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Friday, March 31, 2023


Thursday Thoughts – Waiting on Mitt and the Fed

Health Care in Reverse © Christopher Weyant,The Hill,GOP, Republicans, ambulance, health-care, healthcare, Barack Obama, Affordable Care Act, patient, uninsured, reverse, reversal, repeal, John Boehner, Congress, House of Representatives, Tea PartyAmerica is screwed!

That's what I learned watching the GOP convention last night.  About 5 minutes into Paul Ryan's speech I had to go outside to check to see if my neighborhood was in flames but, apparently, the seniors in my town haven't yet started rioting for their Medicare (which Ryan claims he's trying to protect) funds that Obama is stealing.  

Well, saving, stealing – same thing, right?  

As Romney's pollster, Neil Newhouse said on ABC yesterday – "We're not going to let our campaign be dictated by fact-checkers." and that was the perfect prelude to the BS festival that was held yesterday at the GOP convention.  

“Right there at that plant, candidate Obama said: ‘I believe that if our government is there to support you … this plant will be here for another hundred years.’ That’s what he said in 2008. Well, as it turned out, that plant didn’t last another year. It is locked up and empty to this day.” – Ryan 

Bush Catapulting PropagandaOK folks, this isn't a guy misspeaking, this is what Paul Ryan, Mitt Romney and 20 of the country's best speechwriters (well, best Conservative speech-writers – which is, I admit, a terrible mental handicap to overcome) decided to say to America in THE most important speech of their lives.  Opening with suck a blatant lie pretty much sets the tone for this campaign, don't you think?  Obama was not at the plant October of 2008, it was February, he did not say anything of the sort AND the plant closed in December of 2008 – NOT when Obama was President.  

Interestingly, Ryan test-drove this statement on August 16th in Ohio and was blasted for it by fact-checkers at the time but, as Nazi propagandist Joseph Goebbels used to say: "If you tell a lie big enough and keep repeating it, people will eventually come to believe it."  It's nice to see the GOP embracing the classics.  Goebbels said:  “The most brilliant propagandist technique will yield no success unless one fundamental principle is borne in mind constantly – it must confine itself to a few points and repeat them over and over” like "Drill Baby Drill," "Job Creators" or "Obamacare."  

Ryan slammed the president for not supporting a deficit commission report the same one that he himself, as a member of the committee, had voted against – killing it.  He also made a cornerstone of his argument the claim that Obama "funneled" $716 billion out of Medicare to pay for Obamacare. But he didn't mention that his own budget plan relies on those very same savings or that Obama's plan SAVES the $716Bn (over 10 years) through the Affordable Care Act while Ryan's plan uses the same money Obama is SAVING to give tax breaks to people who earn over $250,000 a year while killing the Affordable Care Act (job 1 for Romney/Ryan apparently) – truly leaving Medicare recipients with nothing to fall back on.  

Ryan also put responsibility for Standard & Poor's downgrade of U.S. government debt at Obama's doorstep. But he didn't mention that S&P itself, in explaining its downgrade, referred to the debt ceiling standoff. That process of raising the debt ceiling was only politicized in the last Congress, driven by House Republicans, led in the charge by – Paul Ryan.  The credit rater also said it worried that Republicans would never agree to tax increases. “We have changed our assumption on [revenue] because the majority of Republicans in Congress continue to resist any measure that would raise revenues,” S&P wrote.

I really liked the touching story of how Paul Ryan's mother used, as did her son, Paul Senior's Social Security death benefits and ongoing checks to attend a state-funded college and, as Paul says, his mom took the public transportation every day to go 40 miles back and forth to Madison, where there were better opportunities, because they couldn't afford a car, but her business in Madison became a success AND THEY DID IT WITHOUT ANY GOVERNMENT HELP!  How does the guy even stand there and say things like that?  Does he not understand what he's saying or does he not care?  

Needless to say, this was not a market booster and Asia was down 1% last night and Europe is down another half a point this morning and the US futures are down about half a point as we all wait to see if Mitt can inspire us this evening.  Of course it's Ben Bernanke that really needs to come through tomorrow morning, as he delivers his opening remarks at the Fed's Jackson Hole conference.  Whatever Chairman Bernanke is planning to do – he'd better do it quick because Romney has vowed to remove him from his post so the clock is ticking.  

Those waiting for Draghi to save us may be disappointed as well.  "The ECB can't unpack the big bazooka. It doesn't have such a mandate," says Lars Feld, an economic adviser to Angela Merkel. He instead expects the central bank to buy peripheral debt "bit by bit," but not have much impact on bond yields.

Copper jumped 2% off yesterday's low and is now (9:05) testing the $3.50 mark and that's an excellent spot to take a short position in the Futures (/HG).  We went long on the Russell (/TF) off the 810 line and the S&P (/ES) off the 1,400 line earlier this morning but we already got a nice pop and made our Egg McMuffin money and we're not long into the open but we will be watching those lines very closely to see if they hold up.  

Oil should hold $95 into the Natural Gas Inventories at 10:30 but, unless there is a big draw, it's doubtful they hold it.  Unfortunately, it's too close to the weekend and then next week's very bullish inventory report (because production is shut down and the shipping channels are blocked from the storm) so it's a little too dangerous to take chances in the Petroleum pits today.  

Personal Spending was up a disappointing 0.3%, matching the Growth in Personal Income but, adjusting for inflation – both were a zero.  Nonetheless, retail numbers are coming in strong as back to school shopping kicks in and, of course, last month's comps were TERRIBLE but we ignored them because Ben was going to give us Trillions of Dollar tomorrow – I can't wait – it's like Christmas!  



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What happens to the NASDQ if AAPL slips? /NQ weaker

CLDX – small ADC companies are being bought b'c of the JNJ deal ($1B).  Our Feb $5 call (buy) put (sell) is now…positive!

666 / Phil – That was actually AAPL's S3 today by some coincidence… But failing that now!

Not good when see AAPL fall. Would be more convincing if the volume was greater.

About time someone burnt that stick!

More China myths exposed:



However, Chan’s research suggests China’s urbanisation to date hasn’t created a booming middle class, and it won’t unless there are major reforms to the hukou system.

So we’ve seen a surge of Chinese growth driven by export-focused manufacturing, followed by a surge of Chinese growth driven by infrastructure boom with its attendant financially repressive policies. Neither of these have created a surge in the number of “middle class” — in fact, although China hasn’t published its Gini coefficient for 11 years, inequality is widely believed to have become more extreme in that time.

CELG call calendar – time to take 1/2 off.

I just bought back both sides of my weekly strangle (1380P, 1425C). Just couldn't take the chance that Ben says something. And 2.5% is too much to tolerate. 

They must be practicing the pin’s: Dow 13,000 S&P 1,400..

Thanks again, Angel, that Nam Tai is strong stuff, it seems, going off the bar to mix me another one!

AAPL – wasn't the price of the first apple computer $666?  Steve is controlling this thing from the great beyond

Thanks Phil…

Mick Jagger, "Shattered", December 1977  [the year I moved to Manhattan] " [R]ats on the west side, Bed bugs uptown, What a mess this towns in tatters Ive been shattered"  – It was pretty grim in NYC that year, before the '80s took off.  Looks like "deja vu all over again" — A Sign of the Times:  http://www.nbcnewyork.com/news/local/Rat-Infestation-Upper-West-Side-Crossing-Signs-167936535.html?dr

From Phil's morning alert – " In fact, let's call it very bad if we're below 3 of 5 on Dow 13,000, S&P 1,400, Nas 3,060, NYSE 8,000 and RUT 810."
So we got 4 of the five and Dow at 13000.71 almost made it five.  Now if only Uncle Ben follows the script.  

Another good article from Rolling Stone (which looks like required reading now):


In fact, government documents on the bailout obtained by Rolling Stone show that the legend crafted by Romney is basically a lie. The federal records, obtained under the Freedom of Information Act, reveal that Romney's initial rescue attempt at Bain & Company was actually a disaster – leaving the firm so financially strapped that it had "no value as a going concern." Even worse, the federal bailout ultimately engineered by Romney screwed the FDIC – the bank insurance system backed by taxpayers – out of at least $10 million. And in an added insult, Romney rewarded top executives at Bain with hefty bonuses at the very moment that he was demanding his handout from the feds.

With his selection of Paul Ryan as his running mate, Romney has made fiscal stewardship the centerpiece of his campaign. A banner at MittRomney.com declared, "We have a moral responsibility not to spend more than we take in." Romney also opposed the federal bailout for Detroit automakers, famously arguing that the industry should be forced into bankruptcy. Government bailouts, he insists, are "the wrong way to go."


But the FDIC documents on the Bain deal – which were heavily redacted by the firm prior to release – show that as a wealthy businessman, Romney was willing to go to extremes to secure a federal bailout to serve his own interests. He had a lot at stake, both financially and politically. Had Bain & Company collapsed, insiders say, it would have dealt a grave setback to Bain Capital, where Romney went on to build a personal fortune valued at as much as $250 million. It would also have short-circuited his political career before it began, tagging Romney as a failed businessman unable to rescue his own firm.

The guy is basically a fraud, taking bailout from the government to save his hide….

66, 666, 88, 888 are all lucky # for Chinese.

Interestingly enough, the straddle on SPX at the close seems to predict a 0.85% move tomorrow on the index. The average daily move has been around 0.5% so some increased volatility in advance of Ben's speech.

EXEL / Pharm – with their PDUFA on Nov 29, I'm curious why would you not buy the DEC options now before the vol on them starts to crank up as we get closer to that date?  FWIW I've been selling the DEC 4/2 put spreads for .70 to fund buying the 4/7 BCS.  What do you see as the target for them with approval?

MRM..there is no PDUFA date now.  It was canceled, so I am playing that they get approval before and that they ride up into the timeframe.  Yours is fine as well.  I already have the stock, Dec sold puts, etc.

I'm suddenly getting ads for a "Chromebook", which must be some kind of Google [Wintel-Android?] based-computer.  Nothing wrong with taking a page from the Apple playbook, I guess.  Since I'm a Wintel guy who would like seamless capability among laptops and [more] mobile devices, it's an interesting play, given that my now-famous Galaxy Note is Android-based. Pontification on the subject welcome.

Bigger drop after the close and now very close to my off the cliff point, 80.40.

Maybe this should be the woman's new theme song against white males who want to dictate decisions upon them…

Chromebook / Zero – It's based on the Chrome OS developed by Google. Very web centric but allows for more affordable machines… Not from the Apple playbook at all.

Self explanatory…..


Pharm – where did you pull the Dow/BASE chart from? The recent action is most interesting – confirms Phil's printing theory regarding what it takes to buy the market up, but note how it drips when there's no printing.

deano – SocialTrade site (Tim Knight at Slope).

Thanks for the advice on V puts.  

Transportation broke through 5,000 line to end at 4993.03., 

California Municipal Bondholders Watch Out: State Controller Pounds Municipalities….no one is talking about this. Even the Crypt Keeper of Omaha is dumping his Cali munies. 

Maybe we should not worry about the volume – today was a down day but yet no big volume change… Very strange!

ST J  /volume maybe the only people in the market are us  the Bots and the mutual fund people ; }

Not 100% sure what this means – but when liquidity of this size dries up, its not usually a good thing:
J.P. Morgan Chase is seeking to reduce its risks in a business that provides crucial plumbing for Wall Street’s money flows.


Ugly and getting uglier:
Global food prices jumped 10% in July from the month before, driven up by the severe Midwest drought which has pushed the price of grains to record levels, the World Bank reported Thursday.
The price of maize and wheat rose by 25% from June to July, and soybeans rose by 17%, according to the Washington-based organization.

90% of the Colbert Report' tonight can be summarized from phil's article this morning….. interesting : )

Phil- Is there a play in DFS similar to our V puts ? What are your feelings about XLU- it seems the utilities are getting oversold but maybe no bottom yet ? Thanks   
Pharm- Thanks again for your positions!

Volume/Stj – markets need volume to make moves up, but can fall of their own weight without volume just fine. Volume is not necessary for any confirmation going DOWN..

Rolling Stone –  Last bastion of Gonzo Journalism.     Hoping the PSW Vegas event does not turn into the epilogue to Fear and Loathing.

Dollar down to 81.16 is this a pump job or does someone have insider information. Maybe the accidently released the meeting speech 14 hour early to the banker peeps

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