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

Click here to see some testimonials from our members!

Monday Market Movement – More Mario Momentum?

SPY DAILYSo, where's our stimulus?

Like good little Pavlovian dogs, we ran back into the markets last week when Mario Draghi rang the stimulus bill – increasing the $60Tn global markets by 5% – that's $3Tn of valuation added in 48 hours on the say-so of a former GS executive that has been put in charge of the European Central bank.  What could possibly go wrong with this scenario?  

If we can't trust the Investment Bankers who are taking over our Government, who can we trust?  So we'll assume that everything WILL be fixed this week and that the ECB, Fed, PBOC, BOE, BOJ and all the little Central Banksters will be pumping enough money into the system to justify a $3,000,000,000,000 increase in Global Equity prices – even though that means, at an average p/e of 15, that all this expected stimulus somehow drops an additional $200Bn to the bottom line of Big Business to justify the bump in valuation.

How many Dollars, Yen, Euros and Yuan do we have to give to Corporations to turn into $200Bn?  Well, if it's AMZN – the answer is $15Tn because it takes $50Bn in sales for AMZN to make $600M so figure 75x in sales to make 1x in earnings.  Why use AMZN?  Well because AMZN is almost 5% of the Nasdaq and it was their amazing run last week, on what rational people would consider poor earnings, that reversed the downtrend initiates by AAPL's (who are 15% of the Nasdaq) miss.  

AMZN WEEKLYI guess it's obvious why we're short AMZN (see Dave Fry's chart) but let's look at AAPL now, who are quite a bit more efficient at dropping Dollars to the bottom line.   Last year, AAPL took in $108Bn and made a profit of $26Bn – now THAT'S a good company!  So let's pretend that all companies are as good as AAPL and nowhere near as bad as AMZN at converting sales to profits.  

Now to get that additional $200Bn in Corporate Profits we only need about $800Bn in stimulus – assuming, of course, that money actually went to people who would spend it and not to Banksters who are still trying to back-fill multi-Trillion Dollar holes in their mark-to-fantasy balance sheets.  $800Bn is a doable number so let's pretend it is enough to justify a 5% bump in the market and now we know what we'll be needing this week to hold Dow 13,000.

I suppose the question, for those of you playing along at home, is what do do with our TNA play?  Our trade idea from Friday was the TNA Aug $49/54 bull call spread at $2.20, selling the CHK Sept $17 puts for $1.28 for net .92 on the $5 spread.  TNA shot up to $53.06 into Friday's close and the TNA spread is already $3 while the CHK puts fell to $1.08 for a net of $1.92, a 108% gain on cash for the day.  

By the way, if you ever wonder why it is the top 1% doesn't complain about the Fed diluting our money with these ridiculous stimulus programs – it's because we can make simple trades like this that make 108% on cash in a single day once we're given the word (the same word I shared with you Friday morning) for what we call a "Free Money Day," when the Trade-Bots take the market higher and higher all day long and all we have to do is decide where to capitalize on it.  We don't need a big conspiracy, just a nod and a wink from our boy Draghi and we know to deploy some of that cash we've been sitting on.  

SPY 5 MINUTEAnd, wouldn't you know it, our cash had just topped out at 84 on the Dollar so we even made a good profit on our sidelined cash while we waited for the signal.  What fun!  If you are a poor person who has to wait until the end of Friday to get a paycheck, which you then have to put into your bank and wait for it to clear so you can buy some stock on Monday – we have some lovely stocks to sell you this morning as we dive back to cash.  Isn't Capitalism great?!?  It's so nice that everyone gets to participate like this…

Today, in fact, despite all the excitement over the promised stimulus, we'll be dipping our toes back into the Long Put List.  As we noted last Monday, we're done with the CMG Sept $350 puts, which went from $5 on the 19th (when we initiated the list) to $55.50 at Friday's close (up 1,010%) as well as the ISRG Jan $350 puts, which are still $5, up from $1.70 for a 194% gain.  But these are available again now that we've rallied:  

  • AMZN Oct $205 puts at $4.20 (our $180 puts dropped from $2.75 to $1.85 and we rolled them up to the $205 puts)
  • DIA Dec $117 puts at $2.50, now $2.25 – down 10% (we prefer the $119 puts at $2.60 now)
  • MA Jan $290 puts at $2.85, still $2.85 – even
  • SPY Oct $120 puts at $1, now .85 – down 15% (we prefer the $123 puts, now $1.08) 
  • V Jan $100 puts at $2, now $1.90 – down 5%  
  • XRT Jan $53 puts at $2, still $2 – even 

See how great the long put list is?  We have 15 more like that for our Members as well!  The ISRG trade made $3.70 and the CMG trade made $50.50 while the "misses" barely bothered us – even in this massive rally and we have ages to make it back on the next dip or, in the case of MA and V – if we do get stimulus and our bearish premise is blown – we simply walk away and find something else to play.  

The key is that, in the same time-frame we found very successful bullish trades and very successful bearish trades to take advantage of these wild market swings – and these are just the free trade ideas we put up in our morning posts – as is our tradition during earnings months.  Sadly, July is coming to a close and so do the free picks until November, when we'll be having our Second Annual PSW Seminar in fabulous Las Vegas, which is Members only this year but next year we may open it up to a bigger venue.  

One of the things we teach our Members to do at these seminars is to take advantage of the panic of others.  Whether it's a stampede of bulls, like we're having now, or a stampede of bears – these are ways to profit from the madness of the markets.  In fact, just today, our long-standing long on SHAW is paying off as CBI looks to buy them out for $3Bn, or around $50 a share.  When did we buy SHAW?  Right after Fukushima, of course, when the stock dropped from $40 to $27 (and later $20) as fear gripped the industry.  Here's me discussing it in an interview the week of the Japan crash last year.     

So what will we do with our TNA play?  We're happy to ride out the CHK short puts because we like the stock and the net $15.72 entry is certainly nothing we would worry about if it were put to us on that side so we can let those expire worthless and make another Dollar (another 100%).  But that leaves 200% of potential upside on the table and what we can do, if we aren't afraid of margin risk, is stop out the long calls (the TNA Aug $49 calls) at $5 (now $5.50) and only cover the short Aug $54 calls (now $3.30) only if the Russell makes it over 800, which will require that $800Bn in stimulus for it to stick.  If all goes well and the short calls expire worthless – we can make $6 on a $5 spread – that's a neat trick!  


Tags: , , , , , , , , , ,

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



Comments (reverse order)


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

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

    Click here to see some testimonials from our members!


  1. I keep getting trapped by the music… Can't get into Member Chat.  The videos have me stuck.
    Any suggestions?


  2. Isn't the success of the bonds markets like being the #1 Girl Scout in sales for selling all your cookies "to your MOM"… I guess you got them all sold but what if the cookies were rancid? 
    First rule they teach you in broker school "Don't Sell to Family and Friends"    


  3. The success of the bond market tells one that the relative safety in an asset they will be paid back.  UST will not default, the EU cannot say that.  PPs for today.


  4. Look at AAPL taking off, up to $590 pre-hours…


  5. Oil Lines

    R3 – 91.87
    R2 – 91.16
    R1 – 90.71
    PP – 90
    S1 – 89.55
    S2 – 88.84
    S3 – 88.39


  6. Phil
    "If we can't trust the Investment Bankers who are taking over our Government, who can we trust?
     
    That's an easy one.  You can trust Romney.  He's a really good guy, he never lies, he never has a bad hair day, he has lots and lots of money so he does steal much, he's very considerate and polite, doesn't swear, has a nice wife, relates real good with the middle class, and he's a Mormon.


  7. Good Morning!



  8. Pattern seems to be holding:

    http://www.bespokeinvest.com/thinkbig/2012/7/29/can-it-really-be-that-easy.html

     

    Throughout the year in reports to our Bespoke Premium clients, we have highlighted the similarities between this year and prior Presidential Election years numerous times.  Most recently, in early July we noted the fact that based on the historical pattern, the S&P 500 could see a modest pullback in mid-July coinciding with the kick-off of earnings season.  Sure enough, the market saw some choppiness about a week and a half ago and subsequently rebounded in the middle of last week.  Holding to the historical pattern, that rebound came right at the same time that the market historically sees its summer low.

    If the pattern continues, the S&P 500 could be set up for a nice rally to end the Summer.  Will it hold?  Only time will tell, but if the historical pattern has worked so far, what's to stop it from continuing?


  9. cars / jomptien
    Enterprise is ~$20/day weekly rate for a Fusion/Passat class.  Very reputable.


  10. Phil: WMT
    WMT has had a run into what appears to me a little overbought but is a company I won't mind starting to own around $60 so a good strangle candidate for me.  Selling more calls than puts for now since it has run so high.  I've already got 1X the Aug $70's that I can roll to 2X and sell some puts.  Your thoughts?  I trade for income so would prefer not to have to go out further than 90 days initially since I will have to once I am in a full position if WMT continues on a tear.    TIA 



  11. I had the wrong prices (month) for the SQQQ spread and the short call was not $0.30 as I indicated but $1.30 on Friday so I kept it on for now.




  12. stjeanluc:
     

    lflantheman
    July 27th, 2012 at 3:29 pm | PermalinkIgnore this user
    MoMo trade:  Buy 3 LNKD Sept 100 calls at 11.00


  13. Good morning!  

    BuyBots still on the attack this morning with AAPL driving the Qs ever higher.  Figure $600 should pause them, maybe Nas 2,975 and I really don't see 3,000 being taken without firm announcements of QE.  

    Hope should spring eternal until the Fed on Wednesday, even if the EU does nothing between now and then but the Euro is back down to $1.2247 and that SHOULD make bulls nervous – although nothing seems to this week.  Dollar just made a run to 83 and has been rejected there – bulls need below 82.50 and bears need over 83 for it to make a difference. 

    Oil rejected at $90 so far.  Nat gas is flying at $3.17 – no idea why.  Maybe the fact that this news release managed to combine gas and CHINA!!! in the same paragraph:

    Royal Dutch Shell (RDS.ARDS.B) says it hopes to boost investment not only upstream but also in the downstream gas sector in China, as it wants to profit from every link in the gas supply chain. Shell already is heavily involved in upstream gas projects in China, and it is believed to be buying a stake in an LNG import terminal in eastern China.

    Overall, I think this move up is hellishly overdone and I think it's a good time to cash longs and pick up some more shorts – just in case we get disappointed by our Government – AGAIN!  

    In addition to the Long Put List trades listed in the morning post – we have others that are still good entries.  I'm just adding the "now" part this morning – the rest of the wording is from the 7/19 original entires:  

     

    • DIS (was $15, now $50) Oct $46 puts are .95, now .76.    
    • GE (was $7, now $20) Oct $18 puts are .35, now .21  
    • HD (was $18, now $51) Nov $46 puts are $1.10, now .78
    • IBM (was $70, now $195) Jan $155 puts are $1.60, now $1.80 
    • JNJ (was $35, now $69) Oct $65 puts are .51, now .46
    • KO  (was $40, now $76) Jan $67.50 puts are .83, now .57
    • MMM (was $42, now $91) Jan $70 put are .86, now .84
    • MO (was $15, now $36) Jan $31 puts are .50, still .50 
    • MON (was $45, now $86) Oct $75 puts are $1.20, now $1.05 
    • MRK (was $20, now $44) Oct $40 puts are .53, now .30 
    • PCLN (was $150, then $30, now $666) Oct $510 puts are $5 (bonus on PCLN is they also make good terrorism protection), now $4.35
    • T (was $22, now $35) Jan $33 puts are $.95, now .63
    • WMT was $42, now $72) Jan $65 puts are $1.20, now $1

    Keep in mind these are plays that pay off in a major correction – they make nice bearish hedges because they don't lose too much while your longs make money but they DO LOSE – so don't go crazy.  The lower VIX is making them very attractive at the moment as well.  

    If the RUT can't break 800 – that's a bad sign.  NYSE is 7,900 so keeping pace with the RUT at 10x and 8,000, of course, will also be very hard to break over there.  Then we have S&P 1,400 and that's a lot of reasons to be confident about bearish bets up here with VERY clear signs of when to get out of bear trades as those levels are not likely to be gapped over.  

    So, sorry I could not be more bullish but we have to play the cards we're dealt…

    We'll try to keep an open mind until we get some FACTS, not rumors! 


  14. V Jan $100 long puts are going for 1.66


  15. Thanks dclark! Corrected online!


  16. Good Morning!    stfjeanluc, when you get time, I posted at 3:29 friday a MOMO trade:   Bought to open 3 LNKD September 100 calls for 11.00 each.  Thanks.  They were bought friday, so the previous post from me is slightly misleading, but still a good trade methibnks for anyone who wants to follow.   I'm going to pair the trade with another, details to follow. 


  17. dclark…thanks!   You guys are all over it! 


  18. lflan:
    It's the least we can do to help stjean. That's a lot of work he has to do each week. Thanks for the trade!


  19. Trapped by music/Jacalyn – Isn't that the plot from Phantom of the Opera?  Not sure what you mean as you're asking the question in chat but contact Greg (admin at philstockworld dot com) and I'm sure he can look into it for you.  

    Girl scouts/Jacalyn – It's more like a simple Ponzi scheme were you constantly sell more debt to pay off prior debt and transferring the debt from bucket to bucket.  Works great until you have one, HUGE, catastrophic failure and the whole scheme collapses but, as Madoff taught us, you can keep this stuff going for decades – even after people begin to get suspicious and, at 1.5% for US and German debt – people aren't even very suspicious yet.  

    Romney/Exec – Well I'm convinced!  

    SVU/Kinki – Stock doesn't seem to care much.  

    S&P/StJ – Well that does make a strong bullish case. 

    WMT/Lincoln – They are on the Long Put List, I like that play on them being overbought but, even now, they are popping $75.  If we get stimulus, there may be no top on them for a while – they're not a very expensive stock – just expensive per their usual.  

    FAS Money – Damn, I knew we should have killed those calls.  Oh well, we have 15 longs that are up $540 to balance us out on that end and we still make money on the short puts so nothing to panic about.  The weekly $88s are $4.55 but FAS is $91.15 so $1.50 of that is premium ($300) so no reason to pay that.  If we look ahead at rolling a $3 loss, the Aug $93s are $3 so that's a 1x roll if we need it and the $97s are $1.50, which is where a 2x roll will take us so certainly no reason to worry until XLF pops $15.  

    $25KPM – Let's buy back those SQQQ $60 calls for .80 and clear the deck.  We can decide what to do with the calls later.  Other stuff is fine.  Let's add 5 AMZN Oct $205 puts for $4.40.  

    $25KPA – Odd that EDZ is holding up so well.  Since we don't mind owning them for net $13.80, no reason to get out.  Other stuff is all fine – same move on buying back SQQQ caller and then, hopefully, SVU gets excited about the new guy and then hopefully AMZN crashes when someone points out that emperor has no clothes.  


  20. Wow, what happened to MT?  It's finally up to where I bought it at 16.20!  
    https://www.google.com/finance?client=ob&q=NYSE:MT


  21. Here is a current market snapshot of the Long Put and TWIL lists
    Snapshot


  22. Phil – I have a MCD Sept $92.5/$97.5 BCS. What roll do you recommend? Thank you much


  23. Morning All – Looks like another horrible Dalls Fed print.  -13.2


  24. lflan, what's your target for lnkd 100 calls--up nealy 20% now.  thanks.


  25. Pharm – Can you believe that MS Sept 13 put is now down a few %.  I should have sold it when it was up like 20%.  Anyway, are you adding here?
    I purchased it for .70 and it's now .60.  


  26. PCLN Crazy Trade – it's up about 40% from our Friday entry, if you are a convservative investor, take the money and run here.  If you're crazy like me, stay in.  8)


  27. lunar/LNKD….take profits any time now.  I will be staying in the trade for the present. 


  28. V/Scott – Well that's the idea of the list – we want to take advantage of the ones that get cheaper.  V and MA are getting a big boost on stimulus anticipation.  I love them both as long-term shorts because Square is making inroads and PayPal is making inroads and the merchants are pushing back against the fees – something's going to give at some point.  Always be suspect when a middle-man operation makes Billions – that gets competitors very excited.  

    At the open: Dow +0.01% to 13078. S&P +0.03% to 1386. Nasdaq +0.21% to 2964.

    Treasurys: 30-year +0.08%. 10-yr +0.04%. 5-yr +0.02%.

    Commodities: Crude -0.11% to $90.03. Gold -0.09% to $1618.85.

    Currencies: Euro -0.64% vs. dollar. Yen -0.35%. Pound +0.42%.

    10:00 AM On the hour: Dow +0.17%. 10-yr +0.06%. Euro -0.51%vs. dollar. Crude +0.12% to $90.24. Gold -0.04% to $1619.65.

    June Chicago Midwest Mfg. Index: +1.1%M/M to 94.1. Regional output rose 11% Y/Y.

    Market preview: Stock futures are mixed following recent strong gains, with the S&P 500 benchmark -0.2% but the Nasdaq+0.1%. EU shares are solidly higher too as markets on both sides of the pond wait in hope for central bank handouts this week. Shaw Group (+65%) is a sure thing today on news it's being acquired by CB&I, although the latter is -9.8%Later: Dallas Fed Manufacturing Outlook 

    Move along, nothing to see here:  Eurozone economic sentiment indicator fell to 87.9 from 89.9 in June, below expectations of 88.9. Consumer confidence pulled back to -21.5 from -19.8. Industry sentiment drops to -15.0 from -12.8. Services sentiment down to -8.5 from -7.4. Retail index down to -15.0 from -14.4. Construction index -28.4 from -28.1

    Or here:  Japan's industrial production unexpectedly fell 0.1% in June after May's 3.4% decline. Economists had expected a 1.5% gain.

    Or here: Spain's preliminary Q2 GDP -0.4% Q/Q, slightly worse than the -0.3% registered in Q1. The data is in-line with expectations but the euro is under pressure, -0.45% to $1.2277.

    Or here:  July Texas Fed Manufacturing Outlook: Business Activity Index -13.2 vs. consensus of 2.5, 5.8 prior. Manufacturing production 12.0 vs. 15.5 prior. New orders 1.4 vs. 7.9. Capacity utilization 8.7 vs. 13.3. Shipments 9.6 vs. 7.4. Employment 11.8 vs. 13.7.

    Have Bernanke and Draghi finally figured it out, asks John Hussman – that economic and market downturns need never happen again as long as money can be printed. And if that doesn't work, just print some more? Current rumored central bank interventions are already "well-reflected" in market prices, and investors will ultimately regret their confidence in such machinations. 

    Less talked about than QE, the Fed may be contemplating cutting the interest paid on reserves to 0% (from 0.25% currently), suggests former Fed economist Ward McCarthy. The amount banks have deposited in Fed vaults has ballooned to $1.49T from $2.4B in 2007. Cutting the rate to zero might force the cash into the economy (or it might destroy the money market industry).

    Speculation that the ECB might restart buying government bonds helps send Italian yields lower in an auction of €5.48B ($6.749) of debt with differing maturities. The cost of 10-year paper dropped to 5.96% from 6.19% in an auction in June, while the bid-to-cover ratio edged up to 1.29 from 1.28. Yields on five-year paper dropped to 5.29% from 5.84%.

    It better be more than a quarter point cut on Thursday, writes Ambrose Evans-Pritchard of the ECB policy meeting after Mario Draghi "promised the moon." European markets are up 8% or more since Draghi's comments on Thursday. A failure to deliver on his pledge could be a disaster.

    Ahead of its interest rate decision tomorrow, the RBI paints a picture of a stagflationary economy in its quarterly report. "The near-term outlook on inflation continues to be marked by a number of upside risks, despite the significant slowdown in growth … fiscal and monetary space to stimulate … remain limited." Inflation worries are likely to keep the RBI on hold for now. 

    This earnings season is starting to raise some red flags, Cullen Roche writes: "47 companies in the S&P 500 have issued negative EPS pre-announcements to date while just 13 companies have issued positive EPS pre-announcements. Analysts now expect a year-over-year decline in earnings for Q3 (-1.6%)." 

    The ECB again made no purchases of sovereign debt through its SMP program last week, now marking 6 months of no activity. From this standing still start, markets expect the bank to embark on a buying spree of Spanish and Italian debt? (see also)

    For a brief, shining moment, the outlook had been for continued growth in earnings, but global weakness is forcing U.S. firms to cut costs and cut guidance; the ratio of negative-to-positive Q3 forecasts is the most negative since 2001. Analysts now expect Q3 profit and revenue for S&P 500 companies to decline 0.4% Y/Y.

    A wave of cash wins the battle against a growing tide of bankruptcies as the municipal market this month is set for its best month since January. Helping the 1.8% July gain (through last Friday) is the strongest quarterly flow of redemptions ever set against investors clamoring for any sort of reasonable yield.

    Chinese stocks ignore the worldwide rally, Shangahi -0.9%, led by a 4.6% drop in China Cosco – the country's largest publicly traded shipper. The company estimates its H1 loss will grow by at least 50% from a year ago. China's shipping company woes are well known – nearly 90% of shipyards have received no orders this year, and 28% no orders since 2009's end.

    Also hurting in China was a 5.6% dive in Shanghai B shares – dollar-denominated shares traded in Shanghai – amidst consideration of rules that would add a special tag to stocks of firms with 2 or more years of consecutive losses. The new proposals would also make it easier to delist stocks.

    Grain futures rally sharply following their first week of decline since early summer as a little bit of rain fails to stem reports of crop damage. While soybeans could still be saved by decent rainfall, a good portion of the U.S. corn crop is past the pollination stage and beyond repair. Sept. Corn +2.7% to $819/bushel, Sept. Beans +2.3%, Sept. Wheat +2%

    A new 800-page report from a Senate committee harshly criticizes the for-profit education sector. The biggest complaints from Senator Tom Harkin's biting report are that taxpayer money is being squandered and students aren't getting much bang for the buck from their enrollment. On watch: CECOCOCOEDMCSTRALOPE,APEINAUHBPIAPOLESIDVLINC.

    JPMorgan (JPM -2.1%) underperforms its TBTF brethren, lit up bright red after Deutsche's Matt O'Connor downgraded this morning. "Risks at most peers no longer seem to be outsized vs. those at JPM – liquidity and capital differences have narrowed and certain peers seem ready to be more aggressive in maintaining/gaining market share."

    Back to the future: Best Buy (BBY) founder Richard Schulze's plan to retake his company includes bringing back ex-CEO Brad Anderson to help lead a turnaround, according to sources. Insiders say that Schulze isn't just blowing smoke, but is "serious as a heart attack" over his efforts to bring P-E firms on board with his bid. BBY +6.3% premarket.

    Shares of Green Mountain Coffee Roasters (GMCR+4.3%) edge higher with more questions about the viability of CEO Lawrence Blanford swirling around. With the company facing some of its harshest challenges ever, analysts ponder why founder Robert Stiller is still the go-to source for questions on the company's direction. - Gee, all that scandal and only up 4.3%?  Who do you have to kill to get a double-digit gain in this market?

    Boeing (BA) suffered yet more problems with its 787 Dreamliner over the weekend, when debris fell from one of its GEengines at Charleston International Airport in S. Carolina and sparked a fire. The incident occurred less than a week after Japan's All Nippon Airways grounded five 787s due to concerns about the potential for corrosion in a gearbox.

    Suntech (STP -13.4%) makes new all-time lows after stating it could be the victim of a massive fraud. Suntech was guaranteed €560 ($692M) worth of German government bonds by asset management firm GSF Capital as collateral for a €540M ($679M) investment in a fund that invested in private companies developing solar projects. However, the company now believes the bonds "may not have existed." YGE -11.2%CSIQ -7.3%JASO-7.2%TSL -6.7% after warning.

    More on CB&I (CBI -5.4%acquisition of Shaw (SHAW]+66%): the deal, which is worth ~$3B, will create a company with 50K employees, a backlog of over $28B, and engineering and fabrication facilities on all continents. The firm will "become fully diversified across the entire energy sector." CB&I will use both companies' cash and $1.9B in debt to finance the agreement. Shaw will operate as CB&I Shaw.


  29. What's wrong with this picture?   From Bloomberg: "China’s Stocks Decline to March 2009 Low on Earnings Concerns"  But FXP in March 2009 was 200 and now it's 27.  Can you say "decay", wow!  And EDZ is even more useless…


  30. Phil / Peter – I sold UNG Sept $23 Calls.  I left plenty of room to roll if necessary.  At what point should I consider rolling up?
     
    Maybe AMZN could buy SVU and start same-day grocery delivery.  Just a thought.


  31. FXP / MrM – The downfall of all these ultras….


  32. Hi Phil,
    I'm thinking of selling a put on the VIX possibly an $18 for Aug.  What are you thoughts?  What is the roll over affect on the VIX? or is the VXX a better trade?
     
    Thanks


  33. Is the list of puts considered an *idea* list? Pretty impossible to own all of them for my size portfolio.


  34. Birdman – Think of it like a buffet. Eat what you like leave what you don't.


  35. Europe closing up very nicely, up over 1% mostly with PIIGS up about 2% so they are still believing.  

    Thanks for updates Burr – I'd say TWIL List is take the money and run on the winners.  We'll have to see how the week shakes out but this is a nice top to cash in on.

    MCD/Crussell – If you want to stay with them, I'd go out to the March $90 calls at $3.85 ($3.20 for the roll) and begin to pay for that by rolling your caller (.10) down to the Sept $90 calls at $1.45 for + $1.35 so for net $1.85, you drop 2.50 in strike and buy 6 months of time but, on the whole, MCD would have been on my long put list if they hadn't already taken a dive – I'm not terribly enthusiastic about them with food prices climbing on the drought – the one everyone seems to have forgotten already. 

    Decay/Mr M – Well we know holding those things long-term is madness.  Good idea for AMZN, we should start a rumor..

    VIX/Ging – I have found VXX to be more liquid than VIX so I end up using that one lately.  I would only trade it short-term enough that the other considerations don't matter.  While it's tempting, I think it's foolish to ignore the possibility that there WILL be QE and the VIX will drop significantly.  I'm playing it skeptical in that I would rather cash longs and buy some speculative puts as I think the upside is mainly baked in but looking for a rising VIX is a bit more specific of a trade and you only have 18 days to be right.  

    Ideas/Bird – Yes, the "idea" is to pick a few you believe in (and balance out your portfolio) well enough that you'd want to roll it up and double down if the position moves against you (or take a 20% loss and get the hell out).  The only one in our $25KP is the AMZN, as we have shorter-term bear bets than those.  The point on these are, we generally do OK with them, with many chances to gain a quick 20% and get out and, once in a while, we hit a grand slam like CHK or ISRG but, in a real market collapse, they should all be good for huge gains.  


  36. Phil, it has been published that Romney currently has over 100million in his IRA.  How the hell can you get that much money in there if the maximum allowable contribution is 5k a year?


  37. Iflan,
    What do you think about buying an EXPE sept 50 put?  Do you watch this stock much? The stock looks like a step function up but 25% is a huge move up.
    Thoughts?


  38. Here you go Craig!

    http://www.bloomberg.com/news/2012-07-15/the-secret-behind-romney-s-magical-ira.html

    The other possibility, Kleinbard suggested, was not dissimilar to what Maremont theorized: that Romney contributed limited-partnership interests in Bain’s buyouts to his IRA. What was “quite troubling” to Kleinbard is that he suspected Romney may have contributed these interests to his IRA at a fraction of their market value — “pennies on the dollar” — and well below what he might have charged you or me. When the buyouts became successful, Kleinbard proposed, the pennies on the dollar were suddenly worth real dollars.


  39. When Romney retired he must of rolled it over to an IRA/Rollover and then invested WISELY! 


  40. Phil – Thanks for MCD. Given your feelings about MCD, is there a way to play a put spread to offset the call spread. Goal here being to get back to breakeven and get out. Or, maybe that makes no sense. Thanks again


  41. craigzooka – Generous employee matching??


  42. Gingbaum…..EXPE….I would do the opposite.  I would SELL a Sept 50 put.   More likely this stock goes up than down. 


  43. Markets hanging by a thread. Could rocket with QE, turbo rocket with global QE, crash and burn without it. Is this week an inflection point or what? I'm in all cash just waiting, waiting, waiting, figuring that standing aside *is* a position.


  44. I mean employer.  


  45. all of asia ex china up solidly last night, shanghai comp down another -.9%.. dallas fed -13.2 vs. 5.8 in June and 2.0 est….BUY!


  46. Greed/Fear Laboratory Experiment

     
    Which is the stronger emotion: Greed or Fear? If I was in the 1% I would try an experiment. Do a Greed/Fear arb and buy equal parts TNA and TZA. Then, when the rocket launches or blows up, cover the one against me and let the other one go. My theory is that greed would be stronger than fear, mainly given that there would so much ego on the losing side making folks hang on too long.


  47. ARE THE MORMONS A STRANGE CULT LIKE GROUP? I MEAN MORE SO THAN SAY CATHOLICISM JUDAISM OR SAY METHODISM?   I SEE ALOT OF THE MSM TAKING SHOTS AT THEM OR IS IT THE ELECTION?


  48. Greed/Fear Experiment
    Check that – I would sell both sides immediately if my premise was met and the spread between them expanded.


  49. I am not a mormon..
     
    but..
     
    FU ANGEL!!!


  50. Mrmocha…..Grab some profits on that PCLN trade!   We have to show the board that we can make money trading either direction!  


  51. MoMo trade!     Bought to open 10 September $35 OPEN puts for 2.80.   This is a paired trade, with the LNKD calls purchased earlier. 


  52. I am not seeing a lot of the comments that Phil is responding to (Bird, Exec, etc.) that I used to see as a Basic member.  Is anyone else experiencing this?


  53. JABO! BAD DOG! I WAS BEING IRONIC!


  54. IRAs/Craig – Well a couple can put $24,000 a year into a Roth by putting the money in a regular IRA and then moving it to the Roth via "conversion".  This is somehow combined with rolling 401Ks and the regular IRA in some way someone tried to explain to me but the bottom line is, it can be done but, of course, that ain't gonna get you to $100M but, when you are a takeover guy and you can buy options in your IRA before your company buys another company – you can stack up those gains pretty quickly!  

    And what Kleinbard said!  

    MCD/Crussell – I think they can drop another 20% so I wouldn't sell puts.  It's just not a good time to be investing in a company whose primary expense is food.  

    Waiting/Bird – Nice plan.  Greed/Fear thing is an interesting way to play but easier to wait in cash for one or the other and then just make the one bet.  

    Mormons/Angel – You should go see "The Book of Mormon" – silly but a lot of insight into Mormon faith.  


  55. They could've also used different types of IRAs and all the 401k contributions plus the matching component to get the accounts to a good size. 


  56. jelutuck/comments--   me too. Basic member also.


  57. I'm sure Romney's IRA is on the up and up – just like everything in his life. He will document it when he releases his tax returns. Oh wait! He's not releasing his tax returns someone just said.


  58. jelutuck
     Basic member ALSO SHARING NON-experiencE.


  59. Jelutuck/same problem-a little unsure as to how the comments are edited for our (Basic) consumption.


  60. JET/ Comments- Yep.


  61. lflantheman / PCLN – Fair point, but I did counsel people at 10:42 to take profits, which ran to 50% at the peak sell point, so that should provide the desired lesson.  For myself, I'm not conviced of a PCLN uptick until I see more strength in AAPL, so I'm holding fast.


  62. Same here.  Basic Member.  And I still don't fully understand the difference between basic and prem., even though Phil touched on it last week.
    Starting to squeeze the shorts on SVU?


  63. SVU/Phil – still like the October $20 calls or would this be some of the longs to get out of here?


  64. lflan
    "MoMo trade!     Bought to open 10 September $35 OPEN puts for 2.80.   This is a paired trade, with the LNKD calls purchased earlier. "
    what is the underlying stock.
    Thanks,
    gandhjo


  65. gandhjo.  OPEN is actually the ticker.  Confusing.  


  66. Basic Members:  you can see the lost comments if you use RSSOwl with the feed…
    Phil: if this is not on puspose, feel free to ignore and leave the RSSOwl :)


  67. Crazy Plays - I bot some SGEN AUG 25 calls for 2.70, this stock had a little pullback today after a nice run but could head upwards again quickly if the market has a strong afternoon.


  68. Comments/Jet – Yes, the site was in vacation mode for quite a while but normally (which we are back to) Basic Members can't see Premium comments on market days until after 3pm.  

    11:00 AM On the hour: Dow +0.1%. 10-yr +0.2%. Euro -0.63% vs. dollar. Crude -0.31% to $89.85. Gold -0.03% to $1619.75.

    11:50 AM European shares close sharply higher, catching up to a big Friday afternoon move in the U.S. and marking 3 days of gains since ECB President Draghi suggested more action from the central bank. Stoxx 50 +1.6%, Germany +1.2%, France +1.2%, Italy +2.5%, Spain+2.8%, U.K. +1.2%. Spanish 10-year bond yield off another 13 bps to 6.61%.

    12:00 PM On the hour: Dow -0.12%. 10-yr +0.21%. Euro -0.58% vs. dollar. Crude -0.41% to $89.76. Gold +0.09% to $1621.75.

    1:00 PM On the hour: Dow -0.06%. 10-yr +0.22%. Euro -0.48% vs. dollar. Crude -0.5% to $89.68. Gold -0.04% to $1619.65.

    "A deep-seated feeling of mistrust has taken hold" at ECB headquarters, reports Der Speigel following Mario Draghi's "whatever it takes" comments last week suggesting imminent central bank bond purchases. The remark was a unilateral one, and will face clear resistance from the usual suspects. "What's intended to keep the monetary union together could actually drive it even further apart."

    Talking about breaking up the big banks is officially trending, with sources indicating Bank of America (BAC) execs and officers discussed the idea but decided against it. In the meantime, "Fast Eddie" Crutchfield, who M&Aed First Union into a sizable player in the 90s, joins Sandy Weil and Phil Purcell: Putting "gargantuan, completely unrelated businesses under one roof is probably not a good idea." 

    Mortgage bonds (and the companies that invest in them) could still see further gains as investors, according to a JPMorgan survey, remain unconvinced housing prices have bottomed. The negativity suggests the fabled housing turnaround has yet to be priced into MBS even as they have rallied strongly this year. 

    Annaly (NLY -0.9%) goes on sale thanks to a downgrade to Underperform from Wells Fargo. It's the usual (not unfounded) list of concerns: Shrinking net interest margin, higher prepayments, and the popularity of the stock compared to other mortgage REITs.

    SA contributor John Petersen castigates what he call's A123 Systems's (AONE -0.5%) "death spiral financing," which has caused a collapse in its share price. The financing "has created a toxic supply overhang that virtually guarantees significant future price erosion," writes Peterson. "Under the circumstances, I believe A123 is not a suitable investment for anybody but professionals."

    Alpha Natural Resources (ANR -7.9%) is the S&P 500's biggest decliner as the coal company discloses that on July 25 a subsidiary received an imminent danger order for one area of its Eagle Butte Mine in Wyoming. More likely, shares are simply giving back much of Friday's outsized 20% gain on Arch Coal's better than expected Q2 report

    Investors should temper their enthusiasm over theagreement between BioFuel Energy (BIOF +4.8%) and Gevo (GEVO-7.5%) to explore large-scale production of isobutanol light of the small size of the isobutanol market, Tristan Brown writes. The conversion of only a few U.S. ethanol facilities would swamp the market and drive down profits of retrofitted facilities.

    Many Sears (SHLD -4.1%) stores are in line to get a facelift due to their widely-described "decrepit" look, but will fresh paint be enough to bring them back to relevancy? Retail experts warn the trouble with the retail chain may run deeper than its own self-afflicted pain, with close to a third of Sears stores located at older malls in the U.S. described as "dead or dying" amid empty parking lots. Part of the problem is that teenagers aren't gathering at the mall en masse anymore to bring in much-needed traffic.

    Unilever (UL +0.4%) works out an agreement to sell its North America frozen meals business to ConAgra Foods (CGA+1.1%) for $265M. The deal will include a transfer of licensing rights for the Bertolli and P.F. Chang brand names. 

    Shares of Coinstar (CSTR -2.7%) haven't found a bottom yet after last week's Q2 revenue miss and soft guidance set off broad selling pressure. The common theme from critics centers on the premise that company may have a flawed business model by selling physical products in an increasingly digital market. 

    Chinese Internet giants Baidu (BIDU) and Sina (SINA) are reportedly forming a broad partnership that will cover "search, content, platforms, technology, and resources." Details as to what this means remain scant – Sina has already built Baidu search into its Weibomicroblogging platform, and Baidu has added Weibo publishing support for its cloud services and.Box Computing platform Stronger integration of Weibo posts within Baidu's search results is a possibility. 

    Microsoft Surface (MSFT) will ship on Oct. 26, the software giant discloses in its FY12 10-K. Pricing details remain non-existent. Also in the 10-K is a paragraph claiming Microsoft is driven to compete with the "vertically-integrated model" of a rival (no doubt Apple), even at the risk of hurting margins and alienating partners. Steve Ballmer suggested as much recently.

    "We don't do market research," says Apple (AAPL) design chief Jony Ive. "It will guarantee mediocrity and will only work out whether you are going to offend anyone." Consider that one more way Apple's culture is the opposite of Google's (GOOG), which is famous for taking a data-driven approach to everything. Ive also raised eyebrows by declaring the goal of the world's most valuable company "isn't to make money," but to "make great products." (previous: III)

    Apple (AAPL +2%) outperforms after iMore reports the next iPhone and iPad Mini will be introduced at a Sep. 12 event, and will go on sale 9 days later. Such a timetable would allow Apple to book some FQ4 sales for the devices, which could help it beat itscautious guidance for the quarter. Also, Japanese blog Macotakara has posted a video of the next iPhone's supposed case – it looks similar to what has been displayed in "leaked" images

    Three lunchtime reads:

    1) The Euromess continues

    2) Megacap stocks are walking tall again

    3) Apple sounds warning bell for smartphone industry


  69. VVUS players - it's trying to paint a hammer today so the run could be over for the puts, keep a close watch.  I'll let you know if I shift from short to long, I have only a few puts left now.  Pharm, if you're checking in, got an opinion?


  70. lflan / AAPL - it's painting a nice slow symmetrical upward channel right for almost two hours, a break above or below would be a signal to play a direction, IMHO.


  71. SVU/Scott – I take it you mean Oct $2 calls?  I still like them (up 10% today) but hard to tell when they pop properly.  I see it as a multi--year accumulation, nothing I expect to make money on short-term.  

    RSSOwl/Arivera – That would not be on purpose!  

     

    Banks Are The “Achilles’ Heel of Capitalism”

     
    By Barry Ritholtz – July 29th, 2012, 10:00AM

    Edward Yardeni of Yardeni Research in this week’s Barron’s:

    “The problem with banks is that they tend to blow up on a regular basis. That’s because bankers are playing with other people’s money (OPM). They consistently abuse the privilege and shirk their fiduciary responsibilities. Whenever they get into trouble, government regulators scramble to bail them out first and then scramble to regulate them more strictly. Without fail, the bankers respond to tougher rules by using some of the OPM to hire financial engineers and political lobbyists to figure out ways around the new regulations.

    In my opinion, banks are the Achilles’ heel of capitalism. They really do need to be regulated like utilities if their liabilities are either explicitly or implicitly guaranteed by the government, i.e., by taxpayers. Banks should be permitted to earn a very low utility-like stable return. Bankers should receive compensation in the middle of the pay scale for government employees, somewhere between the pay of a postal worker and the head of the FDIC. It should be the capital markets, hedge funds, and private-equity investors that provide credit to risky borrowers instead of the banks.”

    ‘Nuff said . . .


  72. SVU – I'm actually making money on SVU today.  Nice run up!


  73. ttp://news.investors.com/article/620090/201207271807/gm-risky-subprime-auto-loans-fuel-sales.htm
    http://www.bloomberg.com/news/2012-07-30/subprime-auto-abs-grows-as-lenders-chase-margins-credit-markets.html
    Anything under 660 is generally deemed subprime. GM Financial auto loans to customers with FICO scores below 660 rose from 87% of total loans in Q4 2010 to 93% in Q1 2012.
     


  74. They should stop Romney from talking until after the election. Here he is in Israel:

    Do you realize what health care spending is as a percentage of the G.D.P. in Israel? Eight percent. You spend eight percent of G.D.P. on health care. You’re a pretty healthy nation. We spend 18 percent of our G.D.P. on health care, 10 percentage points more….We have to find ways — not just to provide health care to more people, but to find ways to fund and manage our health care costs.

    If he likes it so much maybe we should try the same universal taxpayer supported non-profit healthcare system in the US. What a frakin' hypocrite!


  75. tsl/stp…2 more solar cos headed for ch. 11


  76. Birdman / ultras - regarding "buy equal parts TNA and TZA", see my earlier post about China ultras.  There are good research articles on Seeking Alpha, and our experience with ultras on this board concurs, that just shorting both ultras in a pair over the long term is better than buying them.  Case in point – one year ago TZA was a 67 and TNA at 71, check their current prices!


  77. Anyone playing GMCR earnings?


  78. Phil and other USO traders – this is what I get for having money in two accounts, but not paying adequate attention to both; I was long last weekly USO puts, failed to close, and therefore assigned 1000 shares over the weekend.  The trade is profitable, but regardless of what I might like to do with it, I just got a call from Etrade saying they can't find shares to borrow, so I need to buy to cover by 3EST today.  Just wondering; does unavilability of shares to borrow suggest anything to you?


  79. Phil – did you see my question earlier about UNG?  I am short UNG Sept $23 calls, and would like to know how I decide when it's time to roll up and DD.
    Also, can you clarify which comments are premium?


  80. Phil, Is it possible that some of Yardini's take on the banks, could be applied to segments of the healthcare industry as well?
    I think so…..
     
    I thought it was interesting that the Brits decided to have a segment of the opening ceremonies devoted to NHS, their National Health Service….
    http://www.independent.co.uk/sport/olympics/comment/chris-blackhurst-theres-nothing-remotely-leftie-about--celebrating-immigration-and-the-nhs-7986150.html
    http://www.nursingtimes.net/nursing-practice/clinical-specialisms/management/east-london-nhs-staff-describe-unforgettable-olympic-night/5047721.article?blocktitle=Olympics-2012&contentID=8611


  81. Pull up a comparison chart of OPEN vs LNKD.  The divergence is very interesting, short term and long term.  I think it's an excellent paired trade.  Both report on Thursday this week.
    Mrmocha…..thanks for the input. 


  82. When do we get the bernanke's speech? 2?


  83. Angel:  Mormons are not a strange cult-like group.  They are simply a minority, and subject to the same falsifications and attacks as any minority anywhere.  They are a bit clubby, unsurprisingly, but I have attended their services and funerals and was surprised at how Protestant-ordinary is all is.  They have their "Jesus Jammies" and some oddish rituals, but considering that Catholics believe that bread and wine are actually and physically transformed into the flesh and blood of a dead man and then consumed in public, I have trouble discriminating against Mormons on the basis of their beliefs.  I was given my first Catholic confirmation by an Archbishop at St. Peter's in Rome after many months of focused indoctrination, so you may rely on my characterization of  Communion.


  84. Borrowing Shares/Dude – Well, it means that there are a lot of shorts out there. On the other hand, it's not uncommon for the retail online brokerages not to be able to borrow shares as they are at the bottom of the food chain.



  85. Phil, suppose for a moment that we get some large stimulus in the near future. Do you have a buy list?


  86. Phil/ excess reserve rate
     
    I just read an article on SA about the Fed changing the .25% rate to zero, while I have long speculated that they would do this a while ago to stimulate lending and perhaps inflation. Do you see this as the possible next easing and if so, how do you feel this would affect the makrets? TIA


  87. Mormons
    I have been over run by them, I do everything in Idaho app. 80% mormon and I will say they are the most un American twisted bunch in this country. The only part of law that most follow now is 1 wife. They blame every problem on non LDS ways, sounds a lot like Romney!


  88. Crazy week last week. Going easy for awhile (too many trades). Just LULU LNKD PCLN and few others for fun …. :) still holding AAPL aug calls for now. Those were too cheap early last week not to bite.
     
    Lot's of cash right now. I'm not looking forward to get back into anything anytime soon (except for the REIT portfolio that i'm slowly building but that's a 10-15 year proposition).


  89. Just saw the Vanity Fair article where they polled Americans and only 14% knew who Jamie DImon was.  It's easy to let the fox in the hen-house with a stat like that. 


  90. Waiver of ethanol mandate could push oil prices higher as we shift use from corn to oil again.  

    Loans/Angel – I have been saying for the past year that the "outperformance" in US auto sales has been driven by essentially giving a loan to anyone with a pulse.  This kind of BS will just keep happening as long as we bail out all the companies/banks who make these bad loans as if they are not to blame when they turn out to be uncollectable.  

    Romney/StJ – Wuh??  WTF is he trying to say?  Yes, we (rational people) are aware of the fact that countries with national health care spend half of what we do to insure twice as many people with better outcomes so what is Mitt trying to tell people? At the Olympics, the UK is so proud of their NHS, they featured it in the opening ceremonies.  

    Solar/Angel – Knocked WFR back down today ($1.87). 

    GMCR/Amalfi – Dead company but a silly Momo so might turn around and bite.  I'd just avoid.  

    USO/Bolt – The market is so thinly traded these days, I don't think you can read into it.  I'm sure there's a huge demand to short at the $90 line.  Just a good think they're having a down day.  

    UNG/Rykro – Sorry I missed it.  As they are all premium, I'd watch the 200 dma at $22.50 as the point at which you have to give up. Nat gas is rallying off warm weather forecast (and again – that's VERY bad drought news) and it is a very dangerous trade but, if you don't mind rolling and doubling down, it's a logical trade to stick with.  As a rule of thumb, it's best to wait until your caller/putter is between 2/3 and 3/4 intrinsic before rolling them.  At the moment, you are at 100% premium with 0 intrinsic.  Premium comments are comments made by Premium Members.  Since I rarely only answer one comment though, you see my answers to both usually.  

    Health care/1020 – That's funny, I was just saying the same thing.  Sure, it's the general problem with Capitalism – especially when applied to stock markets.  The NEED to expand quarter after quarter means almost everything grows to the point at which it collapses but, since that growth involves destroying all competitors along the way – society is left with a disaster to clean up after the fact.  If you have a private business that does $100M in sales and makes a $10M profit year after year after year for decades – that's great with steady 10% returns in your niche.  But, if you have a public company that runs like that, you and your executive team would be fired within 3 years and replaced by people who "know how to grow a business."  

    Bernanke/Jrom – That's the normal time.  

    "I have trouble discriminating against Mormons on the basis of their beliefs"/ZZ – I'm sure there are groups that can help you with that!  8-)

    Buy List/Rpme – As you can see from Burr's earlier TWIL list – we have almost 1/2 of our trade ideas still available.  That is a big indication that this rally is BS as industrial blue chips like AA and X and BTU are not participating but, with more stimulus – a rising tide should lift all ships.  Also, I will be loving XLF and FAS to get back to $16+ and BAC is cheap again and HPQ is crazy low as is SVU, WFR, GT…  So that's a good start!  

    Zero/Sage – I think it makes them look desperate.  I think it makes a wall (as it did with Japan) that says – we're done – it's not possible to do more now.  I have been joking for several weeks that I am waiting for them to pay me to borrow money – this would be the step before that.  

    Cash is good BDC.  Maybe a nice pop on not really enough stimulus will give you a nice short entry point.  

    Jamie Dimon/Ink – Who?  


  91. lflan, i closed out half the lnkd position earlier for a profit…tempted to bail on the rest now.  you plan to hang on till wed?


  92. AAPL broke out of that upward channel so I'm taking some QQQ puts here with tight stops just to be safe in case of an anti-stick.


  93. Final question since it's past my bedtime, do you think, "The Fed stands ready to act" will be enough to rally the markets like Europes BS or do you think we will need concrete action to continue this BS rally?


  94. MRM – what about some AAPL puts – the downside on AAPL is pretty substantial here if they don't pop 600…


  95. Phil/Buy List,
    In addition to BAC, XLF what do you think of TLT (slowing moving to 130), QQQ
    Thanks.


  96. lunar…LNKD…I will be keeping these.  I may hold some through earnings. I would only hold LNKD and OPEN together most likely.  Not likely I'll miss the call on both. 


  97. jerconn / AAPL - That's a good question but better suited for lflan, my AAPL picks are only about half right, and I have PCLN puts and QQQ puts already so I have enough risk if they pull a surprise stick upwards today…


  98. someone turn up the volume…this thing is as dead as Elvis.


  99. Surprise Stick/mocha – Do those bots have to eat *every* day?


  100. Geithner on Bloomberg tomorrow night – timed for Asia's open.  Very strange:  

     

    Tomorrow night, July 31, 2012, Treasury Secretary Timothy Geithner will speak exclusively to Bloomberg Television's Chief Washington Correspondent Peter Cook. The interview will take place in Los Angeles after the Treasury Secretary's latest trip to Europe.

    The full interview will be available after 10:30 pm ET on Bloomberg.com and can be seen on Bloomberg Television in Europe and Asia. The interview will air in the U.S. starting at 6am ET Wednesday morning on "Bloomberg Surveillance.”

    Tune in to hear Geithner's take on the European debt crisis and the message he just delivered in Germany, plus his assessment of the U.S. economy ahead of the Fed decision on Wednesday and Friday's jobs report.

    Dow volume just 55M at 3pm – must be Sunday…

    BS/Jrom – As I noted this morning, I think the assumption of action is now in.  Today's action (or lack thereof) seems to confirm that.  Of course a bullish statement can always give us a pop but to get us over 3,000 on the Nas and 1,400 on the S&P and 800 and 8,000 on the RUT and NYSE is going to take more than hot air. 

    TLT/Pat – If the stimulus is directed at lowering rates – then TLT can go up but if it's aimed at smoothing out the economy, TLT can go down and, either way, I would not bet them up from here.  

    2:00 PM On the hour: Dow -0.15%. 10-yr +0.23%. Euro -0.57% vs. dollar. Crude -0.75% to $89.45. Gold +0.17% to $1623.05.

    3:00 PM On the hour: Dow -0.04%. 10-yr +0.29%. Euro -0.48% vs. dollar. Crude -0.42% to $89.75. Gold +0.27% to $1624.75.

    The knives come out for Mario Draghi, Der Spiegelreporting the EU Ombudsman has requested an investigation over whether the ECB President's role with the Group of Thirty lobby group presents a conflict of interest. Earlier: The Germans push backagainst Draghi's "whatever it takes" remarks. 

    An interesting chart from Morgan Stanley shows the effect of Fed intervention – as measured by PE multiple expansion (green line) on the broad stock market – has gotten smaller over time, and quickly dissipated once the program ended. Technicians would say it's a pattern of lower highs and lower lows. (via)

     What's the best offense in this kind of market? A cyclical defense, says Baker Avenue's Doug Couden. Rather than sticking to the traditional favorites like consumer staples or utilities, which in the present environment are exposed to currency risk and higher input costs, he recommends looking at technology and oil service sector names where profit streams are more defensible. His picks: Ebay (EBAY +0.9%), Qualcomm (QCOM -0.4%), Schlumberger (SLB-0.7%) and Haliburton (HAL -0.6%). ( Video )

    Argentina better hire more currency-sniffing dogs as dollar deposits continue to flee the country, now off 42.3% since October. Following the government appropriation of the energy industry, depositors and investors aren't waiting around to find out the next target, writes Sober Look.

    Yay Markey!  Rep. Ed Markey, top Democrat on the House Natural Resources Committee, calls on the Obama administration to issue a conditional block on the proposed merger between Cnooc (CEO) and Nexen (NXY), saying NXY has drilled for oil in the U.S. without paying royalties. Markey says a "massive transfer of wealth" would extend to China at the expense of the American taxpayer. 

    Barrick Gold (ABX +1.8%) moves up despite an S&P credit rating cut to BBB+ from A- with a negative outlook, reflecting higher capital spending plans even as gold production is delayed at its Pascua-Lama project. Shares could be getting a lift from a positive blog article which says ABX is undervalued, enjoys strong earnings growth, and production will pick up in H2.

    Shares of Uranium Energy (UEC +4.5%) are higher today after announcing it has completed its third uranium sale . A total of 150K pounds of U3O8 were sold at $50 per pound, bringing total sales for the fiscal year ended July 31 to 270K pounds. This last sale brings its FY total revenue generated from uranium sales of $13.76M.

    For-profit education stocks show sharp losses after a Senate report (.pdf) widely criticizes the industry. Summing up the report quite nicely is the stat that while for-profit schools enroll only around 10% of students for higher education students in the U.S. – they account for nearly 50% of all student loan defaults. Falling the hardest:EDMC -9.1%CECO -7.4%ESI -7.4%STRA -6.1%.

    Suspicions of insider trading surround CB&I's (CBI$3B acquisition of Shaw Group (SHAW) after a trader today made a big paper return on 2000 August $29 options that he or she bought bought on Thursday for $0.25 each. With Shaw's shares +55% to $41.40 the calls are worth $12.40. 

    Under Armour (UA +0.1%falls under the microscope of the professors who contribute scathing analysis at the Grumpy Old Accountants blog due to its booking of a $3.3M gain on a $63.8Macquisition of tangible and intangible assets that it claims came in under fair market value. Though the gain was socked away into the firm's SG&A expenses back in 2011, it's the kind of accounting scrutiny that has made things uncomfortable in the past for prior targets of the relentless accounting profs.

    Hard drive controller chip vendors Marvell (MRVL -2.1%) and LSI (LSI -1.7%) slump after Williams Financial cuts its estimates on Marvell due to widespread signs of softening PC demand. Williams is also worried about slowing orders for Marvell's TD-SCDMA baseband chips, used in phones running on China Mobile's 3G network. LSI took off on Thursday following a Q2 beat. Seagate, a major Marvell and LSI customer, reports after the close. 

    As Alcatel-Lucent (ALU -1.9%) continues to flirt with the $1 threshold, SA's Stephen Simpson expresses doubts about the telecom equipment vendor's ability to stage a turnaround before its debts come due. ALU has burned through ~€4B in cash over the last 5 years, Simpson observes, and its restructuring plan will cost it another €800M. Meanwhile, over €2.3B worth of debt will mature over the next 3 years, and near-term industry capex is weak. (Q2 results

    After rebounding strongly on Friday with the help of Amazon's Q2 report and LivingSocial data (not to mention short-covering), Groupon (GRPN -9%) has tumbled below the $7 level once again. Expect shares to remain volatile ahead of August 13's Q2 report, which should clear up whether recent fears about slumping U.S. and European billings are justified.

    Samsung (SSNLF.PK) is taking Windows Phone 8 (MSFT) seriously: the company has disclosed in court documents it's planning to launch two WP8 models in Q4. One will feature a 4.65" display, and both (like the U.S. version of the Galaxy S III) will run on Qualcomm's (QCOM) powerful MSM8960 processor. It looks as if Nokia (NOK),reportedly launching two WP8 models of its in the coming months, will have its work cut out for it. (also


  101. Anyone have the link to the TWIL list, I do not have Burr listed comments for today.


  102. TWIL/Rpme – Here is Burr's Spreadsheet


  103. Jerconn / AAPL – good instincts there, hope you bot some puts!


  104. SGEN Calls Crazy Play - I closed these with a dime loss, if you want to keep them, or perhaps half, overnight that wouldn't be a bad idea, there's lots of time, but I have a full meeting day tomorrow and can't babysit them…


  105. MRM – Thanks, I did buy some puts but AAPL's pretty bouncy in this range so it's not helping much…maybe tomorrow…


  106. PHil – so if I understand correctly you don't think Geitner will say anything that will move the market tomorrow?  It's all baked in already?


  107. Birdman / Bots - just sit back and watch the magic -- look at the AAPL chart for the last few minutes, just maddening how they play around…


  108. Thanks Phil and BTW, your timeline for the privately held company's change of management, 3 years, is right on target. Having had the pleasure to live through it, not really a pleasure. Long term thinking supplanted by the ultra short term thinking and all the Corporate mumbo jumbo (highly technical jargon) that goes with it.


  109. Somebody is loading up on IWM last 1.5 hours, close to 700,000 shares at a time.


  110. Geithner/Jerconn – I think he will make a statement like Draghi but, like Draghi – he also has no actual power to do anything and there's no way Congress will pass anything so it has to be BS.  It MIGHT move the market – and the timing indicates it's the kind of BS that they hope to get Asia and Europe to buy into and, if they rally based on his BS, then THAT can move our market – or at least our pre-market – and that seems to be the game, they are just talking things up as best they can – buffing essentially as they are pretty much out of ammo.  

    Meanwhile, back in reality-land, gasoline gapped down this morning from $2.89 on Friday to $2.80 and has only recovered to $2.8145 – that's a pretty realistic commentary on demand.  This is summer – if not now, when?  

    Timeline/Rpme – In my previous life as a consultant, I have seen so many good companies destroyed by that "logic" it's just criminal.  We have an entire economy that is run by people looking to charge the most possible money for the lowest quality levels of goods and services possible – what are we really accomplishing with this attitude?  Quality does sell but it's takes hard work and dedication to put out a quality product every year and it's not as profitable as selling crap so the crap sellers end up buying the quality companies to co-opt their reputation for as long as that scam works but, in the end, it's a gigantic race to the bottom. 


  111. MNST – Monster Energy Drinks – what's people's take on this stock?  Is it CMG like?


  112. IWM/Shadow – Someone is also unloading. :)


  113. I've read everything I could find, and if there is something new to come out of Draghi it is only whether, and to what extent, the BCE has been buying and intends to buy sovereign debt in the secondary markets. I don't think Germany has given Draghi any other type of round to put in his gun at this point.  Maybe if Merkel has had a really relaxing vacation this summer she can be persuaded. But the overarching point is whether Germany could maintain the Euro at its current exchange rate even if it threw its wallet on the table.  I think they cannot, and, if they tried and failed, would make the situation infinitely worse.  "It is better to be silent and thought a fool, than speak and remove all doubt."


  114. Well, no stick into the close – no volume either – 69M on the Dow with 2 mins left.  

    MNST/Lolo – They are priced for growth that's not likely to be realized so it's a stay away to me.  

    Well, there goes one day burned with no action taken – very much like the end of last month, when rumors amounted to nothing. 

    Tomorrow's another day – I have to run for meetings.  


  115. Birdman
    Very clear pattern of BOTS selling smallish lots to drive down the price and then a giant block, over and over.


  116. Shadow – Oh, interesting. Sometimes my mind is a little simple.
     
    This is like being in the eye of a hurricane. It feels like all hell is going to break loose. When? Real soon.


  117. Shadow,
    How / Where can you see the bots buying/selling patterns?


  118. New Commemorative Pistol

    Ruger is coming out with a new pistol in honor of the United States Senate and the House of Representatives. It will be named the “Congressman”.

    It doesn't work and you can't fire it.


  119. i zega
    The tick and order bench. Takes time to train your eyes to notice the extra 000s as they flash by then at bid or ask, today those big blocks were ask, a few over but only 1 buy each, didn't count but about 6 @ 688,000 shares all about the same which leads me to one entity or person. $250 million maybe much more!


  120. Did anyone pick up any of the Long Put list puts today?  Just wondering….  
     
    I tried to get out of a bunch of my longs but no one was biting for a extra dime or nickle.  With volume so low, I guess that's expected.


  121. Burr – I picked up the DIA, MA, V and PCLN puts today, tried to pick up the AMZN as well but didn't work.  Watch, market will go up now…what are your expectations?


  122. Long Puts/Burr – picked up GE, V, MA, AMZN – wanted SPY and PCLN too but didn't get fills..


  123. Phil:
    For as long as I've been with you ( 2 years) you always preached that buying options was for suckers,but I see a lot of Put buying recommendations lately. Are u changing your tactics ?


  124. Flat & bored. But patient.


  125. Burr- I picked up Visa and SPy puts will be on short leash tomm


  126. "Germany is Tapped Out… It’s Only a Matter of Time Before the EU Breaks Up - July 30, Zero Hedge"  I preface my comment by reproducing todays febrile Zero Hedge prognostication, because I had quite an interesting conversation with some Europeans this evening that tends to point towards ZH being dead wrong.
     
    Members of Merkel's CDU political party met with a small group of money managers today in Spain and made the following points:  Greece will leave the Eurozone, because it is not seen as an industrial economy in any sense.  Spain and Italy are seen far differently, and will be supported and funded, the price being greater political union and fiscal controls.   Hencet here will be no breakup of the Eurozone in the broader sense  - full stop  [there was no mention of Portugal].
     
    I asked about current Spanish interest rates, pointing out that they were essentially cancelling out any savings from Spanish austerity policies, and stated that Spanish unemployment simply would not recover on Spain's current economic trajectory without a further very substantial further drop in the Euro, which Germany would not tolerate.  The answer given was that opinion is incorrect..  Germany is an export-driven economy, the drop in the Euro was supporting the DAX quite nicely, and that a further drop [to 1.10 or par/$] was not of particular concern to Germany because the U.S. fiscal deficit was actually worse than the Eurozone and hence a falling Euro/Dollar was not seen as particulary worrisome in the longer term, and tended to encourage necessary Eurozone fiscal adjustments in the shorter term.  Hence it was both desirable and likely that the Euro would continue on a downward path this year.
     
    H'm…..I can only say that this came from a very credible source, and is not implausible on its face.  Everyone can draw his own conclusions, of course, but it certainly sounds like commodities, including gold, could get whacked pretty badly, and that certain European large caps should extend their present uptrend if true.  I won't extrapolate further, but feel free to do so, I'd be pleased to hear PSW opinions.


  127. I've just posted a comment that is being held for moderation, perhaps because it contains the words "dead" and "whacked."  Mysteries of the organism.



  128. Just spent 3 hours in a focus group judging political ads with Frank Luntz! Didn't care for most of the ads, but very impressed with how he can dissect and parse group feelings and thoughts in seconds. They will be several ads coming just based on the ad libbed reactions. Sorry about that!


  129. EUR/zeroxzero. i agree that EUR needs to weaken before the EU sees any recovery, but i don't see that happening until SNB gives up on the peg (and presumably finds another way to deal with safe haven flows)


  130. Burr – I picked up more AMZN and a new one on PCLN.
    dflam – I think the reason phil is buying puts is because VIX is low so not as much downside if it goes against you.


  131. Another bullish report for housing from Schwab : http://investing.schwab.com/public/schwab/resource_center/expert_insight/todays_market/sonders/sonders_073012.html
    Conclusion – housing recovery is to continue at a good pace.  It is clear that the housing stocks have been "forecasting" this recovery for quite some, too.
    If housing continues to recover and US economy does not fall of a "cliff" (all indications in current data support slowing economy, not an economy that's about to fall down), then why would a Fed stimulus be necessary?  May be, it's Europe and Asia that need the stimulus more than the US.  If that occurs, US dollar would continue to do well, US stock market would also be supported and international economies would recover too, albeit slowly.  Under this scenario, global economy could execute a soft landing.  How strong is this possibility?  What say you all.  If this were to play out in 2013, and stock markets start executing on this 6 months before it occurs, we could be looking at start for a new rally.  My 2 cents, or fwiw.


  132. Euro/zero – interesting observations, thank you. I do not follow that commodities would be whacked with a falling Euro however, and in particular, gold. An inflationary policy to lower the Euro against dollar would suggest to me a greater euro export opportunity, increasing the economy, and therefore, possibly, comodity demand. Re gold, with that special circumstance in that it plays as a store of wealth when currencies are inflating/devaluing, to me, suggests a bias toward MORE interest in gold, as well as diminishing purchasing power of said Euro against things such as commodities.. And what europeans really want a dollar anyway? Where will they go? The swiss franc has been pegged to the euro. More and more they will go to… gold. 


  133. Good morning! 

    Still nothing definitive on stimulus but everyone seems to be meeting.

    image

    As you can see from the above chart, our Fed has the most room to act, as far as adding to the balance sheet while the ECB has room to lower rates but is on the hook for about $4.5Tn already, mostly in long-term loans (so not a refresh soon) and the dreaded "other assets."   And check out the BOE – they spend 20% of their GDP buying their own bonds – that's not going to end well…

    From the WSJ:  

     

    In the U.S., Fed Chairman Ben Bernanke is trying to help an economy that isn't growing fast enough to drive down unemployment. He has the benefit of a financial system that has gone a long way toward repair since the 2008 financial crisis.

    In Europe, on the other hand, Mr. Draghi confronts a regional recession, undercapitalized banks and an air of crisis that recalls the one Mr. Bernanke confronted in 2008 and 2009. While the continued survival of the U.S. dollar isn't being questioned, Mr. Draghi is forced to deal daily with market speculation that one or more of the 17 countries that now share the euro will leave the currency union.

    Messrs. Bernanke and Draghi, both Ph.D. economists from the Massachusetts Institute of Technology who talk regularly, seem to be moving reluctantly toward action. Markets are eager for quick and forceful action and could be disappointed if either doesn't deliver right away.

     

    The Fed could unveil a new program for buying mortgage or government securities to bring down long-term interest rates, or take other actions to spur growth, or simply promise to do more later if necessary. Officials might wait until September, when they will formally update their economic forecasts, before deciding anything significant.

    Two questions loom over the Fed: Is more action justified by the threat that the economy's sub-2% growth rate could persist? And if so, will the Fed's existing tools do more good than harm?


  134. Shanghai is down AGAIN but the Hang Seng is up 1% and the Nikkei up 0.7%, bouncing off that 8,650 line but rejected at 8,750 after bottoming Friday at 8,500.  

    London is flat but Germany up 0.6% and France is flat but trends looking up.  Spain up 0.6% too.  

    Dollar 82.91, Euro $1.2259 so the same concerns as yesterday with a weak Euro and Pound getting weaker at $1.568 so Pound needs to take back $1.57 and Euro needs $1.23 otherwise there's nothing to be bullish about.  Same deal on the Dollar – over 83 is bearish, under 82.50 is bullish.  78.27 Yen to the Dollar after testing 78.1 this morning.  BOJ buying Dollars again as buying Euros and Pounds for a week hasn't done anything to strengthen the Yen and the the BOJ, unlike the Swiss, do like to get actual results for their money.  

     

    Taiwan GDP Unexpectedly Shrinks

    Taiwan's economy unexpectedly shrank in the second quarter from a year earlier, the first on-year contraction since 2009, as exports and consumption sagged.

     

    The Ups and Downs of China Profits

    What goes up must go down. For Chinese firms, a rapid rise in profits is set to be matched by an equally rapid fall.

    China Move Reflects Sensitivity on Pollution

    The cancellation of a second Chinese industrial project in a month following fierce environmental protests demonstrates the government's growing sensitivity to China's pollution problems.

    China Moves to Contain Cooking-Oil Prices

    China is taking steps to contain the price of cooking oil in a sign of Beijing's unease amid a slowing economy and political uncertainty.

    Morning Briefing: Jobless, Earnings, Energy, Romney in Focus

    Hungarian data, Czech and Slovak bank earnings, Czech energy issues and American politics will take center stage across the region Tuesday.

     

     

    Greece Pushes for Extension on Bailout

    The leaders of Greece's ruling coalition, struggling to reach consensus over an austerity plan, will seek an extension of the country's bailout program, a senior government official said.

     

    U.S. and Germany Seek Renewed Effort

    U.S. Treasury Secretary Timothy Geithner and German Finance Minister Wolfgang Schäuble said they have confidence in efforts to fight the euro-zone crisis, but urged continued implementation of economic overhauls.

     

    Crisis Hits Deutsche Bank Income

    Deutsche Bank sought to reassure investors that it has sufficient capital, despite confirming a sharp drop in net profit and saying the debt crisis is still pressuring client activity


  135. Tuesday's economic calendar:

    FOMC meeting begins

    7:45 ICSC Retail Store Sales

    8:30 Personal Income and Outlays

    8:55 Redbook Chain Store Sales

    9:00 S&P Case-Shiller Home Price Index

    9:45 Chicago PMI

    10:00 Consumer Confidence

    10:00 State Street Investor Confidence Index

    3:00 PM USDA Ag. Prices 

    3:32 AM EU shares open mostly lower following a sharp three-day rally and ahead of the start of the FOMC's two-day policy meeting today. Euro STOXX 50 -0.3%, London -0.2%, Paris -0.2%, Frankfurt-0.1%, Madrid +0.1%, Milan -0.1%. UBS -4.2% in Zurich following its earnings.

    The Reserve Bank of India keeps interest rates unchanged, as expected. The bank also cut its growth forecast and lifted its inflation outlook. "In the current circumstances, lowering policy rates will only aggravate inflationary impulses without necessarily stimulating growth," says RBI Governor Duvvuri Subbarao. BSE Sensex -0.5%.

    Mario Draghi's gonna have to basically pull a rabbit out of his ass at this point.  (NYT)

    Don't Believe In The Central Banking Theater Of The Absurd.

    The Reality Of The Rest Of Draghi's 'Believe-Me' Speech.

    Welcome to Central Bank Week, as the FOMC meets Tuesday-Wednesday followed by Draghi & Co on Thursday.  (MarketBeat)

    The FOMC is due to start a two-day policy meeting today, with markets hoping for a fresh injection of monetary opiate, but with leading Fed watchers predicting that the bank will show its concernabout the economy but not much for the moment. Still, some Fed officials have talked about the return of taking "insurance" action to pre-empt looming risks such as a eurozone meltdown.

    Treasury Admits It Underestimated Debt Needs, Predicts Ceiling Breach In 2012; $600 Billion More Debt In Second Half.

    Moody's says the U.K. is facing renewed economic headwinds, and cuts its GDP forecast to 0.4% for 2012 and to 1.8% for 2013.

    Singapore's GIC Says Outlook Remains Challenging. The Government of Singapore Investment Corporation (GIC) said yesterday that the investment outlook remained challenging, with the global economy struggling to return to sustainable growth, as it reported an unchanged annualised 20-year real rate of return of 3.9 per cent for the fiscal year ended March 31. "The developed economies will continue to be weighed down by an extended period of debt-deleveraging. In Europe, the debt crisis has spread beyond the periphery to the larger Spanish and Italian economies," GIC Group Chief Investment Officer Ng Kok Song said in its latest annual report released yesterday. "In the United States, the fragile economic recovery could be aborted by automatic spending cuts and tax increases if political gridlock continues beyond the 2012 elections with no compromise on a long-term plan for reducing the public deficit. Growth in the emerging economies, particularly China, is also slowing," he added.

    Eurozone July annual inflation unchanged at +2.4%, in line with forecasts. (PR)

    Eurozone unemployment holds steady at 11.2% in June. The number of unemployed increased by 123K on the month after +95K in May and +181K in April. The record total of 17.8M in June was over 2M higher than in the year-earlier period. (.pdf)

    Swiss UBS Consumption Indicator rises to 1.6 in June from 1.02 in May, the third-largest increase ever reported. The rise reflects sharp growth in new car registrations ahead of the introduction of a CO2 tax on July 1.  (PR) 

    German retail sales (prelim) -0.1% M/M in June in real terms, missing forecasts of +0.5%. On a nominal basis, sales were +0.3%. (PR)

    German unemployment holds steady at 6.8% in July. The number of unemployed rises 7K, as in June, but lower than forecasts of 10K. 

    Spain retail sales -4.3% in June versus a year ago. (PR, in Spanish) 

    Spain to Urge More Regional Budget Cuts as Deficit Deepens

    Europe Local Authorities Have 1.5 Trillion-Euro Debt,Figaro SaysLocal governments in 12 European countries will have 1.5 trillion euros ($1.83 trillion) in debt by the end of the year, Le Figaro reported, citing an estimate by Standard & Poor’s. Local authorities financing needs will rise 27 percent this year to 268 billion euros, including 71 billion euros in Spain’s autonomous regions, the newspaper said, citing S&P. Local authorities in Italy need to borrow 6.5 billion euros and in the U.K. 25 billion euros, Figaro said.

    IMF Predicts Euro Crisis Resolution Will Be ProlongedThe International Monetary Fund said today that the euro-area debt crisis has exacerbated global financial instability and an orderly adjustment process is likely to be prolonged and costly. The Washington-based IMF’s assessment came today in a pilot report intended to make external monitoring more effective. The IMF announced changes to its surveillance of members’ economies to better account for the effects of their domestic and financial policies on other countries. “Unsustainably large intra-euro area imbalances were part of the global boom-bust cycle, and the failure to resolve the euro-area crisis is causing heightened stresses that are spilling over to other countries,” the IMF said.

    Mapping The Real Chinese Economy From The Bottom-Up.

    Used Lamborghinis Linger on Hong Kong Lots Amid China SlowdownWaiting lists for ultra-luxury cars in Hong Kong are getting shorter and used-car lots are cutting prices on Lamborghinis, Ferraris and Bentleys in the latest sign of China’s slowdown

    Rubber Demand in China Set to Contract 5% as Truck Sales Tumble. Natural-rubber demand in China, the world's largest user, may drop this year as slumping truck sales and slowing economic growth cut sales of heavy-duty tires, according to the country's biggest maker.

    Most Chinese Stocks Decline on Growth Concern; B Shares Tumble. Most Chinese stocks declined amid concern the slowing economy will hurt earnings growth. Foreign- currency denominated B shares tumbled for a fifth day. Kama Co. led declines by B shares on concern companies trading close to their face value may be delisted. The Shanghai Composite Index (SHCOMP) added 0.2 percent to 2,112.78 as of 10:20 a.m. local time, with more than three stocks falling for each one that rose. The gauge has fallen 14 percent from this year’s high on March 2. “If 2,100 gives way, which looks likely, it warns that the 1,665 low seen in late 2008 will not only be tested but should be broken,” Thomas Schroeder, a Bangkok-based managing director at Chart Partners, wrote in an e-mailed response to questions. “I have targets at 1,700 and then near the 1,500 region upon a breach of the 2008 low.” The Shanghai B-Share Stock Price Index plunged 3.4 percent to 198.51, poised for the lowest close since Sept. 30, 2009.

    U.S. Drought May Limit China Rate-Cut Space: Chart of the Day. China's central bank may have less room to cut interest rates as inflation is imported from the U.S. in the form of soybeans and corn to feed the nation's pigs. "Pork-induced inflation may rear its ugly head again if global agricultural commodities prices, especially soybean and corn, continue to be drive up by the worst drought in the U.S. in more than five decades," said Zhang Zhiwei, Hong Kong-based chief China economist at Nomura Holdings Inc. "That may limit China's space for monetary easing." Corn futures prices jumped about 61% as of yesterday from mid-June, while soybean futures costs climbed about 24% in the U.S. China's inflation may rebound starting in the fourth quarter, with the central bank likely to raise interest rates next year, according to Zhang, who previously worked for the IMF. The boost to the inflation rate from higher global grain prices could reach 1 percentage point, Societe Generale SA economists including Yao Wei in Hong Kong wrote in a July 26 report. Almost 90% of the variation in China's domestic pork prices can be explained by global prices of corn, with a lag of about three months, and soybeans, with a half-year lag, the economists said.

    Grain Cargoes Seen Slowing Most in 19 Years on Drought: Freight. The worst U.S. drought in more than a half century and dry weather from Europe to Australia will mean the biggest contraction in grain cargoes for 19 years and unprofitable rates for owners of Supramax commodity carriers. Global trade in grains will drop 4.9% in the 2012-13 marketing year, according to the U.S. Dept. of Agriculture. Forward freight agreements, handled by brokers and used to bet on future costs, anticipate a fourth-quarter rate of $9,117 a day, 17% less than now, Baltic Exchange data show.

    Korea Output Unexpectedly Falls as Europe Caps Demand. South Korea’s industrial production fell for the first time in three months in June as Europe’s debt crisis and China’s slowing economy curtailed export demand. Output fell 0.4 percent last month from May when it climbed a revised 1.3 percent, Statistics Korea said today. The median estimate of 12 economists in a Bloomberg News survey was for a 0.1 percent gain. Production rose 1.6 percent from a year earlier.

    Taiwan Economy Unexpectedly Shrinks as Europe Hurts ExportsTaiwan’s economy unexpectedly contracted in the second quarter amid a faltering global recovery, prompting the government to cut its growth forecast. Gross domestic product fell 0.16 percent in the three months through June from a year earlier after expanding 0.39 percent in the previous quarter, according to preliminary data released by the statistics bureau in Taipei today. The median estimate in a Bloomberg News survey of 13 economists was for growth of 0.5 percent. The economy last contracted in 2009.

    The value of P-E assets under management rose 9.4% in 2011 to a record $3T last year, research from Prequin shows. On the one hand, the figures could indicate that the sector retains its attractiveness, although skeptics believe the trend also reflects the long time lag before P-E funds come to the end of their lives, while funds are being forced to hold on to assets longer than they ordinarily would. 

    How many years have I been saying this?  The FHFA calculates that Fannie Mae and Freddie Maccould save $3.6B by reducing the balances for some homeowners who are in negative equity, the WSJ reports. Until now, the agency has maintained that the firms' existing rescue programs were less expensive. The FHFA is due to soon decide on whether to drop its opposition to Fannie and Freddie taking part in a debt-forgiveness program. 

    3 Million Of America's Most Vulnerable Homeowners Are On The Brink Of Foreclosure.

    Commenting on Deutsche Bank's (DBearnings, co-chairmen Jurgen Fitschen and Anshu Jai say performance was impacted by "a volatile environment" and "the European sovereign debt crisis continues to weigh on investor confidence and client activity across the bank." (PR)

    UBS (UBS) will start legal proceedings against exchange operator Nasdaq OMX Group (NDAQ) after the bank's Q2 results were negatively impacted by Facebook's botched debut. UBS says it lost 349M Swiss francs ($357M) following the "gross mishandling" of Facebook's IPO. (PR .pdf)

    Barclays is now showing employees a film about how not to manipulate Libor. I swear:  (CNBC NetNet)

    IntercontinentalExchange (ICEintends to revamp trading in trillions of dollars of energy contracts, saying yesterday that it is moving all cleared products listed on its OTC energy market to futures products in January. The move, which effectively limits customers' use of swaps, will probably appease legislators, who have criticized the lack transparency in OTC derivatives.

    BP (BP): Q2 loss of $1.38B, after being forced to cut the value of a number of key assets. Replacement cost profit (which excludes oil price movements) of $238M vs. $5.4B in the year earlier period. Expects earnings momentum to build in 2013. (PR)

    Deutsche Bank (DB): Q2 net income of €661M. Net revenues of €8B. Core Tier 1 ratio of 10.2%. Pretax earnings at the asset and wealth management arm fell to €35M from €227M in the year-earlier period. Pretax profit at the corporate banking and securities arm came in at €357M, down from €969M in the year-earlier period. (PR

    Why do hedge funds want to be mutual funds?  Easy – stickier, dumber money.  (Barrons)

    Honda (HMC) FQ1: Net income rises more than four-fold to ¥131.7B ($1.68B). Net sales +42% to ¥2.44T. Declares dividend of ¥19, up ¥4 on year. (PR

    More on Honda (HMCFQ1: The increase in earnings was due to last year being hit by the earthquake. However, net profit missed forecasts of ¥150.7B, hurt by the strong yen and increased marketing spending. Op profit breakdown: N. America +4-fold to ¥82.2B; Japan swings to profit of ¥61B from loss ¥45.9B; Europe posts loss of ¥7.63B. Keeps FY guidance unchanged.

    Humana(HUM) Shares Down 9% As Q2 Results Miss Estimates, Weak Outlook. Shares of Humana, Inc. dropped nearly 9 percent in extended trade on Monday after the health insurer reported results for the second quarter that missed analysts' expectations. The company also provided earnings guidance for the third quarter, well below Street view, and lowered its earnings guidance for the full-year 2012, while maintaining annual revenue forecast.

    Panasonic (PC) FQ1: Swings to net profit of ¥12.81B ($163.9M) from a loss of ¥30.35B a year earlier vs. consensus of ¥8.38B. Revenue -6% to ¥1.815 vs. consensus of ¥1.891T. Operating profit up 7-fold to ¥38.6B vs. consensus of ¥40B. (PR)

    More on Panasonic (PCFQ1: net profit strengthened by cost cuts as company undergoes a massive revamp. Maintains FY forecast for net profit of ¥50B, op profit of ¥260B and sales of ¥8.1T. "Their outlook doesn't suggest a solid turnaround is under way. It continues to be tough for them," said asset manager Makoto Kikuchi prior to the results.

    Seagate Technology(STX) Off 7%: FYQ4 Misses, Q1 View WeakDisk drive and storage products maker Seagate Technology (STX) this afternoon reported fiscal Q4 revenue and profit per share that missed analysts’ expectations and was in keeping with a warning provided back on July 5th.

    UBS (UBS): Q2 net profit -58% to 425M Swiss francs, vs. 1.02B francs in the year-earlier per



  136. UBS (UBS):
     Q2 net profit -58% to 425M Swiss francs, vs. 1.02B francs in the year-earlier period; earnings -49% from Q1. UBS I-bank posts a pretax loss of 130M francs. The eurozone crisis and a weak economic outlook will continue to pressure client activity in Q3, creating "headwinds for revenue growth, net interest margins and net new money." (PR .pdf

    Your cheat sheet for this week's knock-down, drag-out court brawl between Apple and Samsung.  (AllThingsD)

    Apple(AAPL) Said to Prepare IPhone Redesign for Sept. 12 Introduction. Apple Inc. (AAPL) is preparing to introduce the next version of the iPhone on Sept. 12 in what will be a design overhaul of its top-selling product, according to two people with knowledge of the company’s plans.

    The best advice from history's greatest investors.  (BusinessInsider)


  137. Is the Bernanke speech today?  I highly doubt we'll be getting any QE3 as long as we are near 1400 on the SPX and in a election year.  Just my 2c.