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Turn-Down Tuesday – Even Coke is Having Problems!

7-15-2013 6-55-48 PM gdpKO disappointed.  

It's not good when Coca-Cola misses revenues.  It's usually an indication that the consumer is really hurting.  Net Income fell to .59 for the quarter, down from .61 last year but it was the 3% drop in Revenue that was surprisingly light, leading CEO Muhtar Kent (a straight-shooter – see my 2010 interview) to state he "was not happy with our performance."  The beverage maker cited "a challenging global macroeconomic environment" and bad weather for its performance.  

Rather than shorting KO, we're shorting oil this morning and I sent out a tweet early this morning, identifying a shorting opportuntiy on /CL Oil Futures at $106.45 but we stopped out of those at $106.50 and now we're looking at the $107 line as our next shorting target, waiting for the big drop we are fairly positive is going to come as we head into the NYMEX contract rollover next Monday.  I'm not going to get into it again (see last few weeks of posts) but the bottom line is they have faked way too many orders for September and now they have just 5 sessions to cancel or roll 130,000 contracts, about 25,000 contracts per session and, yesterday, they only managed to get rid of 13,000 – that does not bode well for the NYMEX Fraudsters.  

Click for
Chart
Current Session Prior Day Opt's
Open High Low Last Time Set Chg Vol Set Op Int
Aug'13 106.44 106.74 105.91 106.47 05:23
Jul 16

 



0.15 16473 106.32 138979 Call Put
Sep'13 105.96 106.24 105.46 106.05 05:23
Jul 16

 



0.13 6807 105.92 336220 Call Put
Oct'13 104.64 104.80 104.11 104.66 05:23
Jul 16

 



0.17 1101 104.49 125043 Call Put
Nov'13 103.20 103.20 102.75 103.06 05:23
Jul 16

 



0.07 561 102.99 74312 Call Put
Dec'13 101.63 101.82 101.16 101.77 05:23
Jul 16

 



0.21 1132 101.56 211463 Call Put

By next Monday, all but maybe 15,000 of those contract (1,000 barrels per contract) will disappear.  This will create an artificial shortage of oil in August as no orders mean no deliveries and no deliveries mean inventories will be drawn down, whether demand is actually there or not.  We'll watch this crime in action this week as NYMEX Terrorists threaten our Nation's energy security by tearing up oil contracts (that are already approved for delivery), choking off the supply of oil to our great nation and extorting Billions of excess Dollars from US Consumers at the pump, in the Airlines and to heat, cool and power their homes and businesses.  

As usual, our leaders will do nothing.  

No wait, I take it back.  As usual, our leaders will collect another $30M in bribes from the Koch Brothers.  That's the Koch's average annual spending to buy better themselves better Government.  It's only a sliver of their $50Bn fortune (50,000 Million and, as you can see from the chart on the left – they sure get their money's worth) but there's only 435 Members of the House of Representatives and 100 Senators and $30M/535 is still $56,000 per Congressman from the Koch brothers alone.  Given that about half of those Congresspeople are Democrats, who generally get $0 from the Kochs – we're into 6-figure pay-offs to the average Republican.

In fact, according to the Kochs, those bribes alone makes their Republican cronies 3x richer than the top 1% (I kid you not, this is their actual video explaining it):

That's right you "poor" people – suck it up, you're 10 TIMES richer than people who are REALLY poor so stop your whining and vote to end that minimum wage so you can compete fairly with people making $2.50 a day in China!  

According to the Koch Brothers, making $34,000 a year for a family of 4 puts you in the Global Top 1% – so your interests and their interests are perfectly aligned!  If this is the kick-off to the 2014 mid-term election strategy for the GOP, I know a lot of Democratic strategists who will be having a party this weekend!  

The GOP is convinced they are going to take back the Senate next November because Americans are sick and tired of getting JOBS and having PEACE and PROSPERITY, with a stock market that is now up 200% since finally getting rid of George Bush II in 2009.  We don't want those high-mileage cars or roads without potholes to drive them on.  We want FREEly poluted water and air that you can cut with a knife – just like China!  

That's how we compete globally in the Koch Brothers Fantasy Camp – drop US wages to be on-par with the rest of the World (10% of what we make now on average), stop taxing Corporations and Wealthy Individuals (like the Kochs) and let those Corporations do what they want (as if they don't already).  

If you aren't for those things – you are a Godless, Anti-American Communist who should stop voting and leave the country (where the new immigration laws will prevent you from coming back).  

Speaking of Godless Communists, China financial instability du jour is an 800% increase in WMPs, or "Wealth Management Products" where over $1Tn of Chinese savings (the size of Australia's total economy) is now in instruments that are, essentially, Ponzi schemes, where the investor puts in money for "guaranteed" 1% WEEKLY returns.  

As investors pile in, financial firms need more inflows of cash to pay off maturing products, resulting in mounting risks that prompted China Securities Regulatory Commission Chairman Xiao Gang to call them a “Ponzi scheme” even before the latest record purchases. Issuance of new products and borrowing from the interbank market are among the most common ways banks pay out maturing WMPs, according to Fitch.

The WMP market has inflated to a huge size,” said Wilson Li, a Shenzhen-based analyst at Guotai Junan Securities Co. “Should they go bust, Chinese banks have their reputation on the line, and they face the risk of compensating investors because of pressure from the general public.”  A record 1,137 WMPs were sold by about 70 banks in the two weeks ended June 28, an increase of almost 50 percent from the first two weeks of the month, according to Benefit Wealth, a Chengdu, China-based consulting firm that tracks the data back to 2007. 

“In an environment where liquidity is tight, banks will find it more and more difficult to attract fresh money to keep the game going,” said May Yan, a bank analyst at Barclays Plc in Hong Kong. “Until investors are hit by a real default, they won’t understand what they are really buying into.

Our June CPI was 20% too strong (up 0.5% for the month) and our Chain Store Sales were 20% too weak (up 3% from last year vs. up 3.6% last week) and Retail Store Sales were DOWN 1.1% for the week vs +3% last week and that's dropped the annual run rate from +2.9% to +1.7% on this week's total disaster as people's disposable income goes into the gas tank – THIS IS NOT COMPLICATED FOLKS!!!

The American consumer is at the end of their rope and it's not like Europeans or Asians or Emerging Marketeers are carrying the consumer ball for the Global Economy.  Corporations are not spending and the Fed is telling them that, IF they hire, THEN the Fed will cut off the Free Money.  So, surprise, surprise – THEY'RE NOT HIRING!   Again, not complicated – very simply cause and effect all around.

On the bright side, Goldman Sachs DOUBLED their profits to $1.93Bn as endless supplies of Free Fed Money was converted into incredible trading gains on the stocks, currencies and commodities they manipulate – accounting for $2.46Bn of the bank's Revenues.  Oh, and please, please, PLEASE do not bee fooled by "just $1.93Bn" in profits for GS – that's AFTER they distributed $3.7Bn to compensate their employees (32,000, so $1M each if distributed evenly, which it's not!) through bonuses on the $1.93Bn the company allowed to trickle down to their stocksuckersholders.  

Don't bother sending this article to your Congressman if you want things to change – send them a check instead – that's how the Koch brothers get things done!  

 

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Vegas – I'm in and recruiting – Savi – do you need an email?

WHOAMI/ The only thing I know is you are not Jabobeast! and where is he when you need him?

Phil: TSLA

shocking to see it drop like that, kind of like the roadway halfway down our mountain today.  This where we spend the summers

http://www.wsoctv.com/news/news/local/mudslide-destroys-part-highway-avery-co/nYrsF/

Hi Phil. If I have some shares of apple I bought today at around $428 what calls would you sell to protect?  Got out of tsla today. Shorted at $124 and watched it go to $132 and had a heart attack. Covered at $123 so missed the big drop but at least I will sleep ok. What a crazy stock. I have a friend who owns one and she practically wanted to strangle me when I told her stock was overvalued. She kept saying Elon was going to save the world. Really annoying

I doubt that I feel anything more than normal skepticism toward your run-of-the-mill conspiracy hypothesis, simply because most humans can barely set their watches to the same time and keeps their mouths shut, much less conspire on a global scale regarding anything at all.  There is always a powerful incentive to profit by being the whistle blower, for one thing.  Gold specie, plus mining stocks  — China, Germany, Brazil,  South Africa, Bernanke and Putin —  all working together to drive gold down?  It doesn't sound right, somehow.

Been away the entire day but we are still not getting the down day we need on the indices!

Car sales are going in the opposite directions in Europe and the US:

http://www.bespokeinvest.com/thinkbig/2013/7/16/us-and-european-auto-sales-are-oceans-apart.html

This morning's release of auto sales for the month of June shows that even though the idea of globalization says economies are more intertwined than ever before, it doesn't mean that they now all move in unison.  The chart below shows the trailing 12-month total of new car sales in the United States versus Europe going back to 1993.  In recent years, auto sales in the US have seen a sharp rebound even as sales in Europe have been sliding.  In fact, while the total number of new cars in the US in the twelve months ending 6/30 hit its highest level in five years (15.0 mln), sales in Europe dropped to their lowest levels since December 1995 (12.1 mln)!  

Sears – Interesting article on how Lampert applied Ayn Rand principles to Sears, believing it would spark healthy innovation.  Instead it bred a culture of conflict and backstabbing (who knew that would happen when you encourage people to act selfish for the good of all?)  

Plagued by the realities threatening many retail stores, Sears also faces a unique problem: Lampert. Many of its troubles can be traced to an organizational model the chairman implemented five years ago, an idea he has said will save the company. Lampert runs Sears like a hedge fund portfolio, with dozens of autonomous businesses competing for his attention and money. An outspoken advocate of free-market economics and fan of the novelist Ayn Rand, he created the model because he expected the invisible hand of the market to drive better results. If the company’s leaders were told to act selfishly, he argued, they would run their divisions in a rational manner, boosting overall performance.

Instead, the divisions turned against each other—and Sears and Kmart, the overarching brands, suffered. Interviews with more than 40 former executives, many of whom sat at the highest levels of the company, paint a picture of a business that’s ravaged by infighting as its divisions battle over fewer resources. (Many declined to go on the record for a variety of reasons, including fear of angering Lampert.) Shaunak Dave, a former executive who left in 2012 and is now at sports marketing agency Revolution, says the model created a “warring tribes” culture. “If you were in a different business unit, we were in two competing companies,” he says. “Cooperation and collaboration aren’t there.”

LV Note—-please e-mail me directly if you are commiting or have questions –I am in and out on the site during the day and I miss some of the comments –thx

atm count 8 (incl deano) with 2 pending

Phil—way to get it back!!

I have been waiing impatiently, of course 😉

 

http://i.qkme.me/35do3d.jpg

Elon/cturb – save the world!?  Hah! ask your friend if he is going to save it, why is he trying to get OFF the planet and go to Mars (on a one way trip!)? Also piont out he has no kids..  hardly shows he has much commitment to mother Earth. LOL!

Having expressed my doubts about a "gold conspiracy" earlier, it is only fair that I reproduce this item that appeared in the Times this evening: 

 

Patrick Hosking Financial Editor

Published at 12:00AM, July 17 2013

"A suspected attempt by City traders to rig the Bank of England’s flagship policy to stimulate the economy has been under investigation for almost two years, it emerged yesterday.

Paul Fisher, the director of markets at the Bank, told MPs that details of a “reprehensible” attempt to manipulate the government bond market had been passed on to regulators.

The affair was looked at initially by the Financial Services Authority and continues to be under investigation by the Financial Conduct Authority, it is understood.

Officials believe that traders tried improperly to push up the price of a particular gilt in October"

And this, from FT: oh dear:

 

  "The US electricity market’s overseer has slapped Barclays with a record $470m penalty over manipulating power prices, in the latest heavy regulatory sanction against the UK bank.

The Federal Energy Regulatory Commission’s fines matched the amount proposed last year when it accused four former Barclays traders of manipulating physical power prices in California and other western US states in order to fraudulently boost financial derivative positions."

Finally — inflation/deflation:  Given that the Chinese are executing shadow bankers, it may be that their authorities are actually serious about limiting inflation:  http://www.bloomberg.com/news/2013-07-16/-shadow-banker-execution-turns-chinese-sentimental.html

Water meme continues..

Interesting take on Bernanke's testimony this morning, though I'm hard pressed to think who in Congress is going to come up with these pointed questions:

The economic calendar for Wednesday is headlined by the Bernanke testimony to the House and the Fed Beige Book. Something new is happening to the testimony. The House Financial Services Committee requested the text of Bernanke's comments ahead of the actual testimony so they could prepare questions. The Fed is going to release the Bernanke comments at 8:30 with the actual testimony to start at 10:00. I believe this is going to open Bernanke up to an onslaught of pointed questions that could produce some unwanted results.

Remember, Bernanke is assumed to be a lame duck whose term expires on January 31st. He really has nothing to lose by being blunt in his comments over the country's fiscal problems. He has been blunt in the past about the amount of drag the government is inflicting on the economy. This could turn into a hostile testimony since lawmakers have 90 minutes for their staff to come up with questions designed to embarrass Bernanke and give the lawmaker a sound bite to use in his next election campaign.

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