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Will We Hold It Wednesday – Euro $1.25 Edition

FXE WEEKLYWould you pay $1.25 for a Euro?

Would you take $125,000 of your Dollars and convert them to 100,000 Euros and put them in your safe until Christmas?  The Euro topped out (non-spike) at $1.45 in April (when the markets topped out) and then plunged to $1.31 (10%) before bouncing back to $1.41 (66% retrace) and then fell all the way back to $1.27 (10%) came back to $1.34 (66% retrace) and then down to $1.21 (10%) and is now back at $1.25 (33% retrace).  

Fibonacci would be very proud to see his numbers still ruling the markets 800 years later but it certainly doesn't make us feel warm and fuzzy about the Euro's chances of getting back to $1.30, since $1.29 would be that 66% retrace before we'd expect a drop back to $1.06.

From the point of view of our 5% Rule, we've got a 25-point drop from $1.45 to $1.20 and our "weak bounce" is a 20% retrace to – $1.25 and $1.30 would be a "strong bounce" 40% retrace but a failure here would be a very bad sign and, as you can see from Dave Fry's chart, the 22 week moving average crashing down to $1.25.57 doesn't make it seem all that likely.   

In fact, $1.256 was our shorting spot for the Euro yesterday and there easy money to be made there several times already.  We don't usually bother with currency trades but that one seemed pretty obvious…  This morning obvious Futures trade I highlighted for our Members in an earlier note was going long on gasoline (/RB) off the $2.90 line as we head into oil inventories tomorrow and the hurricane makes landfall and knocks out a couple of refineries (they don't have to be damaged, someone always at least "trips" on the plug and shuts them down for 2 or 3 days to jack up gas prices – especially ahead of holiday weekends).  

Gasoline makes a nice, bullish offset to our generally bearish bets – including oil shorts, because we still have way too much of it – despite 4 consecutive weeks of heavy draws, which were caused by a drastic reduction in imports and a drastic increase in imports to fake the impression of US demand over the summer.  

How much of a reduction?  Thanks to the manipulation of our nation's strategic resources for profit by the Banksters, net imports of crude fell from 8.8Mbd this time last year to 7.6Mbd last week.  Shorting America by 1.2Mbd is 8.4Mb per week and EVEN WITH THIS BLOCKADE OF IMPORTS, the net draw on US stocks was just 3Mb last week.  

Before it was mysteriously redacted, World News had a great article titled "Forget LIBOR-GATE: Oil Market Manipulation Is Far Worse" which gave a nice overview of the manipulation that is perpetrated by Investment Banksters, who leverage their QE money to jack oil prices up as much as $35 a barrel (with $60 being a "fair price" – and XOM's CEO testified as much on Capitol Hill) by manipulating both the supply of and demand for crude and crude products.  I wrote a similar article back November, 2009 titled "Goldman's Global Oil Scam Passes the 50 Madoff Mark" but it didn't change anything – in fact, oil prices now are $10 higher than they were then, costing global consumers yet another $328bn a year for the barrels alone and another $328Bn as the pass-through costs and mark-ups flow through the supply chain (gasoline was only $2.06 when oil was $85 a gallon in 2009, now oil is $95 and we're long on gas at $2.90 – at least we KNOW we're being screwed and can bet on it!).    

What we need, according to Chris Christie is to "fundamentally reduce the size of our Government" – get them out of the way so Wall Street can control your life and steal your wages without being annoyed by the occasional, toothless Congressional inquiry.  It was touching to hear that Gov Christie's father put himself through college on the GI Bill – too bad that's one of the many programs on the chopping block under the Romney/Ryan budget

In other proud GOP moments, Pennsylvania Senator Rick Santorum proclaimed it the party of life, hailing the platform's pledge to ban abortion with no exceptions, even for the health of the mother, incest or rape (what Paul Ryan calls the "method of conception"). Tea Party zealots celebrated the harsh immigration stance premised on hunting down 11 million undocumented workers until they "self-deport."

The conventioneers reacted well to the "hard truths" that Christie said Romney would be handing out, including $900Bn in ADDITIONAL tax breaks for the top 2% (people earning over $250,000 a year).  If there was ever an incentive in this country to up your tax bracket – this is the best on yet – maybe Romney is on to something!

A 20% tax cut across the board above the extended Bush taxes, will hand millionaires an average $175,000 a year tax break. Corporations will get not only a cut in tax rates, but a "territorial corporate tax" system that exempts companies from U.S. taxes for anything reported as earned abroad, giving multinationals a million dollar incentive to transfer jobs and report profits abroad. They'll abolish the estate tax that applies only to multi-million dollar estates of the top 1%. And they vow to defend the favorite loophole of the wealthy: the 15% tax rate on capital gains and dividends and on "carried interest" (the obscene tax dodge that enables Bain partners and other private equity guys to treat their fees as capital gains rather than income).

Romney and Ryan also pledge to cut government spending dramatically, but won't say what they will cut. They do promise to lard even more on the Pentagon, already burning through more money than it did at the height of the Cold War in comparable dollars. And they put off cuts in Social Security and Medicare for a decade, because they don't want to disturb today's seniors who vote in large numbers. The cuts thus must come almost entirely from the 15% of the budget that pays for the domestic services of government — everything from education to FEMA, the agency Republican Governors are calling on to assist in response to Hurricane Isaac.  As Bob Borosage, of the Institute for America's Future, so aptly puts it:  

Behind the multi-million dollar stage in Tampa, beneath the glittery "reintroduction" of Mitt Romney as a pragmatic business guy, lies this "hard truth." With the US suffering Gilded Age levels of inequality, Romney will fight for more tax cuts for the very wealthy and the corporations. And with record numbers in poverty, Mitt's promise is to savage vital programs for the vulnerable. Forget about the Tea Party's ersatz anti Wall Street populism or the Christian Coalition's war on women. This is the candidate and the party of privilege, intent on lavishing more benefits on the few while savaging the already inadequate support for the poor and the vulnerable. That's the "hard truth" Chris Christie didn't bother to mention.

Get rich quick – you don't want to be a poor person in America if these people take over!  


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  1. Oil Lines

    R3 – 97.78
    R2 – 97.16
    R1 – 96.50
    PP – 95.95
    S1 – 95.22
    S2 – 94.60
    S3 – 93.94


  2. Bonjour  from Quebec City
    Very sad cannot play your /RB call as I cannot watch it—-hope everyone has a great trading day


  3. Sounds about right: Obama, Romney and the Low-Wage Future of America
    <quote thingy>
    One impetus for job growth, Faux writes in his book, is that as the super-rich get even richer, they’ll need more and more servants:
     

    They will hire people to take care of their large homes and to tutor their children in Chinese, tennis, and sophisticated strategies for getting into the best private schools and universities. They will hire personal assistants to shop, pay their bills, and run their errands. Coaches will come to their homes to instruct them in physical fitness, mental relaxation, and spiritual transcendence. They will need maids, cooks, and gardeners.
     
    Neither party, Faux argues, is addressing the economic realities that make this the most likely future for our country—because changing course would require massive government intervention. There’s a pretty strong consensus among all but the most ideologically conservative economists that the solution would involve considerable public investment in education, infrastructure, and green energy, new policies to promote domestic manufacturing, more activist regulation of the financial industry in particular, and a more progressive tax structure.
     
    But no matter who wins the election, Faux said, the governing elite has pretty much already ruled out that agenda, in favor of light regulation and governmental austerity.
     
    </quote thingy>



  4. Anyone have any references to articles about the fractal nature of markets?  In particular, in relation to TA and time periods?


  5. All you need to know about the deficit…

    http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/28/republican-national-convention-the-one-graph-you-need-to-see-before-watching/

    Not that you will hear any of that in Tampa though! Cutting taxes more will reduce the deficit apparently!


  6. Woo hoo on gasoline!  $2.9416 and heading up like a rocket!  

    Good time to short the RUT at 815 (/TF) and, obviously, stops at each penny on gas.  


  7. Phil-Thanks- great call on gasoline. I caught the bounce to 2.940.  


  8. Damit amazon… Can you just stick you neck below $240 so I can get out of these puts!


  9. PCLN – Sep 540 puts are down to $2.40. Double down at $2?



  10. Fractals/rain – lots of info out there, especially with the forex traders. Investopedia has some too:
    http://www.investopedia.com/articles/trading/06/Fractals.asp





  11. Good morning!  

    Gasoline done at $2.94, .04 is huge move ($1,680 per contract).  Always a good reason to check early morning comments as we didn't even break over $2.90 until after 8.   

    Normal morning pre-market pump in progress but 815 on the RUT futures should hang tough as it's pretty far ahead of the other indexes.  Europe had a huge recovery with Germany now green and the FTSE and CAC down about 0.3% – half of where they were before our GDP announcement, which was 1.7%, which was up from 1.6% and that's with inventories SUBTRACTING 0.23% so we're talking almost 2% here, which logically takes the Fed off the table because it would be total madness to stimulate a $16Tn GDP that's already growing 2% while commodities are already hitting us with massive inflationary pressures and the last two NFP reports have shown progress.  Also, Corporate Profits were 10% BTE:  

    Corporate Profits: +1.7% in Q2 (revised from previous estimate of 1.5%).

    Q2 GDP (2nd revision): +1.7% in-line with expectation, +1.5% prior. Price index +1.6% in-line with expectation, +1.6% prior.

    More on Q2 GDP: Hidden within the nonevent of a report (calender is closer to Q4 than Q2) are inventories subtracting 0.23% from GDP rather than adding 0.32% to the print as they did in the first revision. This bodes well for future GDP, says Mike Jackson.

    More on Q2 GDP: What stimulus? Government spending has been a negative to flat contributor to GDP since 2010.

    We have Pending Home Sales but mortgage apps were TERRIBLE earlier this morning and we have oil inventories and we have a note auction and we have the Beige Book – after which I must run to an afternoon meeting around 2:30 so get ready for a crazy day!  

    Big Chart – Keep in mind you have to shift all those lines up 2.5% so we have the Dow stopping at it's 200 dma but below the 5% down line, the S&P is holding the Must Hold for now but failed their 50 dma, the Nas is right on the Must Hold line (3,075), the NYSE is resting on the -2.5% line and the Russell failed the Must Hold line and is stuck between the 50 and 200 dmas so very telling which way the RUT breaks and that explains the desperate after hours pump job on them (up about 2 points while other indexes are flat) as they must get back over that 50 dma to keep the TA people bullish.  

    Wednesday's economic calendar:

    7:00 MBA Mortgage Applications

    8:30 GDP Q2

    8:30 Corporate Profits

    10:00 Pending Home Sales

    10:30 EIA Petroleum Inventories

    1:00 PM Results of $35B, 5-Year Note Auction

    2:00 PM Fed's Beige Book

    At the open: Dow +0.01% to 13104. S&P +0.1% to 1411. Nasdaq +0.12% to 3081.

    Treasurys: 30-year -0.09%. 10-yr -0.01%. 5-yr 0%.

    Commodities: Crude -0.33% to $96.01. Gold -0.09% to $1665.95.

    Currencies: Euro -0.2% vs. dollar. Yen +0.16%. Pound -0.1%.

    Market preview: Stock futures show vague stirrings of lifeafter the Q2 GDP upgrade despite it all being fairly expected, with the S&P benchmark +0.1%. Even further strong hints from Mario Draghi that the ECB is set for bondbuying fails to set too many juices flowing. WellPoint +4.55% after its CEO resigns, while Joy Global is -3% following earnings. Later: Pending Home Sales, Fed's Beige Book

    The put/call ratio on the S&P 500 moves to the danger zone- low enough to signal few enough are hedging against stocks falling as to almost assure that outcome. However, cautions Tommy Thornton, wait for indicator to turn higher before beginning to sell.

    MBA Mortgage Applications: -4.3% vs. -7.4% last week. Thirty-year fixed mortgage rate with conforming loan balances ($417,500 or less) decreased to 3.80% from 3.86% 

    More on Mortgage Applications: Off 5.7% last week, the refinance index has fallen for 4 consecutive weeks, though interest rates stopped going (barely) up 2 weeks ago, and is now at its lowest level since early May. A longer-term chart shows the purchase index essentially sideways for the last 2 years despite the purported housing recovery.

    "Watching this market is like watching the Titanic," writes a commodity broker of iron ore, off another 7% today to just $90/ton. The plunge will put to the test to the theory (also hopefully put forth in today's Joy Global earnings release) that Chinese ore production will come to a halt below $120/ton. Since when has oversupply/low prices caused the Chinese to cut back?

    While both Phoenix and Las Vegas had housing booms and busts for the books, Phoenix has seen a far sharper recovery in prices. Does Phoenix have a better economy or is something else at work?

    Going before the microphones after meeting with Mario Monti, Angela Merkel says she agrees with Mario Draghi that granting the ESM a banking license is incompatible with EU treaties (has she been tipped off on the German Constitutional Court ruling?) - I don't see how this is being taken positive, but it is.  

    Now we care what Norway does?  A bit of excitement comes out of Norway where the Norges Bank holds its benchmark rate at 1.5%. The move was supposedly expected, but the euro promptly plunges against the krone, suggesting someone believed the bank was going to cut. The euro also gives up a few pips vs. the greenback, -0.2% to $1.2540. 

    The SNB (the "Zimbabwe of the Alps" according to Jim Grant, now speaking on Bloomberg) finds itself with a lot of cash to invest after reserves rose 50% in 4 months to $380B. The surge is the result of the floor it placed under the euro/franc cross, necessitating the bank to print francs with which to purchase euros no one else seems to want. 

    loud series of stimulus plans announced by local Chinese governments recently are largely symbolic, says Huo Jianguo of the Ministry of Commerce. "I believe there is a certain level of exaggeration."

    Crude oil prices are down as Hurricane Isaac's wrath appears to leave Gulf Coast oil production facilities without significant damage. Even as a levee on the outskirts of New Orleans isbreached, threatening major flooding, for the energy industry it's back to worrying about mundane matters like the global economy and Fed policy. WTI crude -0.6% to $95.73, Brent crude -0.2% to $112.35.

    Molycorp (MCP +4.3%) continues its recent rise after shares are upgraded to Buy from Hold at Gabelli, which cites the recentfinancing to provide liquidity through H1 2013 and hitting milestones to get Phase 1 production online on time and on budget. Although rare earth prices remain weak, the firm says much of the risk already is reflected in the share price. 

    WARNING – REALITY CHECK:  More on Joy Global (JOY): Chinese electricity demand up 3% Y/Y vs. 10-11% growth just a year ago. "The outlook for our business has continued to decline over the past quarter … the deceleration of China demand has deteriorated international markets more quickly and severely than previously expected." Shares -5.3%,CAT -1% premarket. (PR)

    There's no guarantee the move will last, but Yelp (YELP+8%) is up sharply in early trading on the day of its giant lockup expiration. Shares had been hammered in the weeks leading up to the expiration, and 21.8% of Yelp's float was shorted as of Aug. 15. 

    Judge Lucy Koh will hear Apple's (AAPL) request for apermanent ban on U.S. sales of eight Samsung (SSNLF.PK) devices on Dec. 6, giving the S. Korean company three months to clear its stocks of the devices. Judge Koh will possibly hear Samsung's request to lift a preliminary ban on the Galaxy Tab 10.1 tablet on Sep. 20 after the jury partially sided with the firm in its patent dispute with Apple.


  12. Good manipulation on YELP. Short squeeze to set up for big sell off later?


  13. Hope you are having a nice time Savi.  Museum of Civilization is very interesting up there and Notre-Dame very nice.  

    $25KPs – Rolling PCLN $540 puts to $555 puts for $1.55.  


  14. YELP up 8%?? LMFAO!!


  15. VIX had a 10am seizure.


  16. Pending home sales BTE so done with RUT shorts at $813.50.  

    Not getting bullish but not worth giving up gains when we can probably double dip.  


  17. Savi – Was there two weeks ago – took a walking tour which was outstanding:
    Tours Voir Québec
    12, rue Sainte-Anne


  18. Hulbert argues that low volume are no problem:

    http://www.marketwatch.com/story/low-volume-forgetaboutit-2012-08-29

    The bottom line? It’s highly doubtful that this month’s low trading volume carries any market-timing significance. But even if it did, it is not at all clear whether that means the stock market’s prospects are better or worse.

    I don't know but usually volume leads prices…


  19. Nice call on gasoline and the russell, Phil!  Waiting for the master to let me know when to re-enter the russell  shorts, thanks.  


  20. CLF starting to look interesting with a PE of 3.7 and dividend of 6.7% but it is still in breakdown mode. Iron ore resting on support and may breakdown further.


  21. Maybe QE will not bring inflation…

    http://ftalphaville.ft.com/blog/2012/08/29/1136621/the-unintended-consequences-of-qe-not-what-you-think/

     

    In short, the central bank will have lost control. And with the central bank not there to steer the economy, there’d be little stopping real-world deflationary forces — if they do exist — from running wild.

    White doesn’t dismiss the arguments for inflation outright. The bulk of the paper addresses both sides of the argument in equal balance. Yet it’s the paper’s exploration of the unintended consequences in the financial sector and for central banks themselves, which lean to the deflationary side, which we feel stand out the most.

    In some ways, deflation is much more insidious… and not a solution to our debt problem. BTW, so much for gold prices then!


  22. 10:30 AM EIA Petroleum Inventories: Crude +3.8M barrels vs. consensus of -1.1M. Gasoline -1.5M barrels vs. -0.7M. Distillates +0.9M barrels vs. +0.1M. Crude -1.00% to $95.27.
    Not good for oil.


  23. Good points Rain, too bad the last one is the overriding truth/tragedy.

    Fractals/Rain – Try this.  My Dad was really into fractals and chaos theory but too complex for me so I distilled it into my 5% Rule – to me, a thing isn't useful unless I can do it in my head.  

    Oh yes, I would think it's obvious but of course a housing recovery ALSO takes the Fed off the table. 

    Amazing chart StJ – A shame how something so obvious is so obfuscated by the MSM.  

    Congrats Rich! 

    FAS Money – Tempting to take the quick profits on that one but dollar over 81.50 should keep things calm.  

    $25KPs – Nothing else to change (see PCLN above).  

    YELP/Amalfi, Rain – That's what happens when people pre-bet on a sell-off.  After seeing what happened to FB, I'm sure they had a few investor meetings and decided it would be more profitable to wait and burn the shorts – we haven't even begun to see the squeeze that can come as a month of selling reverses in a day.   This stock is nothing like FB, it's only $1.2Bn in total cap, largest shareholder has less than $200M – no one is life and death to cash out of this one below the $26 IPO price – especially when they know the only reason the stock is down is because the shorts expect FB-like selling.  We nailed the shorts on 8/9 (Nov $19 puts at $1.30, now $3.40) but that's the only way I like to play these – shorting them when they get stretched to the top.  I don't like them enough to go long but they are way too dangerous to short when they are low in the range.  

    RUT/Bruce – You are welcome!  Of course we want to short at 815 again – lines don't change that much during the day.  

    CLF/Rain – They are, undeservingly, down with the iron sector but they pay a great dividend and also make money on the finished goods (pellets, etc.) they produce so I do like them down here as a TWIL-type stock.  Unfortunately, China IS failing and WILL fail and that means you still have a pretty good drop ahead to the bottom (probably $25) so I wouldn't go too crazy here.  P/E ratios are nice if you believe the estimates but the /E in CLF in 2009 was down 80% to $200M and that jams your p/e back to 20, which is what most of these miners are priced for because real investors, who play boring stock like this one – are not fooled by the razzle dazzle show being put on.  You can ease all you want but until people get jobs and businesses expand – Industrials and Industrial Suppliers are NOT going to be improving.  

    Deflation/StJ – I think stagflation more likely if they do another round of QE – there is just too much money out there not to cause inflation – it's like filling your pool right to the top on a calm day and then being surprised when a breeze causes it to spill out.  They've already topped out the Money Supply but the velocity of money is near zero.  More money won't increase the velocity and infinity times zero is zero, not infinity.  Unfortunately, infinity times 0.000000001 is still infinity and that's how fast we can be totally f'd by inflation.  

    Oil a build???  We'll have to see what happened at 1pm but I think a lot of tankers jammed into port ahead of the Hurricane and distorted the imports.  Shouldn't have much effect because NOW we have the hurricane but it's light and I'm comfortable with our three and 7-week short positions.  

    EIA Petroleum Inventories: Crude +3.8M barrels vs. consensus of -1.1M. Gasoline -1.5M barrels vs. -0.7M. Distillates +0.9M barrels vs. +0.1M. Crude -1.00% to $95.27.


  24. INTC – what smacked them this morning?


  25. Good Morning!   Back from a great vacation in Newfoundland and I've been sneaking peaks at the market and the PSW site over the past couple of days.    I see no trades that I'm itching to make at the moment….because…..the events of the remainder of this week could move the markets up or down significantly.   Since I don't know which direction this will be, I don't want to commit too much to any particular new trade.  The best trade opportunities could present themselves  on  friday.  The MoMo portfolio is doing well, with AAPL trade up, EXPE trade up, and LNKD dead even.  Be alert that I may turn some or all of this to cash within the next 48 hours, and I may even put  in a short or two, as I think we could see a short-term correction. 


  26. Do we have an appetite for HPQ yet, or is that slowly falling knife now.


  27. Phil
    USO
    sell the Sept 36 puts  ?
    Thanks


  28. scottmi / Phil / fractals — Thanks.  I've just been noticing that it would seem the bots pay attention to TA on certain timeframes (1 minute, hourly, daily) but tend to ignore it on others (3 minute, 15 minute). I'm sure they do it at the seconds, millisecond and nanosecond levels as well.  It seems to be more visible now than it was in the past and I've been trying to take advantage of it.  Of course, it might be a problem of "unseeing" something once you see it, or, more likely the reduction in volume is making it more precise (perhaps fewer or converging bots). Just thought there might be some specific studies out there relating to it.


  29. Phil / CLF — Most definitely a conservative play but one that should be a leader if we ever get out of this quagmire.  I already have a position that I'm painfully rolling along.  A new "new deal" would be the ticket to ride.


  30. …and recipient of the most "wet willies" during a senior year….
    http://www.tmz.com/2012/08/13/paul-ryan-high-school-prom-king-brown-noser/
     



  31. Hey Iflan, welcome back!  Missed your wisdom on Apple esp. in view of all that's been going on these past 2 weeks


  32. HPQ / Bryan – You have to go back to 2004 to see these prices… Like we said before, a big work in progress that will need patience!


  33. Wheeee!  

    Wow, look at that Nasdaq fall!   If AAPL goes too, this can get uber-ugly.  

    INCT/Scott – Rumors (very well-founded) that they are about to cut guidance.  I don't see how they can escape the horrible demand numbers we're seeing – especially as more and more people opt for pads over laptops and I don't think businesses are exactly on the upgrade path – especially with Windows 8 still ahead (I always waited to buy computers that were actually built with the new system as upgrades were a nightmare).  

    Welcome back lflan!  I told people to take the money and run on AAPL but your call officially.  

    HPQ/Bryan – Not an appetite so much as the nauseous feeling you get when you ate something horrible and you can feel it just eating away at your stomach but it's too soon to throw up.  How's that for a summary?  

    USO/$25KP, QC – Sell puts?  Oh, you mean take profits?  No, not yet, let's see if we get a nice panic sell-off back to $93.50 but you are right – at $1.40, we shouldn't take those puts for granted and should set a stop at $1.30 because, if oil holds $95 off that build – then it's not likely we'll like the action for the rest of the week and we're not going to sit on these over the weekend and then have only 3 weeks left on Tuesday so let's set a stop and hope it doesn't trigger.  

    Fractals/Rain – There are hundreds of studies and, believe me, the IBanks have spent hundreds of millions on private studies looking to gain an edge (my Dad was one of the people they consulted) but the reality is it's too complex – like trying to use weather models except there are a few hundred people around the planet who can manipulate some of the weather, which wrecks any model you may come up with.  


  34. QQQ with a very nice bounce off $68.10 (Nas 3,070), which has held since last Friday.  Let's lock the dip with 20 QQQ weekly $67 calls at $1.25 and a very tight stop at $1.10 – just looking for bounce profits if they are there to be made.  Both $25KPs.   


  35. Assumption is that AAPL pops back over $675 – otherwise I'll lose faith in this one fast.  


  36. Phil/anyone….what time does the B talk on Friday?   Could be pertinent to deciding of trades. 


  37. Guess that VIX seizure was foretelling.


  38. Thar she goes!


  39. Bernanke / lflan – 10:00 AM EST. Lagarde speaks at 2:30 PM EST and that could be interesting as well.


  40. Actually 10:00 AM on Friday could be interesting as we have Bernanke, U. of Michigan Confidence and Factory orders all within 5 minutes. 


  41. Bernanke/Lflan – 10 am – "Federal Reserve Chairman Ben Bernanke (FOMC Voting Member) To speak on "Monetary Policy Since the Crisis" at the Federal Reserve Bank of Kansas City Economic Symposium"

    Europe closing back down about 0.6% as their morning pump was total BS.  

    VIX 16.92 – could we actually see 17?  



  42. And Friday night, China's Manufacturing PMI is expected to show contraction. Really interesting weekend ahead….


  43.  

    Shorter Doug Kass: Joe Kernan, STF Up!

     
    By Barry Ritholtz – August 29th, 2012, 11:08AM

    This morning, Doug Kass eviscerates the pontificating blowhards who pretend to be reporting about business, but are really nothing more than political hacks using business TV to push their own.

    You don’t have to be a media savant to understand precisely who he is referring to: Joe Kernan, the anchor of CNBC’s morning show Squawkbox.

    Kass writes: “I have very strongly held political beliefs, but I feel as strongly that my platform in my diary on Real Money Pro is an inappropriate forum for me to deliver and voice my views.” Which of course is precisely what Kernan does. That is the reason that so many market professionals have flicked over to Tom Keene on Bloomberg TV each morning, and why Squawkbox’s ratings are in the crapper.

    Mind you, this is NOT about this or next week’s convention coverage, but more specifically, its about pseudo business news coverage 24/7/365.

    After watching what Fox News did to CNN, CNBC seems to terrified of Fox Business. Amongst mainstream broadcast media, CNBC has led the politicization of business reporting. Just as Murdoch has damaged the WSJ, which was once the finest business and all around paper in the US, so too CNBC has forfeited their position as best financial television on cable. They disastrously followed the Roger Ailes school of journalism, erroneously believing it would work with business & stock market programming.

    Only they were terribly wrong.

    To continue with Kass’ missive: He discusses attending a forum where two iconic sports figures — former New York Giants football coach Allie Sherman and the dean of broadcasting Marty Glickman.

    It was Glickman’s discussion of what makes for a good sports broadcaster that Kass wants to see applied to business news:

    “Glickman emphasized that the most important roles of a broadcaster were to repeatedly tell the score and to visually and lucidly describe the game’s plays and action. A good broadcaster, he said, doesn’t coach; he lets the game tell the story.

    I bring this up, in part, because some of the business media has and will continue to voice their political views, and similar to my political views, no one should be interested in their political stands and/or opinions. . . “

    Kass’ advice to the Kernan’s of the world: Report, don’t coach!


  44. VXX is a fraud again today with the VIX up 2.7% and VXX down 0.3%…. Unreal! This is a just a bad ETF.


  45. RUT 815 again – ROFL.  It's like a broken slot machine.  

    $25KP – QQQ only up a dime and the RUT already over 815 so not feeling good about the Qs with AAPL stuck below $675.  I'd say let's move the stop up to $1.25 now and not have a loss.  


  46. stjeanluc….here's what I'm thinking…..the markets are going to move on Friday, and maybe again on Tuesday.  If we get QE, and I doubt we do, but there is a chance, then we are up up up.  If we don't, then we are down.  Best way to play this entire 'event' is cash.  When in doubt, get out.  Phil says when in doubt get 1/2 out.  That's good too.  The point is, I think exposure needs to be reduced over the next few days, and if you want to play percentages you need to have a bearish bias in your portfolio. 


  47. All better already, AAPL over $675, Dollar below 81.50 so watch those lines for heads up on stopping out. RUT 816 and we're not interested until/unless the drop back below 815 although if you want to be aggressive, you can take a stab at shorting off the 817 line (/TF), which should hang tough.  .


  48. How about the TZA at 1.25 for a bounce. 


  49. A long time ago, in a galaxy far away, I used to like joe kernan…..
     
    Check out the first comment after the article….Carl? Really?!!!
    "Hello. It’s the executive as celebrity as much as the politics. Kernan is downright fair and balanced compared to Carl Quintinilla and some of the other suck-ups."


  50. Cash / lflan – Sounds like a good plan! I think that it would be interesting to see also if the premium on options reflect the uncertainty of the situation. It would make a lot of sense to see IV rise on Thursday in anticipation of a market moving event on Friday and there might be plays there as well. But there are lots of factors – if for example the Chinese PMI comes in light, Monday could be ugly outside the US. But as you point out, 3 days to burn that premium until Tuesday!


  51. iflan – while i agree with the premise of a bearish bias, I am thinking that they move this baby up on encouraging words from Dr. Ben (false breakout).  Then comes the EU barrage of hot air that moves us higher yet again, then …  then … then … the carpet gets yanked.


  52. $25KP – Let's take $1.40 and run on the Qs – a nice $300.  Make $300 a day and that's $60,000 a year so never think it's not worth it!  


  53. I have been watching bonds, oil and gold for clues.  Gold started parabolic, but then paused.  Oil is starting to roll b'c the demand is falling and the traders know that the higher prices are going to bite them in the arse.  Bonds, well, even with all of them on the Fed balance sheet, they could still fall (fail), but with all those in banks, insurers, sovereigns, etc, that will not be allowed to happen.  So,  my bias is up to a new high, maybe a poke through to get the TAers long, and whammy!


  54. 1020/Kernen
     
    Kernen is way more biased than anyone else on that show.  He is Sean Hannity donig business news and he makes no secret of it.


  55. Doesn't that Bespoke Inv. study note that days b'f the Fed, the market goes up?!  Well, tomorrow would be that day.


  56. $25KP – Now we can flip to 10 TZA weekly $15s at $1.30 with a stop at $1.20, which is pretty much like playing the RUT futures short at 817.  


  57. Good call Den!  


  58. .cnbc lost its credibility a long, long time ago……
    they use to cut off anyone who didnt agree with the obama./ dems……..
    kernen has become unlistenable if thats a word….other than fast money……its painful……..
    kass makes a great point………….lets not pollute business with ideology……..
    there are forums for both and people should exercise their beliefs in the approp arena.
    im not sure if it was zz or someone else but ad hominem political attacks on a business board dont help anyone make money………or build community……….
    my 2 cents…….


  59. SGEN Sept 20/25 BCS.  Selling for 4.75 or better.  Not worth waiting for the last little bit JIC.


  60. Hello, CRISsy CRIS….


  61. CNBC:  Mark Haines was always good to b-slap Kernan when he go out of line.  Sometimes he'd do it just to have some fun.  They have no one filling that role now, so they just split their time between awe-struck and marionettes.  Much less distracting to watch with the sound off.


  62. Phil
    What do you think of XLF October 16 calls at .10 ?
    Thanks
    Strether


  63. millcreek – On day's like today, all business and no politics, makes jack a dull boy….
     
    If you subscribe to PSW, you are passionate about markets and chances are, passionate about life. Unfortunately, politics today in many ways, leads markets and I for one, look forward to politics becoming once again, the "other news of the day" some day soon…..
     
    :)


  64. Looks like more pumping with spare change doing the work that should be billions invested. I ask where is the investing? Answer is there is none.


  65. It was close for a while but we are building more oil inventories again…

    http://www.bespokeinvest.com/thinkbig/2012/8/29/crude-oil-inventories-rise-gasoline-inventories-drop.html

    Gasoline is another issue and is more normal. I wonder what we are doing with all the extra oil that we are storing.


  66. 10:00 AM On the hour: Dow -0.07%. 10-yr -0.07%. Euro -0.34% vs. dollar. Crude -1% to $95.37. Gold -0.42% to $1660.45.

    12:00 PM On the hour: Dow -0.01%. 10-yr -0.15%. Euro -0.22% vs. dollar. Crude -1.26% to $95.12. Gold -0.54% to $1658.45.

    12:00 PM Europe closes moderately lower, not stirred by Mario Draghi's hint of "exceptional measures." Stoxx 50 -0.4%, Germany+0.1%, France -0.6%, Italy -0.1%, Spain -0.4%, U.K. -0.5%. The euro-0.2% to $1.2539

    Low volume? Forgetaboutit! (MarketWatch)

    July Pending Home Sales:+2.4% to 101.7 vs. +1.0% expected; -1.4% prior. - Perspective please on what +2.4% means at this level (from 390 to 399):

    9,000 more sales PER YEAR is 15 more sales per state per month and home sales and contracts are SUPPOSED to increase in the summer, when people want to move to get their kids into the new school so it's the expectations that were stupidly low, not the performance that is somehow high.  

    More on Pending Home Sales: "Limited inventory is constraining market activity," says the NAR, with chief spinmeister Lawrence Yun blaming sales weakness in the West on "an acute inventory shortage." More from Yun: "Expected gains in housing starts of 25-30% this year, and nearly 50% in 2013 are insufficient to meet the growing housing demand."

    The big banks have done little in the way of mortgage modifications since the $25B foreclosure settlement earlier this year, finds settlement monitor Joseph Smith (BofA pulls a Blutarsky, $0.0). The vast majority of relief has come in the form of allowing short sales of underwater properties.

    Why the RUT is outperforming – it's actually a play on no QE:  A rally in small-caps could be given further momentum should the Fed – instead of QE – announce a program of incentives to juice bank lending, says RiverFront's Mike Jones. The boosted funding, he argues, might find its way into M&A, rather than plant and equipment.

    The unintended consequences of QE (not what you think) (FT Alphaville)

    U.S. monetary policy since the financial crisis (Econbrowsers)

    Finance ministers likely will discuss oil markets at October's IMF meetings, a UK Treasury source tells Reuters, after the G7 nations say they may tap strategic reserves to calm prices. With Canada opposed to a release of oil, a coordinated G7 tapping of reserves is seen as unlikely, but a strong joint statement at the IMF could help cool prices.

    The EFSF (the EU rescue fund) sells €3B in 10-year notes priced to yield 2.307%, 93 basis points more than German Bunds. A corporate comparison: Yesterday, Volkswagon borrowed €1B for 10 years at 2.417%.

    Joining Catalonia in requesting a bailout from the itself likely-to-be bailed-out national government is Spain's 3rd largest city, Valencia, and the region of Murcia.

    Battered prices and vows of corporate discipline have given new life to gold mining stocks, which have recently outpaced the metal itself, and some investment pros say the shares are still bargains. The largest gold miners are valued at an average of 14.5x earnings, below the overall S&P 500 average of 15.9x and the miners' historical average of 30x.

    Valero Energy (VLO -1.1%) leads a retreat across much of the oil sector as Hurricane Isaac leaves behind less damage to the Gulf Coast's energy industry than first feared. Among refiners: COP-0.2%TSO -1%. Big E&Ps: XOM -0.2%CVX -0.5%MRO -1.1%. Oilfield services: RIG -1.5%HAL -1.2%SLB -0.7%. Explorers: APA-0.3%APC -0.3%.

    When the grasping for yield goes bad: BP Prudhoe Bay Royalty Trust (BPT -5.9%) adds to recent losses, now off 27% in 2 weeks. The entire royalty trust sector has been shaken of late thanks to payout cuts at several (HGTSJTDOM), and the idea prices for these popular income plays have gotten far ahead of what they could ever pay out. 

    TrueCar.com predicts sales of new cars in the U.S. will rise 17% in August Y/Y, which translates into an annualized rate of 14.2M, up from 12.1M a year earlier and 14.1M in JulyGM and Ford (F) will continue to lose market share as Japan's economy recovers, the report says, adding "Volkswagen is quietly becoming a serious player whose growth can’t be ignored.”

    A Best Buy (BBY -1.8%buyout is unlikely, Oppenheimer's Brian Nagel writes, even though the situation is fluid and a deal is feasible. Ample cash flow and a still healthy balance sheet suggest BBY could support the added leverage associated with an LBO, he says, but potential PE buyers likely will be scared away by a declining business model.

    Well, this is a far cry from what happened with Facebookand Angie's List. Yelp (YELP +24.4%) is skyrocketing on lockup expiration day, as shorts who profited during the company's recent selloff rush to cover. 5M shares have already been traded, or more than 5x Yelp's average daily volume. It looks as if the handful of VCs and insiders who own nearly 85% of outstanding shares aren't in a hurry to sell, at least for now. (earlier)

    Sony's (SNE) quixotic tablet efforts continue afoot. Today the former consumer electronics leader unveiled the Tablet S, a $400 Android device featuring an Nvidia (NVDA) Tegra 3 processor and a Microsoft Surface-like keyboard. Earlier this week, images leaked of a similar-looking Windows 8 tablet that will be called the VAIO Duo 11. Also announced today: a flagship Android phone called the Xperia T. It contains a 4.6" display, 13MP camera, and Qualcomm (QCOM) Snapdragon processor. 

    Nokia (NOK -5.9%) is selling off again today. A less-than-flattering WSJ article about the early U.S. uptake seen by Windows Phone (MSFT) could be playing a role. An AT&T reseller claimed the Lumia 900 only made up 2% of its sales, even though profits on 900 sales are higher than for the iPhone or Galaxy S III, and a T-Mobile reseller claimed WP devices made up just 3% of its sales. The column also notes developer reluctance to write for WP in the absence of a large user base. (yesterday)

    More on Nokia: The company has also received anotherbearish note from Bernstein's Pierre Ferragu, a long-time critic. Ferragu joins others in taking a cautious view of the impact of the Apple-Samsung verdict; thinks Q3 results could miss estimates; notes Lumia models are being heavily discounted in the UK, and says global surveys have consistently shown a "lack of consumer interest" in Windows Phone. He views Nokia's recent rally as a good shorting opportunity.

    Revolt of the Rich (The American Conservative)

    Unleashing the Campaign Contributions of Corporations (NYT)

    Donors Invest Millions in Romney for Billions in Returns (Bloomberg)


  67. In keeping with my comments above, I have bought back the 10 EXPE October puts for 1.90, for +20% in the MoMo portfolio. 


  68. Phil says you should spend time listening to counter views. That is not listening to CNBC. They are just what is wrong in the world twists is not another side it is lying.
    I can say I stoped listening every day early this year, a coulp times I went to them thinkig they would broadcast whatever and they just don't report that. I turned them on 1 day about a month ago and my good luck came to an end.
    Just turn them off! I am down to using Yahoo Business with moderation and what you people dig up all for the better.


  69. Good article 1020.  

    Markets will move/Lflan – Couldn't agree more!  ;) 

    XLF/Strether – Great if we get QE but not likely to happen otherwise so only if you're flinging it for a gamble.  They are not .10 for no reason, they can't even get people to pay .10 on the possibility XLF will go up 10% in two months.  

    Inventories/StJ – Wait until next week!  Probably about 10M barrels fail to deliver this week.  Gasoline doesn't build the same way because they have nowhere to put it and it's easier to control on a weekly basis because they simply choose not to refine it.  Also, we're exporting about 700,000 barrels a day, which helps keep our inventories looking low and demand looking high.  

    CNBC/Shadow – I listen so I know what other investors are hearing, that's critical in the kind of trading I do.  Most of the time, it is like nails on a chalkboard to me but, until they stop moving the markets – or someone else moves it better – I'll be keeping them on with the volume.  


  70. MoMo trade:   I have sold the 5 long  Sept 100 LNKD calls for 9.50.   Note that I am keeping the 5  Sept 115 LNKD calls for now.


  71. The LNKD Sept 115s are short and have a margin of $7500 for the 5.  


  72. FAS/Phil – any fresh new FAS setups to make as hedge for if some kind of easing is announced this weekend?


  73. Phil/listening…..It's always important to listen to what other traders and investors are doing, even if you think they are stupid.  My mother used to say…"God gave you 2 ears and one mouth for a reason….you are supposed to listen twice as much as you talk."    I like to put it another way…..If I listen to you but you don't listen  to me then I know more than you know, because you only know what you know, but I know what I know PLUS everything that you told me.    :)


  74. TZA/ All:  My TZA Jan 15/22 Bull Calls just filled. Current Ask $1.58 for those thinking of entering.


  75. FAS/Phil – like a sept 101/106 BCS for $1.40, or…?


  76. I'm the last guy to be recommending option trades, much less commenting on their pricing.  But the [lightly traded] FXA [Australia ETF] October $103s at @ $1.5, FXA now $103.9, seems a good way to play a China tank, a commodities tank, and a "Australia isn't looking too hot in general" tank at a reasonable price.  Just saying.  Post hoc criticism always welcome.


  77. How to enter a spread:   There was some discussion on this a day or two ago.  I wanted to share my method, for anyone interested.  I like to enter the spreads at the lowest possible price, and by that I mean bidding what is bid for the long leg of the spread and asking for what is asked for the short leg.  Example:  XYZ  September  bull call spread  100/105 …..bid /ask on the 100s is 3.00/ 3.20.   bid/ask on the 105s is  1.00/1.15.    So I would offer 3.00 minus 1.15 =  1.85 for the spread.  This gets you in at the lowest possible price.  What if it doesn't go throught?  Who cares?  No position is worth entering at the other guy's price.  Well, maybe AAPL……….  :)  


  78. FAS – looking at a broken wing butterfly.. all september, buy 1x FAS Sept 95, sell 3x FAS Sept 100, buy 2x FAS Sept 110 for 2.12 credit. if no QE and FAS goes down, you make your $212 per contract. If FAS pops on QE, you can get more, and protected up to 103.50. What i don't know is how much, how far, how fast might FAS pop with QE?


  79. So much for the TZA puts in the $25KP – stopped out at $1.20 on that spike.  

    Dollar 81.56 so that didn't do it.  Frankly I think they were just trying to spike us out but we're not going to press short bets when we're already generally short.  

    FAS/Scott – I'm just hoping the $97s expire worthless and then we'll see which way we pop and set up another round next week.  Most likely we'll kill the $97s ahead of Bernanke – too risky.  I think the Sept spread is a bit risky as they'll drop really fast if Ben disappoints.  Maybe find a similar in Oct?  XLF can jump 10% on QE and that's 30% on FAS – under no circumstances would I get into a position that exposes me to that!   

    Listening/Lflan – Good point and one of the good things about being in a forum like this one.  Exchange of ideas is very valuable.  

    TZA/JBur – Thanks.  That didn't take too long. 


  80. One, two, three strikes….ur…up?  LLY swings again…and misses.  I don't understand….I really do not…..


  81. Full confession, I was referring to EWA [Aussie stocks] not FXA [Aussie currency], although either might work.
     
    1020 -  Thanks for the Christopher Hitchens piece on mortality, etc., very good. Epicurus had it right.  He commented that, since none of us resent not being alive prior to our birth, and it seems rather unlikely that we will resent being dead, and — given that, while still alive, we're not dead — there is very little cause to complain about the prospect of dying, other than the possibility of a little pain during our expiration.  He thought the whole "fear of death" thing was entirely overblown.


  82. SQQQ Sept $38 Calls filled at $1.50… remaining half of the DD at $1.45 pending


  83. QE – It seems to me that the MSM has already given Big Ben a free pass to delay QE and the market has not reacted whatsoever.  Does anyone else see this as a setup for a continuation of the "melt up"?  If he does nothing it is "expected", minimizing the sell off, or, in this crazy market, possibly another leg higher.  If he does something/anything then obviously we at least retest this year's highs…thoughts?


  84. I bid you, BIDU….


  85. Not a pretty sight:


  86. cdel – my comments earlier agree with your prognosis….


  87. At least one business is booming (pun intended):

    Noticed how things have gotten worse since that commie peacenik Obama took office!


  88. lflan / Do you enter those two legs as separate trades or together for $1.85?


  89. FU PCLN!!!


  90. Unemployment means up!


  91. APKT + CSCO….


  92. Phil
    I am back catching up again. I feel you should and I depend on you in your role to listen to CNBC for your reasons. I also believe some people, your students like me may do better by turing them off.
     Semms more extend on fluffy sugar spin. IWM needs to hold and close over 82.
    I listened to Ann Romney try to dispell a storybook marrige but getting sick in a rich family and having the money to beat it is not missfortune any more than we all will die of something. I can speak loudly on this because my only wife died of breast cancer, grilfriend lost her thyroid to cancer, her sister to breast cancer, and I broke my neck at C4-5, 13 others, and that is just spine. The speach did not do what it was intended for others with medical missfortune and I suspect people with families similar, but overall was very good and perfect presintation  X laughing.


  93. $25K USO just stopped out at $1.30


  94. BBook not worse than the last one and they had a meeting since the last one in which the Fed declined to make changes – you do the math…

    No time to parse it out today but nothing bullish here.  


  95. ajaytoo….I enter long-term spreads as a single trade.  I sometimes enter short-term spreads as separate legs, but if it's a short-term spread it usually started out as a long call or put that I decided to convert to a spread;  I use that conversion to protect a profit while I stay in the trade


  96. A little Bbook topping?


  97. Maybe rough sledding for commodities ahead…

    http://www.macrobusiness.com.au/2012/08/pettis-hard-commodity-prices-will-halve-in-2-years/

     

    This is going to come as a shock to many people. In my discussions with senior officials in the commodity sectors in Brazil, Australia, Peru, Chile and even Indonesia, it seems to me that many analysts have been insufficiently skeptical about the Chinese growth model and are unaware of how dramatically the consensus has changed in the past two years. They have failed to understand how deep China’s structural problems are and how worried Beijing has become (this worry may be best exemplified by the extraordinary growth in flight capital from China since early 2010).

    Under these conditions I don’t see how we can avoid a very nasty two or three years ahead for commodity producers. This isn’t all bad news, of course.  What will be a disaster for hard commodity producers will be great news for companies and countries that are commodity users or importers. One way or the other, however, we are going see a big change in the distribution of winners and losers.



  98. Don't forget I'm leaving at 2:30 but I'm perfectly happy with $25KPs as they stand (and USO stopped out).  

    LLY/Pharm – I think it's just generally being in a safety sector ATM. 

    PCLN flying on BTE notes on tourism.   Realistically, no one can afford to go to Japan and England was already booked up with Olympics so US became a default destination (plus Americans can't afford to leave and took vacations locally) so I would not put too much faith in this.  I'd still rather roll up another $15 than DD so we wait.  

    SQQQ/$25KP, Itrade – Thanks for reminder to DD on those!  

    Melt-up/Cdel – To be expected into the month's end anyway.  What happens next week with Europe is key.  

    Dow volume coming up on 50M at 2:15 – About 10M (25%) ahead of yesterday's pace. 

    Good point Shadow.  I think anyone who got whacked with a medical bill and had to choose between trying to extend the life of a loved one or paying the mortgage was yelling at the screen last night.  


  99. stj China, I have seen it first hand.


  100. 1:00 PM On the hour: Dow +0.08%. 10-yr -0.14%. Euro -0.30% vs. dollar. Crude -1.39% to $94.99. Gold -0.49% to $1659.25.

    2:00 PM On the hour: Dow +0.24%. 10-yr -0.07%. Euro -0.27% vs. dollar. Crude -1.09% to $95.28. Gold -0.38% to $1661.05

    The Treasury sells $35B in five-year notes at 0.708%. Bid-to-cover ratio of 2.92, vs. a recent average of 2.86; indirect bidders take 39.7%, vs. a recent 41.9%. Direct bidders take 11%, vs. a recent 9.3%.

    Fed Beige Book: The U.S. economy grew "gradually" last month, with credit conditions improving but manufacturing activity was soft. Housing markets across all districts showed improvement, with sales and construction continuing to rise. Employment held steady or grew only slightly in most districts; wage pressures were contained.

    More Beige Book: Six of 12 Fed Districts indicated the local economy continued to expand at a modest pace and another three cited moderate growth; among the latter, Chicago said the pace of growth had slowed. Philadelphia and Richmond reported slow growth in most sectors and declines in manufacturing, while Boston cited some slowdown since the previous report.

    Those who remember the St. Louis Fed's Bullard sayingdovish FOMC minutes were "a bit stale" will want to keep an eye on today's Beige Book. CRT Capital says the more current read may be more upbeat than the July 31/August 1 minutes would suggest. "To the extent the minutes whetted QE3 appetites, (the) Beige Book could cause some queasiness."

    "I'm flat and I'm nervous," says Dennis Gartman, reiterating his exit from stocks. His concerns range from China to overheated expectations for Jackson Hole. On one hand, there are signs (like the disappearing put/call ratio) stocks are headed for a fall. But then you have Gartman. Crosscurrents are everywhere. Tough game.

    Illinois' GO bonds are cut to A from A+ by S&P, which also maintains its negative outlook. "The downgrade reflects the state's weak pension funding levels and lack of action on reforms … (It) also reflects continued financial weakness despite significant measures … to improve structural budget performance."

    Tesla Motors (TSLA -1.5%) CEO Elon Musk says that next year it expects to post its first operating profit since the electric-car venture started in 2003. He credits the success to its Model S, a new lower-priced model released in June that sells for $50K – about half the price of Tesla's Roadster. The company plans to build 5K of the new models this year and 20K in 2013, and has already taken reservations for more than 12K.

    Motorola Mobility (GOOG) plans to launch an Android phone featuring an Intel (INTC) Medfield Atom processor on Sep. 18. The launch will come 13 days after the expected unveiling of the Droid M with Verizon. Separately, details have leaked about Valleyview, Intel's next-gen Atom solution for mobile devices. Like Intel's Ivy BridgePC CPUs, Valleyview, expected to arrive in late 2013, will leverage an advanced 22nm manufacturing process and feature a proprietary graphics processor. (yesterday)

    Samsung (SSNLF.PK) has launched a follow-up to thesurprisingly popular Galaxy Note. The Galaxy Note II features a 5.5" display (its predecessor has a 5.3" display), a quad-core Exynos processor, and a stylus with 1,024 levels of sensitivity. Universal Display (PANL) benefits from Note sales, since a larger display requires more of its OLED materials. Samsung is also launching an Android-based camera, and Windows 8/RT tablets with built-in 4G. (live blog)

    Worries the next iPhone's arrival (expected on Sep. 21) will lead to a huge exodus of AT&T (T) iPhone subs are misplaced, says Wells Fargo. 88% of AT&T's postpaid subs are using a family plan, benefit from corporate discounts, or both, Wells points out – this translates into a "sticky" customer base. The firm also notes fears of major subscriber losses following Verizon's 2011 iPhone launch proved misguided. A recent Piper survey indicated Verizon has an edge over AT&T among those thinking of buying the next iPhone.

    Three lunchtime reads:
    1) In euro zone, a convergence that never was
    2) Time to buy Canada, sell Australia
    3) The real reason behind oil price rises (interview with James Hamilton)
     


  101. iTrade/ Did you get 9 or 18 SQQQ?  Thanks


  102. Lflan / I have a couple of AAPL Jan 14 450 short puts.  I'm up 45%, and want to protect the gain.  What kind of a spread would you suggest?  Or do you have another idea?  TIA


  103. I vaguely remember some comments on here about Bitcoin… well the ponzi scheme finally collapsed with a $5.6M loss. http://news.slashdot.org/story/12/08/29/0349226/large-bitcoin-ponzi-scheme-collapses-with-a-loss-of-56-million


  104. I had an order set on SQQQ at 1.45 but didn't get a fill.


  105. OK, I have to run so play nice!  

    Don't forget our adjusted breakout levels are: Dow 13,464, S&P 1,428, Nasdaq 3,060, NYSE 8,160 and Russell 816 – only the RUT and Nas are over and next closest is NYSE at 8,044 and not likely they pop 100 points so no change of stance but – don't forget it is prudent to have a hedge and yesterday's DIA hedge is still cheap with any offset you like.  

    PCLN/$25KP – Gotta take advantage of this and roll to the $565 puts ($3.65) for $1.10 and DD there.  That puts us in 10 for our original $3 + $1.50 for roll 1, $1.10 for roll 2 and $3.65 for the 2nd 5 is $4.63 each and the Oct $565 puts were $8.50 yesterday.  

    Bitcoin/Ajay – ROFL!   Sorry BDC – hope it wasn't too many but boy, is that friggin' funny!!! 

    "Despite the many people calling it out as a Ponzi scheme from the beginning, Pirateat40 was able to collect millions of dollars worth of Bitcoins from thousands of Bitcoin users. At almost every stage Pirateat40 copied the path of the EVE Online Ponzi scheme except on a much larger scale with a far more liquid take. Now, it has shut down, and investors are wondering where their digital currency went. Quoting: 'He claimed that BS&T was sitting on 500,000 BTC on the day of the shutdown, worth more than $5.6 million USD at today's price of $11.38. "Once my process is released you'll understand more of how coins move around," he told members of the Bitcoin community last week. Pirateat40 initially promised to refund his investors' Bitcoin deposits plus interest within a week, effectively admitting that he did not have the Bitcoins on hand. The fund normally paid out on Mondays, but last Monday and today have passed so far without refunds. BS&T investors are complaining loudly and so-called "pass-through" funds that invested with BS&T are shutting down. As of this writing, BS&T says there is "no ETA on payments."'"

    Oh yeah, you've gotta love alternate currencies – on to the Rial!  


  106. Good stuff Rustle – why do we have to go to Rolling Stone for good journalism!


  107. PCLN – Phil meant the Sep 565 puts, not Oct, correct?


  108. SQQQ – I had 20 contracts prior to this and bought 10 more with an order for the last 10 at $1.45 which never filled… $1.50 was the only price that filled.


  109. stjean rustle
    Going to Rolling stone sounds bad to people who smoked dope in the 60s. Hopefully we don't have source the truth in High Times, famous for center fold BUDS.


  110. Phil if i am stupid enough to be in the 17/17 bull call spread for BBY still with a 1k loss what would be the prudent thing todo ? take the loss, or roll to the OCT 17/19 BBY bull call spread for $400 more ?
     
    thanks
    david


  111. 2can….no hurry to adjust that.  Let me contemplate and I'll post an answer this evening.  


  112. micro 17/17 is not a bull call spread. Check and correct before Phil can't help you.


  113. BBY Sept 20C – Could be sold for $0.34, yesterday morning (so I sold x5 as a cover for my longer term spreads) and they have moved to $0.66 today, with stock staying flat and no market moving news that explain the rise, except heavier volume and open interest accumulation.  How can the option price move so much underlying?


  114. Rustle – Great Stones article!


  115. i mean 17/19 bull call spread


  116. BBY Sept 20C – Could be sold for $0.34, yesterday morning (so I sold x5 as a cover for my longer term spreads) and they have moved to $0.66 today, with stock staying flat and no market moving news that explain the rise, except heavier volume and open interest accumulation.  How can the option price move so much without underlying stock's participation?  Does it indicate an upcoming move (i.e. should get out of the way?)


  117. BPT you posted about earlier—ouch!


  118.  
    Pharmboy 
     This looks like your trade from Aug. 24
    Tue, Aug 28, 2012
    One investor is hedging a position in Ironwood Pharmaceuticals before a regulatory ruling next month.

    optionMONSTER's Depth Charge monitoring system detected the purchase of 1,200 September 10 puts for $0.60 and the sale of an equal number of September 15 calls for $0.45. Volume exceeded open interest at both strikes, indicating that a new position was opened.


  119. qc….too funny!


  120. Bitcoin- If I read that correctly, Bitcoin itself hasn't collapsed and wasn't a ponzi scheme, but somebody used the Bitcoin payment system to create a Ponzi and "take deposits", that have disappeared.  Just goes to show that people will cheat in any currency.  I think the real issue with Bitcoin is that governments can just declare them illegal if they feel threatened.


  121. Although mine was the opposite….so….


  122. Pharmboy 


    2 sides to every trade


  123. qc — the wrong side and the right side.


  124. From FT: [11:15 AM EDT]  "Catalonia will request an emergency €5bn credit line from Spain’s central government as the region struggles to refinance its debts, underscoring anxieties about the eurozone debt crisis a week before the European Central Bank is expected to unveil details of its revamped bond-buying programme.
     
    The government of Catalonia, which has debts of €42bn and manages an economy as large as Portugal’s, on Tuesday said it would request the aid from Spain’s regional bailout fund. The region has been locked out of capital markets and will become the second of Spain’s 17 autonomous regions to formally request aid from a €18bn government rescue fund.  Francesco Homs, spokesman for the regional government, said it would not accept additional political conditions over budgetary measures already agreed with Madrid “because the money is Catalan money” – a stance that risks fostering further tension with Spain’s central government after Catalonia boycotted a meeting to set regional budgets in late July."  [Emphasis added]
     
    Catalonia is the hardest-working, most productive, most resented region in Spain — and was on the wrong side of the Spanish Civil War [Orwell, Homage to Catalonia].  It has a separate language, a different culture of work [I was told, with some embarassment, that the Catalans were "the Americans of Spain"] and is an Autonomous Region, which cannot be compared with a U.S. State.  The Constitution of 1978, adopted during the transition phase to democracy, was the result of a compromise between right and left, and therefore was not free from a number of contradictions and unresolved problems. The current political and legal status of Catalonia and its rights in its relations with the central government was defined by a new statute approved in a referendum held in Autonomy on June 18, 2006, preceded by intense struggle associated with the intention of its drafters to define Catalonia as a “nation.”  The articles, which have legal force, in fact named Catalonia a “nation,, and their  flag, national anthem and national day of Catalonia were officially recognized. In many other areas (judicial and law enforcement system, tax collection, language rights), increasing the right of autonomy when compared with the statute in 1979.
     
    Catalonia feels that they have contributed much – fully a quarter of all Spanish government revenues until recently — and have received little in return, with many of their autonomous projects unrealized as a consequence. So, whatever Draghi might think, Catalans are unlikely to accept many "conditions" to aid from Madrid, as they believe, with some reason, that the money was "stolen" from them in the first place.  


  125. Angel:  Thank you for the Nam Tai tip.  I realize that, with the world plunging further into the Great Depression, their should be a bull market in creative alcoholic refreshment with which the masses can drownn their sorrows.  Would it be disclosing too much to relate how exactly one should mix a Nam Tai?  Now that I have earned enough to buy a bottle or two from your kind recommendation this week, I am desirous of imbibing the stuff this weekend by way of celebration.


  126. Phil and all that care
    I was friends with a man when he was ?? next under Ceo of Saint Johns Hospital, then CEO at my disaster in April Hospital. He took that place from causing the county to go ijn hock to a profit last year. He also got them to offer x the bill because of malpractice etc. I just got off the phone with him, fired without notice replaced with a man that was a computer consultant. Oh but he belongs to the R. church and Vergil did not. He is 60 something and carries an insulin pump. He said they are going to leave the valley, when I asked about selling the house he said not even going to try.
    I ask how far will this go? Doctors have left, a ? decent sheriff suddenly quits, and that is just the big guys. 2 people in Jail and all to save a dug addict drunk .01 per center, who belongs to that church. 10% buys power and I am the victim.


  127. I caused this by wrong place wrong time. I was the guy how got hurt but not the only one. I feel so bad for all these others that have done nothing more than the right thing! I wish I could stop this but can't!


  128. There goes 815 /TF


  129. microflux/BBY – fwiw, I have Jan 17/19 spread and holding.  I think BBY will present many short term trading opportunities between now and Jan.  I will defer to other members (and PHIL) to identify those opportunities.  IMHO, stock could trade between 17-21 unless some material news is announced wrt buyout, so I would consider a roll forward if Sept spread does not work.


  130. Pharm /EXEL afterhour up .50  now .40 any reason


  131. thanks drmtv10; i just hating turning a loss into a bigger loss, but a roll seems in order


  132. Pharm / EXEL Found the reason whats it mean?????????????
    Exelixis, Inc. EXEL today was notified by the Food and Drug Administration (the “FDA”) that the Company’s new drug application (“NDA”) for cabozantinib as a treatment for patients with progressive, unresectable, locally advanced, or metastatic medullary thyroid cancer has been removed from the agenda for the November 8 and November 9, 2012 meeting of the FDA’s Oncologic Drugs Advisory Committee (“ODAC”). As a result, the Company does not anticipate a discussion of the NDA by ODAC. The previously announced Prescription Drug User Fee Act (PDUFA) action date remains November 29, 2012.


  133. It means that more likely than not, they will get approval.  Very small market, but approval none-the-less.


  134. Even though the major indexes have been meandering aimlessly the last few days, the transportation average has been on a downward slope.  Since  peaking at 5202.99 on 8/22, the transportation average ended today at  5050.67.  Not that we needed any other conformation that the economy is signaling another dip or dare we say recession.


  135. Pharm: Does it make any sense to use calendar spreads as a directional tool?  For example, buy PCLN J590P for $46, then sell weekly puts against it.  The idea is that PCLN will decline, but we don't know when, so sell near puts begins to recoup cost.


  136. denlundy – thanks for that note re transports.



  137. kogen – because those puts can burn you on a massive move, then I would tend to go down and OTM.  So, with Amazon we are in the 220/230 Sept/Oct.  I tend to use weeklies to cover a stock that looks as if it has topped….and only do small covers.  They are too hard to gauge.



  138. Phil—have you looked at BPT? It has been crushed lately and I am wondering if it now has become attractive?


  139. Wow, nice dip in the Futures.  RUT 1% off the top, back to 810.  Dow down almost 100 from afternoon high, S&P 1,402.  It's not the Dollar.  

    Of course, after listening to the GOP tell us how bad things are in this country, everyone should be selling.  OMG – can we get Obama out of here tomorrow before America bursts into flames?  Apparently, he's already soaked it in gasoline and is now playing with matches….

    Great Taibbi article – says it all.  

    Paul Ryan's speech was really good.  Would have been a lot better if the facts were true but we know that kind of stuff isn't important when you're trying to make a point.  Best comments I saw were: 

    Well, the fact-checkers all hung themselves about ten minutes ago, so I hope he doesn't go on much longer.

    — @HunterDK via TweetDeck

    Paul Ryan slamming Obama for ignoring the Bowles-Simpson commission … on which Ryan sat … and against which Ryan voted. What a fucking fraud.

    His speech was remarkably dishonest. It is the kind of dishonesty that can get under your skin and get you stutteringly mad. I know, because it made me mad. But that's part of his goal: to get his opponents so mad, they veer off message.

    Paul Ryan asked for it on Medicare. He wants the debate. He's going to get it. And he's going to lose it, badly. - Daily KOS

    KOS is right – Rice made comments that were untrue and I was going to say something about them but Ryan has me so pissed off I can't even think straight.  I also can't sleep because the incredibly remote possibility that this guy gets in the White House is more terrifying than Palin ever was.  At least she was a well-meaning idiot, Ryan is neither well-meaning or an idiot – that makes him very dangerous. 

    PCLN – Sorry, that was, of course, Sept – we certainly can't afford the Octobers.  

    BBY/Micro – Nothing wrong with rolling back a month but maybe a bit premature.  Sept $17/19 is .85 with BBY at $18.21 so your $85 calls are worth $1.21, 50% more than your net .85 and, since you have a bull spread, why are you letting the net paper loss freak you out.  This is why you have to UNDERSTAND what you are trading.  You are letting unrealistic balances caused by premiums you KNOW you won't have to pay force you out of a position that's on track.  If I were going to make a roll – I'd spend $1.05 to just roll the Sept $17s ($1.80) to the Oct $16s ($2.85) so you pick up a month AND a dollar in position.  Then when the $19s (.90) expire worthless, you are naked in the Oct $16s for about net $1 and then you can sell something for $1 and you have a free spread or you can cash out.  Or you can just be patient and leave it alone and just plan on executing that roll eventually – but only if you have to.  

    BBY/DrM – It's sentiment.  A lot of people think they will be bought out so they are paying a lot for calls under $25.  I don't know if it will happen so soon but I sure as hell wouldn't short them.  

    Bitcoin/Rdn – You're right.  I read it too fast – it does sound like someone simply used Bitcoin to defraud people.  

    Big Chart – RUT clearly outperforming.  Dow Futures failing the 2.5% adjusted 50 dma as is NYSE (also failing 200 dma). 

    BPT/Jabob – Was a news item this morning (above) about trusts.  A lot of issues there.  I only like them when they seem very cheap, BPT is past it's prime:  

    BP Prudhoe Bay Royalty Trust (BPT) is retreating for a third straight day following a Wall Street Journal report on Friday night that stated the royalty trust's market cap appears to be larger than the amount of cash it has available for distributions. In its last annual report, BP Prudhoe said that it had $1.4B available for distribution, according to The Journal’s Jason Zweig. Even after the stock declined for two days, the trust's market cap was still about $1.87B before the market opened today. Since royalty trusts can't acquire new assets, their yield tends to drop as the wells and mines in which they own stakes become depleted, causing the trusts to eventually disappear, The Journal explained on August 24. In late morning trading, BP Prudhoe sank $7.26, or 7.77%, to $86.20. The stock has declined over 27% so far this week. Whiting USA Trust I (WHX), another trust mentioned by Zweig, has also been in a downward trend.


  140. Phil
    I listened to Ann Romney, excuese my no sympathy, Rice started my WHAT! Ryan I had to lay down. My cats got mad growling, hissing at each other and I am telling the gosple total quiet in less than 60 sec. after he stopped. You did the listen to what you object to, excellent, I didn't make it.


  141. Phil/AMZN  -  Here's some "food for thought" from Steve Rosenman on SA reg Amazon…Despite their high PE and low earnings, Rosenman says the following…
    "Why are investors bidding up the stock? Because Amazon's total addressable market is seemingly endless. If you can buy a toilet at Amazon, they can sell you anything. Every year, Amazon adds more product lines to its web site.
    The Next Big Market
    There is a giant market on-line shopping hasn't touched yet – services. I wouldn't be surprised if some day you'll be able to purchase plumbing or electrical services on Amazon. Consider buying services from accountants, lawyers, doctors, handymen, or babysitters through Amazon. In a few years, I might be contracting to have my next toilet installed by a plumber through Amazon. Selling services on the web wouldn't be that hard to do. Providers could advertise at set rates with Amazon taking a cut. Maybe a quality guarantee and certainly a ratings system. Amazon would upend the service industry."


  142. Good morning!

    After a brief attempt to recover, the markets are back where they were at midnight and looking weak.

    Nikkei, Hang Seng and Singapore down 1%, Shanghai (already at 2009 low) flat, India up 0.5%.  

    Europe all over the place but all red with Germany leading to the downside at 0.5%, CAC -0.2%, FTSE flat, Spain -0.3%.

    Euro $1.254, Pound $1.5825, 78.60 Yen, EUR/CHF $1.2008 (stronger Euro) and Dollar 81.53.

    Oil $95.27, gold $1,658, silver $30.72, copper $3.465, nat gas $2.66, gasoline $2.92.  

    We should test 1,400 in S&P (/ES) and, of course, that the line to go long on if you want to lock in the loss but very nasty if it breaks so super-tight stops.  810 has been holding well on the RUT (/TF) so another spot to go long for a quick bounce but, if we don't get back over 812.50 – a quick bailout it a good idea.  


  143. Olaf Palme:  It is reported in Europe that the Tetra Pak heir's wife, recently deceased, had information on a computer regarding Palme's unsolved, assasination, apparently a business interest concerned that his re-election would harm his business.  Fairly bizarre.


  144. AMZN/Jercon – Wow, that's some major cheerleading.  So you are saying that using the power of this INTERNET thing, AMZN can be all things to all people all the time.  WOW!  That changes my mind…  Sounds like every dot com business plan from the 90s.  And let me tell you, there's nothing you want to own in a recession more than a stock that already sells everything to everyone – what a winner!   I'm going to stick with GOOG for that as they already have everyone paying them to advertise and they say when they are done with China and Africa they will be moving on to the Moon and Mars (why do you think they have the rocket competition) and there's rumors they will begin advertising to fish because it's the planet Earth's largest untapped market so BUYBUYBUY!!!  

    Thursday's economic calendar:
    ," the Labor Office says.

    German engine © Paresh Nath,The Khaleej Times, UAE,Germany, Eu, recession-2, train,collapse, Spain, Portugal, Ireland, Greece, Italy, slowdown, eurozone crisis

    Spanish CPI a preliminary +2.7% Y/Y vs. +2.2% in July, with the rise blamed on higher oil prices. The August figure is the highest since December. (PR)

    Angela Merkel is visiting China, whose Premier, Wen Jiabao says his country will continue to buy European sovereign debt, but on the condition of a full risk evaluation. In addition, Germany and China intend to increasingly use the euro and the yuan to conduct trade 

    Angela Merkel's visit to China heralds the announcement of a number of major deals. In on of the largest, the air leasing arm of the Industrial & Commercial Bank of China orders 50 Airbus (EADSF.PK) A320 jets valued at $3.5B. Airbus will also build a plant in the Chinese city of Tianjin under an agreement valued at $1.6B. Volkwagen (VLKAF.PK) will invest $290M on an autoparts factory in the city. 

    The U.K.'s Serious Fraud Office has launched a 2nd criminal investigation into Barclays (BCS), this time into payments made under agreements between the bank and Qatar Holding during its Middle East capital raising in 2008.

    CNBCkid gloves for bankers, boxing gloves for bank critics (Columbia Journalism Review)

    Oil and gas operations in the Gulf remain at a near standstillas operators wait for Hurricane Isaac to pass; the slow-moving storm has kept Shell and other operators waiting to assess damage and restart production. U.S. regulators say 94.7% of crude oil production and 71.6% of gas production remain shut in.

    Average U.S. gasoline prices spike five cents today to climb within 7% of their all-time high $4.11/gallon set in July 2008. The new price marks the first time since April 23 that a national average in 2012 was the highest ever for the calendar day, and AAA says prices likely will continue to set new records for each calendar day heading into the fall. 

    After plunging 5% early, Joy Global (JOY) completed a startling turnaround, finishing +2.5% after its FQ3 earnings conference call. Coal exports are strong and coal has taken back some power generating market share, indicating U.S. coal has hit bottom, CEO Mike Sutherlin says. The upside is from natural gas prices that are expected to continue moving up.

    A123 Systems (AONE -10.7%) crashed to a new low of $0.28 today in the absence of major news. Shares are now 40% below the level they traded at before A123 announced a giant andcontroversial financing deal with China's Wanxiang Group. The Street may be worried the deal will fall through due to political concerns, or will be dilutive to the point where existing shareholders are left with very little.

    Costco (COST) August comparable-store sales +6% vs. consensus of +4.5%. Total sales +8% Y/Y to $7.4B. Comparable-store U.S. sales +7%, international +4%. Excluding higher gasoline prices and forex effects, same-store sales +6%. (PR)

    LyondellBasell (LYBwill replace Sears (SHLD) in the S&P 500 after the close of trading next Tuesday. Sears' public float has been well below the 50% threshold for inclusion for an extended period of time and is no longer considered representative of the index, S&P says. SHLD -3%, LYB +3% AH.

    Global server sales declined 2.9% Y/Y in Q2, per Gartner – that's worse than Q1's 1.8% fall, and evidence demand is soft even as hard drive supplies improve. Sales of x86 (INTC) servers rose 5.6%, but those of non-x86 Unix servers fell 17.9% – that's a big reason Oracle's (ORCL) share fell 110 bps Y/Y to 6%. Dell (DELL), which exclusively sells x86 gear, saw its share rise 120 bps Y/Y 15.4%, while H-P and IBM saw modest drops. Non-top-5 vendors saw their share reach 18.4%, as Internet companies continue opting for a do-it-yourself approach.

    Intel (INTCprovides details about its rumored wireless charging tech for notebooks and mobile devices. The solution will leverage chipsets from IDT (IDTI +2.1%), and (unlike older solutionsthat require a "charging mat") can work simply by placing two devices near each other, and running the required software. Intel boasts its tech can allow an ultrabook to fully charge a smartphone in an hour. (earlier)

    None of Yelp's (YELP +22.5%) three main VC backers, who together own almost 60% of the company, sold or distributed shares today, a source tells Dan Primack. Another source claims chairman Max Levchin (13.6% stake) and CEO Jeremy Stoppelman (11.1%) also didn't sell on the first day they were allowed to do so. That goes a long way towards explaining today's giant short covering-fueled rally. (earlier: III)

    Apple (AAPL) roundup: 1) HTC, which has a relatively weak patent hand, says it has no plans to settle with Apple following the Samsung verdict. The fact Apple doesn't seem interested in seriously negotiating with Android OEMs could be a reason why. 2) Delta Air Lines (DAL) plans to deploy 4,500 iPads at its 3 airport hubs to provide information and food/beverage services to travelers. 3) Apple is reportedly planning an AirPlay upgrade that will allow music to be streamed to speakers via Bluetooth instead of Wi-Fi.

    Wall Street Gives Up on Obama and Roots for Romney (Fiscal Times)

    The Case for Noblesse Oblige (NYT)


  145. The Spanish price index rose 2.7% in Augurst, primarily a product of oil prices, it was reported.  And the falling Euro, I would add.  The Euro's @ 13% drop in the last year must be depressing consumption beyond what austerity measures, which includes a liberal dose of layoffs, have done.  There are additional budget cuts on the horizon.  Inflation was reported at 2.2% YOY in July, so it sounds like the rate is accelerating, consistent with the Euro drop.  The inflation/deflation arguments brought forward yesterday were somewhat arcane, it being put forth that rock-bottom rates in the U.S. that are held down artificially by money-printing could actually have a deflationary effect in the U.S  so perhaps there could be an assymetrical result between Europe and the U.S., which I wouldn't have thought possible.  


  146. 2:42 AM Asian shares are lower following weak Japanese retail figures, falling commodity prices and disappointing earnings, and, of course, ahead of Jackson Hole tomorrow. Japan -0.9%. Hong Kong-1.1%. China -0.2%. India -0.4%.

    3:49 AM EU stocks mostly follow their Asian counterparts lower in early trading as investors get the jitters over Ben Bernanke's speech in Jackson Hole tomorrow. EU Stoxx 50 -0.3%, London -0.3%, Paris-0.2%, Frankfurt -0.6%, Madrid -0.4%, Milan +0.1%. [Top Stories,Global & FX,

    6:00 AM Overseas: Japan -0.95%;. Hong Kong -1.19%. China-0.03%. India +0.47%. London -0.09%. Paris -0.13%. Frankfurt-0.57%

    6:36 AM U.S. stock futures point lower with more economic data out from Europe looking shaky and Jackson Hole still in focus. S&P-0.4%, Dow -0.3%. 

    7:00 AM On the hour: S&P -0.37%. 10-yr +0.06%. Euro +0.10% vs. dollar. Crude -0.18% to $95.31. Gold -0.26% to $1656.35.

    The economy should hit its stride late into next year, says Moody's Analytic's Mark Zandi. He's forecasting 4% growth into 2014, citing continued strength in U.S. corporations due to cost cuts and better profit margins. All we need to do is "nail down those fiscal issues," Zandi says. “By 2014-15, the surprise is going to be how strong the economy is growing.”

    Japanese retail sales -0.8% Y/Y in July vs. consensus of -0.1%; -1.5% M/M. Consumer spending is likely to be further hit in the coming months by the tapering off of government subsidies for car purchases.

    Eurozone economic sentiment indicator drops to 86.1 in August from 87.9 in July and vs. consensus of 87.6. Consumer confidence -24.6 vs. -21.5 in July. Industry -15.3 vs. -15.1, services -10.8 vs. -8.5, retail trade -17.3 vs. -15, construction -33.1 vs. -28.5. (PR)

    German unemployment grows for a fifth consecutive month, increasing by 9,000 to 2.901M vs. consensus for a rise of 8,000. The jobless rate stays unchanged at 6.8%. "The significant labor market indicators as a whole are developing increasingly weakly. Lower German economic growth is showing here," the Labor Office says.

     


  147. Ah, I see Phil has already marked Spanish inflation in red!!!


  148. Inflation/ZZ – We can't all have the weakest currency but we sure are all trying and that means we are flooding the World with money but, because the money is flooding into the banks and not into the hands of people, we keep the prices of commodities artificially high through the speculator class no matter how much less the bottom 99% consumes.  It's all very logical for the top 1% – as with gasoline – if you drive less and use less gas, then we'll just charge you more per gallon because it's not about supply and demand, it's about the profit margins.  

    Don't forget, 25% unemployed in Spain eat maybe 10% less food, not zero, so the simple solution is to charge the remaining 75% 2.7% more for food and that makes up for the 2.5% less sales and everyone (in the top 1%) is happy.  

    I think a lot of these old economic models are breaking down simply because there is no longer a free market.  Even interest rates used to be a function of supply and demand but nothing is steady – the rates are set by Central Banksters but what your local Fed does can be offset by another CB across the globe an hour later and the Money Supply is a random number and demand is faked and supplies are manipulated in ways that didn't used to be possible when this was a nation of small businesses and small farms.   

    The world is very, very different from the one Smith and Keynes lived in but no one has updated economics in the last 100 years.   Part of the reason is, like the weather, it's just too complex to explain these days but it's very clear from the way estimates  are off 30-300% on a regular basis that even the consensus of dozens of "leading economists" is, at best, a guess.  

    Today they expect 370,000 Jobless claims at 8:30, Personal Income for July is supposedly going up 0.3% (and there's a 50% miss if ever I saw one coming), Personal Spending expected up 0.4% (doubtful) and Core PCE Prices are predicted up 0.1% and that's a rounding error one way or the other since it's about 1.45% now, so that's set up for a 100% miss if it comes in at 0.2%.

    Tomorrow is the Chicago PMI, which will likely miss and Michigan sentiment is a final revision so still around 74 (which sucks) and Factory Orders may also be turning negative but are projected to be up 2% – that could be a huge miss.   


  149. I don't know how this got on Fox News, but apparently someone there dropped the ball and let this on their website:
     
    Paul Ryan’s speech in 3 words


  150. 2. Deceiving
    On the other hand, to anyone paying the slightest bit of attention to facts, Ryan’s speech was an apparent attempt to set the world record for the greatest number of blatant lies and misrepresentations slipped into a single political speech. On this measure, while it was  Romney who ran the Olympics, Ryan earned the gold.
    The good news is that the Romney-Ryan campaign has likely created dozens of new jobs among the legions of additional fact checkers that media outlets are rushing to hire to sift through the mountain of cow dung that flowed from Ryan’s mouth. Said fact checkers have already condemned certain arguments that Ryan still irresponsibly repeated.

    Read more: http://www.foxnews.com/opinion/2012/08/30/paul-ryans-speech-in-three-words/?fb_action_ids=10151058561393892&fb_action_types=og.likes&fb_source=other_multiline&action_object_map=%7B%2210151058561393892%22%3A430876850304107%7D&action_type_map=%7B%2210151058561393892%22%3A%22og.likes%22%7D&action_ref_map=%5B%5D#ixzz251uJU5nw


  151. If I took something away from the inflation/deflation/law of unintended consequences articles yesterday, it was that all the fiscal manipulation we are seeing destroys the value of pricing signals, leaving central banks and governments entirely in the dark in respect of what policies to pursue.  I don't think the fundamental laws of economics have changed [people react to savings/consumption/investment signals in the same old way] but the multi-variate problems of a globalized economy, with vastly different income, savings  and consumption levels, and the feedback effect of each economy on the others, is simply too complex for policy makers to address on a country by country basis.
     
     And, on a global basis, the model is competition, not cooperation [China hides all data at all times, for example], which, in the event, is proving a recipe for chaos.  Chaos creates fear, fear postpones investment, hiring and spending decisions, and in the end we're all wandering around the woods looking for acorns to eat.  A rather grim picture right now.  
     
    I notice that prognosticators are predicting great things for 2014, demonstrating that the farther out an event, the more precisely it can be safely predicted, since no one will remember idiot ideas of the distant past.


  152. Revtodd:  Fox / Amazing:  Has there been a hostile takeover?


  153. Phil, So yesterday Good News was NO news, you say we need a new model for the economy and I agree but what about new models for trading against the machines.  It's like HAL in 2001 Space Odyssey….
    Dave Bowman: Hello, HAL. Do you read me, HAL?
    HAL: Affirmative, Dave. I read you.
    Dave Bowman: Open the pod bay doors, HAL.
    HAL: I'm sorry, Dave. I'm afraid I can't do that.
    Dave Bowman: What's the problem?
    HAL: I think you know what the problem is just as well as I do.
    Dave Bowman: What are you talking about, HAL?
    HAL: This mission is too important for me to allow you to jeopardize it.
    Dave Bowman: I don't know what you're talking about, HAL.
    HAL: I know that you and Frank were planning to disconnect me, and I'm afraid that's something I cannot allow to happen.
    Dave Bowman: [feigning ignorance] Where the hell did you get that idea, HAL?
    HAL: Dave, although you took very thorough precautions in the pod against my hearing you, I could see your lips move.
    Dave Bowman: Alright, HAL. I'll go in through the emergency airlock.
    HAL: Without your space helmet, Dave? You're going to find that rather difficult.
    Dave Bowman: HAL, I won't argue with you anymore! Open the doors!
    HAL: Dave, this conversation can serve no purpose anymore. Goodbye.


  154. Lead-in paragraph of guest column by [convicted fraudster] Conrad Black in the FT: 
    High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our

    "It is an abiding mystery why the US, after leading the west to the greatest strategic victory in the history of the nation state in the cold war and the triumph of democracy in most of the world, has been for about 15 years, in public policy terms, an almost unrelievedly stupid country. America’s enemies could scarcely have devised a more suicidal programme than the one that was followed: outsourcing nearly 50m jobs while admitting 20m unskilled aliens; throwing American lives and $2tn after nation-building in the Middle East; and inundating the world with trillions of dollars of worthless real estate-backed debt, certified as investment-grade by the palsied lions of Wall Street. In comparison, even the hare-brained miscues that have endangered the eurozone seem Solomonic."