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Monday Mayhem – Iraq Kicks it up a Notch

Iraq shiite militia

“A well-regulated militia, being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed.”

Iraqi citizens are taking it to the streets to stop the Sunni Militant advance that has now moved on to 
Saadiya, a "city" of 20,000 people which leads the US media morons to conclude that they are just about to take Baghdad, a city of 5,672,513.  The MSM plays on American's complete lack of geographical knowledge and poor math skills to excuse the profiteering by their sponsors
(Banksters and Energy Companies) that has driven the price of oil in America up 7% this month – even though oil wasn't this high during most of the actual war in Iraq.  

Anyone who actually knows anything about war knows that the ISIL doesn't have the men, equipment or supply lines to hold what they have now, let alone march on Baghdad, let alone move another 200 miles south towards the nation's oil fields – but that doesn't fit the story the media is spinning, so it doesn't get any play.  

As noted by the New York Times (and pretty much no other paper) the goal of the ISIL is to provoke a civil war in Iraq and many of their clams of captured cities and Shi'ite executions are nothing but propaganda meant to incite riots.  As I said last week, if you follow the money, it trickles down from the $2Bn monthly windfall this unrest is giving NYMEX traders, not to mention the 90M barrels of Global oil sold each day for +$7 ($19Bn per month), 2M of which (+$420M per month) comes from Iraq itself.  

Despite all the unrest, our $107.50 oil short from Friday's post is still going strong at $107 this morning (up $500 per contract) and we're still shorting at the $107 line (those of us not so crazy as to leave shorts on over the weekend) as we're hoping to see some capitulation on the 154,000 contract that remain open (1,000 barrels per contract) on the NYMEX between now and Friday's termination date.  

As of Friday, any open contracts must accept delivery FOB at Cushing, OK – a terminal which holds, at most, 50M barrels and is half full already.  I posted a chart on Friday that showed FAKE!!! open interest of 172,551 open contract and now, one trading day later, it's down to 153,752, which means they canceled about 19M barrels worth of orders on Friday.  

Why, you may wonder, would traders cancel over 10% of their orders in one day when there's a crisis driving up the price of oil?  Well, that's because it's FAKE!!!  The crisis is fake, the demand is fake – the entire energy trading set-up is nothing more than a con game to extract a maximum amount of profits from Global consumers in exchange for the 2nd most plentiful liquid on the planet.  

I'm not going to have a big debate on this matter – you either believe it or you don't but we did tell you how to make $750 on Wednesday and $750 on Thursday and $500 on Friday shorting oil, all of which worked our perfectly – so let's at least conceded that there may be something to this scam theory that bears investigating by Congress (if they weren't also owned by the same Banksters and Oil Cartel members as the media is).  

What I can tell you is that, by Friday, all but 20M of the 153M barrels of FAKE orders will be canceled.  These are current contracts that would deliver 153M barrels of oil to the United States in July at (currently) $107 per barrel.  

By cancelling those orders, the Criminal Cartel that controls energy trading in the US will create an artificial supply shortage in the US, right at the height of summer driving season, which will enable them to charge $20-30 more than the fair price of oil (don't take my word for it, ask the CEO of Exxon) for another month.

If you want to do something fun with the kids this summer, send this article to your Congressmen along with an Email asking them what they are doing about price manipulation in the Energy Markets and then send us their responses.  We did this last year with our Members and, amazingly, many of the letters we got back, especially from GOP Senators and Representatives, contained identical language – as if it were written by Oil Lobbyists on their behalf!  

USO WEEKLYMeanwhile, we'll see if we can get another entry on shorting oil (/CL) at $107.50 (or USO $39.50) in the usual 9am run-up into the NYMEX open (see chart every day!) but I don't think they're going to get these today as already the premise (Iraq falling) is stretching very thin as the Sunnis run out of small towns to roust.  

Bloomberg is running a headline which reads "Oil Topping $116 Seen Possible as Iraq Conflict Widens" but, if you actually read the article (as few people do), they are talking about BRENT Crude, not US WTIC contracts.  It's a subtlety that, of course, will be lost on most traders (intentionally).  

So it's another fine morning to short oil and, of course, we're still working our Buy List (Members Only) and, halfway through our May Trade Review, I notice that we had over 100 Trade Ideas in the First three weeks of the month, over 80% of which were successful so I'm not going to apologize for going oil crazy at $107 – when we have an opportunity to make the same winning trade over and over and over again – we take it!  

In other news of note, Central Banksters have been propping up Global Equities markets by directly buying positions for themselves.  As noted by David Marsh, "Large and similar-minded public-sector investors can show herd-like behavior, seeking the illusive return, for example in the “search for yield” in many markets and thus creating fresh volatility."  According to the OMFIF (Official Monetary and Financial Institutions Forum) $29.1Tn of investments are now held by 400 public-sector corporations in 162 countries.  

Norges Bank Investment Management (NBIM), with $880 billion under management, of which more than 60% is invested in equities. The fund owns on average 1.3% of every listed company globally, and 2.5% of listed companies in Europe.

Rivaling NBIM is now the State Administration of Foreign Exchange (SAFE), part of the People’s Bank of China, the biggest overall public-sector investor, with $3.9 trillion under management, well ahead of the Bank of Japan and Japan’s Government Pension Investment Fund (GPIF), each with $1.3 trillion.

 If you were wondering what idiots were buying equities at these ridiculous valuations – there's your answer.  Hey, I'd buy Trillions of Dollars worth of stock too – if I were able to print the Trillions of Dollars I was using to buy them with! 

$4Tn has poured into Europe alone in the past two years and European Equities are now trading at a record 17.5 times annual earnings.  That's a return on equity of just 5.7% but, of course, that sounds FANTASTIC compared to bonds, doesn't it?  

In fact, Corporate Dividends are now higher than the 2% average bond yields and those yields even sound good compared to Japan's 0.59% rates on 10-year notes.  Japan's bond rates have gotten so unattractive, in fact, that people have finally stopped buying them.  Benchmark 10-year bonds failed to trade on April 14 for the first time since December 2000 and didn’t change hands during two morning sessions last week. The 12-month moving average of JGB trading volume dropped to a record 39.6 trillion yen ($388 billion) in April, according to Japan Securities Dealers Association figures going back to September 2004.

“The flows on both the buying side and selling side continue to fall,” said Takehito Yoshino, the chief fund manager at Mizuho Trust & Banking Co., a unit of Japan’s third-biggest financial group by market value. “Falling volatility is a very serious problem for traders and dealers who are unable to get capital gains.”

“It’s difficult because the business is shrinking,” Hiroshi Kunimura, the director of fixed-income trading in Tokyo at Barclays Plc, one of the 23 primary dealers obliged to bid at government bond auctions. “Because we’re in an environment where traders take positions at auctions only to sell them at BOJ buying operations, trading volumes with investors struggle to increase.”

 So the only person buying Japanese debt (now 240% of their GDP) is the Bank of Japan.  This is what we usually call a crisis folks or, as the MSM likes to say – "Monday".  

Be careful out there!  

 


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  1. Good Morning!


  2. Oil Lines

    R3 – 108.65
    R2 – 108.11
    R1 – 107.44
    PP – 106.90
    S1 – 106.23
    S2 – 105.70
    S3 – 105.02


  3. Today we have Ghana-USA in the Word Cup!

    Why should we care? One one side, we have a country directed by a black president who by some accounts is guilty of using dictatorial powers, came to power illegitimately, a country where wealth inequality is massive and growing, a country where a couple oligarchs manipulate the political system, where the environment takes a second seat to the extraction of natural resources and on the other side, we have Ghana!


  4. That's a positive development:

    http://talkingpointsmemo.com/dc/obamacare-good-news

    Dan Diamond at the research firm Advisory Board noted one of the most important trends as insurers prepare for enrollment in 2015: "In every state so far, more insurers are asking to participate in Obamacare."

    He included this handy chart from some of the states that have publicly released information:

    As TPM noted back in March, what insurance companies choose to do after participating in or monitoring Obamacare's first year should be one of the more telling signs about its long-term success. It's important for a couple of reasons. First, more insurers should mean higher competition and lower prices. Second, though it's a bit less tangible, is that insurers are going to be among the best judges of whether or not a market is working.


  5. This looks like a good book about IBM, but not very positive as far as investment is concerned:

    http://recode.net/2014/06/08/book-excerpt-the-decline-and-fall-of-ibm/

    Even on the surface, IBM in early 2014 looks like a troubled company. Sales are flat to down, and earnings are, too. More IBM customers are probably unhappy with Big Blue right now than are happy. After years of corporate downsizing, employee morale is at an all-time low. Bonuses and even annual raises are rare. But for all that, IBM is still an enormous multinational corporation with high profits, deep pockets, and grand ambitions for new technical initiatives in cloud computing, Big Data analytics, and artificial intelligence, as embodied in the company’s “Jeopardy” game-show-winning Watson technology. Yet, for all this, IBM seems to have lost some of its mojo, or at least that’s what Wall Street and the business analysts are starting to think.


  6. stjeanluc/Ghana  Thanks for the :)


  7. Good Morning!  You will love this one too Phil….US exports of Oil…almost back to an ATH (from SoberLook)


  8. Good morning!  

    Washington Post ‎- by Antonio Olivo ‎- 4 days ago
    Tea party challenger David Brat defeated the second-ranking … elite while at Princeton,” but Brat never attended Princeton University. Rather ..

  9. ~~"With a PhD in economics and a master’s in divinity"….Brat sounds like a tea party's wet dream…..


  10. CTFC/JJ – Well, unfortunately:

    Traders Face Curbs on Speculation With CFTC Vote on 

    http://www.bloomberg.com/…/traders-face-curbs-on-speculatio

    Bloomberg L.P.

     

    Nov 6, 2013 - Related consumer prices climbed as well, and airlines and other businesses sensitive to commodity prices blamed speculators. The CFTC's ..

    Same song and dance as last year.  

    Oil (/CL) still floating along that $107 line.  With 172M in contracts open on Friday, they were only able to dump 18M and they don't have 10 days left so I would think there should be at least $2 of downward pressure between now and Friday.  

    Beware of the contract rollover, the current contract is /CLN4 (July) at $107.10 but soon CNBC and other channels will start using /CLQ4 (Aug), which is currently $106.35.  What should happen this week is N4 should go lower and Q4 higher as July is sold (supply) and August is bought (demand) but both should fall about $2 overall.  

    Still, very tight stops over $107 (and we can take a stab at $107.25 but very tight stops over that and again at $107.50 but, over that – we'd have to play it by ear).  As I said last week – they can pop $110 at some point – but they can't hold it, so always keep plenty of dry powder handy in oil. 

    LOL StJ!  

    LOL on Obamacare working too.  

    Nice Algo summary – I was talking about the Random Number Generation fallacy in our Webinar last week.  

    Exports/Pharm – Wow, that's well over 2M barrels a week we send out while importing 7Mb.  So 30% of the oil we import isn't consumed in the US.  


  11. TSLA wtf???


  12. Oil /Phil   Great article  you answered my queston 110%.

    Regards.


  13. what's up with TSLA?


  14. Brat/1020 – Turns out his thesis on Economics is that it's a sham.  Actually, it's hard to disagree with that one…  cheeky

    Rather, Brat's ambition is more sweeping. "I do have an agenda," he writes. "To illustrate, by the internal logic of economics alone, that the dominant methodology in economics is in serious question, if not dead." By "dominant logic," Brat appears to be referring to the idea that economics is a science — one dominated by attempts to demonstrate and verify, using methods like statistical regression, theories that accurately predict how economies work.

    Meanwhile, he's influenced (of course) by "realistic" views like Ayn Rand's in Atlas Shrugged like this:

    "Miss Taggart, do you know the hallmark of the second-rater? It's resentment of another man's achievement. Those touchy mediocrities who sit trembling lest someone's work prove greater than their own — they have no inkling of the loneliness that comes when you reach the top. The loneliness for an equal — for a mind to respect and an achievement to admire. They bare their teeth at you from out of their rat holes, thinking that you take pleasure in letting your brilliance dim them — while you'd give a year of your life to see a flicker of talent anywhere among them. They envy achievement, and their dream of greatness is a world where all men have become their acknowledged inferiors. They don't know that that dream is the infallible proof of mediocrity, because that sort of world is what the man of achievement would not be able to bear."

    "But you say that money is made by the strong at the expense of the weak? What strength do you mean? It is not the strength of guns or muscles. Wealth is the product of man's capacity to think. Then is money made by the man who invents a motor at the expense of those who did not invent it? Is money made by the intelligent at the expense of the fools? By the able at the expense of the incompetent? By the ambitious at the expense of the lazy? Money is made – before it can be looted or mooched – made by the effort of every honest man, each to the extent of his ability. An honest man is one who knows that he can't consume more than he has produced.

     "Only the man who does not need it, is fit to inherit wealth – the man who would make his own fortune no matter where he started. If an heir is equal to his money, it serves him; if not, it destroys him. But you look on and you cry that money corrupted him. Did it? Or did he corrupt his money? Do not envy a worthless heir; his wealth is not yours and you would have done no better with it. Do not think that it should have been distributed among you; loading the world with fifty parasites instead of one would not bring back the dead virtue which was the fortune. Money is a living power that dies without its root. Money will not serve that mind that cannot match it. Is this the reason why you call it evil?

    Anyway, the RUT is right at that 1,157.50 (strong bounce) line we were watching on Friday.  My impression on Friday was that it was consolidating for a move lower so watch the weak bounce line at 1,151 as the first breakdown and then 1,147.50 is the 2.5% line (from the 1,175 top) that would signal the next leg down for the market. 

    Europe is coming off it's lows since we opened.

    Empire manufacturing was up a bit this morning at 19.3 but new orders were way up to 4-year highs – so that's a good sign.  

    • May Industrial Production: +0.6% vs. 0.5% consensus, -0.3% prior (revised).
    • Capacity utilization 79.1% vs. 78.9% consensus; 78.9% prior (revised).
    • June Empire State Survey19.28 vs. 15 expected, 19.01 prior.
    • New Orders: 18.36 vs. 10.44 prior.
    • Shipments: 14.15 vs. 17.44 prior.
    • Inventories: 9.68 vs. 2.20 prior.
    • Net foreign inflow of long-term U.S. securities were $136.8B, with net inflows by private foreign investors of $119.7B and net inflows by foreign official institutions at $17.2B.
    • Taking into account both foreign and U.S. securities, the net foreign purchases of long-term securities were -$24.2B vs. $4.1B (revised) prior.
    • Foreigners decreased their holdings of U.S. T-bills by $41.6B.
    • Report
    • Dow -0.11%.
    • 10-yr +0.09%.
    • Euro +0.14% vs. dollar.
    • Crude +0.14% to $106.32.
    • Gold +0.18% to $1,276.40.
    • China has passed the U.S. as the world’s largest issuer of corporate debt, according to a report released today by S&P. Despite the record, there has been a worsening cash flow at Chinese companies since the financial crisis.
    • China’s non-financial companies had $14.2T in outstanding bank loans and bonds at the end of last year, compared with $13.1T in the United States. New growth in China is expected to put corporate debt levels at more than $20T by the end of 2018 – a third of the world's corporate borrowing.
    • However, S&P approximates that around one-quarter to one-third of China’s corporate debt comes from the country’s shadow banking sector – non-bank lending that caters to borrowers who have difficulty obtaining financing. Shadow banking has caused corporate debt to surpass Chinese household borrowing and government debt, which raises red flags of the ability for companies to make interest payments and repay bank loans.
    • ETFs: DSUMCHLC
    • Ukraine's energy minister has reported that Russia has cut off all gas supplies to Ukraine, after failing to settle on an agreement in yesterday's negotiations.
    • "We have an announcement to make today – that gas supplies to Ukraine have been reduced to zero," says Energy Minister Yuri Prodan.
    • Gazprom (OGZPY) has also filed a lawsuit at the Stockholm arbitration court to try to recover Ukraine's $4.5B debt for gas.
    • China's bank sector (CHIX) was boosted overnight after a number of midsize banks won inclusion into a PBOC move to cut reserve ratios – now a larger program than analysts expected when the central bank unveiled it last week.
    • For the PBOC's part, it says the action isn't an expansion of the reserve ratio cut, but that any company is eligible for eased ratios as long as a significant portion of boosted lending goes to agricultural and smaller companies.
    • Shanghai closed higher by 0.75%.
    • ETFs: FXIPGJGXCFXPYINNASHRYANGMCHIPEKXPPYAOYXICHXFCNFCA,CHNAKBA

    AK Steel +5% as BofA upgrades to Buy

    • AK Steel (AKS) +5.1% premarket after BofA/Merrill upgrades shares to Buy from Neutral with a $10 price target, up from $9, citing better global electrical steel demand, falling iron ore costs which should start to benefit AKS in Q3, and an improving free cash flow story into 2015.
    • The firm says AKS is the only beneficiary of lower iron ore prices in its coverage universe, as AKS still relies on third party iron ore for half its needs even with the Magnetation investment.
    • AK operations should be back to normal by Q3 with the return of its Ashland, Ky., furnace in late Q1 and after playing catchup with customers, BofA ads.
    • Shares of Goodyear Tire & Rubber (GT) are higher in premarket trading after Barron's lines up the stock as an undervalued gem.
    • A strong global automobile market and improved financials at Goodyear are the basis for the bull thesis.
    • Barron's notes significant investors Appaloosa Management and Marcato Capital Management are on board for the ride.
    • GT +2.5% premarket
    • SanDisk (SNDK) agrees to acquire Fusion-io (FIO) in an all-cash transaction valued at $1.1B.
    • The $11.25 per share offer is expected to close during SanDisk's FQ3.
    • The combination of the two tech companies is forecast to be accretive in the second half of SanDisk's FY15.
    • FIO +23.1% premarket to $11.42.
    • Alibaba (ABABA) had a GMV of RMB430B ($69.1B) for seasonally weak Q1, -19% Q/Q and +46% Y/Y. The Y/Y growth rate slipped from Q4's 53%.
    • Active buyers grew 10% Q/Q to 255M. Mobile accounted for 27.4% of GMV, up from 19.7% in Q4 and 10.7% a year ago. Mobile MAUs +20% Q/Q to 163M.
    • For the year ending March 31, Alibaba had revenue of $8.45B (+52% Y/Y), and adjusted net income of $4.44B. Free cash flow was $5.19B. Revenue growth slowed a bit from the 57% seen for the 9 months ending Dec. 31.
    • Alibaba's Taobao (consumer-to-consumer) marketplace had a Q1 GMV of RMB295B (+32% Y/Y, 69% of total), and its Tmall site (business-to-consumer) a GMV of RMB135B (+90% Y/Y, 31% of total).
    • Yahoo (YHOO) isn't responding well to the numbers. Alibaba still hasn't proposed a symbol or valuation. The company is reportedly looking to go public in early August.
    • Alibaba's revised F-1

  15. jabo lunar TSLA

    It is the answer to energy, oil price rising, supply about to collapse, giga factory a fact, and lastly that is the electricity problem solved. Who needs distribution when we have 150 million power sources? How this relates to power generation not with oil and civil unrest in Iraq is the unanswered question. The fake market is selling Musk will fix everything.


  16. Hi Phil: CLF down this morning. Seems like a good buy. What do you think about buying the stock at $13.85 and then selling the Jan 2016 $13 Puts/Calls?


  17. SGEN – Felix Baker (Director), Julian Baker and their Biotech funds (Baker Brothers et al.) bought a total of $30 million worth a few days ago…

    http://www.sec.gov/cgi-bin/own-disp?action=getissuer&CIK=0001060736


  18. stj…..wombat

    sounds like you are feeling better………..very funny re the ghana/ us

    jj….tks for the ubnt…………


  19. Bought back some FNMA & FMCC on this sell off.


  20.  

    Major Earnings for the Upcoming Week:

    Monday:  KFY

     

    TuesdayADBE, BOBE, LZB, UWN, YGE

     

    Wednesday: ATU, FDX, JBL, RHT

     

    ThursdayBBRY, KR, ORCL, PIR, RAD, SCHL, SWHC, TIBX

     

    Friday: KMX. DRI

     

    Economic Releases (6/16-6/20):

    Monday:

    7:30 am CT – Empire State Mfg. Survey

    8:00 am CT – Treasury Int. Capital

    8:15 am CT – Industrial Production

    9:00 am CT – Housing Market Index

                                                                                                                                                                                    

    Tuesday:

    6:45 am CT – GS Store Sales

    7:30 am CT– Consumer Price Index (CPI)

    7:30 am CT – Housing Starts

                                                                                                                                                                                                                  

    Wednesday:

    6:00 am CT – MBA Purchase Applications

    9:30 am CT – Oil Inventories

    1:00 pm CT – FOMC Meeting Announcement

    1:00 pm CT – FOMC Forecasts

    1:30 pm CT – Chair Yellen Press Conference

                        

    Thursday:

    7:30 am CT– Weekly Jobless Claims

    9:00 am CT– Philly Fed Survey

    9:00 am CT –Leading Economic Indicators

                                                                                                                                                                                                            

    Friday:

    N/A


  21. mill // no worries
    even a blind pig finds an acorn ; >


  22. From Dr. John Faessel:

    Bullish sentiment up and well into extreme levels *

     Valuations Stretched** 

     

    MARKET

     

    Last week the markets took a well-deserved breather off hyperextended technical pictures on still low and below average volume. And while the global economic and potentially terrible geopolitical/Mideast upheavals run amuck – the markets trend on higher with a – “no problem” response.

     Presumably, at some point the now accelerating price of crude oil that’s is now breaking above an eight months base will work its way into the global slow growth equation enough to become palpable. There is so much cockeyed with these artificially priced markets due to the gargantuan central-bank stimuli that has the United States, Europe and Japan’s economies at near standstill (or below) I wonder what it will take to get at least a decent correction. Complacency reigns as I mentioned last week and the recent investor bullish sentiment accelerated again.

     The McClellan Oscillator (my favorite overbought and oversold indicator) remains in Neutral at a minus 26.

     The good news is that there is $1.7 trillion in cash and equivalents on nonfinancial-company balance sheets is driving top-line growth through acquisitions as it’s the only way to get earnings per share to rise at many big companies.

     

    To me it seems that the whole ball of wax is held together with pure unadulterated ‘hope’ that market corrections are now a thing of the past due to central-bank acumen. Incredible!

    The Fed Balance sheet as of April 9th is $4.244 trillion. The Federal debt is now 102% of GDP.

     

    * * Market Valuation

    Stretched!

     

    ·       Friday’s forward P/E on the S& P 500 (SPX) moved  up to 15.5 from a recent low of 14.4 on February 3. That’s a new high for the bull market, and the highest since June 20, 2005.

      The ratio of the (SPX) market capitalization to its actual revenues rose to 1.64 during Q1, the highest since Q1-2002.

      The ratio of the market value of all domestic equities traded in the US to nominal GDP rose to 1.63 during Q1, the highest since Q3-2000.

    The ratio of the (SPX) stock price index to its forward revenues rose to 1.63 at the end of May, exceeding the previous cyclical peak of 1.56 during the week of July 19, 2007.

     

    The US Economy is Moribund and Europe is Worse

     

    The U.S. economy grew a meager 0.1 percent during the first three months of the year. Chief U.S. economist at Deutsche Bank and perma-bull Joseph LaVorgna explained “Weaker data on construction spending, inventories and net exports imply that Q1 GDP[gross domestic product] will now show a contraction.” LaVorgna now suspects the economy notched a minus 0.8% growth rate during the first three months of the year. Paul Ashworth, chief U.S. economist at Capital Economics, thinks economic growth fell 0.4% in the first quarter.

     

    Recently the European Central Bank adopted negative rates announcing that it will charge banks 0.1% on overnight assets.

     

    From PIMCOs Bill Gross

     

    “Stocks and bonds are artificially priced. We expect them to remain so, given billions of dollars of check-writing by the Federal Reserve and a federal-funds rate of only 25 basis points [0.25%]. The European Central Bank's $500 billion stimulus program will begin in September. The Bank of Japan is writing even more checks than the Fed. This triangle of monetary stimulation is propelling equity and bond markets higher and lowering bond yields. It is a grand party.”

     

    S&P 500

     

    The S&P 500 (SPX) closed Friday at 1936.16. One week ago it was 1949.44 – the week before that 1923.57 and the week before that 1900.53 then >1877.86.

     

    Channel and trend line support off the November 2012 lows is 1854.

    Short term price support is at S&P 500 (SPX) 1938

    ‘Better still’ price support is at 1867/1862 / 1850 and 1814.

    The still advancing 50-day moving average support is now at 1888.

    The 200-day moving average support is at S&P 500 (SPX) 1809.

     

    * This Week’s Investor Sentiment 

     

    Last week Bullish sentiment was up across the board and is approaching the optimism and highs of a few months ago. The US Advisors Sentiment [Investors Intelligence] of Bullishness is at a 6-year high. Furthermore the Citigroup “Panic / Euphoria” Model is now well into the Euphoria zone after languishing in the neutral or panic modes since April 2008

    (High BULLISH readings in the Investor Sentiment Readings usually are signs of Market tops; low ones, market bottoms.)

     


  23. ~~Central banks becoming major investors in stock markets

    http://finance.yahoo.com/news/central-banks-becoming-major-investors-083020799.html

    This should fix things.


  24. ~~IMF Cuts U.S. Growth Forecast, Sees Greater Scope for Zero Rates

    http://finance.yahoo.com/news/imf-cuts-u-growth-forecast-133002233.html

    This has to help.


  25. Brat/Princeton – Technically the Post got this wrong.  Princeton, Yale and Harvard have separate divinity schools, so it is not really dishonest to say you attended Princeton if you went to the divinity school.  Anyone who went to the JFK School of Government can say that went to Harvard.  Many universities have separate colleges.  So I think that is a bit of leap to criticize Brat.

    That said, his theology of economics is a disaster, both practically and morally.  I was a teaching assistant for the social ethics professor who was at Princeton during Brat's years, and he would have shredded Brat's Ayn Rand based theology as inconsistent with biblical theology.  Much has been made about conservative religion not respecting science, whether environmental or social sciences, but what is also equally troubling is that do not respect their own founding documents in the scriptures.  There is no way you can go from Jesus's word of good news to the poor, give to those in need, the parable of the Good Samaritan and the Sheep and the Goats, to espousing Ayn Rand's philosophy.

     

    As this article notes, the bible and Ayn Rand's Fountainhead are actually proclaim two different religions. Rand was a self-proclaimed atheist!  Can't imagine what conservative Christians are thinking here, other than a covering philosophy for selfishness.


  26. wombat 

    Give me your e mail I have a Dividend‏

     Report I will send you


  27. TSLA/Jabob – Up on patent-sharing news, apparently.  That's getting a bit old. 

    Oil/Advill – I thought that would answer your question!  wink

    CLF/Japar – I like CLF at $13.85 and I will like them at $10.85 and $8.85 too, as long as the reason they are going down is because the price of the stuff they sell (iron ore) is low.  I feel the same way about about gold, silver, copper, aluminum – even coal.  Commodities have cycles and, even in a downtrend, there are cycles within cycles.  

    You have to be a real long-term investor and, of course, companies MIGHT go BK if they aren't able to financially navigate their way through a price drop BUT, if you pick the companies that weather the storm, they can bounce very high, very fast when prices do come back and make fantastic trading vehicles for people who learn how NOT to follow the crowds.  

    Weak as copper is, it's not as bad as iron ore this year, which is very strange as they are both basic building materials.  

    Just keep in mind that 2007 was a silly spike high and that $100 is more the "normal" price for iron ore – not $120+ so we aren't expecting or looking for a huge boom in pricing – just the stability that stops idiot analysts from extrapolating that iron prices go below $60 – which is well below the cost of production (probably mid $70s).  

    Also, with CLF – Keep in mind that 60% of their operation is North American Iron Ore and that gives them a massive cost advantage over China on the shipping end.  CLF should be about $18 – even at these prices, $14 is just silly and you can sell the 2016 $15 puts for $4.50 for a net $10.50 entry (and just $2.90 in ordinary margin!) or you can be more aggressive and add the $10 calls for $4.90 and sell the $18 calls for $1.75 for a net $2.15 credit on the $15s and, even if it's put to you at net $12.85, you still have the $10 calls so the break-even is the average of those at $11.425, which is 25% off the current price and the return at $18 is $8,000 on 10 of them plus the $2,150 credit for $10,150 – 472% in 28 months – let's officially add that to the LTP

    SGEN/Scott – If he's so clever, why didn't he buy last month at $32?  Actually, he did buy $5.7M in May and has bought from June 3 on almost $30M more.  I'd say that's significant.  

    SGEN certainly worth a toss at $40 since you can sell the 2016 $35 puts for a whopping $7 and net in at $28, which is 30% off the current price – 5 of those in the LTP too!  

    Isn't it nice to have sideline money to deploy?  wink

    Earnings/QC – Wow, is it that time already?   Thanks. 

    Wheeee, what a dip from that opening pump job!  

    Gross/Rustle – He's right, we can keep playing until the music stops but, when it does – we'd better have a chair!  

    IMF/Shadow – This is getting really crazy.  Worse and worse news being papered over and clearly the paper isn't working, yet they keep printing…

    Princeton/Rev – What they are criticizing is, right on his own campaign material, it says he went to Princeton ("while at Princeton"), not Princeton Divinity.  It's purposely misleading, no two ways about it.  I think the "good news" to the poor Brat follows is that they will be going to heaven ASAP under his plan…


  28. RUT came right down to our 1,151 line and held it.  That's a bit constructive but still bouncing around below 1,157.50 (/TF).  


  29. phil / frozen
    it would seem that my ports are perfectly balanced ( if you assume that I have remained completely level for the last 3 months ) The other way to look at is, I've burned through about 30K in insurance – arghhh. Still really frustrating being a Bear.
    I was wondering if you could take a look at our old friend CLF for me ( ironic – I just read your post while I was writing this ). I haven't jumped ship on this from the beginning ( 2 years ? ) – wanted to run it by you to make sure I'm playing it correctly.
    CLF
    -50 July $17 Call ( $0.31 )
    +10 Jan16 $15-18 BLCS ( $1.30 )
    -20 Jan16 $15 puts ( $4.18 )
    +50  Jan16 $20/ 25 ( $2.10 )
    Feel free to just say 'hang in there ; > 

    qcmike // Div
    Thanks man jj2020@me.com


  30. I would think TSLA opening up its patents would weaken the company.  Now you can have more competition and possibly better cars with lower prices which will ultimately hurt their profit margin.  Was waiting almost 3 months for a pop like this on some nonsense.


  31. Phil, hard for me to defend anything Brat says since his campaign was mostly based on falsehoods.  Most clergy who went to a divinity school would say they went to Harvard or Yale or Princeton, and not add the "Divinity."  And most can cross register at the regular school.  Compared to his other falsehoods it is small potatoes, but its not like he went to some Bible college spelled "Prynceton."  It is the real deal.  OK, enough of my little soap box.  Did you see this is the NY Times yesterday?

    One priority of business that is in the most immediate jeopardy given Mr. Cantor’s defeat is the Export-Import Bank, which companies like Boeing and General Electric and hundreds of smaller companies rely on to provide subsidized loans to foreign customers. Eliminating the bank has become a conservative cause on par with repealing the Affordable Care Act.

    This actually affected Boeing's stock price.  Politico says much the same here:

    http://www.politico.com/story/2014/06/2014-virginia-primary-wall-street-eric-cantor-loss-107696.html


  32. Balance/Wombat – Well, if you are perfectly balanced, you don't need insurance.  Also, you have to think about the kind of trades you have.  For instance, in the LTP and Income Portfolios, we tend to play trades that will pay us about 20% a year or more under any circumstances in which the stock does not go lower.  That way, when we spend money on our insurance, we KNOW FOR A FACT that we will make money if our insurance is unused.  

    As to CLF, you have 60 bullish 2016 spreads and 20 2016 short puts and 50 short July calls that will expire worthless yet are still a ridiculous 0.11.  I'd cash the extra 10 $15 calls ($2.55 = $2,550) and roll the 10 short 2016 $18s ($1.75 = $1,750) to 30 Aug $17 calls (.25 = $750) and spend the extra $1,500 to roll the 50 Jan $20s ($1.35) to the $18s ($1.75) for net .40 ($2,000) and then, whenever you have a successful short call sale, you can use the money to improve your long position.  

    PCLN back to $1,189.  

    AAPL back to $91.50. 

    Times/Rev – I'm not quite sure how a freshman Rep is going to destroy the E/I Bank.  It's not an issue the Dems will bend on and, when push comes to shove – it affects too many campaign donors for the GOP to take a hard-line on either.  

    Democrats like Mr. Hoyer said Mr. Cantor was often more of an obstacle than a compromiser. In that sense, they are not grieving over his departure. “Cantor was neither the facilitator or creator of gridlock, but he was way too careful of getting too far out ahead of the right wing,” Mr. Hoyer said, adding that he was not writing off all hopes of legislative progress.

    Hoyer is the guy who past the I/E Bank legislation with Cantor and HE would rather work with someone else!  If the GOP does go into some kind of a frenzy and kills I/E Bank and Highway Funding – they'll find their donor support dry up fast in a lot of regions as now they are biting the hands that feed them.  

    To me, these guys are a choice betwen Asmodeus and Gressil:  they're all bad – you just have to pick your poison.  


  33. Phil // CLF
    Not sure where you see 'the extra 10 $15 calls' ? Those are part of the $15/18 BLCS which is currently ($800)

    As to CLF, you have 60 bullish 2016 spreads and 20 2016 short puts and 50 short July calls that will expire worthless yet are still a ridiculous 0.11.  I'd cash the extra 10 $15 calls ($2.55 = $2,550) and roll the 10 short 2016 $18s ($1.75 = $1,750) to 30 Aug $17 calls (.25 = $750) and spend the extra $1,500 to roll the 50 Jan $20s ($1.35) to the $18s ($1.75) for net .40 ($2,000) and then, whenever you have a successful short call sale, you can use the money to improve your long position.  

    and the original post positions

    CLF
    -50 July $17 Call ( $0.31 )
    +10 Jan16 $15-18 BLCS ( $1.30 )
    -20 Jan16 $15 puts ( $4.18 )
    +50  Jan16 $20/ 25 ( $2.10 )


  34. What's the dividend on CLF?


  35. Wombat

    He just means to close the 10 spreads, and get shorter in the front month with the Aug sale.


  36. jarboe // I don't think so, because then he wants me to roll the short half of that spread

    Phil // CLF Follow

    ok, i've read this about 30 times 
    so,, your saying
    cash in the =10 Jan16 $15 for a loss of $800 ( but frees up $2,550 )
    roll the short part of the spread ( -10 Jan16 $18's ) to -30 Aug $17's
    Then use the 'proceeds' to roll down my Jan16 $20 / 25 to  $18 / 25

    I get this but then I have -30 Aug $17's uncovered ?


  37. http://finance.yahoo.com/news/u-s--ranks-last-out-of-11-countries-in-health-care-quality-162331309.html

    ~~The UK, which was ranked highest, blew the U.S. out of the water, despite the fact that the country spends less than half as much on health care per capita ($3,406 on average, compared to $8,508 in the U.S.). The U.S. also spends the most on health care as a percentage of GDP (17%) than any other other nation.

    The chart, not allowed to post, is quite good.


  38. aha – so then you're thinking that the -30 Aug $17's uncovered would be my new monthly sell ?

    ( sorry for the stream of consciousness guys )


  39. ~~Medtronic heads to Ireland’s greener tax pastures: Other U.S. firms sure to follow


  40. Would it surprise anyone if you found out a car company bought a stake in TSLA?  Especially with all the M&A activity going on.


  41. There goes oil


  42. Tesla Motors tips off early 2015 Model X delivery • 1:06 PM

    Shares of Tesla Motors (TSLA +6.1%) trade higher after Model X reservation holders receive confirmation from the company on an early 2015 delivery.

    The first prototypes are expected to roll off the EV automaker's assembly line in Fremont, California this fall.


  43. Well I hate to tell you guys but watching football Germany Portugal so far 4 goals to 0 for Germany but Angela is watching too


  44. PHIL

    The CLF trade is available @~1.38. How did you figure -2.15?


  45. Charging/Jabob – That is good news for them although it depletes the "specialness" of their own superchargers.  

    CLF/Wombat – They are extra once you roll the short $18s to short Aug $17s.  You have 50 $5 spreads – I don't see the point to 10 more $3 spreads.  

    CLF/Maya – They pay a .60 dividend, which is 4% but, generally, it's expected they will cut or eliminate it if ore prices don't pick up.  

    CLF/Wombat – I'm not considering the short July calls a factor.  They will almost certainly expire worthless.  If it makes you feel better, you can cut 30 of those or cut all 50 and sell 50 of the short Augs but doesn't seem worth the effort for net +.15, so I suggested TEMPORARILY having 80 short calls to the 50 longs since 50 of the short calls are 20% out of the money and expire in 32 days.  

    Health cares/Shadow – I was trying to explain this to some cousins this weekend and all they kept saying is "The US has the best health care in the World, in Canada you wait 3 weeks to see a doctor" – it's incredible how the BS they drum into people's heads on Fox is simply accepted as facts by people who should know better.  

    Source: The Commonwealth Fund

    This is what we get for DOUBLE what other countries are spending!  DOUBLE is an extra $1.5 TRILLION per year.  Not only is it enough to pay off our National Debt in 10 years – but it's the cause of our National Debt in the first place.  And, keep in mind that 3,400 per person for the UK's #1 health care plan (and I have relatives on it and I've been there – it's like a science fiction movie how good London is) covers EVERYBODY in the country with no exceptions from birth to death.  

    The UK pays 60% less than we do for that service and the GOP will do whatever they can to make sure we stay as far away from that system as possible.  Michael Moore is right – that's sick!  

    TSLA/Rustle – They are "only" $27Bn and TM is $180Bn and Daimler must be about $100Bn and VW maybe in between the two so either of them could put 10 or 20% into TSLA the way KO did with GMCR but why would they when Musk is giving away the patents?  If he does that – the company won't have much value to anyone other than as a manufacturing facility.  

    Germany/Yodi – Very nice.  You guys play US a week from Thursday – that should be fun for you too!  

    CLF/Zten – The 2016 $10 calls are $4.85 and the $18 calls are $1.75 and the short $15 puts are $4.50 so $4.85 – $4.50 – $1.75 is a $1.40 credit.  I think before I mixed it up and subtracted $4.90 from $4.50 for .40 credit and then another $1.75.  So $1.40 credit is correct, thanks!  


  46. TSLA/Phil

    Think he's giving away patents to suddenly make nice with the auto industry after mocking them a year ago.  Also to get a badly needed charger station network that they can't afford to build out anymore.  Figure if Ford put 2 Billion into them, they'd probably get it back on their market cap immediately from TSLA people buying Ford and others thinking what the potential would be and the "unbiased analysts" putting crazy price targets on Ford or whoever took a stake in them.


  47. TSLA Super Chargers

    As is they can't be shared with other car systems because if you even try to pump that much current into something it has to be able to take it, smaller batteries couldn't take it. I still question the safety of charging that fast. They would have to (ADD) 240 volt charge stations. Connectors would have to be different kind of like unleaded gas pumps have a smaller filler. I have seen a few diesel pumps with the small pipe and wonder why anyone would want allow anyone to maybe ruin a gas car, even though it was to prevent leaded gas in unleaded catalyst cars. 


  48. FU invisible hand mr stick!!!! 


  49. Phil health care

    There are two very bad outcomes that I have experienced in the US. Some doctors, although all would deny, actually decide if your worth the effort and then will it pay enough. Getting into a doctor takes closer to 3 days not weeks but the system is clogged up with that doctor can't help you, refer you down the road, and they know if this specialist will get PO'd if an undesired patient is sent, so they refer you to the overloaded good guy and you wait months just like the VA. How many times did I ask on this site for help? For how long? Jeffdoc finally sticks his neck out, does anyone realize I have asked everyone everywhere for years for a direction? I am an expert at short cutting to the best specialists, no referral, but I still need to have direction of who to seek and that means you need to become a somewhat medical expert, the doctor system is broken. Insurance profits are the cause.


  50. can someone explain to me why /CL drops 14% and Oct SCO don't budge >>?


  51. where did you see /CL drops 14%?


  52. lol
    Im sorry man, I was looking at my cal spreads // my bad.

    on the bright side – you answered my q ; >


  53. FU TSLA!!!!


  54. wombat SCO

    SCO is the opposite of futures in that it is a very thin trade also. I have watched it for years but it is only good for a spread you plan to hold till expiration carefully planned like Phil believes oil prices will fall by fall so now is a good time to take a position if you agree. USO follows closely and much more like /CL


  55. Phil,

    how come there are no bid/ask volumes on /TF? Lightly traded or some kind of error?


  56. oh man f&Ck u TSLA
    they just flipped my array again
    Phil >> I smell blood in the water, can we come up with some trade to pay off a TSLA and then all burn them and put them on YouTube ?

    shadow >> SCO
    I did, I have an Oct 24/28 Bull – I was looking at my /CL calendar spreads 


  57. Buying few Aug $7 Cs in ARIA.  only 5K have moved today…why?  IDK, but I will gamble to see if it is rumour…. :)


  58. Phil you will love this, buying a gun for another could get ugly!

    http://finance.yahoo.com/news/supreme-court-rules-straw-purchaser-law-140713053--finance.html


  59. Figuring this mayhem out. Remember; cashy, cautious, bullish, bearish – long and strong or selling the rally, the only thing that really counts is the price and volume action (and one might say you can make money in this market just focusing on price). Trying to predict market moves and individual stock performance based on believing you understand the fundamental business story is delusional. Based on some of the CEOs I know, with all the benefit of corporate advisors their predictive powers are bereft of, well , 'prediction'.

    Of course as entertainment it provides some value, but don't believe it is enhancing your trading and investment prowess. Reading through the reams of commentary on TSLA that much intellect has been expended on, the price level of TSLA comes down to the daily tussle between buyers and sellers.

    Fortunately the structure of Long Term trades on PSW is predicated on price action, and that if a stock price declines there will always be an 'out' by rolling the short puts. But, in terms of a particular insight into the merits of the stock story I doubt it – absent we are selecting companies that have the 'survivorship bias' in their favour.

    Don't get me wrong, I am not in the business of biting the hand that feeds me. But methinks 'humility 101' definitely needs to be added to the curriculum.


  60. Insurance/Shadow – That's a big part of it.  30% or so of our cost (accounting for 1/2 the difference between us and other countries) goes to insurance companies.  Add in the legal side and there's another 20% down the tubes (but that's not even included in our health care costs).  

    /TF/Jasu – It's moving but very slow – kind of strange.  

    TSLA/Wombat – No thanks.  That's generally a "no trade" for me after getting burned last year on short calls.  

    Guns/Shadow – Well that does make sense, which is why it's surprising that it's a Supreme Court decision…

    Humility/Winston – That's why we scale in.  Even if we think we're right, we can still be horribly wrong.  Also, in this market, if you wait long enough on almost any stock, whether you are bullish or bearish – you will be right eventually.  

    Meanwhile, the madness continues:

    • High-yield debt funds raised their allocations to stocks to 3.2% at the end of March, up from 3.1% at the end of 2013 and just 2.1% one year earlier.
    • JPMorgan suggests investors do more of the same: “We see credit as relatively over-owned and valued versus other risk assets,” says JPMorgan. “Investors are beginning to worry about how the eventual exit will fare in a world of reduced market making by banks.”
    • The move comes as junk bond yields scrape record absolute lows, and on a relative basis, junk buyers are earning 346 basis points more than benchmark rates, the lowest since 2007 and 241 basis points less than the two-decade average. “We prefer to take more risk in equities and we now cut the size of our U.S. high-yield spread trade by one-third," says JPMorgan.
    • weekend box office take on How To Train Your Dragon 2 which fell below expectations prompts some frenzied selling in DreamWorks Animation (DWA -12.2%).
    • Though the $50M box was relatively strong and beat the haul from Dragons 1, expectations were running high that the studio would shake off its slump with Dragons 2 in a resounding way.
    • During the weekend, Dragons 2 was beat out by 22 Jump Street. - LOL, that's embarrassing but $50M not so bad.  

  61. Wiinston

    Very wise words. I have never held any TSLA positions so I preach caution as I believe the company is a failure and all the BS Musk can put out is not going to change that outcome. Other than short trip and city situations recharging electric is not an answer to anything. I also don't think lithium batteries are a good medium for cars or houses. They are an excellent short term back-up because of high discharge capabilities and hold a charge almost indefinitely. The constant use problem is heat and very intolerant to any manufacturing inconsistencies that end in fires. To date the only safe storage for these uses is lead acid, problems: size, weight, and life expectancy. Good side is recyclable.


  62. VIX and TLT at day's highs.  Not very high, though, 12.69 and $112.44.  

    XLF back at $22.50 line – low if the day.

    Dollar 80.56, oil $106.78 (nice $250 drop for our day), gold $1,271 off the $1,285 highs last night.  Silver back to $19.61 from $19.87 Friday night, copper $3.047, nat gas $4.70 and gasoline $3.07.  

    SPY volume is very low but now the average is low too – under 100M from 120M earlier in the year – that's how relentlessly low volumes have been!  


  63. Phil/ CLF

    Offered $1.37 credit for the CLF spread- no takers yet


  64. Trying to get my tasr calls in AGAIN & no volume-nada. Can't believe this market.


  65. Phil/Scaling in; the best advice ever – we emphasize it, but I am not sure everyone gets it. Makes so much difference, but I guess it is one of those lessons learned in the heat of battle.

    Shadow/ what you don't know about electricity is probably not worth knowing. God speed in dealing with your health challenges.


  66. Winston Thanks!


  67. What a big surprise-everything in  the green again.


  68. pirate
    can i have your screen ?


  69. CLF/Maya – I usually find it's best to offer for each leg.  Fills have been no problem at $4.80 and $1.75 and $4.60 for the short puts for net $1.55 credit.  When you put in the whole spread and ask for a price, it's a lot harder to fill. 

    Volume/Pirate – Very dry, we need to stick to liquid stocks.  

    Scaling/Winston – That's why I'm trying to stick to the basics in the Long-Term Portfolios – last year made it very clear that people need to work on those.  

    And, of course, we're saved by the close!  


  70. Wombat-sorry,

    dense-screen?


  71. 0-0 after 80 minutes……  yeah, now i remember why soccer isn't popular here.


  72. :)


  73. Soccer / Burrben – It's the first bad game after 12 of them. There has been a lot of goals so far and some pretty exciting games. More exciting for me than an entire baseball season! 


  74. StJeanluc – Chacun a son gout


  75. True, but things are changing in the US:

    http://www.pewresearch.org/fact-tank/2014/06/16/5-facts-about-the-world-cup-and-the-people-who-are-watching/

    In the United States, 94.5 million people (about 31% of the population) watched at least 20 consecutive minutes of the last World Cup, an increase of 19% over the 2006 World Cup in Germany. 

    And that many people can't be wrong :-)

    About 3.2 billion people around the world (roughly 46% of the global population) watched at least a minute of the 2010 World Cup in South Africa on TV in their homes, according to a report produced for FIFA by the British firm KantarSport. 


  76. Rustle,

    I like the idea of a TSLA-Ford rumor. You heard it here first.  As a stakeholder in Ford I welcome any crazy price targets you'd care to make.  $200 would be just dandy, but let's go for Google-esq. valuation.


  77. Interesting stats:

    http://tech.slashdot.org/story/14/06/16/2040210/are-us-hybrid-sales-peaking-already

    The number of hybrid offerings has almost doubled from 24 in 2009 to 47 in 2014--but U.S. hybrid sales haven't dramatically increased. In fact, hybrid market share actually declined from 2009 to 2010, and then again from 2013 to 2014. So if consumers aren't buying hybrids, what are they buying? It seems some hybrid early adopters are now switching to plug-in hybrids or electric cars stating that these models are just nicer to drive.


  78. From Bloomberg, Jun 16, 2014, 5:00:00 PM

    June 16 (Bloomberg) — Samuel “Sandy” Berger, co-chairman of the Albright Stonebridge Group and former national security adviser to President Bill Clinton, talks about the sectarian violence in Iraq and the potential role of the U.S. and Iran in the crisis.
    Berger speaks with Mark Crumpton on Bloomberg Television’s “Bottom Line.” (Source: Bloomberg)

    Kurdish troops were defending Iraq’s fourth-biggest oilfield against Islamist militants after deploying outside their semi-autonomous region in the country’s north to seize the deposit claimed by the central government.

    To read the entire article, go to http://bloom.bg/1nL4cPL

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  79. From Bloomberg, Jun 16, 2014, 6:05:13 PM

    Mary Barra, chief executive officer of General Motors Co. (GM), during a media briefing before the company’s annual meeting at their headquarters in Detroit on June 10, 2014. Photographer: Bryan Mitchell/Bloomberg

    General Motors Co. (GM) is calling back 3.36 million more vehicles, the latest order related to ignition flaws, and said second-quarter charges for such moves would reach $700 million.

    To read the entire article, go to http://bloom.bg/1p9PfYT

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  80. Watch this video at http://bloom.bg/1lJn01S

    Kerry: Open to Constructive Talks with Iran on Iraq

    The U.S. signaled it’s ready to talk with Iran about how to deal with the crisis in Iraq, as Prime Minister Nouri al-Maliki’s forces battle an offensive by Sunni Muslim militants that threatens to split apart the country.

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  81. Watch this video at http://bloom.bg/1si5K8Y

    Starbucks Brews Help for Workers’ College Tuition

    June 16 (Bloomberg) — Bloomberg’s Scarlet Fu reports that Starbucks is offering employees a break on college tuition if they are enrolled online at Arizona State University. She speaks on Bloomberg Television’s “Bloomberg Surveillance.”

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  82. Watch this video at http://bloom.bg/UFMX8V

    IMF’s Lagarde: U.S. Still Engine for Global Growth

    June 16 (Bloomberg) — International Monetary Fund Managing Director Christine Lagarde talks about the global economy, the U.S. minimum wage and inflation.
    Lagarde speaks with Tom Keene on Bloomberg Television’s “Market Makers.” (Source: Bloomberg)

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  83. Watch this video at http://bloom.bg/UFKmM7

    What You Need to Know About Federal Reserve Dots

    June 16 (Bloomberg) — David Zervos, chief market strategist at Jefferies and Bloomberg’s Michael McKee examine what there is to be learned from the “dot plot” used by the Federal Reserve to determine sentiment on interest rates and how markets react to changes in FOMC opinions. They speak on Bloomberg Television’s “Market Makers.”

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  84. From Bloomberg, Jun 16, 2014, 1:17:31 PM

    San Diego Padres outfielder Tony Gwynn, left, steals third base during a game against the Houston Astros in this June 2, 1991 file photo in California. Photographer: Stephen Dunn/Getty Images

    Tony Gwynn, a baseball Hall of Famer who won eight National League batting titles during a two-decade career with the San Diego Padres, has died of cancer. He was 54.

    To read the entire article, go to http://bloom.bg/1lswksa

    Sent from the Bloomberg iPad application. Download the free application at http://itunes.apple.com/us/app/bloomberg-for-ipad/id364304764?mt=8


  85. From Bloomberg, Jun 16, 2014, 12:51:55 PM

    June 16 (Bloomberg) — International Monetary Fund Managing Director Christine Lagarde talks about the IMF’s revised U.S. economic growth forecast for 2014.
    The IMF now sees the world’s largest economy growing 2 percent this year, down from an April estimate of 2.8 percent., and said the Federal Reserve may have scope to keep interest rates at zero for longer than investors expect. Lagarde speaks at a news conference at IMF headquarters in Washington. The IMF’s Gerry Rice, Nigel Chalk and Alejandro Werner also speak. (Source: Bloomberg)

    The International Monetary Fund cut its growth forecast for the U.S. economy this year and said the Federal Reserve may have scope to keep interest rates at zero for longer than investors expect.

    To read the entire article, go to http://bloom.bg/1y8CJNg

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  86. From Bloomberg, Jun 16, 2014, 6:41:53 PM

    Most Asian index futures fell as
    emerging-market stocks slipped while U.S. shares held gains amid
    growth in American manufacturing. Indian rupee forwards extended
    declines and oil fell from near a nine-month high.

    To read the entire article, go to http://bloom.bg/1i2Td4Q

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  87. From Bloomberg, Jun 16, 2014, 6:35:50 PM

    Two of Thailand’s biggest money
    managers say the surge in stocks that sent the benchmark SET
    Index (SET)
    into a bull market yesterday has gone too far, too fast.

    To read the entire article, go to http://bloom.bg/1i2S25q

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  88. From Bloomberg, Jun 16, 2014, 4:36:26 PM

    May 20 (Bloomberg) — Lee Shavel, chief financial officer at Nasdaq OMX Group Inc., talks about the exchange’s attempts to win Alibaba Group Holding Ltd.’s initial public offering, high-frequency trading and technology disruptions.
    He speaks with Trish Regan on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

    Alibaba Group Holding Ltd.’s fourth-quarter revenue growth slowed and profit margins declined as the e-commerce company spent more on marketing to attract smartphone users.

    To read the entire article, go to http://bloom.bg/1lrU2ES

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  89. From Bloomberg, Jun 16, 2014, 11:11:06 AM

    Daimler AG (DAI)’s Mercedes-Benz sport-utility vehicles are the least likely SUVs to be recovered once
    stolen, as thieves target luxury models to export or dismantle.

    To read the entire article, go to http://bloom.bg/1y963Dx

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  90. From Bloomberg, Jun 16, 2014, 7:01:00 PM

    China Minsheng Investment Corp., the
    country’s largest private-sector investment group, will invest
    $1.5 billion and open its European headquarters in London, the
    U.K. said, as Chinese Premier Li Keqiang began a visit.

    To read the entire article, go to http://bloom.bg/1kYl0CW

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  91. From Bloomberg, Jun 16, 2014, 6:05:58 PM

    An exchange house in downtown Buenos Aires. Photographer: Leo La Valle/AFP/ via Getty Images

    Argentine Economy Minister Axel Kicillof, who negotiated $15 billion of payments to resolve debt disputes in the past four months, has two weeks to pull off his toughest deal yet.

    To read the entire article, go to http://bloom.bg/1lsdoK2

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  92. From Bloomberg, Jun 16, 2014, 7:01:00 PM

    The e-mails from Morgan Stanley bankers were sent to Allergan Inc. Chief Executive Officer David Pyott and other company officers. Photographer: Andrew Harrer/Bloomberg

    Put this in the category of, if you
    can’t say something nice, don’t write it in an e-mail.

    To read the entire article, go to http://bloom.bg/1nKONPs

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  93. Watch this video at http://bloom.bg/1jtr1TO

    Crescent Petroleum CEO Says Iraq Output Is `Stable’

    June 16 (Bloomberg) — Crescent Petroleum Co. Chief Executive Officer Majid Jafar talks about his company’s operations in Iraq amid fighting between the military and Sunni Muslim insurgents.
    He speaks with Anna Edwards and Mark Barton on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

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  94. From Bloomberg, Jun 16, 2014, 10:24:56 AM

    June 6 (Bloomberg) — European Central Bank President Mario Draghi speaks about the unveiling of an unprecedented round of measures to help the euro-area’s record-low interest rates feed through to an economy threatened by deflation.
    He spoke yesterday in Frankfurt at the ECB’s monthly news conference. (Excerpts. Source: Bloomberg/European Central Bank)

    The European Central Bank is likely to refrain from any new stimulus package in coming months as it reviews lenders’ balance sheets, according to two euro-area central-bank officials familiar with current policy discussions.

    To read the entire article, go to http://bloom.bg/1lyxYHc

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  95. From Bloomberg, Jun 16, 2014, 12:32:11 PM

    Russia’s central bank, which has
    raised borrowing costs twice in 2014, kept its benchmark
    interest rate unchanged with inflation set to peak this month
    and the ruble recovering from a five-year low.

    To read the entire article, go to http://bloom.bg/1lrNp5v

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  96. From Bloomberg, Jun 16, 2014, 12:27:02 PM

    American manufacturers are churning out more goods and homebuilders are regaining confidence as evidence mounts that the world’s largest economy is making a comeback after a slow start to 2014.

    To read the entire article, go to http://bloom.bg/1y8yGAw

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  97. From Bloomberg, Jun 16, 2014, 10:51:44 AM

    Pope Francis is focusing on food prices after a jump in the first quarter interrupted what the World Bank described as a 17-month decline. Photographer: Christopher Furlong/Getty Images

    Pope Francis criticized traders for
    betting on the direction of food prices, saying financial market
    speculation deserves part of the blame for shortages.

    To read the entire article, go to http://bloom.bg/1lsqmHM

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  98. From Bloomberg, Jun 16, 2014, 3:21:33 PM


    Go ahead, say what you think.

    The International Monetary Fund is becoming increasingly bold in the way it assesses the U.S. economy and the U.S. government’s economic policies. It’s a positive change that I, for one, think could go even further by covering the global implications.

    To read the entire article, go to http://bv.ms/1pBSryc

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  99. From Bloomberg, Jun 16, 2014, 6:03:24 PM

    China’s ghost cities are looking scarier by the day.                                              

    China‘s infamous “ghost cities” are even scarier than they sound.

    To read the entire article, go to http://bv.ms/1oxZGaH

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  100. Good article on why you have to look outside the US for cheap values sometimes and the returns are great:

    http://mebfaber.com/2014/06/10/if-you-used-valuation-you-would-be-out-of-stocks-since-1995/

    So, instead, had you invested in the cheapest 25% of countries in the world as detailed in our recent book Global Value (as long as they were below CAPE of 20), and rebalanced yearly, you would have returned 17% per year.  Still a -40% drawdown but that comes with the territory in stocks.  That would currently have you in countries like Brazil, Russia, Greece, and emerging Europe.  That may be a hard thing to do, but what sounds better, investing in a basket of countries trading at a CAPE of 9, or a country in a five year bull market trading at a CAPE of 26?

    So, next time someone talks about macro value investing, and how it would have had you out of the US since 1993, tell them that’s a good thing!

    capey2


  101. It's the same story every time there is a Dem president:

    http://talkingpointsmemo.com/livewire/lou-barletta-obama-impeachment-votes

    “He’s just absolutely ignoring the Constitution, and ignoring the laws, and ignoring the checks and balances,” Barletta said during an appearance on a local radio show, audio of which was first posted by BuzzFeed. “The problem is, you know, what do you do for those that say impeach him for breaking the laws or bypassing the laws. Could that pass in the House? It probably, it probably could.”

    In the meantime, lying to the country to take us to war, perfectly OK with them…


  102. Shadow//Phil – healthcare

    It's no secret that we aren't doing well.  Poor outcomes, high costs, and millions without access.  The doctors agree with you, things need to be much better (for them and their patients).  If you take a minute to look over the surveys associated with the chart Phil posted earlier today its pretty evident how bad things are based on the questions (we can figure out the answers that were provided…just check off whatever you wouldn't want, that's what we have). We need more efficient delivery, better outreach and preventative care,  and more reward for good performance…you know…like capitalism is designed to do.  If you do good work, you make more…which lets you do more good work and so on. 

    A simple example…that probably applies to what shadow said earlier.  His situation is complex, so he will require more time, more experience to care for, and likely more resources to recover etc.  Any physician who cares for him will know this and will very clearly realize the challenge/reward ratio to be skewed because his/her reimbursement has nothing to do with difficulty or outcomes standardized for difficult cases.  So, why work harder and longer to make the same money?  We aren't doing that here…we're learning how rigged the game is and trying to play along to our benefit. 

    It should work out he gets seen by a Primary care, referred to a specialist for evaluation if needed, then to a center of excellence for ultimate care.  The reimbursement should be graded based on difficulty, quality of care, outcomes, and efficiency, thus supporting those who do well and allow them to grow their business.  This however is not how it works.  


  103. Phil/USO

    Sorry if I missed it, but looking through today's posts I didn't see any mention of the June 39 USO's we have.  I assume we're holding on to them expecting the drop you expect in oil this week?  If not, any changes that should be made?


  104. From Bloomberg, Jun 17, 2014, 4:10:19 AM

    Asian stocks fell for a fourth day,
    led by the biggest drop in a month for Chinese shares, after
    foreign direct investment in the world’s second-largest economy
    unexpectedly declined.

    To read the entire article, go to http://bloom.bg/1paMSTG

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  105. From Bloomberg, Jun 17, 2014, 3:30:48 AM

    Big price swings are becoming a thing of the past in equity markets as well. 

    As Japan gets the inflation it’s been craving all these years, the bond market is doing something very surprising: nothing.

    To read the entire article, go to http://bv.ms/1kZwTZi

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  106. From Bloomberg, Jun 16, 2014, 10:27:58 PM


    April 14 (Bloomberg) — Michael Liang, the chief investment officer at Foundation Asset Management (HK) Ltd., talks about China’s plan to connect the stock exchanges of Hong Kong and Shanghai.
    Liang speaks with Angie Lau on Bloomberg Television’s “First Up.” (Source: Bloomberg)

    A plan to link equity markets in
    Hong Kong and Shanghai is pushing bullish wagers on Hong Kong
    Exchanges and Clearing Ltd.
    shares to a three-year high.

    To read the entire article, go to http://bloom.bg/1pb4Gy8

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  107. From Bloomberg, Jun 17, 2014, 12:41:47 AM


    Koichi Hamada, special advisor to Japan’s Prime Minister Shinzo Abe, during an interview at International House of Japan in Tokyo. Photographer: Yuriko Nakao/Bloomberg

    Shinzo Abe should cut the corporate
    tax rate in one stroke to match rivals and help Japan survive a
    global tax “war,” said an adviser to the prime minister.

    To read the entire article, go to http://bloom.bg/1oyXu2G

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  108. From Bloomberg, Jun 17, 2014, 3:15:33 AM

    European stocks climbed, rebounding
    after two daily losses, as investors awaited data that may show
    German investor confidence rose for the first time this year.
    U.S. stock-index futures and Asian shares were little changed.

    To read the entire article, go to http://bloom.bg/1q6TNyC

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  109. From Bloomberg, Jun 16, 2014, 10:46:10 PM

    Drill pipe sections lie stored near an oil derrick operated by Salym Petroleum in Salym, Russia. Through its existing oilfields, Russia is the world’s largest producer of crude, with daily output of 10 million barrels a day last year, according to the EIA. Photographer: Andrey Rudakov/Bloomberg

    Even as the decision to stop gas supplies to Ukraine aggravates tensions with the U.S. and Europe, Russia faces a dilemma: it still needs Exxon Mobil Corp. (XOM), Halliburton Co. (HAL) and BP Plc to maintain output from Soviet-era oil fields and develop Arctic and shale reserves.

    To read the entire article, go to http://bloom.bg/1paAwLh

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  110. From Bloomberg, Jun 17, 2014, 3:50:42 AM

    June 17 (Bloomberg) –- Bloomberg’s Mark Barton reports on European car sales figures for May which saw its 9th consecutive monthly gain on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

    European car sales rose 4.3 percent
    in May, the ninth consecutive monthly gain, as a recovery in
    consumer confidence encouraged purchases of new models from
    Renault SA (RNO) and Volkswagen AG (VOW) following a six-year market slump.

    To read the entire article, go to http://bloom.bg/1q6Ocs9

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  111. From Bloomberg, Jun 14, 2014, 10:56:10 PM

    Automobile production in China,
    already the world’s biggest market, may climb about 60 percent
    in the next eight years, boosting demand for steel, according to
    ArcelorMittal, the largest producer.

    To read the entire article, go to http://bloom.bg/1y3eekJ

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  112. From Bloomberg, Jun 11, 2014, 6:01:00 PM

    Aug. 6 (Bloomberg) — Rome Mayor Ignazio Marino has banned cars and motor scooters from the boulevard that cuts through the city’s ancient forums toward the Colosseum to create an archaeological park.
    Francine Lacqua reports on Bloomberg Television’s “The Pulse.” (Source: Bloomberg)

    In the 1948 film “The Bicycle Thief,” the despairing protagonist crosses Rome in a vain search for his stolen bike. Today, Mayor Ignazio Marino is playing a similar role.

    To read the entire article, go to http://bloom.bg/UuoLWZ

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  113. From Bloomberg, Jun 16, 2014, 8:09:19 PM

    Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc. Photographer: Chris Goodney/Bloomberg

    Bond buyers are betting more than
    ever on the mercy of Mother Nature as they seek to boost yields
    being suppressed by central banks.

    To read the entire article, go to http://bloom.bg/1pbiY1A

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  114. From Bloomberg, Jun 17, 2014, 4:07:56 AM

    Japan’s Finance Minister Taro Aso
    said the government is considering changes to the pension system
    that would enable it to cut payments as the nation grapples with
    the world’s heaviest debt burden.

    To read the entire article, go to http://bloom.bg/1uzUQXS

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  115. From Bloomberg, Jun 17, 2014, 3:25:52 AM


    SNB President Thomas Jordan said at the bank’s annual general meeting in Bern on April 25 that officials would defend the franc ceiling to lessen the risk of deflation. Photographer: Andrew Harrer/Bloomberg

    The European Central Bank’s monetary
    stimulus has prompted economists to extend forecasts for how
    long the Swiss National Bank will keep its franc ceiling in
    place.

    To read the entire article, go to http://bloom.bg/1pbfigh

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  116. From Bloomberg, Jun 17, 2014, 12:00:00 AM

    June 13 (Bloomberg) — David Rosenberg, chief economist at Gluskin Sheff & Associates, Jason Pride, director of investment strategy at Glenmede, and Mark Kiesel, deputy chief investment officer at Pacific Investment Management Co., talk about inflation in the U.S., the labor market and the outlook for Federal Reserve policy.
    They speak with Trish Regan, Matt Miller and Julie Hyman on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

    The Federal Reserve will probably raise its benchmark interest rate faster than money-market investors expect, according to most economists surveyed by Bloomberg News.

    To read the entire article, go to http://bloom.bg/1oyWBHq

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  117. Nikkea gains, trading volume drops

    04:09 AM ET · DXJ

    • Japanese shares rose today, with the Nikkei climbing 0.3% to 14975.97, after dropping 1.1% on Monday, although trading volume hit its two month low amid escalating tensions in the Middle East and Ukraine.
    • The Topix rose 0.3% to 1,238.20 at the close of trading in Tokyo, with 1.68B shares changing hands. JPX-Nikkei Index 400 also ended up 0.3% at 11,275.02.
    • Dollar/yen slid back 0.1% to ¥101.91, after rising 0.2% yesterday.
    • ETFs: DXJ, EWJ, DFJ, NKY, DBJP, EZJ, EWV, SCJ, JPNL, DXJS, JSC, ITF, JPP, JPNS, HEWJ, FJP, DXJH, DXJR, DXJF, DXJC, DXJT, FXY, YCS, JYN, YCL


  118. Euro slipping

    03:41 AM ET · FXE

    • The European Central Bank’s monetary easing earlier this month has spelled trouble for the euro, and analysts say a sentiment shift has attributed further weakness. After hitting a 2-1/2 year high hit in early June, the euro has declined over 3%, due in part to the ECB’s negative interest rates, and cut to its main lending rate.
    • Carry trades, which borrow money in a currency that is backed by a low interest rate to fund investments in higher-yielding assets, have also increased using the euro.
    • Both the ECB’s monetary easing and carry trades have been main factors in causing a declining euro. Data released last week shows the net short position for the euro/dollar reaching its highest level since late May 2013.
    • ETFs: FXE, EUO, ERO, DRR, EUFX, ULE, URR


  119. Apple settles e-book antitrust lawsuit

    03:01 AM ET · AAPL

    • Apple (AAPL) has agreed to settle an antitrust lawsuit regarding e-book price fixing, effectively avoiding a trial. The case was filed by U.S. states and other complainants, hitting Apple with $840M in claims.
    • The lawsuit was connected to a case filed by the Justice Department in April 2012 that charged Apple and five American book publishers of conspiring to fix e-book prices and attempting to break Amazon’s hold on the market with its Kindle.
    • The terms of the settlement, which still needs court approval, have not been disclosed.


  120. IMF reduces U.S. growth outlook forecast

    02:38 AM ET

    • The International Monetary Fund has cut its 2014 U.S economic growth forecast to 2% from the 2.8% it predicted in April, due to a weak first quarter. A harsh winter, struggling housing market and weak international demand for the country’s products have all attributed to the economy’s contraction in Q1. However, the fund has maintained its 3% growth outlook for 2015, stating a “meaningful economic rebound is under way.”
    • Markets are expecting the Federal reserve to start raising rates in the middle of next year, although the IMF related that it is not certain that it will be the case. Rates have been near zero since late 2008.
    • Issuing a warning, the IMF declared, “The U.S. must cut spending and raise revenue in the long term to avoid public debt overwhelming the country’s finances,” and also cautioned regarding unemployment risk. To boost more people into the workforce, the organization suggests increasing near-term spending on infrastructure, education, job training and child-care subsidies.


  121. PayPal enters 10 new countries

    01:57 AM ET · EBAY

    • PayPal (EBAY) is expanding today into 10 new countries in sub-Saharan Africa, Eastern Europe and Latin America. The expansion brings the total amount of territories PayPal serves to 203.
    • Countries include: Belarus, Macedonia, Moldova, Monaco, Montenegro, Nigeria, Cameroon, Ivory Coast, Zimbabwe, and Paraguay.
    • Customers that have web access and a bank card authorized for Internet transactions in the new regions will now be able to sign up for accounts.
    • The company reported revenue of $1.8B for the first quarter of 2014, and 148M active accounts worldwide.


  122. Tuesday’s economic calendar

    12:00 AM ET


  123. Some analysts say energy stocks are getting too hot

    Yesterday, 07:17 PM ET · USO

    • The consensus opinion amid Iraq’s convulsion is positive on energy stocks and negative on U.S. retailers and other consumer stocks given that oil prices are likely to remain elevated and provide another headwind for consumers already struggling with slow wage growth and high personal debt.
    • The S&P 500 energy sector is up 5.4% in the past month as Brent crude has climbed, and up 10% YTD; with the strong correlation between oil shocks and economic recessions, concern is growing that Iraq’s chaos could derail the global economy.
    • But some analysts are beginning to say energy stocks are too rich and could quickly give up gains if the Iraq crisis is defused; Oppenheimer’s Fadel Gheit says oil stocks are overpriced and are trading as if crude was going to stay at $110/bbl.
    • “If they can hold onto Baghdad and the south of Iraq, 3M barrels will continue to flow and it won’t be a big deal,” said Again Capital analyst John Kilduff, while admitting that “any credible threat to central Baghdad or the oil fields – it’s $150 just for starters.”
    • ETFs: USO, OIL, XLE, UCO, ERX, VDE, OIH, SCO, ERY, FCG, XOP, DIG, DTO, BNO, DBO, GASL, DUG, IYE, IEO, CRUD, GASX, PXE, USL, PXJ, UWTI, DWTI, DNO, FENY, RYE, SZO, FXN, OLO, DDG, OLEM, TWTI


  124. Level 3 falls as Street dissects TW Telecom deal

    Yesterday, 07:08 PM ET · LVLT

    • “TWTC has a very dense fiber metro base, and I think combined with LVLT domestic and international long-haul routes, the company will be able to deliver a new level of fiber connectivity around the world,” says Stephens’ Barry McCarver, offering an upbeat view of the Level 3 (LVLT -4.1%)/TW Telecom (TWTC +7.3%) deal.
    • But others on the Street weren’t as thrilled about the price, which at announcement time represented a 26% premium to where TW closed on Thursday, before a BrightWire report about Level 3′s interest arrived.
    • Light Reading’s Carol Wilson notes the deal significantly boosts Level 3′s enterprise/Ethernet reach, and that TW has a stellar reputation. “Twice in the past year I’ve had executives from tw telecom competitors volunteer the fact that they purposely avoid going head-to-head with that particular service provider.”
    • Level 3 is offering $10 in cash and 0.7 shares for each TW share. The company has already lined up $3B in financing; it had $7.8B in net debt at the end of Q1.
    • Level 3 expects $240M/year in cost synergies ($200M adjusted EBITDA, $40M capex), and sees $170M in integration costs. TW shareholders will own 29% of the merged company. TW CEO Larissa Herda will be stepping down once the deal closes in Q4.


  125. Argentine stocks drop as U.S. Supreme Court rejects defaulted bond plan

    Yesterday, 06:19 PM ET · YPF

    • ADRs of oil and gas explorer YPF, bank BBVA and Latin America-focused wireless firm NII Holdings (NIHD) fell sharply today in reaction to a setback for Argentina’s defaulted bonds with sent the country’s markets reeling, taking select U.S.-listed stocks lower.
    • The U.S. Supreme Court today left intact rulings that may force Argentina to pay billions of dollars to holders of repudiated bonds, rejecting an appeal in a case that has blocked the country from international debt markets for more than a decade and could prompt the government to default for a second time in 13 years.
    • YPF -11.9%, BBVA -0.8%, NIHD -11.3%, END -14.5%, TGS -10.6%, PZE -8.3%, GGAL -8.1%, PAM -6.6%, APSA -4.2%, NTL -3.3%.
    • ETF: ARGT


  126. Google roundup: Cars, Glass, Project Loon

    Yesterday, 06:12 PM ET · GOOG

    • Automotive News reports Google (GOOG, GOOGL) will show off an Android-based in-car OS at Google I/O (June 25-26). Automakers backing the platform include GM, Audi, Honda, and Hyundai.
    • The OS is tied to the Open Automotive Alliance (first announced in January), which aims to create Android-based infotainment/navigation systems. Apple, BlackBerry, and Nokia are going after the market as well.
    • In addition to the OS, Google is said to be working on “new Android platform features that will enable the car itself to become a connected Android device” (shades of Apple’s CarPlay).
    • With commercial interest in Glass running high (consumer reactions have been more mixed), Google has announced its first 5 partners for its Glass at Work developer program. The list includes APX Labs, maker of a Glass app that allows workers to stream live video from the field, and Augmedix, whose app allows doctors to automatically enter health info during exams.
    • A year after announcing Project Loon, Google says it hopes to use its hot-air balloons to offer Web access in “one or several countries” next year. A series of advances have improved the balloons’ flight times, and LTE connectivity now enables speeds of up to 22Mbps to ground antennas.
    • Though Loon is still in the experimental stage, Google wants to eventually have “300 to 400 balloons circling the globe to offer continuous service to a targeted area.” Google is also making big bets on satellites and solar-powered drones to connect underserved regions.


  127. Report: Shipments of AMD/Nvidia graphics cards hit by high inventories

    Yesterday, 05:12 PM ET · AMD

    • Global graphics card shipments are expected to fall 30%-40% Q/Q in Q2 due to high inventories, industry sources (likely at Taiwanese OEMs) tell Digitimes.
    • Weak Bitcoin-related demand is said to be taking a toll, and AMD and Nvidia (NVDA) have reportedly been pressured to cut GPU prices to boost demand. But both firms are instead opting to focus on cutting GPU shipments.
    • Litecoin miners have been a boon for AMD’s high-end GPU sales. Nvidia posted a 14% Y/Y GPU sales increase during the April quarter thanks to a mixture of high-end PC, server, and HPC strength.
    • The report comes 4 days after Intel hiked its Q2 and full-year guidance, while citing stronger-than-expected business PC demand. However, a large percentage of business PC sales involve systems with integrated GPUs rather than standalone cards.


  128. Euro slipping

    03:41 AM ET · FXE

    • The European Central Bank’s monetary easing earlier this month has spelled trouble for the euro, and analysts say a sentiment shift has attributed further weakness. After hitting a 2-1/2 year high hit in early June, the euro has declined over 3%, due in part to the ECB’s negative interest rates, and cut to its main lending rate.
    • Carry trades, which borrow money in a currency that is backed by a low interest rate to fund investments in higher-yielding assets, have also increased using the euro.
    • Both the ECB’s monetary easing and carry trades have been main factors in causing a declining euro. Data released last week shows the net short position for the euro/dollar reaching its highest level since late May 2013.
    • ETFs: FXE, EUO, ERO, DRR, EUFX, ULE, URR


  129. IMF reduces U.S. growth outlook forecast

    02:38 AM ET

    • The International Monetary Fund has cut its 2014 U.S economic growth forecast to 2% from the 2.8% it predicted in April, due to a weak first quarter. A harsh winter, struggling housing market and weak international demand for the country’s products have all attributed to the economy’s contraction in Q1. However, the fund has maintained its 3% growth outlook for 2015, stating a “meaningful economic rebound is under way.”
    • Markets are expecting the Federal reserve to start raising rates in the middle of next year, although the IMF related that it is not certain that it will be the case. Rates have been near zero since late 2008.
    • Issuing a warning, the IMF declared, “The U.S. must cut spending and raise revenue in the long term to avoid public debt overwhelming the country’s finances,” and also cautioned regarding unemployment risk. To boost more people into the workforce, the organization suggests increasing near-term spending on infrastructure, education, job training and child-care subsidies.


  130. Bond funds to become Roach Motels?

    Yesterday, 03:51 PM ET · LQD

    • Concerned about a run on the $10T corporate bond market, the Fed is considering imposing exit fees on bond funds, reports the FT.
    • “So much activity in open-end corporate bond and loan funds is a little bit bank like,” Fed Governor Jeremy Stein told the FT just before he stepped down last month. “It may be the essence of shadow banking is … giving people a liquid claim on illiquid assets.”
    • Needless to say, the fees would be unpopular for investors, but fund managers may feel differently, and BlackRock, for one, has called for international rules on exit fees for some funds. Implementing exit fees would be easier said than done as a rule change by the SEC would be necessary, and some commissioners are reportedly set to put up a fight.
    • ETFs: LQD, CORP, CFT, QLTA, COBO, IGS, CBND, IGU, QLTB


  131. Williams +18% as dividend hike sweetens Access Midstream deal

    Yesterday, 03:45 PM ET · WMB

    • This is all certainly being driven by the dividend,” says BMO analyst Carl Kirst on the Williams Cos. (WMB +18.4%) promises a 32% dividend hike after it buys control of Access Midstream Partners (ACMP +1.7%) for $6B.
    • Because all ACMP’s revenue comes from fixed fees, ~80% of cash flow at WMB will be guaranteed after the takeover, Kirst says, with ACMP unitholders getting a higher payout in exchange for slower growth at the combined company.
    • Maxim Group believes WMB will continue to raise its dividend at a ~10% rate for several years beyond 2017, given strong coverage ratios and opportunities due to expected continued increase in shale activity and the need for energy infrastructure development in the U.S. (Briefing.com)
    • Also: WPZ +6.5%.


  132. Gross’ fixed-income picks from Barron’s Roundtable

    Yesterday, 03:36 PM ET · BBN

    • The Bond King may be battered and bruised a little bit, but his words still cary some weight, with two of his three Barron’s Mid-Year Roundtable picks from this weekend posting big gains on heavier-than-usual volume. The thesis: Own some mildly levered closed-end bond funds which can borrow at 10 or 20 basis points, re-lend the money at 400 to 500 basis points, and produce a yield of 7-8%.
    • One Bill Gross is buying for his own portfolio is the BlackRock Build America Bond Trust (BBN +2.5%). The feds subsidize 35% of the interest paid, the fund usually owns A- and AA-rated long-term bonds, and currently yields 7.5%.
    • He’s also a buyer of the Pimco Dynamic Income Fund (PDI +1.1%), an owner of non-agency mortgages expected to yield between 8-10%. On sale for some time, the fund now trades at about net asset value.
    • Gross’ third pick is an ETF, the iShares U.S. Preferred Stock Fund (PFF +0.1%). Liquid with an expense ratio below 50 bps, the fund primarily holds bank preferreds. It’s a short-term play, says Gross, as many of the preferreds in its portfolio will be refunded within a year or to and the dividend will fall. In the meantime, one can collect a 5.5% yield.


  133. ArcelorMittal sees its future in China in downstream as new plant opens

    Yesterday, 03:28 PM ET · MT

    • ArcelorMittal (MT -0.8%) sees its path forward in China through downstream products, as it prepares today to open a new automotive steel plant there that promises higher margins on one of the few types of steel not in oversupply in the country, FT reports.
    • China currently imports 1.5M-2M metric tons/year of automotive steel to meet a market growing by ~10%/year, and the expected output of ~1.5M metric tons/year at the new Loudi mill aims to displace most of those imports.


  134. New York nears AAA rating from Moody’s

    Yesterday, 03:21 PM ET · MUB

    • Moody’s boosts New York’s credit rating by a notch to Aa1 with stable outlook from Aa2 with positive, reflecting “sustained improvements in fiscal governance, the strength of the recent economic recovery, a strong financial position reflected in improved reserves, and reduced spending growth in line with growth in the state’s economic capacity.”
    • “The stable outlook reflects our expectation that the state will preserve and improve upon the gains it has made in governance and its financial position.”
    • ETFs: MUB, PZA, TFI, XMPT, PRB, NYF, PZT, PVI, INY, VRD, RVNU, FMB


  135. BofA first to use NY database to stop payday lenders

    Yesterday, 02:50 PM ET · BAC

    • New York outlaws payday lending. and some lenders have tried to get around that by offering Internet-based loans and using electronic payment networks to collect them.
    • Attempting to plug that hole, NY’s Dept. of Financial Services created a database identifying such companies, and Governor Cuomo today announced Bank of America (BAC -1%) is the first bank to agree to use it. DFS boss Ben Lawsky expects similar agreements with other banks in coming weeks.


  136. Analysis: Value message not enough at McDonald’s

    Yesterday, 02:48 PM ET · MCD

    • McDonald’s (MCD +0.4%) faces an uphill battle due to macroeconomic trends and a continual consumer shift away from fast food options, warns Hedgeye’s Howard Penney.
    • The research firm notes the ongoing value message being delivered by McDonald’s hasn’t been enough to turn same-store sales growth positive.
    • A major restructuring could be on tap if U.S. sales stay stuck in a sluggish trend.


  137. Fresh highs for Zillow; Canaccord ups PT, sees plenty of growth

    Yesterday, 02:40 PM ET · Z

    • Following meetings with Zillow’s (Z +3.4%) CFO, sales chief, and mortgage head, Canaccord thinks the company’s Premier Agent business remains strong, and that its mortgage and rentals businesses are making nice progress. The firm’s PT has been upped by $15 to $130.
    • Canaccord observes only ~53K of the 675K+ real estate agents with Zillow profiles have thus far advertised on the site, leaving plenty of room for growth.
    • Likewise, it believes less than 25% of the ~350K “thought-leading, high-producing agents” out there are on Zillow or Trulia (TRLA +3.8%), and that Zillow only captures 2% of real estate ad budgets and 4% of available transaction sides.
    • The firm sees more dynamic pricing boosting Zillow’s growth. It also see a Zillow/Trulia merger as possible down the line, arguing it “could be quite accretive to Zillow even before factoring in any revenue synergies from pricing power.”
    • Zillow and Trulia rose last Friday after Trulia released positive May traffic data.


  138. Many stocks are up and about. I do hate to recommend a stock which is on top of the ladder, but this one really drew my attention, showing good balance sheet and still cash in the bank. 0 Div but good premium.

    Like to have your comment as well Phil TIA

    FANG  I buy the Jan16 BCS for 80/90 for 4.85 and sell the Jan16 67.5 put for 7.30 

    I chose the putter very low in case of a good drop but still the play gives me a credit of 2.45

    I am looking to do 4x leaving me to sell 2x or better 1/2 Monthly calls Jul 92.5 @ 2.50 

    Not to bad to cash 2x 250.00 say for 14x in additional to the BCS.

    TOS asks 435.00 PM margin for a 4x play.

    Lets look how we stand the 4x play will give us 4980.00 if the stock goes to 90 at Jan16 or 4160 if stays as is at present a healthy 4.7%  per month on the long play only. Not counting the monthly calls. The bottom line is the lower protection is 65.00 a 24.90 drop from today's price of 89.90.

    I am not sure if any one reads this as I do not hear many comments usual. Any questions well come!


  139. Yodi, 

    Fang running too hot…..last 20 days up $20……too hot for me….lets see what Phil recommends?


  140. Good morning! 

    Futures in big downtrend (back to even) after being up half a point until about 5am.  I looked at the news and went back to sleep because I thought up 0.5% had no merit but I figured it was the usual pre-Fed rally.  

    As of 6am we had this:

    • Japan +0.29%.
    • Hong Kong -0.42%.
    • China -0.92%.
    • India +1.31%.
    • London +0.21%.
    • Paris +0.43%.
    • Frankfurt +0.73%.

    But Europe has since gone flat too. 

    I think it was the ZEW surveys we were worried about yesterday:

    • German Investor Confidence Fell in June

      Investor confidence in Germany fell for the sixth month in a row, despite expectations for a rise, a closely watched survey released Tuesday showed.

    • The ZEW sentiment survey of 234 analysts and institutional investors showed the indicator for economic expectations fell to 29.8 in June from 33.1 in May. Economists surveyed by The Wall Street Journal had forecast the figure would be 35.0. - Economorons strike again!

    • Euro-Zone Wages Slow, Job Openings Rise

      Wage growth across the euro zone slowed in the first three months of this year, while total labor costs rose at a more sluggish pace, both signs that inflationary pressures were weakening.

    On the whole, it was just the move up that was silly – now we're flat to yesterday's pumped-up close.  

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  141. Jasu1 Fang I hear you but I allowed for a 24$ drop I do not think the will drop that much in 576 days.


  142. /YM 16,700, /ES 1,930, /NQ 3,775 and /TF 1,161 are the lines to watch for long or short on the laggard.  They're all on the lines at the moment with /TF highest at 1,163 and they just dropped half a point so a 0.1% weak bounce back is expected in the very least and THEN we shall see. 

    Dollar still 80.60 – also will give us directional clues.  Oil $106.21 after testing $106 at night.  Gold $1,265, silver $19.54, copper $3.06, nat gas $4.69 and gasoline $3.068.

    The Pound is testing $1.70 on rumors Carney is going to have to fight inflation (UK housing bubble out of control), the Euro is $1.356 and the Yen is $101.97, which keeps the Nikkei happy at 15,035.

    Good news for GM – they have now recalled all the cars they've sold (or so it seems at 20M+), so hard to have more bad news at this point.  Amazingly, the stock hasn't dropped that much – clearly an indication of how insane the market is as they literally ignored evidence their cars were killing people, covered it up and proceeded to kill more people, got caught, covered it up again and FINALLY are going to stop killing people.  

    They are down 10% from the high at $41 – that'll teach them!  

    Athletes' Tattoo Artists File Copyright Suits

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    v


  143. GM/Phil,  Killing people just doesn't have the negative connotation it used to.


  144. USO/Jeff – Kind of a binary event at this point but we're hoping for a better drop this week.  Because of the holiday, we're not going to roll to July so we just have to hope for a better sell-off than what we've had so far.  

    FANG/Yodi – More like a REIT than an E&P company.  The main reason they are up is because they are spinning off a subsidiary into it's own IPO, so your options will get messy on the split.  Even with strong projected growth, the company is only expected to earn $3.80 per now $90 share next year for a p/e of 23.6 if all goes well so it's not something I'd be excited about at all-time highs with oil at unsustainable highs as well and the bullish IPO news pumping up the prices.  

    Last year they gained 100% and this year they are already up 100% so maybe they end up 200% for the year – the growth is good and people are looking for places to stuff money – that's for sure…

    Killing/Sibe – I guess we are desensitized to death at this point.  303 deaths attributed to GM by independents and GM admits to 13 (so far).  Or, as John Oliver says: