares this moment to where we were in 1931 – right before the whole Global Economy went into free-fall, calling this a "perfect storm."  If so, our little TZA spread will make a nice 300% so it's hard to know who to root for.  We're still mainly in cash and our bullish plays are more of an upside hedge against the possibility that stocks become more valuable than our cash but, as I said to Members yesterday – it's going to be a very stressful couple of days and there's no reason to play if you don't thrive on the chaos.  

Speaking of chaos – we're still wondering if Obama's 4th Watergate will finally be the one that brings down the administration – check out the latest on the "Fast and Furious" scandal – it's a great distraction while they cancel your health insurance…

314 COMMENTS

Subscribe
Notify of
314 Comments
Inline Feedbacks
View all comments

Merkel cancelling press conference in a fit because Italy is winning 2-0 at the Euro 2012 I am sure…

PHil – explanation?  "that matters"?

That's right angel – we have been saying that for a while now. This market is entirely driven by rumors now without any fundamental understanding. China is getting hit, Europe is a basket case and we are getting weaker in the US and yet, these guys will stick the market in the last 30 minutes because Merkel takes a bathroom break and tank the futures at night. I guess it's a good gig if you can profit from it!

VVUS / Pharm – Thanks for confirming. So the plan is to cover the short puts the week before and hope for the best right? If they fail a week later, i persume that the puts will make up for the balance..

zz, lvmoda and angel
 
well said re differing opinions……

yes, dpast. Otherwise, we can roll to a vertical and let it go one way or another.  I looked a verticals, but the front month volatility was so high (um, yes I am now aware that we have a reason..and it was not ARNA – well, in part it was), but we can still use the decay to our advantage and then roll out and down to a vertical.  Or take any profits we may have and buy some very cheap puts.  I will outline b'f I do anything, otherwise remind me.

 I'll be interested in stocks again when europe starts deleveraging its banks.

J-sus H!  I walked away for 20 minutes to play the blues over my horrible day and……I'm green!   Almost.  But locked and loaded if Angel puts out tomorrow.  XXX, I know, but if terrapin can say "Holy Stick" 🙂

"Angela", sorry Angel!!

Look at NKE getting raped AH. Missed results…

ACN beats by $.03, nice pop over 58 about 2.75%, which should drive the inverse collar to a double tomorrow.   Sweet.  Expecting to close the long call at the open tomorrow and watch the short put for more decay.

Rainman: yoga pants
Just got back in and read your very helpful thoughts on LULU and yoga pants.  not sure it changes my investing premise but researching on you tube always leads me very far astray from my initial search so I trry to avoid it.  I wear my yoga pants more for the support while I'm sitting here working anyway. 😉

Rimm – when trading resumes, should be interesting.  Talk about under promising and under delivering…

…KABOOM!!!

Serious can kicking- 120 billion euros to promote jobs- that extra debt should solve all Europe’s problems- this is quite comical- if it wasn’t so sad it would be funny!

Will have a massive affect on a 15 trillion economy-LOL!

Can't say I am surprised Jthoma

Might want to walk this one back Mitt…

"As president, Mitt will nominate judges in the mold of Chief Justice Roberts …" – MittRomney.com

It looks like the only thing left for RIMM is to be bought out… I guess they have a portfolio of patents worth something but it's getting cheaper by the minute.

Seems like we need to re-think the health of xlf banks and the analogous interdependency of spx components with europe—not enough wight given to that ?

Isle?

In lieu of euro-bonds, I understand Angela Merkel has agreed to present the trophy at Sunday’s Italy-Spain Euro Final. The cup will be filled with Weimar-era deutsch marks as tokens of moral support.

No survivors in the group of death, however two members of the group of debt made it to the final of Euro 2012

Flip—wanted to apologize for the RL stmt —was unwarranted

Hi Friends. Thanks all for the prayers and best wishes. Still in “Motel Hayseed” but have nothing to really complain about other than the terrible Internet access. My loved ones, including pets, are all safe.
As you’ve probably read, the catastrophe has expanded to over 18,000 acres, with over a thousand firefighters on the job. The fire has been moving in two directions; north and west. To give you some idea of how far it has spread, Monument 13 miles to the north is on pre-evacuation notice, and most of Woodland Park 17 miles to the northwest has been evacuated!

I think that our neighborhood has been spared, I’ll know for sure soon enough. Apparently there were 347 homes destroyed in the hours after the fire came roaring over the ridge as I described yesterday. There is a community impact meeting tonight, and they’ve asked people with homes on 37 different streets to be there.. At that time they will be going over the status of homes address by address. Grief counsellors will be there on standby. I’m so thankful our street wasn’t on that list.
I am usually a pretty clear thinker, but I have to tell you it’s been very difficult to think straight under these circumstances.

Itrade, I hope your folks are well. Sounds like they live very close to me, and the fire line was less than a half mile from my house. If there’s anything I can help them or you with, let me know through this site and we’ll set up some contact info.

Someone on the site recently said, disasters like this really put into perspective what’s important. To that I say a hearty Amen.

For my conservative friends:
 
Dear Friends,

Even though it's been a few hours now, I'm guessing you're still pinching yourself to make sure you're not dreaming. But yes, it happened. At 10:07 this morning, the conservative Chief Justice of the U.S. Supreme Court, John Roberts, not only joined with the liberal justices to completely uphold almost every single part of the Obama health care law, he wrote the majority opinion himself! In fact, he went even further. When he realized that the government had poorly made its constitutional case to the court, he went searching for a clause in their argument and the constitution that would give him the justification he needed to back the administration and to insure that his decision would hold up legally. In other words, even though he is on the opposite side of the political fence, he wrote the Dems' paper for them. Stunning.

The other four justices? They didn't just vote to overturn the individual mandate part of the law, they all voted to kill the entire Act.

The media is already spending much time talking about the mandate being the "centerpiece of the law," but the real news is that if you ever have a pre-existing condition, you cannot now be denied insurance. If you are a young adult without health insurance, you can now stay on your parents' plan until age 26. The insurance company can no longer say there is a lifetime cap to your coverage. The insurance companies are now required to spend 85 cents out of every dollar they take in on actual reimbursement for your health care – not on profit or "administrative costs" (some companies have been taking over a 30% cut; Medicare's total percentage of their budget for administrative costs: 2%).

I know that our side is not used to victories and so we're not quite sure how to respond when we get one out of the blue. For some of us, the first inclination is to point out just how weak the Obama law actually is, that it doesn't provide true universal health care (26 million will STILL be uninsured), and that it leaves control of the system in the hands of the vultures, otherwise known as the health insurance companies. The individual mandate was a huge gift to the private insurance companies, guaranteeing them billions more from millions of new customers. And many of the key provisions of this law don't even take effect until 2014 – and if the Republicans win in November, you can kiss all of that goodbye.

So, yes, the bill is highly flawed and somewhat wrong-headed – but what it IS is a huge step in the right direction. And today's court decision cements that. The right wing knows this and they are probably unraveling in some not-so-pretty ways right now. And that's why today is a great day. The Right has been smacked down by one of their own! They know what we all know — that the path of history has been, and will continue to move toward the basic human right that all people are entitled to see a doctor and NOT have to worry about losing their home because they can't afford to pay the medical bills. Those days are over, or will be soon, and that is where civilization is headed. It's not headed back to the days of Oliver Twist. Today's victory is momentum, it's forward motion, and we WILL have true universal health care in this country in the not too distant future.

So take some time tonight to celebrate; this is a victory for the people. Actually, more than a victory, it is a mandate that all of us must now make sure that a second-term Obama continues to move the ball down the field, toward a system like they have in every other First World country on the planet. He simply has to improve Medicare and then expand it to every citizen in the country. The countries that do this, their people live an average of two to four years longer than we do. Is there a reason anyone doesn't want an extra four years of their lives? Or that our babies would have a better chance of surviving their first year like they do in the 48 countries that have a better infant mortality rate than we do? Exactly who is opposed to this? You'd have to be a bit…crazy.

And that, I've come to believe, is the true divide in this country. It's not blue state vs red state, liberal vs conservative, Democrat vs Republican. The split we have in America can be boiled down in its simplest form to this: On one side are the people who believe Adam and Eve rode on dinosaurs 6,000 years ago – and then there's everyone else. On that first side are the people who've been fed a diet of fear and lies and hate. And who is feeding them? The 1%. The richest people in the country, the ones who aren't done with us yet because they still don't have enough wealth, have done their best to dumb down the population through destroying our educational system and using media to provide them with a vastly distorted sense of reality. The rich's only obstacle is that they only hold 1% of the votes in the country. So they have to try to get a slim majority of Americans to vote their way. And fear, plus keeping them stupid, usually works.

So that's the battle ahead of us: Organizing and mobilizing the majority of Americans to push for true universal health care, Medicare for All. At one time, back in Illinois, that was the position held by Barack Obama. He will not make this happen on his own. He will only be able to do it when the mass of American people rise up and demand it. Demand it. Why not start tonight?

Five years ago this week, my health care documentary, Sicko, opened in theaters across the country. I have spent the better part of the decade on this issue, and for me, personally, fully aware of the current law's limitations, I am very happy with today's news – not because of its specifics or nuances, but because it is a road sign, and that sign points in the correct, humane and sane direction. THAT makes this a great day.

Yours,

Michael Moore
MMFlint@MichaelMoore.com
@MMFlint
MichaelMoore.com

P.S. I will appear on Lawrence O'Donnell's show tonight to discuss this issue – 10:00 pm ET/7:00 PT (replay 1:00 AM ET/10:00 PM PT) on MSNBC.

Thanks for the update jbur! Let us know if you need anything.

Jbur:
I am glad to hear that you and your family are in good health. In addition, it is nice to hear that your properties may have been spared as well. Have they contained the fire? Do you see any end to the fires in your state? Any threat of rain? Thanks for the update.

JBur / ITrade –  I truly hope everything is okay with you both.  I can't imagine the pain a fire would cause my (little) family.  I hope you're both okay.  Just a quick question, my cousin lives in Elizabeth, CO and I don't *think* he has anything to worry about, but I'm wondering if that is the case.  I tried to look at fire maps, but they might have been old.  Is Elizabeth okay?

DC and Burr: We had a few light sprinkles in parts of town today, but not enough to do anything where the fires are

The most up to date firemaps I could find are at: http://www.geomac.gov/viewer/viewer.shtml
Just choose “active fires”, then choose Waldo Canyon.

Burr: Elizabeth is just east of Castle Rock, and is 35 miles north of here. She is not likely in any danger.

Hey, they are letting some people back into their homes…not us yet.

Futures/Euro jump

Dclark/Waldo Fire/JBur:
I also live in C.Springs although thankfully east of I-25, north end of the Academy, and well clear of fire danger – at least so far.The fire is apparently 10% contained now but it will be weeks at least until that number gets to 100%. No rain here, though a friend of mine in Breckenridge said they had some good rain. it really is very dry here and unless there is a serious change in the weather pattern, it will be a long and dangerous summer.

I have a several friends and colleagues who have been (hopefully only) temporarily displaced. Looking on the bright side though, so far no-one has died in the fires. So though it is obviously very traumatic for displaced folks, no-one has been hurt. We are all very thankful for that!

ceegee
Thank you for the updates. Our prayers are with you and yours, and our neighbors and friends to the west. It is amazing that there have been no fatalities. In my area (near Ann Arbor, Michigan) we had a nasty tornado that did major destruction in Dexter, MI a town located 15 miles SSW from where I reside. The damage was simply unbelievable to area homes and the natural landscape (many large trees); yet, not one death was reported. Funny how that works some time. 
I saw the map jbur provided and was surprised to see the number of fires that are occurring, or occurred in your neck of the woods. I didn't know that there were so many.

http://www.space.com/16355-colorado-wildfires-space-station-video.html
– Really cool video from the International Space station looking down at Colorado. That 3-point star is Pikes Peak a 14,000ft mountain… the fire is to the right of it and is a long stream of smoke.
 
Good news for my parents, the Hunters Point neighborhood is safe… no reports of burn! They are still evacuated since there are still "hot spots" on the ridge/mountain. But the firefighters did a damn good job! That was an ugly scene!
 
Thanks for the thoughts everyone!

@Felipe
 
While you and many others refuse to accept it, insuring 23 million people is a doable, sensible, and ultimately CONTROLLABLE system.
Insuring 300,000,000 going to 350,000,000 going to 400,000,000 people is not only not doable, sensible or controllable, it is a rock solid route to national poverty, and insanity, wherein the level of medical care would reduced to that of witch doctors and christian sicientist drivel.
Can Californica insure and adequately provide decent medical under the same rules of Obamascare? Let's find out with a test case. Can a single payer STATE run system do it ??  You bet.  Can Pennsylvania do it for 6,000,000?? Of course, and they can do it, if they choose, without the fraud, corruption and Big Brother invasions of a National system.
But Obamascare is impossible to be done without a monstrous increase in taxes, printed money (which may be the real intention of this law) and inflation in the cost of medical care.  The estimates are out and out lies to assuage those without the courage to take a deeper look at implementing good parts of the law, like Pre-existing conditions.  As lons there is no single payer with strict restraints on how much the privare sector can profit, this is doomed to be a national disaster.

"the problem with medical care in this country is it's run for a profit and every single person along the way has their hand out to take MORE money from the consumer …"
You keep saying that you are not a black and white kind of guy.  Yet, when you see my opposition to the changes proposed by Obamascare, you automatically assume that I am defending the current system in the Divided States of America.  I am among the majority in case you missed it who have always been in favor of aspects of health insurance that are in the law, and simply make sense, like portability, pre-existing conditions, and going piecemeal at changing the doable, sensible and damn the cost of it.
When I tweak one aspect of a System, I am inadvertently affecting something else in the system. THAT's what Obamascare is doing. And lying thru their teeth to do so.  This isn't about health care at all it's like the gay marriage thing wherein it's not about making it a constitutional right to make marriage between non-procreators it's ultimately about grabbing more power, a game for a buncha out of control egomaniacs.
I will say it till i die: You cannot Insure 400,000,000 people without placing a levy so onerous on the productive class that the entire system collapses.  Or to print money to fill in the shortfall and that will be in the trillions in country that is already drowning.
You can point to all the countries you want but there is NO COUNTRY the size and scope and diversity anywhere in the world offering health care to 350,000,000 ++++ people. Why you repeat that Europe can do it when Europe is not a country smacks of hype and disingenuousness on what is really going on with EACH country offering socialized medicine, which, I have said countless times can also be done here on the Continental united states, Hawaii and Alaska: EACH enttiy whether it be regional, state-run or other vitrual combination can properly administer a health care systen, while a nation of our size could NEVER do it, and the attempt to do it will only result in catastrophe in tne long run.
One hopes that more rational beings will adopt the good parts of the law piecemeal. But without cost controls all along the line, and adequate medical professionals and aides (already too few) to carry it out, this is doomed. Whether you defend it or not.
I repeat: I am a victim of this system and have no dog in the hunt to defend it. It must be changed. This is not the way to do it.

Allegiance to the dogma of the left on the health care issue is clearly the prerequisite on this site. People can't afford health insurance, so we have to give it to them. Paid for by somebody else. Never mind that the health care system is riddled with inefficiencies and senseless costs. It costs too much for regular folks, so we must give it to them.
Does that pretty much sum it all up?
 
As I said, I worked in the financial end of the health care industry for most of my adult life, and I am absolutely no friend of the insurance companies. In fact, one of my objections to the ACA is the fact that it gives them much more power and a terrific business opportunity. I suppose Phil and I might be able to agree on that, except this is a liberal bill, and therefore, it does exactly what is needed, right?

It used to be true that government insurance was much harder to understand and to get reimbursement from. Gradually, that changed. Government insurance is not easier to understand nor deal with, but private insurance has become a goddamn nightmare. I now lean toward single payor for that reason.
 
If this law really stands, I would buy health insurance stocks (they are becoming quite a bit cheaper) because I have faith in the industry's ability to sidestep restrictions in the law and invent new ways to squeeze a profit from their activities. I have watched it for years, and their power to make money is awesome.
 
It remains true that health insurance is required because if you don't have it, the bills you are presented are hideous overcharges, and nobody can expect to pay at least some of them. Hospitals charge 15 times what something ought to cost, then write off 90% of it, to net a bit more than insurance would have paid them. As flips said, The system must be changed, but this is not the way to do it.

Flips/Healthcare

But any healthcare system is essentially local. Britain provides healthcare to about 60 million  people. Is there really any difference between 60 million and 400 million, except that more units of health care are to be provided?

Obviously it needs to be broken down geographically. For example for any given population and geographical area, it is possible to calculate roughly how many births are expected. From this can be calculated the number of maternity beds necessary in peak birthing months within a certain travel distance of a certain percentage of the population, and also things like the number of obstetricians that need to be trained, midwives, ultrasound machines, painkiller dispensing machines, rubber gloves, and so on to serve a distinct population over a given period of time.
If you have too many beds, too many obstetricians, then it gets too expensive, and if you have too few, then successful outcomes will probably decline.What is needed is balance, which cannot really be achieved without all the stakeholders working together.
The other factor that then needs to be added in is portability. If all populations are provided for, then a woman who is provided for in Alaska numbers should be able to to receive services in Florida, if need be, on the assumption that a reciprocal agreement will level things out in the long run.
If Britain and Australia can have reciprocal agreements for their citizens to receive health care, then surely the constituent parts of the US can also do so.
So all that is needed is to provide healthcare for one geographically distinct are, then duplicate elsewhere. You can see the same thing with fast food restaurant chains which are about the same wherever you go and may even use the same architectural drawings to build restaurants in different climate zones.

The Flip/Phil exchange is an important one.  I am devastatingly ignorant of the subject, and cannot judge.  I can repeat what I wrote yesterday — that near-70% of health care costs are from self-abuse / bad practices related to tobacco, alcohol and obesity.  I've not seen studies on the abuse of illegally obtained prescription drugs, but somehow, over the last ten years, a phone call "interview" with a "doctor" will get you hundreds of Vicodins/Percocets/hillbilly heroin delivered to your door.  No health care systems tasked with "fixing" a population hellbent on chemical or biological suicide, without discrimination or restraint, is likely to succeed unless those people create enough income to cover their own costs, which, apparently, they cannot.  
 
 In 2004, the national bill for hip and knee replacements was $26 billion. [http://www.nerac.com/nerac_insights.php?category=articles&id=150], a number that is skyrocketing as obese baby boomers age. Any public health care system that in effect subsidizes this abuse, or its consequences, cannot succeed.  Phil is correct in pointing out that the health care industry is dining out on the profits from these billions, and that is surely something that should change.  But a health care system tasked with restoring health to a population without any disincentive for self-abuse must, one would imagine, end in bankruptcy.  

Flips,

I read your piece on healthcare and It seems to me that a system scaled for 400 million could bring better medicine to all at no per capita cost increase over a system serving 40 million. For one thing it would be easier to have a nationwide message about better health habits rather than 50 programs coming from the state level, and I think teaching healthier habits is one key to lowering health costs.

What are your ideas for changing our system so as to provide healthcare for all?

Thanks,

Stay Connected

160,730FansLike
408,506FollowersFollow
2,130SubscribersSubscribe

Latest Articles

314
0
Would love your thoughts, please comment.x
()
x