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Fairy Tale Friday – EU Leaders “Wish” Greece Can Stay

Merkel and Hollande had their big meeting.  

According to Hollande "I want Greece to remain in the eurozone. That's my wish. That's our wish." But he added that "of course Greece must make the necessary efforts for this to happen."  That doesn't sound like much of a commitment to me.  Merkel wasn't any help, saying: "For me, it's important that we all stand by our commitments, and in particular await the (publication of) the troika report, to then see what the result is, but I will encourage Greece to follow the path of reform, which demands a lot of the Greek people."

SERIOUSLY???  We're right back where we started from.  If this is how they are still handling Greece, two years after the fact, do you really think that Spain and Italy will be fixed next month?  Greece's continued access to the bailout packages hinges on a favorable report next month from the "troika" of the country's debt inspectors — the European Union, European Central Bank and the International Monetary Fund. If Greece is found to have failed on key economic reforms that are conditions of the bailout loan, vital funds could be halted.

This was not what the EU markets wanted to hear and they are trading off this morning, despite Bill Gross running onto CNBC after the US's pathetic close to assure viewers (and get quotes in ahead of Asia's open) that QE3 is 80% certain.  Of course more QE makes the higher-interest bearing notes Gross' $1Tn Funds hold more valuable – so he's far from an objective observer on the subject.  

By the way, we were told by the company's PR people that the proper name is not PIMPCO – we apologize for the Freudian slip – especially to America's hard-working pimps, who have never, to the best of our knowledge, callously manipulated the media to misinform the general public in order to personally profit from a financial crisis.  Our humblest apologies…

Our hearts also goes out to the once great American Middle Class who, according to the latest report from census data, have suffered a 4.8% decline (adjusted for inflation) in median household income since June of 2009 (you can check where your own income places you right here).  That's on top of the 2.6% decline they suffered during the prior 18 months, in the thick of the crash.  Household incomes are, in fact, 7.2% below the December 2007 level.  According to the report:  “Almost every group is worse off than it was three years ago, and some groups had very large declines in income.  We’re in an unprecedented period of economic stagnation.”   

It should be no surprise then, that mortgage delinquencies are back near record highs, at 10.4% after pulling back from 11.5% in 2009 to 10% last year.  For perspective, that's up from an average of less than 2% between 1990 and 1997!  Also not surprising is a TERRIBLE Non-Defense Durable Goods number this morning that was NEGATIVE 0.7% on the ex-Transport side vs flat expected.  

Even with an 8% rise in Transportation orders thanks to BA beginning to deliver planes, and a 62% jump in Defense Goods, the headline number missed expectations of 3.5%, coming in at 1.6%.  The prior ex-Transport number was also revised down from -1.1% to -1.2%.  As I asked on Wednesday: "How Many Ways Can We Say Recession?"  

SPY WEEKLYLook at the above Durable Goods chart and look at Dave Fry's SPY chart for the last two years – does this make sense?  Those Durable Goods numbers are back where they were in the slide of '08 and coming in every bit as steep as we were then yet – as if we've never experienced a downturn before – the market is acting as if we are miles above those levels.  

We DON'T have more people in this country and the people we do have, other than the top 10%, are making 5% less.  The Dollars they are earning are also worth less and the Fed printing more money won't make that any better, will it?  It doesn't help America to come up with another program to give the top 1% even more money because there's only so many gold-plated toilet seats the Donald can buy in one year and, obviously, it doesn't make up for the 32% drop in Durable Goods orders from the peak – because the average citizen is simply out of money – there's no more to give!  

There's no home equity to tap, there are no bonuses at Christmas and no raises and there are no new jobs with better salaries ahead.  We are firmly in a decline and the Asterity Nuts in the  GOP are ACTUALLY (not a joke) proposing a return to the gold standard in the party's platform.  No wonder gold has been flying this week with all the well-connected GOP insiders snapping it up ahead of the convention 

GOP spokeswoman, Mary Jo Jacobi (who was Bush's Assistant Secretary of Commerce) said that, in the short term a return to the gold standard would be highly destabilizing, despite it being designed to naturally control government spending. She also conceded that in the short term it may mean more volatility and unemployment, as the central bank wouldn’t be able to vary interest rates in certain situations.  Sounds like another winner to me – economic instability, more unemployment and a handcuffed Government – it's the GOP trifecta!

What lunacy.  Click on this link to see what our markets would look like if they had been priced in gold this week.  Imagine what would happen if we went on the gold standard!  

Is it too late to bring back Herman Cain?  

Have a nice weekend, 

- Phil

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  1. I had to do a double take, Phil….as I thought you said,

    If Greece is found to have failed on key economic reforms that are conditions of the bailout loan, virtual funds could be halted.

  2. Oil Lines

    R3 – 100.12
    R2 – 99.20
    R1 – 97.50
    PP – 96.57
    S1 – 94.86
    S2 – 93.94
    S3 – 92.23

  3. This won't help for the next report.  Wonder how they fudged the numbers for the sale of this one and now have to figure out how to back it out???
    Boeing lost an order for 35 Dreamliners with a list price of $8.5 billion on Thursday in the biggest cancellation for the 787 jet as Qantas Airways scrapped a contract after delivery delays and losses on international routes.

  4. Commodity snapshot:

    More at the link… Oil seems to be a bit toppy now! And so are gold and silver but in a narrower channel so you can't exclude a breakout.

  5. Not a new concept but nice to see it graphically:


    Following the above sentiment, BNP Paribas regularly compile a contrarian indicator called the “Love-Panic” index. They have one for Europe and one for the US.

    The concept is that if the mood in markets is especially negative (panic), it could be a good opportunity to buy. Conversely, if everyone is feeling euphoric (love), it’s might be sensible to sell up and grab the nearest tin hat.

    The below charts compare the indicators with the six-month forward return on the Euro Stoxx 50 and S&P 500 respectively, meaning the last blue observation is the return on the index today if one had invested six-months ago. For example, if you had observed the panic around March 2009 and dived in, the returns on said investment would have been significantly positive.

    As one can see, the Love-Panic indicator for Europe is in the “buy” zone below the axis, whereas it’s more neutral for the US.

  6. hahaha no one at pimpco is reading phils stockworld..unless you are comping it… to them..gross wouldn't pay a nickle to see a piss ant eat an elephant and el erian has no time for reading as he might stumble upon an article that reminds him(and OTHERS!) what he did to harvard's endowment..of course greenspan is there too so theres quite a grouping of cards huh?

  7. speaking of cards how did the i bank world allow zuckerberg to retain voting control of FB…wow..

  8. Are USO Sept 36 puts at $1.30 still worth an investment.  If the market was "rationally" responding to economic conditions, you would "think" oil is due to drop further.  

  9. I am thinking of converting my salary to capital gains as well:


    Annual reports for four Bain Capital funds indicate that the funds converted $1.05 billion in accumulated fees that otherwise would have been ordinary income for Bain partners into capital gains, which are taxed at a much lower rate.

    Although some tax experts have criticized the approach, the Internal Revenue Service is not known to have challenged any such arrangements.

    In a blog post Thursday, Victor Fleischer, a law professor at the University of Colorado, said that there was some disagreement among lawyers, but that he believed: “If challenged in court, Bain would lose. The Bain partners, in my opinion, misreported their income if they reported these converted fees as capital gain instead of ordinary income.”

  10. Phil, wonderful sarcasm. A gut-buster for breakfast :)

  11. Craigzooka, anyone / IRA Portfolio 
    The spreadsheet is really hard to understand, but it looks like the portfolio value is under 100K.  Did it start with 100K and it's down?  I'm just not sure if I'm reading it right.

  12. Cooler heads at the FMOC should prevail from Soberlook.  
    I'm pressing the long put list, with very light longs.

  13. CNBC trying to pull all the bulls out this morning.  One guy said it's disappointing we haven't had QE3 already and another saying the rainy season in September is one factor that will help the market.  Just a note, institutions that invest in hedge funds generally hate the people who actually go on CNBC.  These are little guys who don't have much in their funds.  True hedge fund guys who are successful (Einhorn for example), when they do go on CNBC, never give predictions on the market or expose their positions.  Einhorn in particular is extremely secretive when on the show.  These crappy hedge fund guys get to think they are important and know what they are doing for 15 minutes before they show their horrible hedge fund performance or mutual fund performance to their clients.  Notice CNBC never shows their current or past performance.

  14. i'm with barfinger….lmao :D  

  15. The Merkaltaur's cartoon reminds me of how AOL sold their product in the early internet/dial-up days.  How's that working out for them?  Oh yeah, they get to cuddle up close with HuffPo's grimalkin Arianna on the cringeworth HuffPuff Live celebrity couch….ouch.   

  16. I noticed Boltdude's post regarding drafted Congresspeople, a phrase that has an interesting double meaning, and I want to offer one brief observation: Almost certainly, we would have fewer lawyers in Congress, and that would mean fewer laws and most importantly, less complex laws. I started daydreaming about it, and came up with a new law: If convicted of defrauding the public, the penalty is death. 

  17. pharm,
    are you blowing out of the crm……….or did i miss an earlier post

  18. Romney was in MN last night at a country club on Lake Minnetonka- 350 people showed up- $2500 per head and some spent $10k for a private dinner afterward and another $10k for couples pictures….. and they bitch about their taxes and social programs etc.

  19. Well, they are bidding up CRM….and ADSK…but not HPQ….

  20. romneys earnings are either cap gains or dividends they are taxed at 15%..speculating that tax treatments MIGHT be overturned IF the feds brought a lawsuit is silly..this is why we may lose the election because our focus is myopic and completely aloof to the issues that our neighbors are concerned the plling number of indies and LIKELY voters..its grim

  21. CRM/mill – not yet.  Gotta give them a chance. 

  22. my sister is a teacher and her union had a pre election victory party last week end..for the president..its like being in jonestown..i said hey lets give the campaign some money and the revelers shouted that the campaign had tons of money..ugh

  23. another GREAT POST PHIL!

  24. A recent Doug Short article had a link to a CBO budget summary going back 100 years or so. It turns out that the post-war average revenue % of GDP  is 17.7%. The estimated 2012 revenue % of GDP is 15.8%. The 2012 deficit is projected to be $1326 billion. If revenues were brought to the postwar average % of GDP, they would rise by $296 billion, leaving a deficit of $1030 billion.
    And we don't have a spending problem, we have a revenue problem?

  25. Aloof / Angel – Because Romney and co are much more concerned about the need of the average person? 

  26. Pharm/LLY – Classic!  I sold LLY $41 puts yesterday for .61 and bought back today at .14.  Nice!  I think I will buy back the $40 puts too from the calendar you suggested a couple weeks ago.  Maybe roll to the Oct. $41 puts.  I'm still holding the Jan. 13 $40 long puts to sell against.

  27. CNBC spending a lot of time talking about a group of Buddhist Monks know where Steve Jobs is in the afterlife and he's a mid level angel.  They are now moving towards The Globe type news.

  28. rustle/Jobs
    So somewhere between Mother Theresa and Ronald Reagan, I suppose:)

  29. Wow, CRM….re-stic-u-lous….talk about a short squeeze.

  30. Good morning!  

    Europe is all over the place this morning, with Spain down more than 1%, France down 0.7% and Germany and the UK down 0.3% – waiting for us I suppose.   

    Dollar at 81.63 but keep in mind it's 81, not 82 so we're super-low and it's not going to move the market much until it's back over 82.  Euro just failed $1.25, Pound back to $1.5825 and those two used to be .30 apart, so a 10% discrepancy.  The Yen is at 78.50 and the Nikkei is still going lower, now 9.025 so I expect Yentervention today or tomorrow. 

    Oil flew up into the bell and is back at $96.70 but if you want to be bullish on the Futures, gasoline (/RB) is the way to go off the $2.94 line if it holds (now $2.944).  

    Gold is $1,670 but I'm hoping the gold bugs go wild next week and pump it up so we can short it again.  Silver $30.47, copper $3.47, Nat gas $2.80 – not much going on on the whole.  

    As I mentioned last night, with the Dollar at 81.50, all the lines on the Big Chart should be shifted one 2.5% zone higher and that means the Dow is 5% below the Must Hold, S&P is right on the Must Hold, Nas blew it and it more than 2.5% below, NYSE is testing down 2.5% and the RUT is also testing the Down 2.5% line.    

    Also, do check out that gold-adjusted index chart – what a catastrophe!   

    This "where you rank in income" link is very cool to play with as well.  There will be no more mis-rankings at PSW – $500,000 is the cut-off for the top 1% – so get cracking!  

    Friday's we usually flat-line and there's no expected catalyst today so maybe a dull day as we wait another weekend for the Central Banksters to save us.  If anything, we should be lower than we are now as yesterday's floor was very artificial and hard to sustain in day 2 off that Durable goods report.  Jackson Hole is next Friday so hope springs eternal until then but I don't think no action by Europe this week will be taken well.   Nothing is more key than S&P 1,400, of course and that lines up with Dow 13,050, Nas 3,050, NYSE 8,000 and RUT 800

    SVU finally moving on buy-out talks, up 11% so far ($2.35). 

    Shooting at the Empire State Building!!!   The peasants are revolting

    8:58 AM Europe hits session lows, Stoxx 50 -0.9% as a rumor hits the German finance ministry is "mulling" a temporary Greek exit from EMU. Say what? It's a certainty the finance ministry is "mulling" lots of things. This is what officials are supposed to be getting paid for – planning for any number of possibilities.

    At the open: Dow -0.08% to 13047. S&P -0.17% to 1400. Nasdaq -0.16% to 3048.
    Treasurys: 30-year +0.25%. 10-yr +0.1%. 5-yr +0.04%.
    Commodities: Crude +0.33% to $96.59. Gold -0.07% to $1669.35.
    Currencies: Euro -0.53% vs. dollar. Yen +0.04%. Pound +0.2%.

    Market preview: Stock futures point to a lower start after yesterday's swoon, as S&P futures -0.3%. Weighing at the open is a lack of indication that Merkel is prepared to allow Greece more time to implement austerity measures. But the fact that stocks haven’t been able to muster a rally this week even though the Fed practically admitted more stimulus is on a silver platter could be a more telling sign. 

    A new trend or just a slow August, but the euro and stock markets – moving in perfect lockstep for much of the past year and a half – have moved in opposite directions for 10 of the past 13 sessions (not today, though). The breaking of the euro's correlation to risk may be a necessary one if bears on the currency are to see their targets hit.

    As expected, no big bang came out of today's meeting between Germany's Merkel and Greece's Samaras. A post-meet press conference yields the usual lines about Germany wanting Greece in the EU (Merkel), and Greece not asking for more money, just "breathing room." (Samaras).

    Don't look for big ECB action at its September 6 policy meeting, say 2 unnamed officials, as the bank looks likely to wait on any bond-purchase announcement until after Germany's Constitutional Court rules (Sept. 12) on the legality of the EU's permanent rescue fund (ESM).

    The eyes of global central bankers are on Denmark, which last month made the experimental move of setting its main deposit rate for banks at -0.2%. The ECB has already said it could follow suit, although the possible consequences are disputed: to claw back the cost of the rate, Danish banks will have to increase the price of lending for customers.

    As expected, U.K. Q2 GDP is revised up to -0.5% Q/Q from an initial estimate of -0.7%. The improved figure comes after the government said that the contraction in construction and manufacturing output wasn't as deep as feared. (PR)

    Short PCLN!  The number of overnight stays in hotels in France dropped 10% in August, citing the national association of hotels, restaurants, cafes and caterers. Drops reached 25-30% on the Atlantic Coast, Normandy.

    Japan's government could run out of money in October if parliament doesn't pass legislation that would enable the country to sell ¥38.3T ($487B) of debt, or over 40% of this year's budget. The fate of the bill is in the hands of the opposition-controlled upper house, which may press PM Yoshihiko Noda to fix an election date before approving the debt sales.

    Japan manufacturing mood worsens on global slowdown -Reuters TankanBig Japanese manufacturers' sentiment worsened in August and is expected to improve only slightly in the coming months, a Reuters poll showed, as Europe's debt crisis, a global slowdown and a stubbornly strong yen take their toll on the export-reliant economy.

    Some Chinese state-owned banks have cut interest rates on foreign-exchange deposits as part of an attempt to combat the weakening yuan. The move comes after exporters loaded up on their dollar holdings. The rate cut should theoretically make forex deposits less attractive and discourage firms from aggressively selling the yuan. 

    More weak economic data out of China as the flash August MNI Business Indicator slides to 46.76 from 49.73 previously. The report is modeled after the U.S. ISM and Japan Tankan surveys, with similar questions and a read under 50 meaning contraction.

    China's a big country, but it must be getting tough to walk around. The place sounds like its awash in piles, no, make that mountains of excess goods - iron ore, steel, cotton, cars, toys – you name it. In the face of this, factories continue to crank out product and new ones continue to get built. The government? Anxious to prop up confidence, it's fudging the numbers to make things seem better.

    China has become the U.S., or has the U.S. become China? A government position has now become the job of choice for China's job seekers, according to a survey. "Financial positions always have too much pressure," says the group, "(most) are looking for stable jobs with less pressure." And the Chinese are "the best capitalists in the world?"

    Shanghai falls 1% to its lowest level since March 2009, led my Maanshan Iron & Steel (a 16-year low) and Shanxi Coal, which both reported steep drops in earnings. Also not helping is a report from Xinhua News Agency saying Beijing has ordered local governments not to relax property controls. 

    Hong Kong Profit Warnings Hit Record on China: Chart of the Day. More Hong Kong-listed companies are predicting earnings declines than ever before as the slowdown in China's economy curbs demand for their goods and services. Profit warnings have been issued by 331 companies since the start of June, the most for a three-month time frame since Hong Kong Exchanges & Clearing Ltd. started compiling the data in July 2007. "Most of the companies that warned about profits have large exposure in China," said Linus Yip, chief strategist at First Shanghai Securities in Hong Kong.

    The Slowdown in China Hitting Hong Kong's Economy. (video)

    Caterpillar(CAT) Cuts China Production as Digger Slump Reaches Mining.

    Palm-Oil Imports by China Head for 4-Year Low as Economy Slows

    RBI Says Weak India Growth Outlook Imperils Budget Deficit Goal.

    Vietnam rises 1.8% overnight ending a 3-day 10% slidefollowing the arrest of banking bigshot Nguyen Duc Kien, and the stirrings of a run on the bank he founded. Overseas investors step up, buying a net $15M of stock this week, the highest amount since March. VNM +0.5% premarket.

    Although corn and soybean prices are near record levels because of the drought, the worst may not be priced in. A typhoon is threatening the northern Chinese province of Liaoning, with as much as 3% of the country's corn and soybean output at risk. Meanwhile Pro Farmer is set to issue estimates for this year's U.S. crop production following its field tour.

    Gold analysts get bullish, the proportion of 35 surveyed by Bloomberg rising to its highest level (83%) since November, ETPs have purchased 51.7M tons in August – also the highest amount since November – and now hold more gold than France. Gold broke out of a tight trading range this week and is at levels not seen since April.

    Talk that the September event scheduled by Amazon (AMZN) could be used to launch a highly-anticipated smartphone continues to swirl around – even though the smart money continues to bet on a Kindle refresh. If Amazon does pull a rabbit out of its hat with a smartphone announcement, a September unveiling makes perfect sense in front of the holiday season and the iPhone 5 launch.

    Amazon (AMZN +0.9%) and Comcast (CMCSA -0.5%)expand an existing licensing agreement to add hundreds of NBC TV episodes, both new and old, to Amazon Prime Instant Video. With an arsenal of over 22K movies and TV episodes, the Amazon streaming service is a formidable challenger to Netflix (NFLX -2.5%).

    Apple (AAPL) is knocked to 4th from 2nd in China's smartphone market in Q2 after its market share halves to 10% as consumers wait for the next iPhone or buy a different brand, IDC figures show. Samsung (SSNLF.PK) remains the leader with 16% and Lenovo moves to number two with 11%. Smartphone shipments were 44M out of a total of 87M.

    The S. Korean version of Apple (AAPL) vs. Samsung (SSNLF.PK) ends in (dis)honors basically even, with a court ruling that Apple violated 2 patents and Samsung 1. The court also says there was "no possibility" consumers would confuse the firms' smartphones. Judges awarded small damages to both companies and banned sales of infringing devices in South Korea, none of which are latest models.

  31. And yes, I still like shorting oil at $96.50 with a tight stop (/CL). 

  32. Uncle on AMZN for me I just cannot keep throwing money at this pig, hope my capitulation means you 1%ers can make a few bucks in its inevitable collapse

  33. AMZN/sage – i covered my position by selling Sept 220 puts to make a calendar.

  34. BA/JAcalyn – Don't forget they have almost 1,000 on backorder and can only deliver about 200 a year so it's pretty normal that over the course of the very long cycle of orders and deliveries (people have been ordering for 3 years) that situations change for some airlines.  The delay gives Quantas, who's business is way down, an excuse to cut back on a very aggressive order that was made under the assumption that CHINA!!! would keep growing and increase demand forever and ever and ever….

    Gasoline failed to hold $2.94 (now $2.933) – I can't imagine what's holding oil up.  

    Dow volume a sad 16M at 10:15

    LOL Pharm – Always depends who you read…  And what a move up and down on all that!  

    Pimpco/Angel – No, I actually got a very stern warning from their PR people to get their name right – they did not see the humor.  

    Zuckerberg/Angel – Might have been worth sacrificing FB so that they could use that to control future CEOs of real companies when they want to keep control.  If you are getting pressure on several fronts to make concessions, then allowing the one that's sure to fail is a good strategy.  

    Bain/StJ – Everyone does that.  

    AMZN flying on phone rumors.  So annoying.  Good news is we'll test $247 high again.  

    Thanks Barf, Rebel.  

    Fed/Burr – I don't see any rational way they can do it but, that does not preclude the irrational.  

    Fund guys/Rustle – Well if they showed one guy's performance, they'd have to show everyone's and then they would have no guests. 

    Death to Congress/Barf – Good luck getting Congress to draft it.  

    $10K/Newt – That's funny!  Of course the Ryan plan gives and AVERAGE tax cut of $500,000 PER YEAR to the top 1% so $10K for a picture is a pretty good investment.  

    Pre-election party/Angel – Are you sure that's not nomination?  The guys I hang with are not so complacent.  

    Revenue/Barf – If we had collected that $296Bn for the past 20 years – we'd have half the deficit we do now.  Cut 50% of our military spending (and it would still be triple the next largest country and still 25% of the entire planet's military budget) and save $400Bn and then put taxes up to 20% of GDP to make up for what we didn't collect for the past few decades and we're balanced.  This is not very complicated. 

    Jobs/Rustle – That's what I was thinking – why are they wasting my time reporting this?  

    AMZN/Sage – That's why we flipped to the spread, was getting too tedious.  It's still in the same range and Oct is a long way away.  

  35. Fairytale Friday, how true perhaps we end solid green because everthing is so awesome now…Well this is the end of my Q with PSW and I need a vacation, Thanks Phil I have learned a lot and lost more…so hopefully when I get some more guys I'll be back…you guys are awesome here Thanks!

  36. diamond – Thorium in India – Thanks for posting!  I am also intrigued, though still have many questions about safety, waste and the heavy use of water by nuclear power plants.  I'm doing a lot of reading right now on various energy sources.  Anyone have good recommendations on what to read regarding pros and cons of nuclear power?

  37. Phil—thanks for the /RB play—-would you keep playing off the 2.94 line?


  39. FAS Money – Not at all appealing to sell puts or calls at the moment.  Today calls should expire worthless but worth taking them out for .05 on the very off chance they may not!  

    $25KPs – We're up 40 and 60% so the correct thing to do is cash out because we're not sure which way the markets are going.  Keep that in mind because, if this were money I cared about – I'd rather have $40,000 cash after starting with $25K two months ago than leave it on the table over the weekend.  

    • EDZ – Now $13.30 and just over our put strike.  I don't see China or India doing any stimulus and Japan is heading to their own fiscal cliff so, even if assigned these – I still like them but we are at the 2009 lows in China again so there should at least be a bounce so let's take that .75 off the table for a $350 profit.  
    • SVU – We may never win those if they get bought for less than $2.40 but no sense in paying $2 (net $2) for them now. 
    • JRCC – We're lucky our Jans are holding up.  Not sure I'll want to sell $3 puts and certainly not against the $1.50 puts so this may be last month on this spread.  
    • AMZN – Such a frustrating stock but their big announcements are next week and, unless they are spinning straw into gold, we'll be rolling up the longer puts and cashing in the short puts if they pop.  
    • SQQQ – It's a good bear bet but also similar to AMZN so maybe overkill.  
    • VXX – Big Improvement yesterday and giving some back but rollable so may as well stick with. 
    • BBY – New products from RIMM, AAPL, AMZN and Samsung just doesn't seem like a reason to bet against BBY.  
    • SCO – We're looking to DD at $2.50 
    • V – Let's take half off the table and put a stop on the rest at $2.  
    • DIA – Gotta take that money and run.  
    • USO – Looking to DD at .85 (nowhere close).  

    So, very hard to find things to let go of – I'm still happy with the positions but, I'd rather take my $15,000 profit and go somewhere nice next week than leave them open.  Since it's my job to be here – I'm not going to do that but if $15,000 is a lot to you – don't be greedy!  

  40. Doing the /RB play at 2.9478…Cant really see them crashing oil before the weekend like Phil says…. Can see them spiking it lower just to get out the longs before jacking it back up though…. Hoping they already did that though…

  41. I am trying a hard AMZN short at the new all time high

  42. TLT does not seem to be buying the rally…er I wonder why…not

  43. Have a good vaca Sage.  

    Thorium/Diamond – They are on this bandwagon every couple of years.  Initially, it's a lot more expensive than uranium but then has cost benefits over time, as well as environmental and safety advantages.  India began building the second commercial Thorium plant last year (first is in Germany).  Hopefully it gains some traction.  

    Dow up 0.25% but Transports down 1.2% so looks silly, especially with volume at 24M at 11 – just 8M shares in 45 mins.   AMZN and AAPL running up the Nas and S&P, which is why the RUT is lagging and the NYSE is still down 0.7% – nothing to goose them with.

    Gasoline/Savi – You love those futures, don't you?  I'd just keep the stops at $2.95 and stick with it, worth risking losing .05 since we know they can run back to $3.05 during the close.  

    Hillary/Angel – That one ain't over 'till it's over.  Obviously, there's nothing official about any of it.  If Hillary were to turn it down, it would be because she thinks the economy is F'd and doesn't want to be associated with the White House ahead of here 2016 run, which will happen either way.  She'll be just under 70 though – that worried me.  

  44. Hillary/angel – i think she was unwilling to follow in these footsteps.

  45. Pharm: CRM
    probably missed your take on CRM, what is your position? I 'm short sept 165 calls that I can close profitably but the return on margin is still attractive to me.  TIA

  46. USD is getting smoked 81.42 now!

  47. What a joke….utter, uber, joke.

  48. /DX being slammed.

  49. Phil, of course the shortfall of $296 billion when comparing 2012 revenues to the postwar average is only the amount for 2012. If you collected an additional $296 billion for the last 20 years, it would raise the long-term average revenue% of GDP by nearly 5 percentage points.
    You are right that some significantly higher tax revenues actually received over time would greatly reduce the debt and might have eliminated the deficits before 2009. On the other hand, if the US had reaped such a windfall (it would have represented a 25% increase in taxes collected in 1992) I betcha our spending would have been a great deal higher than it actually was.
    My point remains.

  50. Lincoln – I have the Oct 125 Puts.  Not hurt that much, and I don't have many, as I consider this a momo stock.  165 should be safe……

  51. And down goes the Dollar.  

    RUT flew up so we can see where this is going.  

    Apparently Bernanke said something pretty vague but it's being spun as super bullish,  Can't go long into this, just have to wait for it to calm down. 

  52. BMRN is moving.   LUFK is fine.  TLT calendar, get ready to putt the trigger.  I am not liking them much longer.  They are going to ram this through the year high…..IMHO.

  53. Draghi = Dr. Ben and hot air – say it ain't so?

  54. Phil—I do love the futures—you can take your gain or loss and get out quickly—also learning to scale in but I am cautious with 1 contract at a time--(but still getting in/ out too early or too late)—-need another tutorial in Vegas—that will be fun—--last time in Vegas was when I first started trading them

  55. Here's what did it…thanks WSJ…via CNBC

    "There is scope for further action by the Federal Reserve to ease financial conditions and strengthen the recovery," Bernanke wrote in a letter responding to questions posed by U.S. Rep. Darrell Issa, obtained by The Wall Street Journal.

  56. Yen shot up (78.66) on weak Dollar (81.45) so apparently they are still buying Euros ($1.255), which is evidence by EUR/CHF falling to 1.2007 (weaker Franc) 

    V still red, so it FCX, CAT, INTC, JPM, LVS, MON, MOS, NFLX, OIH, UNG (nat gas failing again) and X on my watch list.  

    Hilsenrath again!  

    Federal Reserve Chairman Ben Bernanke, in a letter responding to questions posed by U.S. Rep. Darrell Issa (R., Calif.), chairman of the House oversight committee, defended actions the Fed has taken to support the economy and said there is room for the Fed to do more.

    "There is scope for further action by the Federal Reserve to ease financial conditions and strengthen the recovery," Mr. Bernanke wrote in a letter dated Aug. 22, a copy of which was obtained by The Wall Street Journal.

    The actual letter (pdf only) is nowhere near as exciting but, who cares – the spin is in!  

    This stuff is orchestrated like a ballet.  

    With the Dow divergence from the Transports and the NYSE – I'm kind of liking the DIA Today $131 puts at .17 – no way should we be at yesterday's highs.  

  57. TLT/Sage – Because the markets still look extremely scary.  The chance of Greece defaulting just jumped 20% this morning and that can easily lead to a cascading collapse as people are forced to write off their debt (again).  Even if the ECB does have a backup plan in place – unless the implement it the same day – there's going to be a pretty big flight into US Bonds.  

    Point/Barf – Clinton had a budget, WITH A SURPLUS, that paid off the entire US debt (about $4Tn then) by 2013.  You don't even have to go back 20 years to see where we began going wrong and it was Bush's war spending, tax cuts and the largest expansion of Government in history that put us in the mess we're in today.  

    It's amazing what a difference one man can make, isn't it?  

    PCLN Sept $540 puts at $3, 5 in both $25KPs.  

  58. Phil:
    With all of the stockpiling of commodities going on in (CHINA!), isn't it only a matter of time until the dumping begins as they try to unwind their excesses to alleviate some of their short term issues? I don't see how this can be good for X.

  59. AMZN: 
    news is that AMZN may announce it's "much anticipated" smartphone!  really? someone is waiting on a smartphone from AMZN?  I'm taking this as time to dd my short calls. FWIW

  60. Futures in Vegas/Savi, Phil – i too am looking forward to observing some futures trading in action!  All geared up for it, but haven't dared try it on my own yet.

  61. FU AAPL PCLN and of course, AMZN!!!!!!

  62. It's weird that the VXX AugWk4 12 calls actually have a bid. 

  63. Phil- How many on the DIA131 s? Target out?

  64. This is the BS moving the markets
    NEW YORK, Aug 24 (Reuters) – U.S. stocks rose on Friday on news that the European Central Bank is considering setting yield band targets in a new bond buying program that could help contain borrowing costs for Greece and Spain.
    Besides being recycled old news, it will never work as bond gangsters will just push rates higher and higher knowing ECB has "coverage responsibility.'

  65. Futures/Savi – Getting out early is a sign you are doing things right!  You never know where a move will end but you always know there will be another move to follow 10 minutes later so don't regret the positions you get out of – they just let you look for the next opportunity.  

    Stockpiling/DC – I think China would rather build underground caverns to put things in than admit they mis-planned their economy.  Also, they have such huge stockpiles with such low demand the the money they lose on 90% of what they hold attempting to sell 10% of what they hold isn't worth it.  Like my car lot example.  If my last sale was $35,000 and I have 90 cars left – my book value for inventory is $3.15M but if I have to sell 10 more cars at market prices and that's $25,000 – I have to write down 80 cars left by $10K or $800,000, which is 3x more than I'd make selling 10 cars.  Stocks are like that now – that's why the volume is so low – no buyers and the sellers can't afford to drop prices if all they can move is 120M Dow shares out of Billions they hold.  Even worse if you're buying on margin and would have to realize the losses – so everyone is frozen with the bagholders praying for a miracle.  It's like right before a gunfight – just before all hell breaks loose (Kevin Costner plays the part of the guy who shorted AMZN). 

    AMZN/Lincoln – What's really funny is how excited people are getting about a new Kindle when they still haven't broken even on the old ones.  APPL actually MAKE Billions of Dollars selling IPads, AMZN is now 3 years into this project and still selling at a loss, with ancillary revenues not too exciting either.  It's an amazing thing AMZN stock, they lost .08 last Q vs. making .14 last year and next Q if they really bump last year's .38 up 50% to .55 rather than having another loss like this Q was, THEN they will make .77 for the year, which is 1/319th the price of the stock.  It's not like they're new – revenues aren't going up 100% a year for the next 5 years so they can grow into the valuation (which would still be 19, even if they did that on $2Tn in revenues).  Really insane.  

    Futures/Scott – Try trading TOS with a Paper Money account for practice.  They have a nice Futures system. 

    DIA/Vill – Not for one of our portfolios, just a craps roll (fun trade).  

  66. Futures/Phil – TOS paper is exactly what i'll start with.. after i watch and learn a bit.  i'm in no particular hurry to add this layer of complexity…but i do want to get an introduction.  :-)

  67. Was it just 3 days ago that GLW hit $12?

  68. Yes, a big FU to GLW.  Selling 13 calls against this POS.

  69. Phil / SVU What2Do?
    My position is:
    -5 Jan14 5P at 1.40, now 3.25
    -10 Jan14 5C at 1.58, now 0.25
    I'm not sure how to handle it in case they get bought out, since I haven't gone through a buyout process when holding short options.  What do you think I should do with the position?  My gut is to just close the whole thing out and be done with it.

  70. Phil: AMZN 501 c?
    I love the company and think it provides some great services but since the can't make profits perhaps they should reorganize as a 501 (C.) corporation.  ;)

  71. Thanks Phil

  72. Lincoln/ AMZN a 501 (c)! That's funny LOL!

  73. Maybe we should try this with our politicians….bite back….

  74. Bubuy, oil…..

  75. Hello kitty, er', CLDX.

  76. Phil China
    Your story above in my very recient case, They are not willing to make to order and what they have was done with no thought about, will it work, all are too low to fit a transformer in, the wrong width to fit intertainment centers in any combination, and the ones made standard width mostly not high enoughto fit the heavy transformer in have ugly handels on and slots for equipment racks. Also unwilling to discount the unusable proves what you say to me. They may be useful to hide gold bar in your home theater rack.

  77. Gasoline fell all the way to $2.91, oil's down a bit, gold other commodities all weak so they're not buying this QE BS. 

    GLW/RJ – That was quick. 

    SVU/Burr – The only way to stay in them is to roll down to short $2.50 puts as that will, hopefully be below the buy-out.  The calls would be useless, of course.  See the adjustment we made in the Income Portfolio a few weeks ago.  

    AMZN/Lincoln – LOL!  They go through these bouts of irrational exuberance every once in a while, you just have to be patient.  

    You're welcome Savi. 

    Dow volume 41M at 1:30. 

    RUT 810 is our final strong bounce line to cross (Dow was 13,118 and S&P was 1,408).  

  78. RIG….50 Sept/Oct calendar is mucho, niceo….no?

  79. Hey, that's the ticket:


    Romney then added that the reason that big businesses are "doing fine in many places" is because they are able to invest their money in "tax havens."

    "They know how to find ways to get through the tax code, save money by putting various things in the places where there are low tax havens around the world for their businesses," said Romney. "But small business is getting crushed."

  80. Phil, going to cash on the 25kp is a good call. Will you give a shout when you feel it is a good time to re-enter.

  81. Phil / "Cut 50% of our military spending (and it would still be triple the next largest country and still 25% of the entire planet's military budget) and save $400Bn… "   I've often wondered about the economics of this point of view, given your oft-expressed skepticism towards Europe's "austerity" program for the Peripherals.  Surely the U.S. military, whatever your ideological standpoint, is, among other things [most of them unnecessary], a giant jobs program for exactly the demographic that needs jobs most — the young and less-educated.
     There have been "exposes" lately about how many gang members the military have recruited, but that means fewer of them on the street, presumably.  Over the long term, you are surely correct — the size of our military is absurd.  But in the teeth of a recession, reducing military expenditures will amount to a giant U.S. "austerity" program, both for manufacturing and for young men and women.  It iwould be uncharacteristic of you to miss this point, hence I assume you haven't, and wonder what your view is.

  82. IRWD – Sell Sept 10 p, buy Sept 15 call.  Net 0.  IF they get approval for the IBS drug, they should take off (moderately), and we can sell the call.  If not, they should not fall below 10.  Good risk reward.  This is a BET, so small.

  83. 11:00 AM On the hour: Dow +0.21%. 10-yr +0.04%. Euro -0.38%vs. dollar. Crude +0.5% to $96.75. Gold -0.04% to $1669.95.

    11:45 AM Europe closes mostly higher, erasing losses in the last few minutes of the session as Reuters recycles a story about the ECB considering sovereign yield caps of some sort. Stoxx 50 +0.4%, Germany +0.4%, France +0.1%, Italy -0.4%, Spain +0.5%, U.K.+0.1%. The euro erases most of a big loss, -0.2% to $1.2542.

    12:00 PM On the hour: Dow +0.48%. 10-yr +0.01%. Euro -0.25%vs. dollar. Crude +0.52% to $96.77. Gold -0.09% to $1669.05.

    1:00 PM On the hour: Dow +0.6%. 10-yr -0.01%. Euro -0.23% vs. dollar. Crude +0.29% to $96.55. Gold +0.06% to $1671.65.

    Of the 6.1M workers displaced during 2009-11 from jobs they had held for at least three years, only 56% were re-employed by Jan. 2012, but that's seven points better than the prior survey two years earlier, according to a new BLS report. Of re-employed full-time workers, 46% were earning as much or more in Jan. 2012 as they did at their lost job; about one-third reported earnings losses of 20% or more.

    The ECB is considering bond yield target bands as one of its debt purchase options, reports Reuters, citing central bank sources. Though little more than a rewording of what was previously rumored, Europe shoots higher (taking the S&P with it), turning session losses into gains just minutes before the close.

    "Stocks and other (risk) markets have gotten ahead of themselves," says portfolio manager Joe Balestrino, taking advantage of August's swoon in Treasury prices (already reversing) to buy. "(Markets are) saying the fiscal cliff will not happen and that it looks like 4% growth." The move, says another manager, is "based on bailouts," and can turn on a dime.

    Stock Market Indicators (Dr. Ed’s Blog):

    The Bain Files: Inside Mitt Romney’s Tax-Dodging Cayman Schemes (Gawker)

    Corn and soybean futures have reached record highs this month on the CBOT, but the short term outcome is more likely to be muted on the price of meat, according to the latest USDA food report. The price of meat, poultry and fish will rise 3% to 4%, one-half of a percentage point less than estimated last month, as the price of corn – its main feed source – surged, pushing ranchers to send animals to slaughter sooner and temporarily boosting supplies.

    Bookmark this chart of iron ore prices, as it's becoming one of the more widely-followed global indicators. They've fallen another 1.9% today to just $100/ton, well below the line-in-the-sand price of $120 - the level at which Chinese producers would supposedly stop producing.

    A U.S. appeals court strikes down a previous court ruling that requires cigarette companies to put graphic warning labels on tobacco products. Because the decision contradicts the ruling in a similar court case, the issue may ultimately be decided by the Supreme Court. Winning the day: MORAILO.

    UBS takes on the role of party pooper over the building buzz that Supervalu (SVU) could be sold off, either in its entirety or in pieces. The firm sees a deal unlikely at a choice premium due to Supervalu's debt load and calls a turnaround the most likely scenario. SVU +9.1% to $2.35.

    Buy low, sell high: Disney (DIS -0.5%) considers buying outits partners in Euro Disney as the distressed amusement park operator continues to struggle to see profits. By buying out the 60% of the publicly-traded French company that it doesn't own, Disney could launch a turnaround instead of simply waiting around for royalties and management fees to improve. Most importantly, if it can work out a deal at just a small premium over the firm's market cap of $120M – a steal could be had.

    Best Buy (BBY -3.3%) trades weak as any visibility on the retailer remains cloudy at best. On the news front, the company continues to catch criticism over the compensation package given to new CEO Hubert Joly (CRM +0.8%) has recouped the AH losses it saw following its FQ2 report, as analysts stay positive in spite of aslowdown in billings/deferred revenue growth. BMO argues billings growth would have been 40% rather than the reported 30% if not for forex and the migration to annual subscriptions, but admits guidance for a 3% Q/Q deferred revenue drop is underwhelming. Roth is encouraged by Salesforce's prediction that Service Cloud, marketing software, and will become $1B/year businesses. (transcript)

    Verizon Wireless (VZVODreceived top marks in J.D. Power's annual study of U.S. mobile network quality. Big Red was said to have the best network in 5 of the 6 regions covered in the study, which measures issues such as dropped call rates and Web connection errors. U.S. Cellular (USM) was named the best carrier in the "North Central" region, while AT&T (T) was declared the worst carrier in 4 of 6 regions. Verizon is hoping its network will allow it to maintain premium pricing.

    Apple's (AAPL) Q2 Chinese smartphone share declingisn't as bad as it looks. Inventory shifts resulted in Q1 share being overstated, and Q2 share being understated, by IDC, which measures shipments rather than end-user sales. Apple noted on its FQ3 (June quarter) call that it significantly boosted Chinese iPhone inventory in FQ2 (due to the 4S launch), and then saw shipments decline in FQ3 as inventory was burned through. We might see something similar with the iPad in FQ4, given a 1.2M unit FQ3 inventory increase. (previous)

    After talking with Apple (AAPL) exec Eddy Cue, Pac Crestdoubts an Apple TV set will arrive anytime soon. Cue argued the TV user experience is crippled by the forced bundling of pay-TV channels, and suggested Apple would offer an incomplete solution without a new distribution model content owners are unwilling to provide. This helps explains reports Apple is focusing on a set-top box for cable companies, though that market has its challenges as well. (Barclays) (a la carte efforts)

    Why It’s Important For People to Know Experiences Are Better Than Possessions (Peer-Reviewed By My Neurons)

  84. DD on Oct CRM puts.  125s.

  85. AMZN
    There are people who have adapted to their querky computers but unfortunately too many others find it too time consuming to find what they want. Free shipping and other deals look good but don't bring back the frustrated. They luck out with some refurals from manufacturers. To me the worst thing they do is not recognise anything but the exact product entry, then they make it worse by puting up anything, usually female clothing, even when you are looking for car parts! You know the prgramers don't know a shock from a spark plug but maybe this GUY wants a bra? Perfect a non absobant expensive rag to wipe up oil. It is not the business model it is execution. Make searches fast, accurate, and lots of sales, remember everyone is in that "busy trap."

  86. Phil I do have a hard time with my connections here it surely would help if you could put a buy or a sell with your commend.TIA
    PCLN Sept $540 puts at $3, 5 in both $25KPs.

  87. Damn, had to pull guard duty and left for 2 hours, came back to see the /RB position 4 cents down, fucking afghan internet didnt log my stop at 2.94… Guess Ill have to catch some 3 am trades to recover from this one! It will be awhile before I trade /rb again….

  88. Yes, Dr. Ed also shows this:

    That has plunged to levels not seen since 2009…and we know what happened right around that time……couple that with AAII, and I think this is RIPE for a correction.  Not necessarily a doom, but a good old spankin'.

  89. Yesterday Bob Pisani reported that the market only went down because of Bullard and that the RUT has not participated in the move up in the last few weeks.  Today's lies are the the dow volume is not important, dollar volume is more important and the dow volume is fine.

  90. zerozero: military
    "Drift", by Rachel Maddow, is one of the best books on the topic of how we got to where we are today starting back from the Revolutionary War.  I know she is a "lefty", but her research and insights are excellent.  Also, way more facts and logic than anyone can provide to make the case in support of our current military.  I agree with your point about the employment angle but if we could wean ourselves back off the very wasteful and inefficient, for profit, contractors there would still be ample opportunities for interested young men and women.  my $.02

  91. Savi / TIBX - sorry I didn't get back to you on Wed, I had a couple of busy days so didn't put the trade on until today;  but based on the succesfful pullback test today plus its crazy candle, I'm all in now.  Strategies:
    * Bot some OCT 29 C @ 2.15 naked, if they surge next week then will cover with SEP calls for safety and premium.
    * Bot some SEP 29/32 BCS @ 1.20.
    These are longer-term trades not Crazy Plays.  Happy hunting!

  92. Yodi, If he dosen't say sell then it is a buy – PCLN is buying the 540 puts

  93. LV Short List of ToDo's:  

    Meet the famous players from this chat room
    BBBW Info
    Ideas on setting up trading platforms
    Futures Trading Howto
    Figure out how others are using the investment portfolio's
    Make more money during the Monday Trading session than the trip cost!!

  94. Thanks, Lincoln.  I really don't "believe" in left and right, in that any intellectual predisposition tends to distort  the clarity with which you view new information.  Emotional predisposition is another thing entirely — it either bothers you more, less, or not at all if someone is starving at your feet. But that is not analysis, but merely what you decide to do on the basis of it.  So I shall read Ms. Maddow with interest.

  95. jomptien
    Thanks re PCLN I just do hate vag statements

  96. pharm,
    tks for the update on the crm……im same in the 130's ……..gotta work on my reading skills…..

  97. Jrom – You are doing it wrong. I told you before, program a drone to fly over Iran one day and crash it. Let us know in advance, we all go long oil. Once a month should be enough I think! It would be no different than GS except that we would just cut the middleman.

  98. Phil, you will notice that I cited CBO data only because it was mostly historical, only projecting a single quarter into the future, thus I avoided basing anything on their notoriously flawed models. Surely, they can't screw up much in a projection of a one quarter. Anyway, I said nothing about Obama. Now that you mentioned it, I will observe that Obama inherited a terrible fiscal situation and, on balance, made it worse. That was beside my point.
    It seems that your bar graph shows FY 2009 as "Bush", and omits FY 2011 and FY 2012, both Obama years and both much worse than the (incompetent) CBO projections.
    You could choose to concede my point and then attempt to make the argument that for various reasons, maybe we SHOULD increase revenues beyond the historical norm. However, that's a different argument and it's also somewhat difficult. 
    I just got tired of hearing how we have this revenue shortfall that causes our deficits.
    If you spend like crazy (and I'm not saying Obama is directly responsible for a lot of it) and fail to tax like crazy to pay for it, you do not, ipso facto, have a revenue problem.

  99. stjeanluc – you are now under surveillance for that idea!

  100. The problem with tech starts and investors looking for the next big gain, make money. The rich see everyone will buy that gismo, they have to buy gas, and the rest. Apple products if not abused last a decade, the new whatever is perfect for a couple of people, the rest, this is good enough and I need this more. Amazon forgets we are not all stupid shoppers with unlimited funds. Sad but Microsoft destroyed printer sales by making them unusable in their new products. Seriously today most houses have a computer, if a printer at all needs a cartridge. The business pay the ripoff price, no choice but the rest?
    If Exotic cars were made to fill all demand the price would drop. People want 1 of 10 to store someplace not use. Make 1,000 and you have leftovers under $200,000. In Jackson down to 1 place sells stone countertops and now is the time to buy that if that makes you happy. Problem is too much rock. So to sell like the class division it is easy cheap or bragging show off. Love to know how many computerized jumping shoes sell for $400, where is that market?
    Next windows, 8 has a major marketing  problem that investors don't see, the market, touch screen is COOL!, but people who type don't like it. Moble apps. again how many big wigs do that, how many little people don't. The economy problem the rich don't but enough junk so rediculus expensive sellls and the rest doesn't.
    I still plan to build rediculusly expensive phono preamps so 10 lucky people can have 1. I have an unlimited number of improvements to 2nd 3rd editions to make them equal to the million dollar audio systems. The masses are listening to I whatevers with $10 earbuds. I can't make $8 earbuds or sell enough of them. I do have a plug in to computer USB, HD sound out to your high end system designed $199 or diamond studded $25,000, same D/A chip, and no I will not tell which one, only made by a major manufacturer.
    I am not trying to sell anything here, only trying to get you all to see another side of marketing. Think about what sells in good and bad economic times.

  101. FXE/Euro drifting lower, wonder if U.S. market holds this level.

  102. THe whole day has been a low volume stick.. like air in a soap bubble. will it fade to close, keep expanding, or.. POP! ?

  103. Phil
    I went on a drug store shopping trip!
    Seems drug sales are falling off as too many reach the donut hole. $165 pills, the tiny independent Corner Drug $53. I said sold and handed over the prescription.
    She said sales started dropping fast in July. Don't expect big pharm to exceed expectations the rest of the year. Inside information at any drug counter.

  104. Scott – hot air makes things rise very slowly, drift, and then you know what?

  105. BTW time to fill 120 SECONDS!!!!!
    Beat that or price Wall Mart.

  106. Shadow – if the drug comes off patent, the price precipitates faster than diarrhea out the ….  never mind.

  107. China/Shadow – If you want quality work done in China you need to send over your own quality control team. 

    Romney/StJ – Under his administration, I'm sure the IRS will audit people to make sure they took the maximum deductions.  I wonder what the penalty will be for not off-shoring enough jobs?  

    Cash/Rpme – Well new trades are new trades in the $25KP, the goal of each one is to make a profit.  It's the weekend I'm worried about, in case Europe comes up with something magic and then, of course, there's the possible run-up into Jackson Hole next weekend.  

    Jobs/ZZ – There have been numerous studies showing the military is the worst way the Government creates jobs.  It costs them about $1M to create a $35,000 soldier each year – pointless.  Also, look at all the Dollars the military spends overseas – that's more money sucked out of our country in non-productive ways.  

    PCLN/Yodi – OK but do you think for one second my plan is to sell naked puts on that?  If you have absolutely no sense of the context of a trade idea – why would you make the trade?  YOU have to have some conviction as to where PCLN will go up or down – not to mention that is a follow-up to a trade idea from yesterday, where I did discuss the rationale for the trade but PLEASE – if you are looking at a trade and you think it doesn't matter if you are buying or selling – DON'T MAKE THE TRADE – it's just not something you have your own opinion on and that can lead to problems when and if you need to adjust it.  

    Gas/Jrom – Don't blame the stop, blame yourself for not cashing out when you left.  You can't do that with futures – I wouldn't even go to the bathroom with an open gasoline contract!  You can't be worried about regretting missing out on profits that don't exist – a penny is great to make on a gas contract, which is measured in 0.0005s.  

    Bullard/Rustle – Yes, I heard that.  But it's OK if something Bernanke said two days ago is taken out of context to move us higher?

    AAPL loving that $666 line.  

    Good plan Mj! 

    Drone/StJ – That is an excellent plan!  

    Graph/Barf – Is that really how you see things?  I didn't make the graph – it can't possibly have 2012 actual because this is 2012 and just because the CBO grossly underestimated the damage done to the economy and it's rolling effect on the Deficit under Bush doesn't mean it was somehow Obama's fault. We do have a revenue shortfall and we've had one for 12 years and that IS the problem.  If you give the top 10% a $500Bn tax break for 12 years it takes 12 years of an additional $1Tn in taxes to make it up.  That's why only a total moron would cut taxes to the point of creating a deficit – it's national suicide and now we have 2 morons running on a platform that says the way to fix this is to cut more.  We spend LESS than the OECD average by far – this is not complicated stuff.  Here's your "no new taxes" model at work:  

    And who ramped up the spending and who cut it back – come on – you can figure it out:  

    Stop letting yourself get brain-washed.  This is not a complicated issue.  This country was taken over by psychopaths in 2001 and, like plundering pirates, they looted the treasury and burned down nation – destroying a century's worth of economic progress in just 8 years – leaving the people in debt and without a viable future.  THAT'S what happened – Just like Bush couldn't totally destroy the Clinton surplus in his first year, Obama inherited the worst economy since Roosevelt and it took FDR a decade to turn this country around.  

    Drugs/Shadow – Good point, I think this happened last year as well with a lot of people not picking up their prescriptions once they found out they weren't covered anymore.  

    NYSE still down half a point and no one seems to think that's strange?  

    Dow volume 51M at 3. 

  108. Pharm – yeah.. but will it happen today? i think 'they' are investing too much into this today to let it go. must be some end of week targets wanted….

  109. NYC/Empire State Building:  It sounds like 1/ disgruntled employee kills boss, 2/ police go into spray & pray mode, kill gunman, 3/ wound eight other bystanders with riccochets and stray rounds.  Not exactly a cool hand luke performance.

  110. I am afraid to say, that I think we drift higher next week and take out the year highs.  I think I said it earlier in the day.  Fireworks most likely start in September.  They need reasons to believe!

  111. Gold consolidation is good here.  Should be more follow through.

  112. GLD 167 Sept/Oct Calendar looks like a good one to play with.  Since Sept is along ways off and the 166 area is a congestion zone.  5 to start with for 1.18 or better.

  113. Phil I thank you for your detailed advise on PCLN. As I explained before I do have a hard time picking up the internet on my travel and if I try to follow an idea I hate to guess obviously I would not spend 7K on margin for 600$ (2 opt). You spend a long comment on Merkel this morning over her vague Greek comments but what the hell can she do. Yes a simple SELL or BUY Greece would obviously help to clear the picture.!!!

  114. CRM / Pharm – I realize you already DD'd, but wondering what you think of a $10 roll to $135 for about $3.

  115. AMZN / Phil – what are your thoughts on a bear call spread?

  116. CNBC:
    Watched more of this than normal, with the sound on today, so I feel I learned a lot and can now go play golf,  They give so much brilliant analysis it almost feels like cheating, why doesn't everyone watch?

  117. bolt – normally, that would be advisable, and Phil may want to way in on it, but for $3, the delta is only .11 different.  So a move against me is less impacted.  The chart is definitely not in my favor, as I am now trying to get out even.  If anything, selling the Sept 130s to move up to the Oct 130s is better IMHO.

  118. FWIW, Jeff Saut had a graph of election year S&P results and we were following pretty closely, topped around Sept 7, fall through Nov1 and finish the year strong.

  119. LLY Sept/Oct Calendar….DD on Oct Puts.  That data was crap…everyone knows it, and if it were good, then the stock would be pressing $50.  Unfortunately, my Sept Puts are most likely, toast….

  120. CRM / Pharm – I may not have been explicit enough; I was long Oct $125p.  In any case, I went ahead and rolled to Oct $135p.  If CRM rolls over, higher gamma on the $135s should help, no?
    But, yes, would be interested in Phil's thoughts as well.

  121. Phil,
    Re SVU, I am sad to say I am also short mucho SVU puts (1/13 and 1/14) along with Burben and equally unsure of what to do.
    The 6/12 Inc port adj you referenced was back when SVu was @ 5. If one were to roll now (to the 2.50s):
    (1) which strike month would you advocate ( Oct, 1/13 or 1/14) ?
    (2) I realize its a guess at best but what odds would you assign to a more positive result from rolling to 2.50 versus bailing now?
    As always, TIA

  122. I would like to see the SEC put in as much effort as USADA in uncovering cheats- say it ain't so Lance……

  123. and, lift off.

  124. Phil China
    Another example of mom's saying. "We can't get there from here!" or I can't go there from here and what people. Right now this is on disabled person. Did the calculator and wow how sad is it for some I am at 27%, in the top of 30%, holy shit! I suppose I should be feeling better better that is 60,000,000 living under $20,000 per year. My girlfriend fits in there, no transportation in a rural area. Missed 2 doctors appointments because the bus forgot to pick her up, bus service is by 24 hour advance notice!
    Big problem didn't think that last year and I ran ot of Drug coverage in December last year, I waited. Guess about 90% of the country have not thought of that, even I didn't. One day without pain relief, had to lie down 2 times so far, unbarable sure can't day trade or work on projects.

  125. hil
    In the off hours could you explain why (and the source)  of the outsized volume that posts at the end of each trading session. Also who controls or influences the gaps we see from close to following mornings opening prices. Directing me to some articles,  or book or website would be fine TIA.

  126. Den – the AH volume is due to the algo/bots dumping their positions.  The options do not stop trading on the indexes until 15 min after the market close.

    As for the gaps, those are due to the futures market moving the levels around.  Not sure when futures started, but they are relatively new.

  127. Phil:
    Kind of hard figuring anything out with only 60 million shares traded. Why not just open at 3:45pm and close at 4pm – assuming we get the typical rush getting in or out at the EOD.

  128. Pharm,
    AH volume would have to envolve a buyer and seller, no? Who is it that algo/bots are selling to when they dump?

  129. Empire State/Scott – Here's a good pic of the scene:

    Times says the gunman and the guy he shot are dead, 9 wounded:


    Mr. Kelly said that the two officers fired a total of 14 rounds and that he believed some of the shooting victims had been shot by the officers “based on the number of people shot and the capacity of” the gunman’s weapon.
    None of the bystanders’ wounds were life-threatening, Mr. Kelly said.
    Mr. Johnson, the commissioner said, was carrying a .45-caliber semiautomatic handgun “in a bag under his arm.” It had a capacity of eight bullets, officials said, adding that Mr. Johnson had fired three at Mr. Ercolino, who was apparently a vice president at Hazan Imports. Mr. Bloomberg said Mr. Johnson pulled out his gun “and tried to shoot the cops and kill the cops.”
    “They returned fire,” the mayor added. A law enforcement official said later on Friday that Mr. Johnson did not fire his weapon at the officers.

    Want to know the difference between New Yorkers and everyone else in the World?  Check out this guy:


    t Bellevue Hospital Center,  Robert Asika, 23, a ticket seller for Gray Line tours. emerged with his right arm in a sling. “The bullet came in and went out,” he said. “I’m very lucky.”
    Mr. Asika said he had been shot by a police officer.  Asked how he felt about that, he said, “I guess, you know, stuff happens.”

    Gold/Pharm – I hope we don't regret getting out of silver.  AND I REALLY HOPE EVERYONE DOES HAVE UPSIDE HEDGES (from Tuesday) IF THEY ARE STAYING BEARISH OVER THE WEEKEND!

    Merkel/Yodi – They make it seem simple but it isn't.  Her hands are tied until the courts decide if it's even constitutional to contribute to the ESM and they are still trying to enforce austerity – this is not likely to end well but that doesn't mean they can't kick the can another 6 months down the road with another round of half-measures.  

    Gasoline barely holding $2.90, oil at $95.91, gold not moving at $1,672 – where's the QE fever in commodities?   

    Transports still down a point, NYSE still down 0.3% – wacky stuff.  

    AMZN/Bolt – I thought they couldn't hold a 300 p/e and that's exactly where they are now.  As a bear spread, I'd go for the April $270/230 bear put spread at $20.50 and look to sell the Sept $230 puts for $5+ (now $2.35) on a dip if they reverse back up and then I'd work that for $1 or $2 over and over as a momentum play.  Catch 10 or 15 good moves between now and April and you have a free bear spread.  

    CNBC/Lincoln – Yes, all the secret knowledge they impart is amazing.  Yesterday, when we were crashing – they had the nerve to say "we told you so."

    CRM/Bolt, Pharm – That must have been one frustrating thing to be short on!  I'd just walk away (which is what I said pre-earnings) it's a totally irrational stock.  

    SVU/8800, Burr – Regardless of where you started, if you want to play SVU, it would be 2x the 2014 $1.50/2.50 bull call spreads at .45, selling the $2 puts for $75 for net .15 on each $2 worth of spreads so you make 1,233% if SVU is bought for $2.50 or better or if it just finishes up there in Jan 2014.  If not, you own them for net $2.15.  That's essentially the same as the Income Portfolio Spread, where we bought the bull spreads for .40 x 2 (.80) and sold $3 puts for $1.60 for net .80 credit, which is the same net $2.20 entry.  I still like it as a new trade.  TOS says .50 in margin to collect the .75 on the short puts – what can be better than that?  

    FAS Money – FAS $96 calls .65 in the money – that was a nickel well-spent and a great example of how greed can kill you in those trades.  Unless you think there is NO WAY you can lose – you have to consider .05 a full victory and be done with it.  

    Too bad we didn't play DIA the other way – $131.50 now.  

    Armstrong/Villash – From a Capitalist standpoint, he won.  I don't know if he cheated or not but, assuming he did, then he cheated to win, got famous, made a fortune, got caught but has no jail time and Nike is keeping him on so he really has no penalty as he wasn't racing anymore anyway.  That is EXACTLY what the SEC does!  

    61M on Dow at 3:52 and the tone is changing fast after that blow-off move up.  

    27%/Shadow – The good news is you can set some pretty simple goals to get to 31% next year and 35% the next.  Before you know it – top 50%!  

    15-minute market/DC – I agree.  I also think they should do that with NBA games.  Most of them are pointless until the last few minutes.  

  130. DAX on the rise, but not over or near $82.

  131. NBA=pointless=really bad game! :)

  132. Wow. That is quite a graphic picture! Not good for the dude on the ground.

  133. Phil, I love the way you put words in my mouth, then try to stuff them down my throat. The classic straw man. If your bar graph was updated to include 2011 actual, and then, using the 2012 with one quarter estimated, you would have to acknowledge that those deficits were much higher than projected when your graph was created. Again, not my point.
    The line graph you present shows the average revenue since 1960 at 18.3% of GDP, and the current year at 16.1% of GDP, a bigger gap than I cited. My period extended farther back (to 1946) and it includes off-budget items. My long term average is 17.7% and I show the current year as 15.8%. We have no real dispute on that point, then. Clearly that graph supports the idea that it is spending that is currently the major outlier. I was only trying to say that if you could bring current revenues up to the long term average of revenues, you would still have a bigger deficit than ever existed before we elected Obama. 
    I still am not trying to blame Obama, but it is an interesting coincidence if nothing else. Just because somebody doesn't agree with the policies you support doesn't mean they advocate perfectly ridiculous opposing views that you invent and put in their mouth.
    I continue to insist this qualifies you as a first class political campaigner :)

  134. This market is even beyond what Greenspan could have ever conjured up. Bernanke is the fking man! 
    This one goes out to Bernanke…

    Safe weekend to all.

  135. They have some Leprechaun on CNBC talking about how the market will squeeze much higher next week.  I don't know if he's right, but I'm going to follow him so he can lead me to a pot of gold.

  136. What a 'market.' Color me disgusted.  pffft.

  137. scottmi
    Not fun for anyone here.

  138. I read Lance Armstrong's statement, and although I don't know anything much about the jurisdictions and the differences of rulings he mentions, I do know that if somebody was innocent and he was condemned because his performance exceeded norms, that is exactly the statement they would release. Almost like if somebody happens to have a whole lot of money, they can be charged with cheating to achieve their success. After a while, you just get sick of having to defend yourself.

  139. Phil
    Amazing what $10,000 can do for people.  Now sell that to any politician. The math is way more manageable. How much would it actually cost to set a minime income subsidy program that would eliminate poverty? But  we have REPUBLICANTS!
    Let the rich few take over because they know what is best for the masses.

  140. well that sucked the root. 

  141. shadowfax: have you tried filling prescriptions by mail in Canada? Florida has a new law which attempts to shut down "pill mills", a rather unspecified group of physicians whose careers have wound up with them treating chronic pain. Just because some percentage of those legally prescribed pills winds up being sold on the street at 10x their normal price does not prove the prescriber guilty. I personally know three people who can not fill prescriptions, legally obtained, because the State is going after DRUGSTORES as well as the docs, and they are scared to death of the consequences.
    I understand you are not in Florida, and you should thank God for that, but you have my deepest sympathy. 

  142.  Pharmboy  Thanks

  143. After hours/Sparky – Yes, someone has to buy but that's the bottom 90% who AUTOMATICALLY buy at whatever end of day price is set through their mutual funds so the Banksters jam the markets up to a high into the close and then place orders to sell their day's volume at 3:59:59.9999 and those sell orders are paired up with the mutual funds' buy orders at market close and that's how the top 1% buy low and sell high to the bottom 90% every single day.   We're at 66M now at 3:59 and we'll finish over 100M as every single one of the buys made since the bottom are dumped on retail bag-holders at the close.  Ah Capitalism – so many ways to screw people!  

    Graphic/DC – Yes, rule of thumb in NY – try not to be the guy they draw the chalk around….  

    Graph/Barf – It's very difficult when I put up facts and you just talk them down.  Where are the links?  Why is it I can find, in seconds, multiple charts to support my statements and then your counter is "if your graph was updated" – go find an updated graph.  Even one from the Heritage Foundation if you have to and we'll pretend that's real.   Who cares what the revenue was in 1946.  We had a balanced budget in 2000 with a verified surplus.  What happened since then?   We spend much more and taxed much less – very stupid plan.  The DEFICIT that was created by taxes less than you spend can't be fixed by just spending less in the Future – it's too late.  You must PAY YOUR DEBTS.  This is not a complex line of reasoning.  And it's not about bringing them to the average.  You must PAY YOUR DEBTS.   You can't blame Obama because Bush ran up debts and disappeared and now Obama is in charge and IS cutting Government spending but is telling you that you must now PAY YOUR DEBTS.  It doesn't matter what the average is or was – it needs to be enough to PAY YOUR DEBTS.   This is VERY SIMPLE – PAY YOUR DEBTS.  

    Non-Defense discretionary spending is $400Bn – you can cut 100% of it and it's not going to help,  This is why Conservatives are lunatics – this is very, very simple math.  You can't save $1.5Tn by cutting $400Bn – especially when that $400Bn is ALL Government services.  As to SS and Medicare, which is $1.5Tn – well, for one thing, $865Bn worth of the revenues we take in are specifically to pay for those programs which had a massive surplus (and still do) until BUSH STOLE IT to pay for wars and tax cuts.  So, the question is what kind of evil bastard crook do you want to be?  These people contributed to these programs their entire working lives in good faith that the US Government would invest the money wisely and they could count on that money when they retire.  How much do you want to gut those people and, if you do – how much of the program do you think you can cut before people refuse to give you $865Bn a year for something you're already defaulting on?  

    If that's not the view you are advocating – great.  What exactly do you want to do?  

    Wow, only 86M into the close.  That was really lame.  

    Minimum Subsidy/Shadow – That would be giving about $10,000 to let's say even the bottom 50% of taxpayers (70M) and that's $700Bn which is essentially what we do with $553Bn going to Unemployment, Food Stamps etc.  Another thing Conservatives refuse to understand is Obama didn't double that spending by any decision he made – the number of people eligible for these programs that have been around since the 60s has doubled as this country falls off a cliff and millions sink below the poverty line.  

    Well, we end up the week down about a point after all that drama.  Next week will be very exciting. 

    Have a good weekend,

    - Phil

  144. SVU/Phil:  I know you are probably sick of questions on this stock by now but some help would be appreciated.
    I have 4K sh. originally at $7.77. Net price on these through premium sales is now $4.04. I additionally am short 40 contracts of the Jan14 5 puts. Put to price for the 8k shares is $3.69.
    I would like to play for a breakeven if possible, and am concerned that if a buy-out comes in below my put-to net I will be out some $$.
    How would you restructure the play? Would you suggest dumping the stock and short puts at a loss, then going with the Bull Call and short put sales as you discussed above? 
    As always, Thanks.

  145. Barfinger
    Thank you, My problem is not filling but paying. I was on continuous Fentenyl with some 10mg oxycodone for breakthrough pain. I had to shut that down but my $53 story was I got the maximun 120 pills, 4 per day of 15mgs without the tylenol. All the doctors and drug stores know me and my problem. The doc would't give me the 30mg, saying they were only for those dying from cancer. They don't do much, I am still too nausiated to eat today. I doubt Canada will send fentenyl and again I tried Canada years ago and they are not cheaper. The problem is $850 per month for drugs, I need $3,500 for property taxes next month or next week depending how you look at it.

  146. At the close: Dow +0.75% to 13156. S&P +0.67% to 1411. Nasdaq +0.54% to 3070.

    Treasurys: 30-year -0.09%. 10-yr -0.1%. 5-yr -0.05%.

    Commodities: Crude -0.39% to $95.89. Gold -0.02% to $1670.25.

    Currencies: Euro -0.43% vs. dollar. Yen +0.26%. Pound +0.33%.

    Market recap: Stocks rallied broadly after Bernanke said there's "scope for further action" by the Fed and on rumors the ECB is considering setting a yield band target in a new bond buying program. Still, all three major indexes failed to log gains for the week, with the Dow and S&P snapping six-week winning streaks. NYSE advancing issues led decliners three to two. 

    The man who likes assets whose charts are moving up and to the right, Dennis Gartman cites his "traders intuition" as among the reasons he's exiting stocks. Showing a firm grasp of conventional wisdom, Gartman also mentions weakness in China and the Fed's Bullard's hawkish CNBC appearance as reasons to sell.

    ECB bond purchases are easier said than done as this great graphic from Nomura shows. The ECB will apparently buy from the banks, but can the banks sell? They've already pledged much of this paper as collateral for their LTRO borrowings. What's needed is replacement collateral and this is where the rescue funds must get involved. A tangled web.

    The Treasury successfully unloads preferred stakes in 4 community banks, but the sale of a 5th – Guaranty Federal (GFED-2.8%) – was cancelled as the bidding didn't hit the minimum price. The auctions brought in $62.4M, less than the $67.5M investment, but throw in $12M in dividends and the taxpayer came out ahead. The 4 sales: BNCNFCCO, FXNC, MFNC

    One solution to the corn shortage (and perhaps a more productive use of capital than an investment in Facebook): 3D steaks. Peter Thiel's Breakout Labs has made an investment in Modern Meadow which aims to bypass livestock by combining regenerative medicine with 3D printing to create edible meat.

    Pro Farmer estimates following this week's crop tour have corn yield at 120.25 bu/acre vs. the USDA estimate of 123.4. Beans 34.8 bu/acre vs. USDA at 36.1 ("The crop from Ohio to Nebraska needs a drink right now to realize these yield estimates"). Iowa (nation's largest producer): "Early start to the growing season turned into a mid-season nightmare for corn trying to pollinate." Market reaction will have to wait until Sunday night. 

    Steel stocks finish lower today, continuing their decline on the back if yesterday's downgrade of the sector by Dahlman Rose on expectations of weak pricing: AKS -0.8%MT -1.8%NUE -1.1%X-1.8%.

    Platinum (PPLT) prices hit a four-month high this week asspreading unrest among mineworkers in South Africa, which accounts for nearly 80% of the world’s supply, prompted investors to cover bearish positions. Yet concerns about supply disruptions come at a time of low demand for platinum; analysts believe that if the unrest recedes, prices could fall. 

    General Motors (GM +0.5%) catches another credit upgrade after Fitch moves its rating to BB+ from BB on a stable outlook. The ratings agency calls the automaker the most global diversified of the Big Three, which should help it navigate a downturn in any particular region. GM now stands on the verge of a return to investment grade, needing only a notch upgrade from two of the three rating agencies to move off its junk status.

    Good for 16 Dow points today:  JPMorgan reiterates a Buy on IBM: the firm argues software's growing top and bottom-line contributions could lead multiples to rise (Big Blue currently has a trailing P/E of 14), and also convince IBM to reduce M&A activity and return more cash to shareholders. Henry Blodget notes IBM obtained 44% of its 2011 profit from software, and could get over 50% in the future. H-P (HPQ), by contrast, gets less than 4% of its revenue and 6% of its profits from software. That helps explain this chart.

    After looking at Dell (DELL) and H-P's (HPQ) awful July quarter PC sales data (III), IDC now predicts PC shipments will be up only 0.9% in 2012. Even that forecast could prove optimistic, given the decline seen in Q2. U.S. shipments are expected to fall 3.7%, after having already fallen in 2011. IDC continues to expect double-digit notebook shipment growth in later years due to emerging markets demand, but the tablet market's rapid growth makes that far from a sure thing.

    A delayed thought on the Square-Starbucks linkup: Though Square has been the one grabbing most of the kudos emanating out its announced partnership with Starbucks (SBUX +1.5%), don't overlook the impact the deal could have for the coffee chain's bottom line. Every time a customers pays with the Square smartphone app, Starbucks saves a little on credit card processing fees. It could also speed up lines at busy stores if the app's hands-free feature is utilized

    Though (CRM +1.4%) has turned positive following a ho-hum FQ2 report, Larry Dignan thinks nagging questions remain. Among them: what the future holds for Salesforce's partnership with cloud ERP/HR software giant Workday in light of Salesforce's expanding ambitions (Dignan thinks a merger is possible); whether Salesforce will buy an e-mail marketing software firm to complement its social media marketing push; and whether Salesforce is becoming too dependent on large deals. (more) (transcript)


    The Lost Decade of the Middle Class

    By Barry Ritholtz – August 24th, 2012, 12:00PM

    The research report that you need to some some time with over the weekend is from the Pew Research Center, and its titled: The Lost Decade of the Middle Class

    Some charts and excerpts are below:

    As the 2012 presidential candidates prepare their closing arguments to America’s middle class, they are courting a group that has endured a lost decade for economic well-being. Since 2000, the middle class has shrunk in size, fallen backward in income and wealth, and shed some—but by no means all—of its characteristic faith in the future.

    These stark assessments are based on findings from a new nationally representative Pew Research Center survey that includes 1,287 adults who describe themselves as middle class, supplemented by the Center’s analysis of data from the U.S. Census Bureau and Federal Reserve Board of Governors.



    Read the rest of this entry »

  148. Phil
    I responded to don't hold all short this weekend, $80 calls  were ask $2.10 bid $2.07. I tried 20 at $2.10 and no fill over half an hour, so I guess I may be screwed again.

  149. Barry's succinct summation of week’s events:


    1) New Home Sales in July at 372k were a touch above estimates and the most since Apr ’10, albeit still 73% below its record highs. 2) Short term positive only, Der Spiegel on Sunday reports the ECB is considering establishing caps on interest rates for government bonds. The similar story gets somewhat regurgitated today by reuters who said the ECB is discussing yield bands. Bottom line, I’m sure the ECB is talking about everything with the Germans staring intensely over their shoulder.


    1) July Durable Goods Orders weak ex volatile transports with non defense capital goods ex transports down for 4th month in past 5 and lower by 6.2% y/o/y.
    2) Initial Jobless Claims total 372k, 7k more than expected.
    3) July Existing Home Sales a bit light relative to est but months supply falls to 6.4 from 6.5.
    4) After 5 weeks in a row of declines of a total of almost 9%, mortgage apps to buy a home rise only .9% on the week and refi’s fall 9.2% to a 6 week low.
    5) While somewhat ‘stale’ as Bullard said, the FOMC minutes say many Fed participants want more QE. I keep putting this in the negative camp because I believe the inflation it engenders (CRB index just shy of highest since early April) won’t be offset by economic growth (squeezing corporate margins) and wage growth (squeezing the average person) .
    6) HSBC preliminary mfr’g PMI at 47.8 is lowest since Nov ’11 and below 50 for 10th straight month.
    7) Shanghai index closes at lowest level since Mar ’09.
    8) Euro zone mfr’g and services composite index little changed but at 46.6 is below 50 for 11 month in past 12.

  150. SVU/Jbur – Yes, I'd just reposition.   If you are down about $6,000 then you can use the above spread to commit to owning 4,000 shares at net $10,600 and you can short 40 of the 2014 $2.50 puts for $3,000 and buy 80 of the bull call spreads for $3,600 for net $600 in cash and about $2,000 in margin.  That's it.  You leave it alone and, if you are lucky to get called away at $2.50, the 80 bull call spreads will be worth $8,000 and the short puts expire worthless and you make $7,400 on cash.  If SVU can't hold $2 – you can short 4,000 shares or just cash out and move on.  

    Fills/Shadow – Seems to me it might have been worth the extra .03 for piece of mind.  

  151. That is depressing Phil but to me the good news was the buy calls didn't fill. I make more if the market dives and TZA doesn't fade as much as options with time. 92% of my trading account is in TZA, 8%cash. I know you don't approve Phil but I am at a don't give a flying f    ing shit. I am either going to make enough to turn the pain machine on or not. You don't qualify for any help with more than $2,000 another sad fact the the fing rich don't get. Like making everything a feloney crime, after that you have a permanent liability that you created by your idiot way to fix anything. Crime goes down when people see any other way and the so called lazy stand up if worth the effort. This is total shit and the masses are geting PISSED OFF!!!!!!!

  152. Phil
    Problem is will $2.13 fill? Ask was $2.10 still is. Aren't they screwing the guy who wants out also? After hours doesn't allow a market order. You have bid, ask, and unknown in options as far as I know and nothing is moving.

  153. BID 2.07 ask 2.10 offered full price! Not good enough? WTF?

  154. Must be selling $20,000 VWs! See what happens everyone, VWs not worth $35,000 or even $20,000 now.

  155. shadowfax: I am not qualified to give investment advice, but then, we are all here in this room, so here goes: Phil led me (maybe not taught me) to realize that the right approach is not to bet on direction. I have an entire portfolio consisting of opposing bets, counting on the decay of premium to pay me what I need to live. Sell puts, sell calls, collect premium, and hope to withstand the big moves.
    One of the people I was talking about can hold a job and earn his way, as long as he has his meds. When the State blocked him from his drugs for a while, he became non-functional and lost his job, and his ability to pay for the drugs he requires. He is running out of people to beg, and it pisses me off even more than Phil :)
    I might be one of the f*ing rich(sort of), but I didn't design our f*ing government. I was not consulted.

  156. Phil: yes, you must pay your debts. What I complain about is that we have no decent discussion of reality here, only political bombs. I am a retired businessman, and I understand as well as anybody that there are choices. Sometimes quite reasonable programs are discontinued. Sometimes, good people lose their jobs because things just fell wrong.
    As a consultant, I routinely walked away from clients whose only solution to their troubles was to figure out a new marketing program to create the revenues to pay for the profligate operations they were running. 

  157. Shadow – As someone who understands pain, my heart goes out to you. Just wanted you to know that someone really cares and that you're in my prayers.

  158. Looking for some advice on how to trade and monitor your account while traveling.  I'll be on planes, trains and automobiles a good part of the day for a while.  I was thinking maybe a tablet or small laptop with a wireless card.  Not ideal, but at least you can see what's going on and execute some simple trades.  Any advice appreciated.

  159. I find a small laptop with a wireless card a lot more useful than an iPad.  The keyboard's the key.  All that one-finger tablet stabbing doesn't work for me, although simple trades can be done. I also like to have multiple tabs open, again, possible with tablets and even with an iPhone if you're a masochist with a magnifying glass, but, again, awfully fiddly.  Given that I can lose the price of a small laptop with one screwup, I use the tablet for checking stuff out, but fear to do any serious trading with it without a gun to my head.  The only counterpoint is that a tablet with VZ/AT&T etc. doesn't need a wifi connection, so I do carry one around in case I hear air raid sirens  or a see a comet hitting the earth, but then my paranoia level is higher than most, a product of living more than half of my life in strange lands, [watching TS Isaac overhead as we speak].   My two cents.

  160. Thanks for the thoughts Birdman.

  161. Phil and all,
    Don't think I will give up! I called a friend and said after one day I can not funtion on the oxycodone and have not eaten today. I have a bunch of stuff on ebay and the most expensive tubes for sale $999.99 for 11 sold at 3:51 PM MST. That puts a much needed infusion into the Alta Audio fund. I will get the needed to sell cases going and good news all Americans I am buying the aluminum from KT USA! Too bad China, think about that.

  162. Travel- timely subject as I have been using an HP-Mini with the Verizon MiFi Hotspot for several years and it has worked well. I particularly like the battery life on HP but the small screen (10") is a drawback. The Verizon service is very good. In fact, I often use it instead of available wifi connections which are frequently overused and low bandwidth with poor performance.
    Alas, the HP is acting up and it is time to replace it. I was going to post a question to members on suggestions for a "traveling" laptop – a bit larger screen but still small and light with decent battery life. I have no need for anything special as it is only used for running TOS and the usual daily web sites
    All comments welcome.

  163. Gel returning
    I hope all that know  him or have contact incourage return. Phil I doubt you need the money, send it my way. to pay my drug bill. I loved that guy even though he is north I am south but this site needs me 19.5 years education and broke and Gel putting 2,000 gallons in the no sail boat to top off the tanks but to most of Americans dumb as a rock. I actually told him if he didn't want to pay taxes to leave the country.  I wish I could foget facts and remember nanes but we all add in different ways and no, Shadowfax the poverty guy is not as left as Phil but I believe he is at least one that understands where I am at and gets the simple math. He shows charts that some don't get, I will drive everyone nuts if I start showing the detailed math and honest projections.
    Simply put change is comming the choice is want it the easier way or rammed up your KISTA!?

  164. pastas
    I guarentee I can fix it. If your going to buy new anyway, please send it my way as I love finding out the real problem. The last one I got into a HP was smashed, the problem was porn site visits and other dumb searches. Not even a serious virus. I am not saying you do that and if you don't want know why or any posting of anything anywhere you got that. I need to keep my mind going with all I can afford to do. I would pay the shipping.
    Thanks for consideration.

  165. Pstas:  I have a 13"  Vaio, which works very well, screen size perfectly adequate, and I can hold it at arm's length with one hand, my standard for weight.  I was kinda wondering if a slightly smaller screen would also work, since I'll replace within a year, so it's good to hear that 10" is too small, I doubt my eyes are sharper than yours.  It is [I just held it up] 25% longer than an iPad screen, so that's probably a good lower limit.  I've been crowing about my Samsung Galaxy Note, which is supersized, and think I'm reaching convergence — bigger smartphones, smaller laptops.  As mentioned, I plug the Vaio into big or even bigger HD TV screens at home, it has an adequate on-board memory for programs, and I have a USB 3.0 / 3 Terabyte hard drive at home base, cloud storage, and assorted small hard drives I throw in my carryon for travel.  That way, I'm never staring at a 13 inch screen for more than 20% of the time in any case.  Thank goodness for progress.

  166. Barfinger:  I'm no expert on pill mills, or anything medical, for that matter, but I do know that prescription drug abuse has exceeded street drug abuse by some measure due to ease of access.  I knew addicts who regularly bought large quantities of hydrocodone from Florida some years ago, and the "requirements" were a joke: "Hi, I'm Dr. X, what's the problem?  "Oh, I have back pain, had surgery once."  "OK, no problem."   With 3 days, 270 Oxycodone arrived by FedEx in a single shipment.  Of course, the price was high — $450, and that was awhile ago.
     It's good to be humanistic, but don't be naive. Drug addiction destroys lives, and the number of drug addicts is very highly correlated with the ease of obtaining addictive drugs.  Here's a few cites, in respect of morphine [U.S. Civil War], cigarettes [WWI, American Expeditionary Force consuming 14 Million cigarettes per day,  WWII [alcohol], Vietnam [Congressional investigation showed 15- 25% of soldiers habitual heroin users]

  167. Zero
    There are new USB add ons that can do anything not sold at Best Buy or most places as everything and everyone all the way to China is trying to sell what hasn't sold. Glad to hear your dealing with what you have because others and hopfully  Pastas needs to stand up and say this new gismo isn't better just not filled up with what you have done. Most people screw themselves more by loading everything from the old computer to the new.  Try copy programs one at a time, files same thing, and forget the history of use.  There are even ways to power stuff for days without an AC plug and all fit in a backpack.

  168. AAPL + $10 after hours – they won patent suit

  169. AAPL news on Bloomberg. The Friday new weekly options trade in aapl would have really paid off !

  170. Zero
    Thats what you are all about, sorry I posted the last note to you and I do remember your last pile of shit. WTF do you want? The abuse can't be stopped until you bust the doctors just like the ecomomy is not coming back until you throw the trouble makers in Jail. But no, you think give the docsters and banksters a break because they created all those jobs. Put the hard luck people in jail for not being born with a f    ing silver spoon in their mouth like you.
    Yes I do take that note to Barfinger as an offense and right now I know who your talking about . Think I am addicted to drugs? I quit along with 2 other non offensive to you medications because I am broke and right now I hope your dumb ass is split in 2 with a broken neck. Just try to exercise it off or take an asprine. I can believe you exist, I have met others like you and that is very sad. The good news is most people don't stoop to your level.
    No I will not click ignore this user, keep your friends close, your enimies closer!
    Hope your life goes to hell, go broke, loose use of limbs, and experience real pain, then go broke, to jail, and live the rest of your life alone, because you need to go to the school of hard knocks to knock that bull shit out of you.
    Good luck, you will need it when the balance returns, I will never see a value in a vindictive piece of crap like you. Sorry bud but you did show your real colors in the last week, mostly black.

  171. rex AAPL
    Winning isn't going to make them a dime, they get some money but that patent isn't worth much in the fast tech what is new world. Sell into the excitement Monday open, their run is over.

  172. @burrben, sorry about that, I fixed up the portfolio today.  You are correct, the current portfolio is under 100k.  It is sitting at 99k right now.

  173. I'm genuinely sorry if you thought I was addressing you.  Last week I was, because I thought you were being intolerant, and said so.  But not tonight.  Now you think I'm being intolerant, and you're saying so.  Nothing wrong with that, but allow me to explain myself.  I recognize that you are injured, and you need pain drugs.  I was injured — I destroyed my lower back — and I spent three years as a heroin addict, street stuff, no doctors, midnight scores, and came back after years of hard work.  But there was a night I spent on the floor when I crawled over and picked up a .45 to blow my brains out from the pain, a friend showed up with an ambulance at 4AM and they operated that night. So I do have some sense of what it can be like. No silver spoon, I'm afraid, just hard work and lots of luck.
    Whether you are addicted to drugs or not is irrelevant, drugs are a medical issue, not a moral issue, and I am not a member of any Moral Majority.  You're hurt, full stop.  I live in the Third World where you can buy whatever over the counter, but I'm not hurt  now, so I don't.  You've got me all wrong here, you just don't know me.  My comment was not directed at you — it was about all the kids that aren't injured, but suffer from all the anxieties and pressures of the "modern" world, and take their lives from bad to worse with drug addiction.  I feel for you, Shadow, like everyone on this site, but you are welcome to hate me if it's a useful distraction.  I regret if I made you feel bad, I promise it was not intended.

  174. Iflan/Phil,
    Iflan i realize you maybe on vacation, but if you happen to see this could you please advise regarding APPL play for for Monday am? Thanks in advance.

  175. Pharm- Maybe I am missing it, but is there a chance that you could post your positions  in format similar to optraders', either as a daily or weekly spreadsheet. I really appreciate your trades and like to learn from the strategies both you and Phil post- gaining insights with every session.  Thnx

  176. "20 Ways Wall Street Rips us Off"
    Ethical Investor – New column on Huffington Post
    No surprises here for us:

    20 Ways Wall Street is Ripping Off Small Investors:
    1. Providing nominal returns, not real returns.
    2. Encouraging too much diversification, if that's possible.
    3. Hiding fees and expenses.
    4. Turning you into a passive investor.
    5. Convincing you that money markets are the same as cash.
    6. Telling you that bonds are safer than equities.
    7. Explaining that in the long run equities outperform bonds.
    8. Simply by lying about their products.
    9. Convincing you that their bank is a large, stable, safe operation to deal with.
    10. Recommending products that have enormous sales commissions attached to them.
    11. Cheating you on bid/ask spreads.
    12. Selling you what they don't want.
    13. Measuring your success in dollars.
    14. Lending your securities to others.
    15. Ripping your eyes out if you ever try to close your account.
    16. Grabbing any slight positive real return for themselves.
    17. Sticking toxic waste to small investors.
    18. Pretending they can pick stocks.
    19. Acting like they are your best friend and they have your best interests at heart.
    20. Knowing next to nothing about the value of holding real assets like gold and real estate.

  177. From the Five Most Under-reported Stories of the Summer in The Nation Magazine:
    (I have been short Amazon off and on for 3 months and basically whipsawed to break even.  Maybe this is why they are such a tough short to win.  They may be insanely priced and have high PE ratios, but they are game changers and people will always over-value them.  There has to be lower hanging fruit to short than playing with Amazon.)
    4.) The Amazon Economy Gains Steam

    The increasing influence of over the world economy would seem to be a natural story for intrepid business reporters. But it took a series of articles in the Financial Times to explain Amazon’s astonishing economic impact and detail the corporation’s growth as not just a technology giant but a utility—providing vital infrastructure that supports and fuels the businesses of third-party retailers and other startups. At the same time, Amazon is a threat to many of those same companies, able to use its intimate knowledge of their businesses to compete with them. It’s complicated stuff, as The Nation’s special Amazon issue in June made clear. The only surprising thing is why more journalists aren’t looking into the profound ways that Amazon is changing life as we know it.

  178. Hypocrite of the Year award to Francoise Hollande- " The Greeks must keep to their promised reforms"- didn't he basically throw out all of Sarkozy's hard won reforms to balance France and give the youth there a chance at being gainfully employed this decade ? Also, Revtodd- thanks for posting above- my epiphany being that Bezos intent is to, at some point, "Willy Wonka" the Amazon conglomerate- the use of robotics will lead the way to a future where he will have few labor disputes or costs as he will have no laborers- just robotic oompa loompas all being financed by shareholders wanting "cheap" goods and high stock price gains. The caveat to this plan is that there will be no consumer dollars to buy anything at all and Amazon shall sit like China with warehouses full of finished goods and no buyers. The game is in timing the cycle- I will defer to Phil on leading us through this dark forest!

  179. villa – I used to do it, but it became very hard for me as I have a day job (I don't know how StJ does it!).  I also have several different methods I use, one being biotech investing, the other I use Opts methods and/or calendar spreads on a few stocks that I know and follow.  Don't be afraid to ask, in chat about any positions.  I can try to do it again, but won't promise anything.

    Here are the calendar plays, and there are/may be a few others, but let’s start with these. The Aug/Sept TLT 130 is most likely dead, as the Augs expired worthless, and the Septs Cs will need to be exited for a small loss:

  180. Thanks Pharm ! I forget that we have lives outside of the virtual world.

  181. Thanks Pharm,
    I appreciate it also!

  182. A great story like this, helps one forget – for a while – about the sh*t storm we're in…..


  183. Pharm – during the PSW meetup, cud u also speak about how u pick calendars. 

  184. revtod villas
    Thanks for the supporting documents on Amazon. I am a simple single person who sees through the hogwash. Phil is great at what he does but I continuously think he is outside some point of real life. Individuals don't make it big selling millions of $2 items at 50% profit. From responces he doesn't see selling tubes for $90 at over 100% profit. Also sold $999.99 after ebay costs shipping, insurance and required signature over $250 my net is $854, then pay pal takes 3-5% more so close to 20% goes to those who are supposedly helping you. They do almost nothing. How am I going to find out a guy in Nevada wants them. I still see a huge problem with ebay and amazon, we get rid of what we don't need or will never use. It is only 1 step over the pawn shop deals or payday title loans. The cost causes businesses to never acctually succeed. I bought a book this week $35 from a very smart engineer I know, he had a contract with amazon and could not sell it now. What does he net $20? He went to school, wrote the book, printed it, shipped it, not amazon. I tried to search for it just to see how it went, without his link I would still be looking and then they offer a bunch of clueless self help books and female garments. This should be stopped, it is almost stealing, There is no oppertunity without big money.
    And yes we all need to say FU China, try eating that crap that won't sell, and continue to eploit and starve your people.
    It worked out so well and how big are those caves to hind reality in? The good part is they also steal from the stupid rich, and I have yet to meet a smart one face to face. Try understanding electricity never mind electronic circuits without math, phil's graphs and charts don't tell that story, even digital is simple on or off. Find 1 wealthy person with the brains to figure any of that out. I can try to explain it but 90% of engineering students don't get it and wonder why with that deploma can't find a job. Universities should plane and simple flunk them out but no it is just another way to seal money from the unsupecting public.

  185. nicha….that would make 2 seminars….I am only getting paid for one! ;)

  186. ZeroXZero
    I am trying to understand your way of saying things!
    What 3rd world country do you live? That may help. I hope you really did heroin and wanted to die brcause it would expain part of it ,not that I would even wish that on you.
    Not by most successful standards today but I thought I did well coming from a very poor family. Then a drunk drug deranged rich son of a bitch took it all away and got away with it. Medicare and my prior good luck paid for 30 surgeries, but I still am left with a condition that will and is killing me. Now I can't afford pain relief or fix my truck that hasn't started for 3 months. I could fix anything but now I wait for an engineering student that will work free because he is lost in college. He did as I told him and took a algebra catch up course. I honestly think he is wasting time and money becuase he has to work full time also and that is three part time minimum wage different jobs, not one remotely his field of study.
    I acctually wish I could go to any other country, third world sounds good, I could do well there with my education and experience, here has proven to be a land of the exploited, disposable. Phil helps but who else on this bog of maybe 300?  That is the problem, some try simple ideas but like the 800# I was given for medication help yesterday, first is has been a busy line and I have tried this over and over, no help until all assets are below $2,000. They offer all kinds of help to rid me of all my assets. It has come to mind, kill a few cops, that would prove I'm crazy, 3 squares, roof, medical care, and go where the controling class think I should be, the good, great last resort, GRAY BAR Hotel!
    The only differences are small room and no illusion of freedom. It hurts hearing about vaccations when I have not been out for a night since 2001. I continue to put all effort and assets to getting out of this trap. Nothing works!

  187. 1020
    I checked out that link and as too many times in the last few days made me cry. I was told in 2007 my only hope was a stem cell implant. I don't have a clue where to try or go to, did what the doctor said, and wrote my US congress people. Their advice is below an insult to me. Like everything else I decide to forget it and try some other worthless idea. 5 years later the one improvement was pain control starting in January which I had to stop this week because I chose not to pay attention to the cost. 2 nights have shown I sleep 13 hours instead of 7 and need to go to bed every 2 hours.
    How can this great country allow this to happen to anyone, now my blood presure is going out of control again that is what pain does. Another reason to extend and pretend all problems go away if you ignore them. Didn't work for me this year. I ignored the warning last December you can't afford any more medicines, I was cut off of benifits. Why did I try another? The surgery idea stonewalled again! Blocking out is dumb, you stupid SOB!!!

  188. Somehow this revieling what should never come out helps when you have no one around. I await for an answer to why the farmer stopped cutting grain at my property line. He must think this is helping me feel good. The issolation technique is working, I feel like the "problem" so please stop.

  189. Shadow:  I live on a Caribbean island, but it's not like the movies.  I never intended to live here, but life takes interesting turns, and I will end up stateside in a year or two.  The Third World is no place for foreigners to make a living, do not idealize it.  Life is a primarily a survival exercise in these countries for all concerned, and I require armed drivers and a heavily guarded expatriate compound to avoid waking up with a pistol to my head.  It ain't called the Third World for nothing.  Since I use to live in Bogota, Colombia and other S.A. countries where my father was a U.S. government worker, and I'm no-American-accent fluent in local languages, I know how to be the gray man and float above it, but there is a reason that there are an estimated 11.5 million illegal immigrants in the U.S. today.  

  190. Zero
    I don't idealize anything. I have loaded guns in my house for reasons. I was broken into again Wednesday. Nothing gone, computers have tons of new crap that takes 6 hours to delete. This has become a third world country. The elete float around and send ???? into my house because I know too much. As I have stated these are very stupid people, pawns, brainwashed to believe this is their chance to get ahead. Hold me at the doctors office won't work next time and I am sure PSW is monitored because of me, but like AAPL winning a law suite, it and what I know was passed a long time ago. To bad the slimplistic bastards don't get some people know how to disable their best attemps over and over. They don't pay attention to their trail, this time they locked the garage to Kitchen door when I went out the front, I do a simple thing every time I leave to detect entrance, unbelieveable, simple, and how arrogant to not pay attention to the dumbest trips.
    What the hell do they think I can do to them. Wish I could afford a guard or medications.

  191. Phil / VXX – Reviewing my positions for possible adjustments Monday.  I Have the VXX Calls, Sept. 14 Strike currently at 0.35 (mark).  Considering rolling to Sept 12 Strike ( costs .37 more) or the Oct 12 Strike (.89).  This would be the third roll since the Sept. 18 Call from Aug 3rd.  So, down 260.00 (54%) on the first set, Down 229.00 (39%).  So, currently down 39% and need to adjust on/before -50%.  Planning ahead!  Your thoughts?  TIA

  192. A week or so ago someone posted a video clip explaining high frequency trading- could you please post it again, I can't find it. Thank you!!

  193. TS Isaac did not catch sufficient landfall from Hispaniola to do more than split it's center, and it is now spread out over a very large area with a projected path over very warm water and it seems likely to re-form into a Cat. 2 or 3 hurricane, whacking the Gulf Coast between eastern Fla. and Louisiana.  Most south Fla. school districts will close on Monday. Tampa could have rain and salt water flooding.  The northern Gulf Coast has been given 60 hours to prepare.  The Weather Channel has put tornado condition in Fla. at an 8 out of 10.  Peak winds look like they'll occur around New Orleans, perhaps a.peak 100 knots.
     But this is weather, and 60 hours is a very long time in storm development, so it could be a damp squib or a howler.  Better safe than sorry if you're between Pensacola and S. Texas, though.  Here's a blog on WeatherUnderground if you'd like to be confused further:

  194. It's perhaps worth pointing out that a Cat.3 is about to smack the Korean Peninsula.  Samsung shouldn't have appealed that Apple judgement, Stevie appears to still be looking out for them.

  195. Zero
    Samsung apeals, very stupid unless they have no money or choice.

  196. Samsung
    I have and like 6 of their monitors, my trading system, who makes their disc drives? Seagate? I have a few and they and Seagate  seem to be a problem, Western Digital don't fail unless Shadowfax the Abbyssinian cat decides they need to be stored on the floor with a paw attack! Samsung seems desparate and worthy of short consideration. FWIW

  197.  Back five hours later, checking out Isaac's development.  I'm sorry to report that there is a decent chance of another New Orleans hit; the models are starting to converge, and it is looking like a broad front from Pensacola to New Orleans, with Mobile Bay the possible center, Fla/Ala border, more or less, but maybe reaching as far west as Houston.  Isaac is looking like a Cat 2, at the minimum, and the New Orlean's levees probably can't handle the storm surge.  Evacuation routes might not be adequate.  One model has a S. Fla. landfall in 24 hours from now.  The storm is shrimp-shaped at the moment, hard to call, but lots of heat and convection.  All indications point to a large and powerful Gulf of Mexico hurricane.

  198. NSA Domestic Spying – and how, I wonder, does anyone think their 'vote' will affect this?

  199. Good morning! 

    No progress in Europe so far, same old BS:  

    As with the meeting between Angela Merkel and Greek PM Antonis Samaras, the latter's get-together with Francois Hollande yesterday produced the usual platitudes and some fantasy too: Hollande wants Greece to stay in the euro but says the country must get its act together (or words to that effect), "while making sure that it is tolerable for the population." Should Greeks laugh or cry?

    AAPL may be up on Monday, spiking the Nas:

    More on the Apple-Samsung verdict: Samsung (SSNLF.PK) has been ruled guilty of infringing additional Apple (AAPL) patents via more than a dozen devices. The jury has also ruled Samsung's infringement of 5 patents was willful (could produce multiple damages), that its parent company induced subsidiaries to infringe, and that none of Apple's patents are invalid. One minor win for Samsung: the Galaxy Tab is deemed innocent of copying the iPad's design. (live blog

    More on Apple-Samsung: The jury rules Samsung (SSNLF.PK) owes Apple (AAPL) $1.05B in damages. Apple has been declared innocent of all of Samsung's software patent infringement claims, and Apple has been barred by patent exhaustion from enforcing two patents. No damages for Samsung. AAPL +1.3%AH. Expect Samsung to open lower in Seoul on Monday. Mobile patent plays such as InterDigital (IDCC) and VirnetX (VHCcould rallyon the verdict. (more) (live blog)

    Apple (AAPL) has until tomorrow to outline which Samsung devices it wants to ban from being sold in the U.S. following the U.S. company's massive patent win. A hearing is provisionally set for Sept. 20. Following the verdict, Samsung (SSNLF.PK), might need to postpone introducing new devices so that it can make design changes. Meanwhile, the WSJ, Bloomberg (I,II) and Reuters provide accounts of jury's deliberations. 

    "Come on. This is farce," says tech legal site Groklaw, incredulous Apple-Samsung jurors took only 21 hours to deliberate over a 700-question form one lawyer says would take him 3 days to understand. Groklaw is also unimpressed with contradictory statements from jurors, several verdict inconsistencies, and the fact jurors reached a decision without reading a 109-page instruction form(.pdf). Some lawyers are predicting this case will reach the Supreme Court, due to the issues it raises about UI and design patents. (more)

    A bit of non-patent Apple (AAPL) news: AllThingsD reports the iPad Mini will be announced at a separate October event, rather than at the expected Sep. 12 event where the next iPhone will be introduced. This is in-line with recent speculation, and (if accurate) means Apple won't record any Mini sales in FQ4. (Apple-Samsung coverage)

    Samsung (SSNLF.PK), unsurprisingly, plans to appeal its harsh legal loss to Apple (AAPL). Apple's response to the jury's verdict: "We applaud the court for finding Samsung’s behavior willful and for sending a loud and clear message that stealing isn’t right."Samsung's response: "It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies." (more)

    PhotobucketAnd other news:

    Wondering why the markets aren't pricing in armageddon? Why no one can see the looming fiscal cliff? It's because most investors believe about as much in the fiscal cliff hype as they do in the Mayan calendar signaling the end of the world on December 21st. Nevertheless, the issue is something that will affect us in fewer than six months, could have a devastating impact. One thing remains for certain too – the problem is unlikely to be resolved prior to the election, and investing around it is going to continue to be a thorny problem for the foreseeable future. 

    While Wall Street ramps up its end-of-year projections for the stock market, veteran money manager Dennis Gartman is bailing out. Why? Call it intuition. He feels that additional stimulus from the Fed isn't as big a lock as many market participants expect, and comments about the economy growing sufficiently from insiders like St. Louis Fed President James Bullard recently just reinforce that view. Another red flag is coming from the steel sector. "The steel industry in China is a literal disaster and steel share prices broke hard yesterday."

    Most laid-off US workers take pay cuts in new jobs (AP)

    To eat … or to drive? Draconian concept, yes, but that's the choice many Americans may be faced with soon as the worst drought in decades pits meat producers against the ethanol starved oil companies. The issue of food versus fuel and surging corn prices crosses both economic as well as ethical borders, and is growing louder in Washington, D.C. as ripe fodder for an election cycle. In the end, it's likely big oil will win out, because as long as it is more profitable to produce a gallon of ethanol from corn than selling it for animal feed, not much will change. 

    The gold standard returns to mainstream U.S. politics, as a "gold commission" is part of the official Republican party platform. The notion is widely condemned as "a clown idea"; even economists who support Romney believe "there are better ways" to achieve stability. But rather than a gold commission, another commission idea may have more staying power: one that would examine the Fed and its mandate.

  200. Congrats to ZZ on a very restrained response to a very obnoxious attack! 

    AAPL/Chas – I take it you mean the Momo play of the $600/650 bull call spread.  The problem with Jan spreads is you really don't realize all your profits until Jan.  If it hits $40, I'd just close it early as it certainly is worth risking $40 to make 10 more in 5 monts.  Logically, you can make more than $2 a month with $40 cash (5%). 

    AMZN/Rev – They can be a game-changing company but, at some point, they need to make a profit.  To support a $112Bn market cap, they need to make $5Bn profit at some point.  Their best year was $1Bn so lets say they magically double profit margins (although, in fact, they are going down) and are able to make $2Bn on the same $50Bn in sales.  It's taken them 20 years to get that much and the only reason they have such impressive sales growth is exactly what that article is crowing about – they are acting as the back door operations for other retailers and there is NO WAY those margins are ever going up because they'll make it unappealing to the retail customers so the only upside is the hope that AMZN screws them over and steals their direct business – what a model!  So, giving them a presumed 100% increase in profit margin they need to get to $125Bn in sales to drop $5Bn to the bottom line so they need to grow sales at 25% for 5 years while doubling their profit margin to grow into their current valuation.  My theory is that, somewhere between now and then, they may hit a bump in the road that causes people to question their Biotech Start-Up Level valuation.  

    By the way, WMT had $9Bn in online sales last year as they begin to seriously go after that market.  It's only 2% of their total sales, so room to grow there.  I wonder whose market share they will eat into?   WMT took a 51% share of Yihaodian in China – an E-commerce web-site so I imagine they are pretty serious about this. 

    Billionaire/1020 – That's a very nice story.

    Real life/Shadow – It's interesting how you can so easily see that others can't understand engineering the way you do while you offhandedly dismiss decades of sales and marketing experience as valueless because you know better.  As you say with the book, you can have the greatest $999 specialty item in the world but the cost and effort to identify and market to enough people to make a living.  I could point to thousands of examples of companies where this has played out and you certainly know this if you've ever been to an electronics store anyway – what's the mix of people who buy "the best of the best" vs. how many people buy mid-range and low-range items?   Anyway, not going to argue with you – do what makes you happy but don't blame the support network you're using – can you imagine what it would cost you to set all that stuff up on your own?  A lot more than 20%.  

    VXX/Jfaw – At this point, we have to assume an up week next week and that will leave 3 weeks to expiration with the EU meeting on the 12th so rolling back a month to October takes priority over rolling Sept positions to better strikes.  The point of the VXX is that, at some point, we expect volatility to return.  If it never does, there's nothing that will save them because that's what the bet is all about. 

  201. Oh boy oh boy oh boy…..Fantasy Football is here.  My draft is tonight, oh boy oh boy oh boy.

  202. Phil/AMZN – I can't fault your reasoning in any way.  However, I'm rethinking my short to medium term shorting of AMZN because it is so hard to say when the fundamentals come into play.  My case is the old saw "the market can stay irrational longer than the investor can stay solvent."  This especially applies to companies that are perceived to be innovative and game changing.  As I deploy my scarce investment resources, I'm not sure waiting for this one to blow is my best bet.  I find it very hard to short things well.  I tend to be better at picking up unfairly punished stocks when on the rebound than I do at shorting high PE companies.  I like your advice to stay in a lot of cash right now and wait for better opportunities, selling a little premium along the way.  I'm ready for whatever comes out of Jackson Hole, QE to infinity or a big drop, either way I'm ready to deploy my cash.

  203. Oh, and read this article.  Guns or not, we need to revise a few laws in this country…..

    Under federal law, you only can use guns with a maximum three-bullet capacity if you’re hunting migratory birds. Even the most completely mindless faction in the National Rifle Association appears willing to give that a pass.

    So the guy driving toward the Sikh temple with the high-capacity magazine on his gun was legal until he started shooting. The guy sitting in the duck blind, no. Mull that one over the weekend.

  204. Pharm/Seminar – I will pay for the second one :) . It will be worth it as you have a 90% success rate. 

  205. Phil- So with AMZN- our catalyst is earnings and it looks like they are doing Q3 following EXP. date in OCT.- Should we just sell and collect premium in Sept. and Oct. weeklies  to finance a play in JAN? It just seems that no matter how irrational their valuation, people investing in the company do not care. Then the obvious danger is that come January they have good earnings from the holiday season. Is the play here on a general market decline and hoping rational investors will flee the high P/E stocks. I am trying to get in your strategy on this one and understand the moving pieces. Thanks

  206. Likely Republican presidential nominee Mitt Romney said he would replace Federal Reserve Chairman Ben Bernanke when his term expires in 2014.

    Guess that might make me do an about face…..QE3….here we come.

  207. Anyone have those charts of the depression from 1929 thru 1940?  Didn't the double dip happen four years later, 1933…and where are we now after 2008?

  208. Eli Lilly's (LLY) Effient blood thinner surprisingly failed to perform better than Plavix, an older drug, in study of 9,000 patients. While the outcome is a blow for the hopes of Eli Lilly and partner Daiichi Sankyo in expanding the use of Effient, it's good news for AztraZenica (AZN), whose Brilinta does have an edge over Plavix. The results were reported at the annual congress of the European Society of Cardiology.


    OK, now an official

  209. Jerconn – there is a ton of chatter out there, calling for a megaphone topping pattern.  Some think a ~10% drop followed by a huge move up to the top of the channel to start the 'Jaws of Death' pattern.  So, if it plays out, we should get near or exceed the ATH b'f the decent.  Most likely in the Q1 of 2013.

  210. Phil- Sorry another question- SCO and USO,  why do we play both ( calls for SCO, puts for USO ) if they are not basically pursuing the same outcome ? I know it must have to do with pricing of futures but am educating myself for the purpose of simplification in number of positions. Thanks

  211. No SWW the last two Sundays.  Did I miss something?

  212. Pharm/Dog tease,
    one of my favorites!!
    Check out "Women, Know your limits" — it also sort of fits in with the recent discussion of returning to the gold standard.

  213. Pharm – thanks for the update…if there's a ton of chatter out there then it's probably not going to happen…but I'll be very defensive first quarter 2013 anyway…

  214. repi / SWW – Lat week SWW announced a delay in the next issue until…I think it was… next year.

  215. LLY- so, Pharm- I take it this is on your short list again?
    I have shorted this before but it fell off my radar of late- I just got tired of watching it. Following are some recent excerpt from the S&P report on LLY:
    July 25, 2012
    LLY posts $0.83 vs. $1.18 Q2 non-GAAP EPS on 10% lower worldwide revenue.
    Capital IQ consensus forecast was $0.77. Says Zyprexa patent expiration partially
    offset by significant growth in other products. As a result of strong underlying
    sales performance, favorable impact from a stronger dollar on its cost of goods
    sold, raises '12 non-GAAP EPS guidance to $3.30-$3.40 range.
    July 25, 2012
    43.11***): Following Q2 results, we are increasing our non-GAAP '12 EPS
    estimate $0.09 to $3.35.We raise our target price by $3 to $45, based on revised
    forward P/E and DCF assumptions. Impacted by a 73% drop in sales of off-patent
    Zyprexa, Q2 non-GAAP EPS fell 30% to $0.83. However, EPS beat our $0.73
    forecast, helped by robust sales of Cymbalta and animal health products, as well
    as a positive forex impact on gross margins. While we note LLY's robust R&D
    pipeline, we remain cautious on its key solanezumab Alzheimer's drug. Also,
    Cymbalta's U.S. patent expires in December 2013. /H. Saftlas

    I always take these with a generous grain of salt but and this does not sound too ominous.
    Would appreciate your read.

  216. Phil
    I have regrets on the responce to ZZ. I don't claim to be able to overcome any business model. I am only stateing what with limited resourses canot be done, that being entering the low and mid end market. If you remember my goal on day trading was $100 per day, I was outdoing that until my stupid braking the rules because it worked well a few times. This same idea applies to business, if I can make a little 6 to 12 times per year that helps and breaking in big volume is a nice dream. I also stated making the BBBW  minimum of $200,000 per year is dream, $50,000 is a dream unfulfilled for many years. Maybe someone will step in but I don't know how to find that person.  You may have missed that those zip start sites are hobbies and side projects as alturnatives to classroom acceivement. I do think it is a good thing but where has the USB light gone and more important why. I don't have a factory  or access to $.25 cent labor. I am very disappointed that even the Chinese sqeeze all profit potential. This is business as usual all to the top. I am determined not to have another great idea stolen while not having the money to protect  them.
    Why do people now have to enter my house, spying electronicly accross the street gives no clue what all the electronics are for. Yes they put dumb spy program on my computers. But my ideas are not on them,  calculations are on paper and all the details are in my head. Searching through my "stuff" only proves it has happened, I can't find what I worked on Tuesday night Wednesday afternoon. I do have that memory thing like you and don't need to put things on the computer or even use the computer for that. Yes they can watch what I search for but until they tap my mind have no clue why. I bought a $35 book, 338 pages for detailed explanation of 1 thing, 2 pages, 15 minutes and it was exactly what I already did but less, because of spying the author has no clue what as I don't ever tell details on any level. I warn AAPL is over extended, don't put up details just like I want whoever is watching to know where I am at. Posting on this site has effects and maybe like almost 2 years ago and last summer will end the problem. Spying really only works when undetected.
    scottmi  Excellent not new to me! PHIL take some time to watch it. Consider the stae it is in and assotiation to another of my outlashes. With outrage and reason! You are the only one that could change anything. People listen to you and not the rest of us, you have the power. Hope you can see reason to use it, I would.

  217.   This is where we are right now.

  218. Regarding last week's Al Jazeera report on BP Deepwater Horizon oil spill, there is a rather technical debate going on regarding the potential effects of the storm on the Gulf of Mexico residual oil on the seafloor.  It is at least clear that whatever is down there will be kicked up, whether there is still crude or it has broken down, and much tar dumped on beaches.
     But the most serious effect may be as follows: "…much of the crude will break down but the worst most carcinogenic compounds are very persistent in the environment. The cyclic hydrocarbons do not break down, those little molecular rings just clump together to form ever-more complex polycyclic compounds. Even when they are digested by bacteria or anything else, the metabolites are just other dangerous polycyclic hydrocarbons. Just because we buried the problem in the deep ocean doesn't mean it went away."      
    One wag responded: "well…in all fairness to BP….much of the oil can now be found inside fish, shrimp and oysters…along with much of the Corexit…"  If for no other reason than further press coverage [I haven't seen this picked up by the mainstream press yet] I would be careful with long BP positions.

  219. Louisiana gov. calling for voluntary evac of New Orleans.

  220. Most important Zero is this:

    Projected Path

  221. Engadget take on that Apple-Samsung patent dispute:

    In the end, consumers will lose. Companies high and low are scrapping potentially amazing product ideasright now for fear of legal retaliation. Not just from Apple — this ruling is way, way bigger than that — but from any company with a patent on [insert obscure shape here]. I hope we're happy.


    Especially as I own technology from both companies, I have incredibly mixed feelings about the verdict. I agree with many of you that software patents ought to be curbed or even given the boot — they often cast too wide a net, and some of them have workarounds so trivial that you wonder why the patent holder bothered. If it were up to me, Apple wouldn't sue over software patents at all. You'll even catch me agreeing that a few things like multi-touch are closer to being "obvious" features that wouldn't justify patents to begin with, even if their exact implementations aren't as simple as some would like to imagine.

  222. Yes, Stj, gasoline prices are already up .09 on the Lousiana/Alabama coast, and the price of gas containers naturally doubled.  There is also 97L coming across the Atlantic, with a 50% TS probability by NOAA, although where it would end up is anyone's guess.  The problem with Isaac is that it is very big, and while it is being assigned only a CAT 1 or 2 wind strength probability, the CAT scale doesn't take into account storm surge, which is much greater with a storm of this size, over 1/3 more at least.  Moreover, there are forecasts calling for a CAT 3 at landfall, there is no way to pin it down right now, but there is an estimated $36 Billion of Gulf Coast real estate at risk.  
    And in case you were wondering about Asia, there's this:  "Massive Typhoon Bolaven slams Okinawa, Japan and heads for Koreas

    August 26, 2012 – JAPAN – A massive typhoon began to make landfall Sunday over Okinawa, bringing winds more ferocious than even the typhoon-weary Japanese island has seen in decades. It will likely be the strongest since 1956, said CNN International meteorologist Tom Sater. 

    With a cloud field of 2,000 kilometers (1,250 miles), Typhoon Bolaven is 20 times larger than Okinawa’s length.

    “It’s been very, very severe,” said storm chaser James Reynolds, on the northwestern coast of the island. Tree branches were flying through the air amid torrential rain, he said. The infrastructure on Okinawa is designed to withstand violent storms. “Everything’s made of solid concrete,” said Reynolds. “Utility poles are so wide you couldn’t even put your arms around them,” Reynolds said. “All the houses are built with concrete. There’s no such thing as a beach house in Okinawa because it would just get destroyed by a typhoon.” Still, the power was out where he was Sunday. On Sunday evening, Bolaven was carrying sustained winds of 213 kilometers (132 miles) per hour, with gusts reaching 259 kilometers per hour (161 mph) — the highest since Typhoon Naha in 1956. Bolaven was traveling northwest at 15 kilometers per hour (9 mph). The storm is on course to hit China and the Korean peninsula. “It’s roughly the size of France to Poland in land mass,” said Sater. “The typhoon is producing wave heights of 16 meters high, so the possibility is there for a storm surge of 8 to 10 meters high on the coastline. "

  223. The "36 Billion residential property" number came from residential data analysis company CoreLogic, quoted today [Sunday] by Reuters.

  224. Wish I could have helped with travel agencies.
    I will continue to try, it uses up time. Not much return on effort.
    About to give up high end. I will use one and dump the other or stip and sell the parts, loss either way.
    This is what has happened with everything. Nothing ever works out.
    Romney and Ryan? Brilliant solutions!
    Well PSW I am reality and add that to the well off.
    A market crash would help!
    AAPL will prevent that, only takes 1 company with unpaid winnings, earnings in question.

  225. Sorry please delete it.

  226. Hello Everyone!  Just returned from a marvellous vacation.   Now back  from the beautiful eastern coastline of Newfoundland.  Sightseeing, waterskiing, sailing, fishing, and getting to know all my wife's in-laws and outlaws.  It's true!   Some of her ancestors made a small fortune salvaging shipwrecks off the coast of Newfoundland in the late 1800s and early 1900s.  One of her uncles recently made a not-so-small fortune in Spain turning castles into hotels.  I met him at a party.  Anyway, it was a great time, and I somehow resisted the urge to think much about trading,  but now I'm ready to get back to the also fun challenge of making money in the options markets.   I'll be starting to catch up on reading tomorrow and perhaps before the week is out we can hitch a ride on a MoMo or two.  See you in the morning!   

  227. electricity flows negative to positive
    Never posted during market hours ignore or get my point.
    Electric field E=Kq/d x2 in newtons/coilomb 6.25×10 x18 = 1 coulomb
    force for flow F=Kqq1/d2
    then F=qe in newtons
    now you have electricity flow – to + now lets modify it by semi conduction
    this takes exponetial force by breaking  down dielectric strength of the mixing insulators with conductors
    it is done with potential energy, more math.
    How many now understand electrical flow? This is proof, look it up.
    Amplifiers use this with capacitance, indutance, and resistance. Simple E= RI and advertised by P=IE
    E=volts potential energy R=resistance I= amps force in flow P= power in watts advertised as  the spec you need difference in good and bad power I=100 E=1 good E=100 I=1 Of course this is an extreme example of the math.
    Some High end amps can flow 50 amps or more Sony dream of 1 for a milli sec. That big flow controls a speaker cone movement and that stops distortion. That is what you pay for.
    Knowing this is worthless but math works in my second education business and economics also worthless!

  228. Welcome back, Iflan. 

  229. Phil
    You and all helped me decide to quit a project. Hope you are right but we will never know.  

  230. Welcome back LFlan!  We've missed you!  
    Especially your trading oriented, non-political, non-personal, non-religious, take on how you make money and manage you're accounts.  Thanks for sharing with the group!  

  231. Good morning!  

    Much more subdued reaction than I thought to AAPL news.  I guess there are winners (AAPL, MSFT, NOK) and losers (Samsung, GOOG, many similar designs, non-AAPL chip suppliers) but AAPL is only up to $677 pre-market – up about 2%, which seems light to me.  

    Samsung (SSNLF.PK) joins Intel (INTC) and TSMC (TSM) in investing in ASML, with the South Korean company agreeing to provide the Dutch chip-equipment maker with €276M for R&D. ASML has now raised €1.38B from the three chipmakers for this purpose. Samsung is also buying a 3% stake in ASML for €503M, bringing the total customer equity investment to €3.85B. (PR)

    Samsung (SSNLF.PK) is down 6.9% in Seoul after losing big to Apple (AAPL). Much of Samsung's $4.5B Q2 net profit was tied to smartphone sales, hence the risk of U.S. injunctions and less competitive products is being taken seriously. Still, some think Android (GOOG) can remain competitive even if it can't use the software patents Samsung was declared to infringe, and others see Apple's efforts to portray Samsung products as Apple clones giving Samsung a marketing boost.

    More on Apple-Samsung: Though Samsung is appealing to the CAFC, the odds could be tough: an AP article notes only 19% of the cases handled by the CAFC in the 12 months ending March '11 were overturned. However, since then, Apple and Research In Motion have managed to get patent-related jury verdicts of $625M and$147M, respectively, tossed out. Expect Samsung to focus on verdictinconsistencies and evidence of prior art (and the jury's possible overlooking of the evidence).

    That's pushing the Nas up 0.4% – all AAPL – and we're slightly green and Europe is flat despite a really disappointing session in Asia with the Shanghai breaking below 2009 lows and the Hang Seng finishing at the day's low as did the Nikkei DESPITE supportive words from Chairman Wen.  

    Huge downward pressure on the Yen (stronger) was the problem for Japan, who pumped the Yen up (weaker) to 78.85 pre-market and opened the Nikkei gapped up to 9,150 but the Yen dropped back during the session and the market followed with the Yen finishing at 78.66 and the Nikkei at 9,085.  

    2:49 AM Asian shares are mixed as investors mark time ahead of the central bankers' get together at Jackson Hole at the weekend. Japan+0.2%, Hong Kong -0.4%, China -1.3%, India -0.1%. South Korea-1.9%, Samsung -7.45%.

    China’s Stocks Drop to 2009 Low as Slowdown Spurs Profit Concern.

    Chinese Industrial Companies’ Profits Drop for Fourth MonthChinese industrial companies’ profits fell for a fourth month in July, a government report showed today, adding to evidence the nation’s economic slowdown is deepeningIncome dropped 5.4 percent last month from a year earlier to 366.8 billion yuan ($57.7 billion), the National Bureau of Statistics said in a statement on its website today. That compares with a 1.7 percent decline in June and a 5.3 percent drop in May.

    New records for Hong Kong real estate. As Hong Kong property again sets new highs, it’s getting harder to find any conventional yardstick to make sense of these stretched prices.

    Japan Contraction Risk Rises on Faltering Global Demand: Economy. JPMorgan Securities Japan Co. forecasts a 0.3 percent annualized decline in gross domestic product in the three months through September after previously seeing 1 percent growth. BNP Paribas SA estimates a 0.9 percent fall after earlier predicting no change.  Japan will downgrade its assessment of the domestic economy for the first time in 10 months in a report to the cabinet tomorrow, according to the Nikkei newspaper. The nation had a wider-than-estimated trade deficit in July as shipments to the European Union fell 25 percent from a year earlier and those to China slid 12 percent.

    Kloppers Sees Long-Term Price Decline for BHP’s CommoditiesBHP Billiton Ltd. (BHP), the world’s biggest mining company, expects “long-term” price declines for its commodities as slower economic expansion in China weighs on demand, Chief Executive Officer Marius Kloppers said

    Hedge Fund Bullish Commodity Bets Jump to 15-Month HighMoney managers’ net-long position across 18 U.S. raw materials rose 10 percent to 1.32 million futures and options in the week ended Aug. 21, U.S. Commodity Futures Trading Commission data show. Holdings doubled in two months to the highest since May 2011. Bets on corn are the most bullish in 15 months amid the worst U.S. drought in 56 years, while wagers on gold rebounded and platinum more than doubled.

    London is closed today for a holiday so European trading is going to be light, as should the effect on us at 11:30.  

    3:56 AM EU shares open mixed ahead of the German Ifo index of business sentiment today, and, more significantly, Jackson Hole at the end of the week. Euro STOXX 50 -0.2%, Paris -0.3%, Frankfurt-0.2%, Madrid flat, Milan +0.2%, London closed. Nokia (NOK+9% in Helsinki following Samsung's massive patent loss against Apple.

    Germany's Ifo index of business sentiment falls to 102.3 in August from 103.2 in July vs. consensus of 102.6. That's the fourth decline in a row for the Ifo as companies deal with the consequences of the eurozone debt crisis. Current conditions 111.2 vs. 111.5, business expectations 94.2 vs. 95.5.

    As with the meeting between Angela Merkel and Greek PM Antonis Samaras, the latter's get-together with Francois Hollande yesterday produced the usual platitudes and some fantasy too: Hollande wants Greece to stay in the euro but says the country must get its act together (or words to that effect), "while making sure that it is tolerable for the population." Should Greeks laugh or cry?

    ECB Weighs Flexible Targets on Bond YieldsEuropean Central Bank officials are considering steps to keep government bond yields in struggling euro members from rising too high, without committing to explicit caps that could threaten the central bank's balance sheet and independence, according to a person familiar with the matter. The central bank wants to help bring down government financing costs through targeted purchases of government bonds, while preserving their flexibility to change course when needed and to maintain pressure on governments to rein in budget deficits and revamp stagnant economies.

    The latest bond-buying scheme that the ECB is considering involves using informal, flexible yield targets, the WSJ reports. It's a strategy that would theoretically preserve the bank's ability to change course and maintain pressure on governments over reform and budgets. Unlike before, the ECB would divulge far more details of its activities in order to guide the markets as to its intentions.

    Britain’s richest 5% gained most from quantitative easing – Bank of England (Guardian)

    The winners and losers of QE, by the BoE (FT Alphaville)

    How The BoE Is Making The Rich Even Richer (

    Spanish Yields Vulnerable to Opacity of ECB Plans: Euro Credit. The rally that's driven Spain's two-year funding cost to below 4% from more than 7% is vulnerable to the ECB's plans to buy bonds arriving a day late and a euro short. "We have concerns that the market is beginning to expect too much from the upcoming ECB meeting," said Jack Kelly, who helps oversee $250 billion at Standard Life Investments in Edinburgh. "We have not been participating in the recent observed buying of peripheral sovereign debt."

    Spain Deficit Pain Bites Consumers in Prelude to Rajoy AusteritySpanish Prime Minister Mariano Rajoy’s austerity drive will intensify this week as a sales-tax increase tightens the squeeze on consumers whose spending is already plummeting. 

    Spain expects to use approximately €60B of the €100B available for its bank rescue, Economy Minister Luis de Guindos tells the NYT. De Guindos also says that the government could commit to stronger fiscal measures if the ECB were to buy its bonds. He expresses confidence about the property market as well, saying that in some areas, there's even scarcity.

    Economists have uncovered a discrepancy that allows Spain's 17 regional governments to exceed their agreed 2012 budget deficit targets by €1.2B, or 8%. "The government has either made a significant error in the accounts…or they are trying to hide something," says economics professor Juan Rubio-Ramirez. Either way, the credibility of Spain's program to cut its deficit could take a hit.

    Eurozone crisis: German central bank boss warns against more ECB loans. Jens Weidmann said a wave of bond buying by the European Central Bank could become 'addictive like a drug'. 

    TNS Emnid survey finds 52% of Germans have little confidence in the European Central Bank's policy to tackle the sovereign debt crisis. 28% have no confidence, while only 10% fully trust the ECB.

    Bundesbank President Jens Weidmann makes the cover ofDer Spiegel, repeating his usual arguments against ECB purchases of sovereign debt. It sounds like a man resigned to losing the debate, but wanting to stay relevant to policy going forward (as opposed tofollowing his predecessor Axel Weber by quitting). 

    The will for austerity is waning and crisis may not be far away. Recently a number of economists have started to say that George Osborne should end cuts to capital spending (government investment in capital projects) and perhaps even raise it – maybe spending some more money on housing or roads or airports.

    Greek Request for 'More Time Equals More Money'Greek Prime Minister Antonis Samaras, who met with German Chancellor Angela Merkel on Friday, says his country needs more time to meet its obligations. German editorialists argue that asking for more time amounts to asking for more money and insist that Greece should stick to the schedule.

    German Finance Minister Wolfgang Schaeuble says new aid package "isn't the right path" for solving the debt crisis, citing an interview. "More time generally means more money. That very quickly means a new program," citing Schaeuble. The need for another package six months after the last one would "not be a trust-building measure," he said.

    Rainer Bruederle, the parliamentary caucus leader of Germany's Free Democratic Party, said he opposes giving Greece more time to meet requirements tied to its rescue, citing an interview with him. "It isn't about a few days or weeks but about discipline and the serious will to reform," he said.

    Alexander Dobrindt, a general secretary of the Christian Social Union, said he sees no way around Greece leaving the euro area, citing an interview.

    Merkel Warns Government Allies to ‘Weigh Their Words’ on Greece

    The Up-To-The-Minute Guide For Understanding Europe.

    What a mess, right?  The Dollar is still down at 81.5 which means, looking at the Big Chart, that we still have to move those lines up 2.5% which means (and try to visualize this) the Dow bounced off it's 200 dma (which doesn't move on the Dollar) and stopped at the -5% lines on Friday.  That means 13,200 is going to be very critical today if they can even test it.  The S&P tested the Must Hold line and bounced there, 1,400 remains a critical break-down line.  Nasdaq struggled to get back to it's Must Hold level at 3,075 and will be over on the AAPL gap up this morning – they need to hold it (which is why it's called "must hold," of course).  NYSE is 2.5% below it's must hold and also bouncing off the 200 dma so they MUST HOLD 8,000 but there's nothing impressive about bouncing off your 200 dma – it's when you fail to do it that causes us to all head for the fall-out shelters.  And now you can see why the RUT did an air bounce above the line – because if you adjust those lines up 2.5% and bring the dma's along – you can see that what the RUT actually did was bounce off the 200 dma but it's still over 1.25% below Must Hold and, since the adjustment is 20 points – we want to see the RUT over the adjusted 50 dma at 813.  

    I hope that makes sense to people – it's important you take currency changes into account when looking at charts or they can be very misleading.  

    So, where were we?  Oh yes, the Dollar is at 81.575 and oil is $97.23 aided by the hurricane shutting some production in the Gulf.  Gold is $1,675, silver $30.96 on a huge weekend pop to $31.22, copper still can't break $3.50, nat gas $2.744 but gasoline popped a dime to $3.007 I think more so because there's a refinery fire in Venezuela than the Hurricane – which doesn't look like it will be too big.  

    Indicator Update: Expecting too Much from Jackson Hole?

    Not Even Bernanke Knows What'll Happen When The Fed Sell Trillions Of Dollars Worth Of Bonds.

    With the Fed considering open-ended bond buying that would not be bound by a fixed amount or time frame, finance professor Steve Wyatt says it would be a fairly radical move. It would be like the Fed fixing a goal for the price levels that would force it to compensate for any divergences from its policy aims. That would mean that the Fed would be willing to tolerate higher inflation to bring down unemployment.

    Household income is below recession levels, report says (Washington Post)

    The US Job Market Is Just Awful For College Graduates.

    Goldman(GS) Explains "Where To Invest Now".

    Insurers face big agriculture lossesThe insurance industry faces its biggest ever loss in agriculture as the worst drought to hit the US in more than half a century devastates the country’s multibillion-dollar corn and soyabean crops, triggering large claims.



  232. AMZN/Rev – There's no way to know when it will drop.  Our position in the $25KPA is $5K, which is a lot but we've already hedged it with the short Sept puts while the $25KPM has just 5 contracts for $2K because it's a risky trade that we may have to roll several times – not in any way, shape or form a sure thing.  

    AMZN/Villash – See above note.  As I said yesterday – there's no earnings that I believe they can possibly report to justify a 300x multiple on the earnings and it won't take much of a miss to drop them 10-20%.  By mid-Sept, we will be rolling the Octobers further back in time – if the markets survive Jackson Hole.  



    LLY/Pharm – I don't get that.  Surely they know how to test it BEFORE they go and do a major study and embarrass themselves, don't they?  Does it not matter in the end as long as they have another product to compete with?  Seems to me a lot of these companies could benefit from being a little more patients before they rush to trial like that.  

    SCO/Vill – SCO is an ultra-short on oil.  As they are set up now, one is a shorter-term target than the other but the fact we have our SCO longs means we'll be very happy to take a small profit off on USO as we'll still have our main position in Oct.  

    SWW/Rperi – It's on hiatus.  Might be one next week but future of it is currently uncertain.   

    Zip start/Shadow – You may have missed that the point of the crowd funding is you have an audience of people EAGER to invest in gadgets and all I was suggesting is you come up with an inexpensive (under $100 or under $20) gadget that you can PLAN to mass market if you raise, for example, $250,000.  The way the crowd funding sites go is you don't give them shares so the people WANT to buy your do-dads in exchange for a "special edition" of the product or some sort of recognition but the point – for you – is YOU SELL $250,000 worth of product.  So all I was saying to you is, rather than reject that out of hand and continuing to put huge amounts of time and effort into a $1,000 item that nets you $800 "6-12 times a year" – you may be better off taking some time to study what kind of products people like to crowd fund and thinking about something you can make yourself (or have made in China).  While I will point out that all your "valuable" ideas that you are protecting from thieves are worth $0 if your fear prevents you from making them – I will also point out that you don't make ANYTHING under crowd funding until AFTER you have $250,000 worth of orders.  So, you can take any brilliant idea you have – see if investors are willing to fund it and no one will see your designs until after you file your patent with the $250,000 advance you get.  This is not complicated – it's a new and exciting way of getting financing that is perfect for small inventors.  By the way, there are hundreds of "nanny cams" on the market.  If you think people are breaking into your house, get a pillow with a camera and put it on your couch instead of looking for footprints in your computer.  If you don't want people to hack your computer from the outside when you are not home – turning it off works very well.  

    Income Portfolio – Very dull unfortunately.  May have to add more shorts.  

    Typhoons/ZZ – I went through one one summer in Tokyo.  Wasn't a bad one but it rained for a week straight in sheets – it was like a million people were dumping buckets of water from the sky.  We just resigned ourselves to being soaked any time we went outside and, when it ended, it was very strange to see clear skies – like we had forgotten the World could be like that…  

    Welcome back Lflan!  Sounds like a nice trip.  

    Project/Shadow – I just believe you should concentrate on things that have a proper strategy and can point towards real profitability down the road rather than a piecemeal solution.  

  233. Welcome back Lflan / One of the cool things about being married, is that you get a whole new family to explore.