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Friday Fakery – How Many Countries are Faking Economic Data?

I forgot to talk about something important yesterday.

Turkey was caught FAKING their trade data, with Prime Minister Erdogan, working with Economic Minister Caglayan LAST YEAR to manipulate their $800Bn economy by sending gold overseas to boost their export numbers.  How a team that included Turkey’s economy minister sought to manage the current account deficit, as the gap is called, by juicing exports to Iran is laid out in a 300-page document prepared by Turkish investigators in 2013. Caglayan and his collaborators also came away with tens of millions of dollars in bribes, according to the document, which has been cited in parliament by opposition lawmakers

The covert efforts that Caglayan and his associates undertook eventually swelled to a multi-billion dollar enterprise that reached from Ghana to China, according to the investigation. Tons of gold flowed from Turkey to Iran, much of it via Dubai. That freed up Iranian money trapped in Turkish banks, in turn boosting Turkish exports.

When the gold trade was foiled by tightening American sanctions starting in July 2013, Sarraf and his collaborators kept exporting. They sent thousands of tons of overpriced — and sometimes fictitious — food onto ships steaming between Dubai and Iran, according to the document.

That's how things are being done in the World's 18th-largest economy and, notice CHINA (3rd) is one of the countries participating in this scam, as is Iran (21st) and Dubai in the UAE (30th).  We already know China is involved in all sorts of economic manipulation, including building entire empty cities just to boost their GDP numbers.  China, in fact, is in the midst of another set of scandals, with tens of Billions (GS estimates $160Bn) in bank loans backed by silver and copper collarteral that does not, in fact, exist (maybe they "got it" from Turkey?).  

So what is the REAL Global GDP?  Clearly they aren't manipulating the numbers LOWER, so we can assume things are a bit LESS than they might seem.  With a 3% downward revision to US GDP over the past 90 days, who knows what surprises lie ahead?  We know Russia (8th) is corrupt – what about Ukraine (52), Venezula (31), Pakistan (43) Brazil (7), Mexico (14), Greece (43), Italy (9), Spain (13) (to name a few)?  And, of course, let he who is without despicable manipulating, self-interested, lying political bastards cast the first stone:

If you think that's sickening, check this out!  

Even if you assume our First World Politicos have our best intentions at heart and are operating above-board at all times (sorry, it took me 5 minutes to write that as I had to stop myself from laughing every couple of words!), that still doesn't mean they aren't, with all the best intentions, screwing things up completely.  

It's not just US Consumers that are pulling back but Japanese Household Spending is in free-fall – even as inflation doubles.  There's a special economic term for this condition that was popular in the 70's:  STAGFLATION – a stagnant or falling economy mixed wth inflation.  At that time, in the US, it was caused by our Vietnam War Debt and Nixon taking us off the gold standard in order to print money.  

Now it's being caused by Iraq/Afghanistan War debt and we're alread off the Gold standard so we've been printing more money the entire time.  Nixon's economic idiocy led to Gerry Ford wearing "Whip Inflation Now" buttons and, of course, the GOP blamed it all on Washington outsider Carter, just like they are trying to blame this one on Washington outsider Obama – that's how they get to be back in power! 

Well, that and getting a crisis started in one of the oil regions they control (Iran then, Iraq now) so the NeoCons can call the current adminstration weak and scare Americans into voting for the war machine once again – after our all-too-brief flirtation with peace.  

As investors, it's important for us not to care about the human costs of these idiotic policies – we just want to know what the market is likely to do over the next few months.  At the moment, we are "Cashy and Cautious" and in our two $500,000 Virtual Portfolios, the Income Portfolio and the Long-Term Portfolio, we are using less than 20% of our buying power currently as we are still waiting for the market correction that never comes.  

Our $100,000 Short-Term Portfolio is a bearish offset to our long-term positions but we've managed to keep it even, despite the relentless rally.  Our $100,000 Butterfly Portfolio is market-neutral but also lightly committed and our $25,000 Portfolio is almost entirely in cash at the moment as we head into Q2 earnings.

Our primary hedge, at the moment, is an October DXD (ultra-short Dow) $25/29 bull call spread but we also sold some July $25 calls for $1.25 and today, at .65 (up 47%), I'm calling to take those off the table as I feel the risk of a collapse is getting stronger and, though I do feel that "THEY" will keep the makets looking pretty into Monday for "window-dressing" at the end of Q2, I am getting very worried as to whether they can sustain this farce even as long as the holiday weekend. 

Next week is going to be very thinly traded.  We discussed a nice TNA hedge in yesterday's chat and how to portion it for your portfolio.  In addition to that, with the Dow back over 17,000, I like DXD (ultra-short Dow) again at $25.60 and you can pick up the August $25s for $1 and sell the August $27s for 0.40 for net 0.60 on the $2 spread.  That gives you 233% of upside if the Dow even flinches lower (5% would do it) and, since at Dow 16,000 I'd be bullish but I'd also want a short hedge, we can also sell the Jan $24 puts for $1.10 and that nets us a 0.60 credit and we can stop out if the Russell is over 17,500 with a not so terrible loss.

We'll likely add some of those to our Short-Term Portfolio, though we may decide to just add more DXDs.  I do kind of like to hedge with more than one index though and the Russell Small Caps are a good pairing with the Dow Large Caps.  

Don't forget, next week is a short week in the US with a half-day on Thursday and markets closed Friday.  I know I wouldn't want to be too long on the markets going into a 4-day weekend with Russian Troops in the Ukraine and whatever you call that mess in Iraq.  Cashy and cautious indeed! 

Have a great weekend, 

- Phil


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  1. So at the peak our beloved banco central was printing a Turkey every 9-10 months.  Talk about 3D printing…

  2. Oil Lines

    R3 – 108.50
    R2 – 107.64
    R1 – 106.75
    PP – 105.89
    S1 – 105
    S2 – 104.14
    S3 – 103.25

  3. Good morning!  A very interesting and thought provoking article from David Brooks.  If my interpretation is correct, he is saying that our democracy is doomed to fail because we do not share a "biblical morality."  Maybe this is on purpose, because the extremism in our country is headed in a very similar direction as to that of the Middle East, where a small band continues to fan the flames.   Something to ponder, but in many ways, he is not that far off.

  4. A TALE OF TWO PENNY STOCKS – DRWI strong again this morning.  Will sell a little more if and when it gets to $2.  ANAD getting killed on re-structuring and lower forecast.  Bought some in the pre-market.  Will buy some more if it weakens further.  Will look to take a write-off in 31 days.  Unfortunately, some of the stock is in IRA.

  5. Good Morning!

  6. Good morning!!


    /Cl failed 106 – in for 3…let's see what happens. Game On!!!

  7. Let me further explain, as I am not one of 'faith' in the biblical sense of the word.  My faith lies in that of the common man, and my own convictions that a majority of the people are moral, regardless of their personal "biblical morality…."…but it is that extreme biblical morality that is shaping the face of this nation, which is something that the founding fathers tried to separate from the morality of the Declaration of Independence and the Constitution. 

  8. Pharm – This country is headed down the sh*tter, but for many reasons other than "extreme biblical morality"

    'Fanaticism' will always be around and thanks to media and the internet, it would appear to be much bigger than it actually is…..Happy Friday!

  9. Good morning!  

    Please not my call to buy back the DXD July $25 calls for .65 in the STP.  That will flip us more bearish into the weekend.  Last fill was .71 but the RUT is moving up so I'd offer and wait.  If 1,170 doesn't hold, then we need to bite the bullet and pay up.  

  10. Pharm

    happy Fri morning in SD


    at bottom of channel recently

  11. ICPT/Maya – data are due out in September.  What do I think if them.  Flip a coin.  They have some impressive numbers, but until there is definitive evidence that the drug will work in NASH, it is a risky proposition to put in anything but gambling money.

  12. TZA – July 16 calls, 26c.  Loading and waiting.

  13. Pharm

    do you know what happend after the NIH study was terminated early?

    Did they start another one? Any more data in that field?

  14. Phil / GDP numbers;   There is a initiative of EU that Spain just adopted in which you should take in your national account the economic value of the black economy ( drugs, prostitution, counterfeit items, etc), it seems that at least here is adding in the "official" number something around 0.5% additional GDP, most Europeans countries will do the same in the near future.

  15. Maya – ICPT is gearing up for phase 3.  The NIH study was positive, and thus they stopped it early.  FLINT data was delayed, and now will not come out until September.  IDK why it was delayed.  I do think they will eventually get approval (barring a catastrophic event), but it will be the label that will determine the eventual price point.

  16. TOS still having delta calc problems….that is a pain…

  17. advill/Spain  Nothing better than to recognize what law enforcement isn't doing – Though I'm not sure if the consequence of rubbing the collective nose's of those responsible, is a good idea……

  18. advill

    Wouldn't that be calling crime an economic engine? Shows how desperate most are to paint a brighter picture.

  19. Pharm,

    I was told they would be sending a patch to fix this on Saturday.

  20. phil, you think next stop for TSLA is $265?

  21. phil, morning

    had a long bcs/put  on dvn and wound up taking off the long and left w/ 5 sht jan 70 calls…watched it continue to go up and added a jan6 70-85 bcs and sold the jan6 65 put… now i have

    5 sht jan 70 @ 4.05  (-6.30)

    5 jan6 70 @ 10.60

    -5 jan6 85 @ 4.30

    -5 jan6 65 put @ 4.20

    i was hoping to get your thoughts esp w this runup in energy issue/ dvn………as i feel i should add 5 more of the bcs/put……………..tks

  22. …and out. +$1k mcmuffins are paid for!

  23. Should be a pumping up day with no negative data and light volume.  Also, there is Russell rebalancing so we'd better go higher as typically funds that have to sell will sell (the companies that are being removed) first and then buy (the companies that are being added) – that means there SHOULD be money on the sidelines looking to pick up some companies today, though they might be able to fudge it until tomorrow.  

    Funny how they time these events for end of month to help the window-dressers paint the tape!  

    Turkey/Sibe – They are just the guys who got caught.  Everybody does it.  

    Brooks/Pharm – Yes, those religious countries are really embracing democracy aren't they?  I think MORALITY has nothing to do with religion and the real problem is we don't teach morality in schools because, traditionally, that's been the bailiwick of the church.  I would be in favor of a "national morality" agenda but imagine how people would freak out about that (is it wrong to shoot someone?  not in Florida).  I don't think brooks is really talking about religious faith anyway but rather faith in SOMETHING.  We are a nation adrift, at war with itself in both class and ideology.

    I've let the kids choose their own religious path and Maddie has moved from Buddhism to confirmed atheist (the religion of my Father, but I like to think there is SOMETHING down the road) and Jackie kind of feels like I do but both of us have to consider whether that's just a fear of death (my Dad was very upset about dying because he was certain there was nothing after).  Morality, though, is not up for discussion, that I drill them on whenever the opportunity presents itself.  

    They used to at least teach us philosophy in school and at least the discussions around it would give the kids in class a consensus view of morality that didn't depend on a man in the sky being mad at your or not.  As you note, the Founding Fathers very clearly DID NOT want religion to be a part of our Government.  The pledge of allegiance, which Conservatives cite as "proof" that our Government is based on religion, wasn't even written until 1892, over 100 years after our Constitution.  There is no mention of God in the entire constitution and the First Amendment only says: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof;" – too bad the Tea Party can't embrace that ideal. 

    Penny stocks/Albo – DRWI and ANAD worth less than $200M between them.  Less than $1M traded on the average day means very illiquid and then you have idiots at Seeking Alpha, Motley Fool, Fly on the Wall and other pump and dump sites dropping rumors all day long.  It's just silly stuff – don't get sucked too deeply into it.   I've seen a lot of people get addicted to penny stocks and end up getting wiped out by what started as "fun" trades.  

    Oil/Allan – Friday's are dangerous days to short, be careful.  $105.50 should still be bouncy on /CL and I hope $3.07 is on /RB because I like that one long.  

    Nice – DXD filled no problem.

    GDP/Advill – Yes, we've discussed that before so I didn't mention it above.  Everyone is involved in various forms of manipulation to pretty up the numbers and keep the proles in line while the top 1% are skimming what they can like the last days of Rome.  They all have safe havens carved out (mine is Jersey!) with escape routes planned and that's why no one (no one in power) cares that the Debt is insane or that the infrastructure is collapsing – those are going to somebody else's problems as we watch the American fire from overseas havens.  Happy Friday!  

    TOS/Pharm – They have gone downhill since AMTD bought them. 

    Crime/Shadow – Why not, we count war, don't we?  

    TSLA/Lunar – No, I think they are ridiculous and heading into an earnings disaster.  We sold the Sept $200 calls in the STP and those are hurting us but I want to wait until earnings to change my mind.  

    DVN/Mill – They are at $78.78 and might pull back to $75 or maybe $72 if oil drops back to $100 but a lot of ifs to get there.  Your spread covers you to $90 (not including what you already made) so I wouldn't do anything until after the holidays.   Earnings aren't until Aug 6 and your net on the $15 spread is a $5 credit so you have $20 of upside protection against the short Jan $70s that are only $8.78 in the money.  Why would you pay them $10.50 to get out of that?  Don't forget, the net delta on, for example, the 2016 $80/100 bull call spread is 0.30 so, even if DVN goes up $10, the $6 spread would only be $9 and you could still buy another $20 of upside protection for $9 and then you'd be covered to over $100.  Do you really think DVN will be over $100 (up another 28% from here, up almost 100% for the year) by Jan?  

    Nice job Allan, good call.  

  24. If you're playing for the pump on Monday, you can pick up DIA 168 for next week pretty cheap and possibly cheaper as more premium should melt away in the next few hours is the Dow maintains this level.

  25. Are there signs of economic slippage?

    But the EU has added crime to GDP


    The banks have a plan


    China has a plan


    Argentina has a plan

    GOP has a plan for the world, WAR!

    Q2 GDP will be not to bad and then revised and revised so government reporting agencies have a plan.

    What if planning is wrong? Different this time.

  26. Phil – Couldn't agree more with your comments about penny stocks.  Total gambles, and only playing with a small amounts. Even so, the few that I play are researched.  Guess it's obvious that not all research conclusions are accurate ! :-)

  27. ~~Based on the non-partisan, hard numbers, the big winners in Obamacare America are… drumroll please… the insurance companies!

    ~~But a lot of Americas have lost their previous plans, and now they're having trouble finding actual doctors to treat them even under their more expensive coverage

    Big business wins again! Private insurance in US has worked out better than every other countries plan.

    So I found out plans can work if the criminal politicians are allowed to take charge. With more military pressure we can change the world to American success.

  28. Phil: TZA – Can you please run through the TZA hedge trade from this morning's post? 

  29. GMCR

    Speaking of penny stocks, had you bought GMCR at the low in 1998 of .14 (adjusted for several stock splits), $10,000 would be worth ~$9 million today.  Had you bought it at the high in 1998, still worth ~$4 million today. 

  30. ~~BNP Paribas Expected to Plead Guilty and Pay $8.9 Billion Fine

    This is only to be fair, the trustworthy banks have a plan.

  31. Think the banks plan isn't perfect. How did they get the money to pay the fines? Who was it stolen from?

    Defenseless people who go to jail for exercising free speech. They just don't understand the constitution.

  32. I just showed Jackie that tobacco clip from the Daily Show and she was mortified.  The GOP may be losing her vote…

    Monday/Rustle – I think flatline but, based on this week's action, I'm concerned they may blow it on Monday.  

    Slippage/Shadow – Firemen have a plan too – water.  If that doesn't work, they get more water and, if that doesn't work, sometimes other firehouses show up with even more water.  Amazingly, they still can't always stop things from burning down – especially when the structure is weak to begin with.  

    Pennys/Albo – I'm glad, I was just concerned as you seem to be playing them a lot.  

    1,180 on /TF!  This seems like a good time to go in on TZA (now $14.22).  The Aug $15s are .70 and we can buy those and sell the Jan $12 puts for $1 for a net .30 credit without a cover.  If the RUT goes to 1,200, then we can sell $15s to someone else and roll down to a bull call spread (the $12s are +$1.30 at the moment).  Let's put 20 of those in the STP – just the Aug calls and the short Jan puts, no cover yet

  33. tobacco clip/Phil

    Another example of these damn Mexican kids taking good jobs away from Americans for good pay.

  34. TZA/Decad – Well, see above and let me know if there's a question.  Changed plan anyway as we got that nice move down and spike in price of puts.  Numbers were wrong in the morning but no one caught it.  Obviously it wasn't the $25/27, must have been looking at DXD by mistake.  

    LOL Rustle.  

  35. Phil: TZA – I did catch it. Hence the subtle request for review!

  36. Actually, Rustle, Colbert just covered that very well:

  37. TZA/Decad – Please don't be subtle if I make a mistake – it's a tremendous favor to me if you catch something so I can get it right.  

    Here's a good one for StJ – the jig may be up on VXX:

    • “I bought VXX as a play on volatility. But a week went by, two weeks, and the price went down," says Robert Whaley - known as the father of the "fear index" – who is very much not a fan of VIX Short-Term Futures ETN.
    • "Buying this is about the dumbest thing you could do," he says, after some prospectus digging revealed the product is more or less programmed to go to zero over time.
    • Whaley – recently signed on as a partner in AccuShares Investment Management – has his own product to sell as that firm has volatility ETFs in the works. The AccuShares Spot CBOE VIX Up Shares and VIX Down Shares are theoretically designed to do a better job tracking the CBOE Volatility Index, and could launch as soon as this summer.

  38. Phil: TZA - The revised trade makes sense. Thanks.

  39. Phil Fire Water

    Great example! An Idaho fact, Teton County spends over 3 times the state average, the highest by 2,, has full time firemen to protect what they refer to 3 cities, largest Driggs population 800, and has never saved a single home. The sheriff department spends way more having more equipment than the most dangerous city. Recently a woman with a child in the car being chased hit the sheriff with drawn gun, car blocking road, and continued. This is crime and take not of who is being attacked.

  40. StJ / Phil / VXX

    Have either of you checked SVXY? It’s the inverse of VXX. Maybe this one can be used for a BCS…

  41. Vxx puts are more guaranteed as they have the fee advantage working in their favor. As the etf churns and collects administrative fees, the value drops where it works against you in a bullish scenario.

  42. Phil

    This is what I am watching. This is just an example of how GOP policies are failing, standoffs with cops in Idaho Falls and Pocatello actual cities over 50,000 are every week and every one ends with someone dead. So this week they not only defeat a push to increase minimum wage they condemn the concept that will increase poverty!

    I said recession in January and I say as we end June it is worse today. 

  43. GMCR/Albo – Well, you can buy LQMT for .27 today but will you?  

    SVXY/Akad – Not a bad instrument.  Remind me a few times and maybe I'll remember to watch it.  UVXY is the  regular track to the VIX but, compared to SVXY, it's as bad at VXX:

    Since the option spreads are reasonable ans SVXY SEEMS to be reliable, maybe we can take a poke at it short in anticipation of more volatility down the road.  Unfortunately, the puts by themselves are ridiculously expensive with SVXY at $87 and the Aug $85 puts at $5.60.  On the other hand, the $90s are $7.55 so that $5 spread is net $1.95 – quite reasonable.  

    Recession/Shadow – First of all, check before you hit submit, your end sentences are getting gibberishy.  Medication, I suspect?  If we get another negative GDP number then, officially, we're in a recession now and that Global GDP chart above shows a very steady grind down, DESPITE all the Central Bank pumping, for the entire global economy.  Not as fast as 2008 but, with $29Tn pumped in, we're still hitting the same breaking point below 2%.  

  44. I have a question for anyone about portfolio margin.  I have not applied for it and don't really need it because my maintenance requirement is below my account value on all accounts.  In fact, if I were to use maximum regular margin, I feel that I would be way overextended in any downturn with that margin being used primarily for short puts.  What value is there to PM (other than giving me enough rope to hang myself)?

  45. I must also report my local oil indicator as a serious sign of trouble ahead. Oil has shot up in trading while local diesel price went down 10% and gas stays the same. Big oil is squeezing the retailer who can't sell the product with a normal profit. This can't continue, 1 of 3 gas stations for sale, no one interested. How long will they continue to loose money, for sale about a year.

  46. By reducing your margin requirements, it would reduce your margin expenses. If you borrow less, you would have lower interest requirements.

    However, I don’t have a PM account as I’m just getting my capital built up after finishing school!

  47. JPH

    It is fantastic hearing someone finished school and building capital. Good job.

  48. Phil/kids   I'm not sure how a young person can be "this" or "that" when they're still developing mind and body, so I tend to discourage any 'beliefs' they may have. I've explained how in this time of their lives, they need to spend more time on discovering what makes them and others 'tick'.


    We all tend to get caught up in our B.S. (belief system) and with the internet and the media, we soon find the confirmation that fits our B.S.


    I've explained to them that now is the time to enjoy their youth and not spend too much time worrying about 'life'


    That will come soon enough…. :(

  49. Phil // TZA
    FYI – The TZA uncovered is margin intense.

  50. Building capital is slow with a girlfriend and $40k in student loans even with my fairly solid income(engineering). I make more with my side job(personal training) than she makes with her job:/. I’m still putting about a grand a month unity my investment account and$1200 a month towards student loans though.

    Actually, I’d love to get some feedback on what my best course of action is for building up my net worth. Seems like 20% gains in the market are worth more than paying off my student loans but not totally sure.

  51. LQMT – Have traded it a couple of times off your calls.  Thanks.

  52. Universal Display jumps on Goldman note, LG reports

    12:14 PM ET · OLED

    • Goldman, a long-time Universal Display (OLED +7.3%) bull, has issued another upbeat note: The firm sees a variety of upcoming mobile, TV, and wearables product launches boosting Universal’s growth.
    • Goldman recently argued Samsung’s new Galaxy Tab S (features a 2K OLED display) will act as a positive catalyst; volumes should be much lower than the Galaxy S5 and Note 3′s, but revenue/device higher.
    • Separately, Korean media reports state LG Display (LPL +1.6%) plans to spend $788M to expand OLED production, in part to address the nascent OLED TV market (has seen some recent exits). For his part, LPL CEO Han Sang-beom says his company is thinking of expanding production of plastic OLEDs for smartphones and smartwatches.
    • Reuters previously reported LPL will be the exclusive display supplier for Apple’s iWatch. The Nikkei has reported the iWatch will feature a curved OLED display.

  53. JPH,

    There is no substitute for getting out of debt. 

  54. JPH

    Great to hear you can come up with $2,200 extra per month. That is why I would love to work and pay my debt. If you can actually make 20% your plan is solid but I with a lot les than you have extra per month all is going on debt. I have until April, then interest goes to 14.99% and that kills progress for me.

  55. I wonder if I posted a call by Goldman to jump off of the tallest bridge you could find, because that is how you find the pot of gold at the end of the rainbow, how many investors would follow that call? 

  56. phil……..tks for your thoughts and have a good weekend………….

  57. Phiol / DXD
    Just to clarify – are we taking the entire DXD position off ?

    c'mon – somebody whack TSLA at $240 -

    " I told you once to shut up with my mouth"

                            – Winter's Bone


  58. On the hour

    12:00 PM ET

    • Dow -0.13%.
    • 10-yr +0.1%.
    • Euro +0.14% vs. dollar.
    • Crude -0.27% to $105.56.
    • Gold +0.21% to $1,319.70.

  59. More outflows at loans funds; inflows for munis

    11:48 AM ET · BKLN

    • Losing $403M in funds last week according to Lipper, loan funds (also known as leveraged loans, senior loans, bank loans) saw their 7th consecutive week of outflows – this after a 95-week streak of inflows going back to June 2012. Popular for not just their yields, but the adjustable nature of said yields, a little digging finds the variable nature is tied to Libor – which won’t rise until the Fed actually hikes. Further, most loans have Libor floors, which means their rates won’t rise until Libor has moved about 75 basis points.
    • Municipal funds and ETFs, however, saw their eighth consecutive week of inflows, taking in $234M last week. ICI data show even bigger gains, with $798M of inflows last week vs. $805M the week prior.

  60. GoPro skyrockets on second day of trading

    11:01 AM ET · GPRO

    • Not content with yesterday’s big post-IPO gains, GoPro (GPRO +20.3%) investors have sent shares soaring above $37.
    • The action camera maker is now valued at 4.7x 2013 sales. Investors are betting GoPro’s hardware/software investments and strong customer loyalty will protect the company from commoditization, and allow it to maintain its Apple-like gross margins.

  61. Asian EM funds see biggest inflows in more than a year

    11:21 AM ET · EWT

  62. RadioShack +9.1%; SA author sees a contrarian play

    10:39 AM ET · RSH

    • “RadioShack (RSH) is really not the unmitigated disaster that the overwhelming majority are making it out to be,” declares SA author Charles Moscoe, making a bull case for the hard-luck electronics retailer. Management has said RadioShack has enough cash for 12 months, and the company is aggressively slashing costs in the interim.
    • Moscoe is also pleased with recent insider buying, and notes other struggling retailers such as Rite Aid, Best Buy, and SuperValu have risen sharply from their lows.
    • Though he admits the risk of bankruptcy is “material,” Moscoe considers the risk/reward favorable in light of RadioShack’s potential upside. He also thinks equity holders might not be completely wiped out should a bankruptcy happen.

  63. Deutsche looking to cut ties to another boom-era purchasae

    10:37 AM ET · DB

    • Deutsche Bank’s (DB -0.2%) asset management unit spent about $2.3B (including debt) acquiring cargo-container facility operator Maher Terminals in 2007, and has since written down the $1.1B in equity backing the initial deal, according to sources.
    • Now, reports the WSJ, the bank is looking for buyers for all or part of the company, and one source expects a price tag (for the whole operation) of between $800M-$1B.
    • Deutsche last month unloaded another albatross, selling the Cosmopolitan of Las Vegas to Blackstone for $1.7B after sinking $4B into the property.

  64. rustle

    I have Flash Boys on reservation #2 on list at the library and should get in 3 weeks. It surprised me they have it and I couldn't justify buying it. I have wanted to read it since it was released.

  65. Caesars to shut Showboat Atlantic City casino-hotel

    10:30 AM ET · CZR

    • Caesars Entertainment (CZR +0.2%) says it will close the Showboat Atlantic City casino-hotel this summer, citing the high property-tax burden and increased competition in Atlantic City.
    • CZR hasn’t decided what to do with the property or land, which has a prominent position on the Atlantic City boardwalk.
    • Despite the closure, CZR says it would remain the largest operator in Atlantic City, and it is developing a new meetings facility in the area as well as other revitalization efforts.

  66. Buckingham launches coverage on gaming industry; Strip win revenue up 17.3% in May

    10:05 AM ET · WYNN

    • Started at Buy are Wynn Resorts (WYNN -0.2%), Multimedia Games (MGAM +1.5%), MGM Resorts (MGM), and Melco Crown (MPEL +0.7%).
    • Initiated at Neutral are Bally Technologies (BYI -0.3%), International Game Technology (IGT -0.1%), Las Vegas Sands (LVS -0.5%), Pinnacle Entertainment (PNK +0.6%), and Scientific Games (SGMS -1.4%).
    • Underperform: Boyd Gaming (BYD -1.2%).
    • In other news, Las Vegas Strip win revenue of $592.9M in May rose 17.3% Y/Y according to the Nevada Gaming Control Board. The state’s nonrestricted gaming licensees reported total gaming win of $970M in May, up 8.1% from a year ago.

  67. Reuters/UofM Consumer Sentiment

    09:56 AM ET

  68. @shadowfax

    I got it from the library also but read it a month ago.

  69. Glu Mobile +2.7% on Benchmark upgrade

    09:21 AM ET · GLUU

    • Benchmark has upgraded Glu Mobile (GLUU) to Buy.
    • Glu rallied yesterday amid a strong early reception for Kim Kardashian: Hollywood (particularly on iOS). The company also unveiled two titles for Google’s Android TV platform.

  70. DragonWave +7.7% on CIBC upgrade

    09:14 AM ET · DRWI

    • CIBC has upgraded DragonWave (DRWI) to Outperform.
    • Shares are at their highest levels since January, albeit while remaining well below a 52-week high of $3.58. They soared yesterday after SA Pro author made a bull case.

  71. KB Home gains after beating estimates

    08:42 AM ET · KBH

    • Deliveries of 1,751 homes down from 1,797 a year ago.
    • ASP of $319.7K up 10% Y/Y.
    • Gross profit margin of 18.9% up 380 bps, the highest Q2 margin since 2006.
    • Backlog of 3,398 homes up 9% Y/Y. Backlog value of $1.03B up 24%.
    • Net orders of 2,269 homes up 5%. Average community count of 191 up 7%.
    • CC at 8:30 ET
    • KBH +2.5% premarket
    • Previously: KB Home beats by $0.07, beats on revenue

  72. rustle

    Better late than never!

  73. Phil – /CL's fighting resistance at 105.50 and broke up to 105.70 now. Usual short play on a  break below 75 (if it makes it) or are you thinking they'll spike the RUT?  

    Shadow – Great book. You can start here for free to get the premise and to get a 1st hand look at the author and the main protagonist:   The douchebag in the bottom right was later forced to apologize for making a false statement about the feeds that his exchange uses. Priceless….

  74. DuPont -3%, sees Q2 agriculture operating earnings falling by at least 10%

    08:16 AM ET · DD

    • DuPont (DD) -3.1% premarket after cutting its Q2 and FY 2014 earnings outlook, pointing to slower than expected sales growth in its agriculture and performance chemicals units.
    • DD said in a conference call that it expects Q2 operating earnings in its agriculture business to fall in the low teens in percentage terms, with corn pricing in North America expected to be slightly lower than its previous estimate and returns of unused corn seeds in Brazil to be higher than anticipated.
    • Dow Chemical (DOW) -0.7% premarket; chemical peers FMC, SYT, MON, LYB, CE and HUN also will be on watch today.

  75. Mt. Gox CEO: No more bitcoins likely to be found

    08:00 AM ET · BITCN

    • Mt. Gox CEO Mark Karpeles no longer believes that any more of the 850k bitcoins (BITCN, BTCS) that were lost when the exchange collapsed will be found.
    • This past February, the now defunct exchange lost 850k bitcoins, approximately $500M, after a series of hacking attacks hit its systems. A month later Mt. Gox found 200k of the coins, and kept the search going to find the rest.
    • Two weeks ago, the company received approval to file bankruptcy proceedings in the U.S., and is still awaiting approval for a settlement and sale of its business.

  76. Abercrombie & Fitch higher as Jefferies boosts price target

    07:59 AM ET · ANF

    • Following a meeting with management, analyst Randal Konik reiterates his Buy rating and boosts the price target to $60, citing increased confidence in product execution and better capital allocation.
    • ANF +2.2% premarket

  77. BNP to slash dividend, sell debt to pay U.S fine

    07:53 AM ET · BNPQF

    • Expected on Monday to plead guilty to criminal charges and pay as much as a $9B fine, BNP Paribas (BNPQF) reportedly plans to dramatically reduce its dividend and sell billions in bonds. It isn’t clear at the moment if the dividend will be scrapped entirely, or if a token payout will remain.
    • The bank paid a dividend of €1.50 ($2.04) per share in 2013, and one victim of the cut will be the State of Belgium which owned 10.3% of the bank as of the end of last year. “A spokesman for the Belgian Finance Ministry declined to comment,” says the WSJ.
    • Previously: NYT: BNP Paribas expected to plead guilty, pay $8.9B

  78. Federal grand jury now investigating GM’s use of faulty ignition switches

    07:48 AM ET · GM

    • A federal grand jury is now investigating General Motors’ (GM) recall of 2.6M small cars tied to faulty ignition switches and has subpoenaed documents relating to the case, WSJ reports.
    • GM already has paid $35M to settle charges it violated federal auto safety regulations, but a criminal investigation by a federal grand jury could pose a much larger threat; in March, Toyota paid $1.2B to settle a Justice Department criminal investigation of its mishandling of safety problems.
    • Meanwhile, documents released yesterday by a House panel show that lead GM engineer Raymond DeGiorgio knew of the switch issues in 2005, and that some employees at supplier Delphi (DLPH) knew DeGiorgio had signed off on an upgrade to the ignition switch in 2006 without recording the change with a new part number.

  79. Keurig boosted by upgrade

    07:38 AM ET · GMCR

    • Keurig (GMCR) is ahead by 1.3% in premarket action after Argus upgrades to a Buy with price target of $140, citing expected FY14 revenue growth of 10%.
    • Yesterday, Dougherty reported 11.5% Y/Y K-Cup unit growth for the month ended June 15, an improvement from the previous 4-week period’s 8.9%.

  80. …meaning the RUT may be a better play after the lunch crowd comes back

  81. Vornado moves forward with strip mall spinoff

    07:20 AM ET · VNO

    • Vornado SpinCo files a preliminary prospectus for the spinoff of Vornado’s (VNO) shopping center business, consisting of 80 strip centers, four malls, and a warehouse park.

  82. CNBC: Airbus to name RR as exclusive A330neo engine supplier

    06:39 AM ET · EADSF

    • After much discussion to revamp its A330, Airbus (EADSF) is now close to a decision which will allow Rolls-Royce (RRCEF) to become the exclusive provider of the upgraded planes’ new engines, CNBC reports.
    • The announcement reinforces the bond between the two companies, as the current jet engine supply is also provided by rival GE (GE). The new A330neo will be a wide-body jet with new wingtips, and save up to 15% in fuel costs.

  83. Audi’s shows off first plug-in hybrid

    05:48 AM ET · VLKAY

    • Audi (VLKAY) is bringing out its new A3 Sportback E-Tron, the company’s first plug-in hybrid. The move comes as the luxury automaker seeks to compete with an ever increasing electric plug-in market.
    • Carrying a heavy price tag, the new model costs €38k ($51k) in Germany, €15k more than a gasoline-powered A3.
    • By the end of the decade, Audi is planning to offer plug-in hybrid technology to every one of its models.

  84. EU summit to discuss next steps for Russian sanctions

    04:15 AM ET · RSX

    • As Ukraine readies to sign its controversial EU trade deal this morning, western countries will also be debating if Russian sanctions will need to be increased. The U.S. and Germany are insisting the EU broaden sanctions against entire sectors of the Russian economy, including energy, finance and defence. On the opposing end, Italy has expressed concerns that widening sanctions right after the EU trade deal is signed can backfire miserably.
    • The talks at the EU summit follow a week-long failed ceasfire between Ukraine and separatists, and the declaration of a newly formed confederation called “New Russia,” by the breakaway People’s Republics of Donetsk and Lugansk.

  85. Heavy volume expected due to Russell realignment

    02:45 AM ET · IWM

    • Russell Investments is planning its annual index realignment today, affecting more than $5T in assets. Credit Suisse estimates $42B will trade as a result of the adjustment, resulting in one of the biggest trading days of the year in terms of dollar volume.
    • Asset managers and investors will have to realign their portfolios to match up with the new shifts in indices such as the Russell 2000 and the Russell 3000.
    • Due to the expected surge in volume, exchanges are now busy preparing for possible technical issues occurring over the course of the day.
    • Yesterday, the London Stock Exchange said it will acquire Frank Russell for $2.7B.

  86. JPH – You may have the most free cash flow now than ever (or a long time), right now, before wife, house, kids…  If your primary employer offers a 401k plan, contribute the MAX (even if beyond what they may match.. i.e. if you can contribute up to 6%, but your employer only matches 3%.. still contribute the 6%). The more you can front-load that savings, the better. Consider paying extra on your student loan (principal) to push it down (another 5% or 10% per year).. and THEN contribute to your trading account. Oh, and don't get silly with car payments/new cars. When you can write a check to pay cash, THEN get that sweet Porsche..    Just my 2 cents. Others' values may differ.!

  87. This GM switch is only a cover up of bigger issues. They claim a stronger spring is needed but the positions would remain and that is a problem as a bigger bump would do the same thing. The flaw is in airbags and how to manage deployment. Subaru was the first to find out how dangerous they can be when small women in the passenger seat were decapitated in very slow crashes, one a parking curb, their solution to that was remove the front tow hooks. They were low, attached to frame and that is where the detectors are attached. Airbag deployment has to be closely controlled and GM is just the latest to get caught up in the deployment management issue.

    I am not defending GM, my point is this just avoids airbag problems. Cars are non repairable because of the cost of replacement and that burns the owner every time with a check smaller than the cost of replacement. Insurance wins again.

  88. JPH

    I 2nd Scott's advice.

  89. JPH – focusing in on your initial question about margin in general: my .02 is "be careful." Even if you've been successful applying trading & investment strategies in this forum, it's tempting to think, especially at a young age, that you can apply just enough leverage to bump your returns above your loan costs and at the same time escape the pitfalls of a massive downturn or upturn in the market. Think of this period as the start of your investment education and be prepared that there is a cost that comes with every type of schooling. Eventually you'll live long enough to see a 'black swan' that you didn't see coming and will end up paying that price. We all have. Even Phil - I dare say? ;-) 

    Max out your 401k, pay off your debt, put 10-15% of your salary in savings and trade the the rest with smart hedges. I'd also offer that if your company offers an ESPP with a good discount and solid prospects for growth do that, it's paid tremendous dividends for me in the past with every employer I'v ever had. 

  90. /Cl 105.75 moment of truth……Phil – all eyes to you. I'm hungry so it's either short the back gold or go have lunch

  91. JPH
    Jeez I wish some one would of taught me about money when I was a 'kid'
    Seems like 20% gains in the market are worth more than paying off my student loans but not totally sure.

    Just the opposite, my friend. Pay down the loans as fast as you can. They would eating away anything you would make in the market anyway. When you are debt free – then you play the market.
    I love scottmi's advice about cars, but you'll probably buy the Porsche anyway ; > It took me a while to find out cars are probably the worst 'investment ' you can make. They will literally lose 30% of their value the minute you drive them off the lot.
    ?Good advice on the 401K – its free money - take it ! It's amazing how companies have shafted people over the last decade. I remember when companies used to match 100% with no limit. Ah, those were the days but I was too young and stupid to realize.
    If I teach anything to my children it will be kindness, curiosity, and saving.

  92. My board time at a minimum given I am coaching my daughter's 6th grade hoops team at AAU nationals so apologies if we have discussed……….Phil, where are we on the SCO 22/26, BCS?  I do recall your not wanting to hold through the holiday weekend……down a tad since we initiated, we still holding into next week?  Thank you.

  93. no idea why my post was so long and had "no rating", "noweight" in it……..

  94. Steve – you don't get points for dead space dude…….

  95. Short 2 /CL for 105.74

  96. I was vague and not wanting to criticize but I after other comments will say what I actually think and I said all my money is to pay down debt. I differ a bit more from the others. I would and did pay off all debt in1979. I never borrowed a cent until surgeries and many other medical costs got out of control. That was no choice but you have choices student loan $0 then save, a year of living costs saved before marriage, and double that before children.

  97. God be with me……I know Phil – not a valid trading strategy

  98. FU TSLA!!!!

    FU NFLX!!!!

  99. can't fake coin data Phil:

    #260 !! All that work for $9k…. Crazy! I need solar guys!!! ~~~~

  100. BDC

    I am unemployable but if you would teach me how would do twice that much work for $9K. Maybe I can do something for you?

  101. I have an extremely powerful computer.

  102. Jabo – I'm in on the July 400's and Sep 420's on NFLX …let's do it baby…Oct 440s. NFLX was my trade of the year in 2011 I think when they blew the pooch and separated the DVD and Streaming business I was short 500 at 280 (but started the ss ride at 160). Took my profits at 140 or so but saw that puppy ride down to 50. Once the air goes out of the baloon there's no floor on the momos. We just need patience and a bit of capital.

  103. TSLA -  waiting for Musk to tweet that GPRO is talking to him about using batteries from his giga-factories.. sure to pop them toward MS targets on the day before next bond offering..

  104. FU /CL!!! Stopped out at 108

  105. patience???

    FU patience!!!!

  106. meant - 105.80

  107. Ok, so apparently you folks needed a little more juice so I sent 1000 coins to everyone I currently have on my PSW address list!!!  That's like 20 cents people!!!   :)   :P

    I need solar (or wind/biogas) guys. If you get someone to signup I'm paying 10,000 greencoin AND 0.01 bitcoin bounties (even if that person is you!) for the next 10 signups and 5,000 GRE bounties after that. Here's a flyer, it's super easy.

    There's a lot of green up for grabs everyday so early adopters are big winners. 

    Thanks! BDC

  108. Phil – I'll definitely come hang out with you guys in Vegas this year, but only if Jabo comes.

  109. I'm coming to Vegas to give you guys a Crypto-beatdown in poker.

    10,000 greencoin tourney — Phil you in????


    Oh and JABO better be going….

  110. My current amortization schedule is for student loan payoff in under three years while contributing 6% to my 401k(employer adds 10% to my 401k on top of that) and maxing out my HSA. I have a $380 car payment and about $1500 in living expenses for girlfriend and me. She’s starting a new job though and so her income is going to start picking up and she’ll be helping pay down my debt after she finishes off the last two thousand of her debt. I think it’s worth contributing to the investment account still for practice as much as anything. My student loans are about$15k at %3.8 and$23k at 6.8. Car loan is 1.9%

  111. Allan / trading


    3 recommendations:


    1  Don´t mix your real economy deals with  trading, not a good mix…specially when you are young

    2. Read the PSW old articles and comments in´s a mine

    3. See the 2 basic videos around Phil ;   "The man who planted trees",  and  " Be the House, not the Gambler"

  112. PH – definitely read the articles Advil mentions. Goldmine and very useful. I use them to teach some of my non-native US employees on the basic principles of investment and savings.

    FU Sandwich!!!! /CL 105.62 – could have reloaded at 105.75

  113. BDC // Intro
    Hey man – did you get my email ?

  114. Phil // BTR
    Since we're feeling a possible whack in the markets, should we pull in the July positions on some of the Butterflies ?

  115. Who said..Vegas…

  116. Portfolio Margin/Jet – Well if you like to nibble at long-term short puts as potential new entries, it ties up way less margin.  Also for butterfly/condor type plays.  Short call selling is more dangerous but, as earnings plays, we like to do ratio backspreads and those use margin.  

    This or that/1020 – I'd love to have kids that don't worry about life but Jackie woke me up at 2am when she was 6 years old and said she couldn't sleep because she was worried about what would happen to everything when the stars burned out and what the point was to anything if that was going to happen at some point.   She's not much better now and I can relate because I used to think way too much as well, though I haven't told her yet how helpful I found the occasional joint when I was 13!  Maddie has essentially gone dark, I'd say Goth but she's not actually into Goth stuff, just that kind of attitude.   She's actually a bright, cheery person but, underneath she's got a pretty dark view of the World at 14 (in 33 days!).  

    I just try to be there for them and often say "this too shall pass" but, to a person 1/5 your age, a year seems like 5 years to them, so I do understand how hard it is for them to see the other end of things.  Maddie already went through her Greenpeace phase but the more she learned, the more hopeless she decided she was and the more she decided not to waste her time in a futile effort to fight Big Business and try to save the planet.  

    Maddie reminds me of the daughter from Star Trek TNG "Inner Light" (my favorite episode) where Picard is living an alternate life on a doomed planet and his daughter confronts him with her own discovery that they are doomed and, when he admits it, she says "then I guess I'll marry sooner than later".  

    I don't think you can put a timer on when your kids become aware, the key is to help them make good decisions along the way.  

    TZA/Wombat – Well we bought the calls, so it's just the risk of owning the stock, which I consider to be a long-term offset anyway (if things go that far).  

    Student Loans/JPH – That is sick!  I remember having to pay back $175 a month and, as soon as I made enough money, I paid them off in full to get rid of them as my older brother (7 & 8 years older) were still annoyed by their payments and I didn't want that.  Just as bad as our medical system is our education system in this country!  I think you are on the right track, make sure you put away at least 10% a month and just dollar cost average into the market.  20% a year starting young will make you a rich man – here's $500 a month for 30 years at 20%:

    Year Year Deposits Year Interest Total Deposits Total Interest Balance
    1 $ 6,000.00 $ 691.43 $ 6,000.00 $ 691.43 $ 6,691.43
    2 $ 6,000.00 $ 2,159.47 $ 12,000.00 $ 2,850.90 $ 14,850.90
    3 $ 6,000.00 $ 3,949.58 $ 18,000.00 $ 6,800.48 $ 24,800.48
    4 $ 6,000.00 $ 6,132.43 $ 24,000.00 $ 12,932.91 $ 36,932.91
    5 $ 6,000.00 $ 8,794.18 $ 30,000.00 $ 21,727.09 $ 51,727.09
    6 $ 6,000.00 $ 12,039.89 $ 36,000.00 $ 33,766.98 $ 69,766.98
    7 $ 6,000.00 $ 15,997.68 $ 42,000.00 $ 49,764.66 $ 91,764.66
    8 $ 6,000.00 $ 20,823.78 $ 48,000.00 $ 70,588.44 $ 118,588.44
    9 $ 6,000.00 $ 26,708.67 $ 54,000.00 $ 97,297.11 $ 151,297.11
    10 $ 6,000.00 $ 33,884.67 $ 60,000.00 $ 131,181.78 $ 191,181.78
    11 $ 6,000.00 $ 42,635.01 $ 66,000.00 $ 173,816.78 $ 239,816.78
    12 $ 6,000.00 $ 53,305.09 $ 72,000.00 $ 227,121.88 $ 299,121.88
    13 $ 6,000.00 $ 66,316.10 $ 78,000.00 $ 293,437.98 $ 371,437.98
    14 $ 6,000.00 $ 82,181.61 $ 84,000.00 $ 375,619.58 $ 459,619.58
    15 $ 6,000.00 $ 101,527.87 $ 90,000.00 $ 477,147.45 $ 567,147.45
    16 $ 6,000.00 $ 125,118.52 $ 96,000.00 $ 602,265.97 $ 698,265.97
    17 $ 6,000.00 $ 153,884.76 $ 102,000.00 $ 756,150.73 $ 858,150.73
    18 $ 6,000.00 $ 188,962.05 $ 108,000.00 $ 945,112.78 $ 1,053,112.78
    19 $ 6,000.00 $ 231,734.98 $ 114,000.00 $ 1,176,847.76 $ 1,290,847.76
    20 $ 6,000.00 $ 283,891.92 $ 120,000.00 $ 1,460,739.68 $ 1,580,739.68
    21 $ 6,000.00 $ 347,491.62 $ 126,000.00 $ 1,808,231.31 $ 1,934,231.31
    22 $ 6,000.00 $ 425,044.53 $ 132,000.00 $ 2,233,275.84 $ 2,365,275.84
    23 $ 6,000.00 $ 519,611.86 $ 138,000.00 $ 2,752,887.70 $ 2,890,887.70
    24 $ 6,000.00 $ 634,926.42 $ 144,000.00 $ 3,387,814.12 $ 3,531,814.12
    25 $ 6,000.00 $ 775,539.96 $ 150,000.00 $ 4,163,354.08 $ 4,313,354.08
    26 $ 6,000.00 $ 947,002.86 $ 156,000.00 $ 5,110,356.93 $ 5,266,356.93
    27 $ 6,000.00 $ 1,156,083.19 $ 162,000.00 $ 6,266,440.12 $ 6,428,440.12
    28 $ 6,000.00 $ 1,411,033.88 $ 168,000.00 $ 7,677,474.00 $ 7,845,474.00
    29 $ 6,000.00 $ 1,721,918.48 $ 174,000.00 $ 9,399,392.49 $ 9,573,392.49
    30 $ 6,000.00 $ 2,101,008.39 $ 180,000.00 $ 11,500,400.88 $ 11,680,400.88

    This is the part I always have trouble getting people to understand and I realize I shouldn't close out our Long-Term Portfolios because then people miss the long-term lesson.  It never looks very exciting at the beginning and a small set-back makes many people give up since you only end up with $24,000 after depositing $18,000 over 3 years, but the growth picks up and up and up and becomes a juggernaut as time goes by and, if you start when you are 30, you will surely be able to retire in style – even with a lot of inflation in between (also because your equity holdings will increase too!).

    Just keep in mind, young whipersnapper (I feel so old giving advice like this), that each Dollar you put in today is $1,950 in 30 years so the real cost of that extra $5 SBUX you think you should treat yourself to is about $10,000 you are stealing from your future self!  

    That goes double or triple for those of you guys with children or grandchildren who can afford to put money aside for them.  Set up an account, follow a sensible long-term strategy and $300 a month for 20 years at 15% (very realistic, Buffet does better for 50 years)  is $454,000 by the time they are in college.  

    So, it will cost you $600 a month to insure that your newborn child or grandchild is a millionaire by the time they turn 20.  Do you really need that luxury car or that extra living room more than you need a legacy? 

    LQMT/Albo – You're welcome but I'm talking about keeping 10,000 shares or so in a safe for 20 years, like we wish we had with GMCR (or countless other successful stocks).  I think IRBT is also a very likely 10-bagger but LQMT still valued down at $117M, could go 100x if this stuff catches on (and the patents hold).  

    GS/Rj – It wouldn't be none!  

    You're welcome Mill, U2.  

    DXD/Wombat – No, just buying back the short July $25s we sold.   That adjusts the position much more bearish.  

    Oil/Allan – REALLY I would not touch oil this close to a weekend close.  Likely they run it up into 2:30 and then probably dribbles flat after that but /RB died at $3.085 and back to $3.0727 now so clearly there are some major problems for the bulls in the energy pits – could be anyone's game.  

    SCO/Steve – That's an Oct bull call spread in the STP and that's the one I DO want to keep on.  It was the short-term, directional trades I wanted to get out of at $105 ahead of the holiday (and so far, so right). 

    260/BDC – I told you you should have made Philcoins and then I would have accepted them for Membership Fees and we'd all be getting rich by now.  There has to be a flow of commerce for something of value for these things to take off.  

  117. BDC – more GRE in my wallet! that is so cool.  Is this something we need to open/let sync regularly or only when want to do a transaction? I saw it needed to do 12 days of "syncing."  Does the wallet software make one a participant in some kind of mining network or other use of cycles?

  118. BDC

    No clue but can't find my account, thought the computer saved it but if it did I have no idea where to find it.

  119. Phil – the 105.75 to 105.50 range seems to have worked pretty well today but I'm with you, too risky into the weekend. Guess we'll have to see if they spike it Sunday night and play for that early morning dump like this week.

  120. Student Loans

    My goal after graduation was to pay off my 25k in loans ASAP mainly because I saw how my oldest brother struggled after graduating and getting married. I was able to do it in about a year. My parents encouraged me to live at home, so I did, especially since I was traveling 2-3 weeks a month. I found a great 10 year-old car for about $2000 and didn't worry about all the other silly luxuries that some people get caught up in after landing their first job. It just has to be a priority…

  121. Phil – Great examples of the power of compound interest.

    Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn't … pays it.”

    ? Albert Einstein

  122. GPRO/Scott – $35.27 today after being rejected at $40, which was up a ridiculous 60% from yesterday's IPO at $25.  I don't know why investors believe that top-notch investment banks misprice IPOs by 50% or more.  These guys are professionals and know a hell of a lot more about the business than we do and THEY decided it was worth $25.  Maybe they want to see a 20% upside to get it off to a good start so they go a bit low and MAYBE the market conditions push them to come in a bit lower – just in case (since blowing an IPO is a total disaster) – but not by 50%!  


    No one respects the flame quite like the fool who's badly burned

    From all this you'd imagine that there must be something learned - Townsend

    Vegas/Allan – Well, at least he's easy to find…  cheeky

    Poker/BDC – Actually, we should have a 10M coin championship and promote it heavily.  We can collect all the conference fees in Greencoins.  

    Whack/Wombat – No because we've been feeling that whack for months and it never comes.  At this point, we'll just take the loss and regroup.  Butterflies are pretty neutral anyway, I'm not looking to turn them into gambles by making them directional.  

    Vegas/Jabob, Advill – VEGAS!!! 

    Oil/Allan – It always goes too high or too low for silly reasons.  Sometimes we don't trade at all, sometimes we trade 5 times a day (Rothstein again) – wait PATIENTLY for when there is a move to make.  

    Good one Albo.  Doubt that was Einstein though, wasn't a guy who worried about money much.  

  123. GoPro might make me want to Go Short them soon as options come out on them.  Hope it stays around this range or goes higher.  Reminds me of VJET at 70.

  124. Rustle123 – Speaking of shorts, I see SCTY trading over 70.  Are you in ?

  125. ORCL – scared back up off 40..!

  126. scottmi ORCL

    I don't follow it or know one stat but I would stay away based on what they do and how they do it. FWIW

  127. Oh, and F GoPro and F Greencoins and F SCTY – Go HOV!!!

  128. WOW…is that a teacup with a handle or a handle with a teacup on the end?

  129. That's a stock that never should have fallen from $6 in the first place.  

  130. Nice bottom call.

  131. ~~The middle class is even worse off than the numbers show~~The middle class is even worse off than the numbers show~~The bottom 90% of earners — most Americans — save only about 3% of their income these days. And for a decade prior to the 2007 recession, the savings rate for this group was negative, meaning most Americans borrowed on an ongoing basis to supplement their income. That debt binge created a financial hole many families are still digging themselves out of — one reason many people feel like they’re falling behind.

    ~~Wealthy Americans save about 12% of their income, by contrast, and the richest 1% save 38% of their income.

  132. HOV – I like big bottoms and I can not lie…

  133. Phil great charts on both of these you may see fit to post.

    ~~For most families, wealth has vanished

  134. So, the video game nerd that I can be, I just had a chance to play Electronic Arts' beta release of their flagship Battlefield franchise, titled "Battlefield: Hardline". Terribly disappointing! Is there a "fail" button? Push it. A "fail" lever? Pull it. A "fail"…umm…uh, valve? Yeah, well even though I've never heard of a valve mechanism for greeting terrible products, I'd say turn it! This one doesn't deserve to see the light of day. If there's a release party for this piece of "software", it might be best to hold it in a location that effectively mirrors its value – say on the grounds of an EPA superfund-qualifying industrial accident site whose toxic abatement is classified as being "in progress" over thousands of years, or perhaps in the general population yard of a maximum security prison.

    Now I know that one product does not a company make (unless, of course, said company only makes one product) so there is a vast field of resources that EA has their hands in that they can draw on…but I am beginning to experience a drop-off in how I see their overall service provision. Just reusing the same innovative gaming technology that they developed and refined through various company partnerships in less and less innovative ways. Makes me think that the company is looking at a short/medium-term with some moderate downside potential.

    Apparently I'm not alone in this, as an article over at the Motley Fool seems to suggest something similar:

    The industry, overall, has had a strong run and generally needs a break to regroup for new ideas. Otherwise, they'll enter into a dreaded aesthetic period of professional suicide (analogous to what I'd call, in cinema, the "Later Sandler" period – the interval in which the artist abruptly abandons any personal or professional commitment to even the most pedestrian notion of quality and simultaneously disgorges all previously-accumulated credibility – as evidenced by Adam Sandler's "films" such as "That's My Boy", "Grown Ups 1-2", "Jack and Jill").

    Feelings about the gaming industry, anyone?

  135. looks like they are trying to pin pcln at 1210…

  136. Hov, thx Phil.

  137. LOL good  call on F greencoins…. Sure we can poker tourney for 10M. I'll keep buying them to build up a stash. 

    Scott/sync/ you can sync whenever. The software needs to find other nodes when you open it  because it is peer-to-peer software in nature. You never lose anything by not syncing so there is no regular sync schedule you need to keep. If someone sent you some coins they won't appear until the block they are part of syncs  -- for example if you haven't opened your Wallet since Sunday, and someone sent coins on Wednesday, when you open your wallet it will not show the coins appearing until it has synced past the block those coins are in. You can actually see all coin exchanges here regardless (this website has an always-on wallet it interrogates). For example, for your address the info is here and this way you could verify if someone sent you a payment and you couldn't get to your client to sync up.

    Shadow – this technology is kinda "it is what it is," you have to play with it a bit and there is a great deal of value add coming where people can buy and sell carbon directly and not have to fiddle with wallets and such, but that is still downstream for us. There is immediate help generally available in our IRC chat room (go to and enter some nickname and join the channel "#greencoin"). If you can't find the client just search your computer for greencoin, e.g., in Windows -> Start -> [in the search bar type] "greencoin-qt.exe"


    Wombat / I went back and saw your email, must have missed it somehow… I didn't hear from your contact so I reached out just now. Thanks so much. That's worth 5k…. Enjoiy!

  138. ~~Feelings about the gaming industry, anyone?


    How low can they go? Not helping with anything in this country anymore.

  139. housing – man, long term people have no vision. How obvious was it that 2011 was the absolute low? Just as obvious as 2007 being the high! I personally ignore housing "news" these days. For the better part of the past 5 years you needed 2 x 750 credit scores, 20% down, and 3 years of tax returns to borrow up to only 30% of your monthly income. You know how much shadow demand that creates? Compare that to 2004-7 where it was all NINJA loans / ARMs / re-fi revolving door-ATM shenanigens / etc etc. It takes a LONG time to regain the "trust" in the system and we aren't anywhere near it.

    Then Seattle houses go up 5% in two months and everyone is surprised.

  140. Gaming industry – the way you describe them, they sound like every other industry in this country – and the rest of the world, too. You'd think they were being run by the same people who go to the same 'seminars', read the same books…you get the idea.

  141. snow gaming

    All actually owned by the same people, That is why I post what you see today from me. My mission is relentless exposure and write to politicians multiple times per week.

  142. Shadow – Yes sir, it's only a matter of time before they've milked this cow unto death. 

    Snow – Where did they get this cookie cutter that produced these executives and developers? I think you're right that there's something wrong with the culture at large. I keep thinking that this is symptomatic of late-stage capitalism and the onset of the financialized economy that just has no dynamism anymore.

  143. MNKD is approved by FDA….and, and, and…zoom zoom….plop.

  144. Phil – /CL – 105.77!!!! Oh so tempting…..What's the saying "He who's candle burns half as long, burns twice as bright"? – Blade Runner!!!! my favorite movie

  145. Screw it. It's 3:30 already and here comes the stick

  146. Pharm – Classic case of sell the news ?

  147. TSLA, i don't know…staring at the chart…looks like it's going to get driven to 250 then 265 and then 300 before it's return to earth. it wouldn't be up here at 240 if that wasn't the plan.  is this feeling what is referred to as capitulation?

  148. The reason I say it's endemic of late-stage capitalism is that the emphasis of the firm is almost wholly weighted on profit protection and financial metrics rather than on the products themselves. A good product revenue isn't okay anymore. It's almost like a profit for a modern company has to be monumental in relation to capital expenditures if it's going to pass muster at brokerage houses and meet analyst projections. Ugh! It's like the gaming industry has consolidated around a rent-seeking model rather than a research/development model ever since EA and Microsoft and Activision, the largest companies, have planted their flags in the ground.

  149. From


    Mannkind coming under pressure, apparently because of warning label for Afrezza

  150. TSLA…and…next week is the ideal low volume week to drive it up in!

  151. yo_mamma

    I can assure you that us struggling at the bottom are forced to scrutinize every purchase and one thing I hear a lot is Wal-Mart sells junk  and around her business there is off over 50%. Instead buy a good whatever at twice the price and never need another again. Consumers at the bottom are sick of this capitalism.

  152. Hate auto edit here constantly drops the e to her. About the 6th time my writing looks stupid just today.

  153. Again, wash rinse repeat.  What a crock, but don't fight the trend…..

  154. yo_mamma - My thoughts on EA (for context, I'm a long time gamer, build gaming rigs for friends as a hobby and I've played BF since the original 1942) There are a few trends developing in the industry that are acting as very strong catalysts for driving game developers to release quality products

    1. YouTube LP (Let's Play) Channels – there are multiple channels out there with > 1M subscribers that are essentially pro gamers who have an enormous influence on the ratings for these games. I see time and time again the 'trust factor' at work with these guys. They're making their $ off of YouTube ad revenue and are not willing to sacrifice honesty in return for gaming industry bribes when showing the game in action and giving their opinion. BF4 went through major revisions shortly after release when these guys called out the crappy quality of the netcode in the game.

    2. Oculus!!! – now this is something that may very easily force the next wave of major innovation and excitement in the PC AND console industry. The games don't need to be 100% refined if you're able to strap a headset on that let's you simulate flying the f'ing Millenium Falcon(!) and feel like you're IN the movie.

  155. MNKD = Exhubera = DNDN.  Look it up. 

  156. Last minute stick so the .001% get $5,000 Scotch to toast more money. RUT up .6% as bio corps race to the top, but un sustainable as only the .001% can afford them.

  157. Stick that stick, up .7% and climbing.

  158. 3. Indie Game Studios – My oldest son's high school buddy makes $40k/year hosting a MineCraft server and I have to beat my 10 year old and my 6 year old with a stick to get them off the PC on the days they're allowed to play. DayZ – that one idea of playing a perma-death survival game is only now starting to mature and catch hold but I'm sure you know how popular it is. I'd be surprised if the big players are not working on something in this space and can only imagine what it would play like with a Rift. 

  159. Shadow – I know what you mean. Half the time we are paying just for the friggin' namesake of the various companies. That's why I love these guys here at Open Source Ecology. It's like a bunch of tech-hippies that are interested in actually developing low-cost, high-quality, nonobsolescense-based, modular farming / commercial / industrial hardware for the developing world … all based on a worker cooperative model with (as it says in the name) an open-source methodology. In the moments where I think virtually nothing gets produced by small firms anymore (at least not without the backing of venture capitalists who have them in the proverbial figure-four leg lock from the get-go). For a cool summary video about what they're doing, click here

    allan292 – All good points. I think you're totally on with the idea that the Rift will help to push forward the envelope of the industry. The product will revolutionize both the social and material dimensions of it. I just wonder how long it will take those with developer kits to really dig into and get a sense of intimacy with the device so they can create with it. It's a whole new thing, and progress is going to be slow for a while as the coding intuition builds. In the long-term, private studios will have new ways of building (counterstrike with the Rift and force-feedback wearable devices will be closing in on the virtual reality threshold that will cause the Big Revolution – and then all bets are off on who can command those tools – but until the new hardware becomes well known and distributed (and Oculus, though now under Facebook, has done a good job of popularizing next-wave gaming to software engineers up to this point) it won't force the industry to do anything but put out crappy products with minimal oversight and absolutely non-responsive customer service.

  160. Allan / Age  

      I was thinking you are a freshman thinking in how to pay your loan, but you are already a father of 3!.  Sorry the confusion.

  161. Thanks Albo. 

    Middle Class/Shadow – That's the crux of my bearish outlook. Those charts, I think, we've done to death. 

    Battleship/Yo – Depends how big a deal it was in the big picture for them.  It's like a movie company releasing a dud or an oil company with a dry well – doesn't mean they'll take a big hit – that's just the business.  To me, the surprise hit of Titanfall overhwelms Battlefield complaints though I could see doing a backspread into earnings (7/21ish) as they are very unlikely to pop 40 (and a 20 p/e).  Gaming, overall, is very tough to call as they don't publish software budgets like movie studios do with films, so you never know quite how they are doing.  

    CNBC is amazed that the market is rallying into the close.  I guess having absolutely no ability to remember patterns keeps things fresh for news people…

    You're welcome Invest. 

    Housing/BDC – Very good point on shadow demand but we are miles from requirements dropping.  Meanwhile, a move up in rates can send housing down another leg and THEN where will you find people crazy enough to invest in housing?  We pressed home ownership to unsustainable levels at the top of a housing bubble so we busted the maximum amount of people who got caught at the top and those people all have families and friends so we have a whole generation of potential buyers who are likely to be trigger-shy for a lot more than 5 years.  

    Cookie cutter/Yo, Snow – Why it's the Cult of the Harvard Business School!  When first started consulting, I was amazed at how clueless a lot of these executives are and it comes from this idolatry we have in this country for the Harvard/Wharton model of business and the way just having those stamps on your resume fastracks you to the executive suite – so fast that these people don't actually get enough real experience before they get there to have any real idea how to run the company they are in charge of.  

    Even more ridiculous is this insane idea that people who run one company can go to a completely different industry and run that company.  I can understand if GM gets a guy from Ford or something like that but when you think PZZA's COO makes a good CEO for KKD (just happened), that's getting a bit off base.  Sure, they are both food and then — I got nothing…  There are much dumber ones, but that one is stuck in my head.  We turnover almost 10% of the CEOs every year – also crazy.  

    Blade Runner/Allan – So good!  

    TSLA/Lunar – $300 would put their forward p/e at 100, that would be ridiculous and unsustainable.  Now it's "just" 75.  They topped out at $265 in February and the run-up was a lot more impressive-looking with a lot more volume than this one and I got bored telling people it was topping then so, other than this, I'm not going to be the voice of reason now.

    Submitted on 2014/02/26 at 5:17 am

    All this is still a lot to manage and still risky.  It is simpler, assuming you want to stick with TSLA in the first place, to just take your loss ($100K, for example) and kill the entire trade and JUST sell a short strangle, like 20 short 2016 $160 puts for $24 ($48,000) and 20 short 2016 $350 calls for $32 ($64,000) and then you get to keep $112,000 if TSLA is between $160 and $350 in Jan 2016 – about $100 in either direction from where it is now.  Again, you can't lose both sides and that means break-even is $50 higher or $50 lower so $110 – $400 is your range.   TOS tells me this is $51,000 in margin so you can make this trade and move on with your life and stop staring at TLSA all day.  Seems appealing to me!  

    Submitted on 2014/02/26 at 2:30 pm

    TSLA/Mill – Well now that you capitulated, of course they are pulling back a bit.  I think you're balanced enough to watch and wait (unless you still have margin issues).  Once again I prefer just going for the 2016 spread to make up losses but, as you know, I do still think TSLA will see $200 before $300.  

    Submitted on 2014/02/27 at 6:14 am

    TSLA/IHS – See above.  TSLA is pretty much unplayable unless you have serious conviction to gamble short (or long, if so inclined).  The manipulation by MS into this offering is despicable – but it works.  And look at how many Banksters are in with MS on the deal – also smart by Musk to align all their interests in maximizing his stock price.   Do you think any analyst will come out with a negative note on them?  Certainly not from GS, MS, JPM or DB and not from anyone WHO MIGHT WANT TO WORK FOR THEM ONE DAY, nor will any Government Official who may want a lobbying job or a board seat on a company underwritten by one of the them ever investigate the matter.  It's the perfect economic crime – it only hurts the shorts and no one likes shorters anyway…

    That spread is now $16.70 for the puts ($33,400) and $20 for the $350 calls ($40,000) for $73,400 – up $38,600 so far.  That, by the way, is one of the good uses of Portfolio Margin!  

    Good gaming points Allan.  

    Stick finish sold back off a bit after the close.  

    Have a great weekend folks, 

    - Phil

  162. yo_mamma

    The first link didn't say much except a nice idea and the second video wouldn't play.

  163. Shadow -

    Lemme give you the video link again:

  164. Phil / The Management Factory

    Excellent point on the Ivy b-school stamp. it just amazes me how a professional school endorsement and some success in another industry can amount to an easy end run around a whole corporate hierarchy of experience. Have we really come to the idea that business is so generalized in its nature that as long as the executive board and lower-level managers know what they are doing then executive manager can be both competent and successful in directing a firm with virtually no real working knowledge of,it? Sounds like the grand conceit of the hubris of the elites.

  165. Advil – no sweat. I was replying to JPL's thread. He's the "new blood" of the site. 

    yo-mamma – You know what's my perspective on this industry? I think it's very much like Hollywood in that it's success is driven directly by the vision, dedication and commitment of their management teams with the key success factor being pure luck. Every Hollywood studio out there has had major flops on movies that they thought were going to break records and it's the same for the games industry. For every EA there is a Blizzard (aka Activision) and as long as they do the right thing and nurture and enable the hot properties they acquire and/or create they will be lucrative businesses. I just don't think they're a robust investing premise. 

    Phil – Have a great one! Awesome week and hope next one is just as profitable.

  166. Facebook Home’s original development team has reportedly disbanded

  167. Dick Cheney Fearmongers “A Terrorist Attack Bigger Than 9/11 Will Happen Before End Of Decade”

  168. Up To $80 Billion Gold-Backed Loans Are Falsified, Chinese Auditor Warns

  169. 15 Ways The World Will Be Awesome In 2050

  170. If You Want To Make A Lot Of Money, There’s Really Just One Industry To Go Into

  171. Wells Fargo is leading the US banks’ push from mortgages to car loans

  172. Apple’s users spend 4X as much as Google’s

  173. Euro zone economic sentiment slumps in June

  174. Freddie Mac: Mortgage rates down again despite new cut in Fed stimulus

  175. Why the latest GDP numbers are simply baffling

  176. S&P 500 to hit 2,000 for first time by end of 2014: Reuters poll

  177. How Google Is Taking Over Our Lives

  178. China is building way more theme parks than it needs

  179. SAMSUNG: Our Next Earnings Report Is Going To Be Pretty Bad

  180. Chinese millionaire holds lunch for homeless New Yorkers | Reuters

  181. BlackBerry Shipments Fell 76% Year-Over-Year In The Second Quarter

  182. Daddy’s Girl: How An African ‘Princess’ Banked $3 Billion In A Country Living On $2 A Day

  183. Titcoin Is a Brand New Cryptocurrency for Porn Purchases

  184. Cocoa prices are surging, but cocoa farmers are still making a pittance

  185. Why the iPhone 6—not the iWatch—is Apple’s biggest launch this year

  186. Phil,

    With all this talk of penny stocks maybe you could take a look at MONIF. This maybe one you buy and wait, but really would appreciate your opinon. Thanks.

  187. Swarm of mini builder drones could 3D print a house

  188. 500 Startups is crowdfunding its new $100M fund, with help from SeedInvest

  189. Big day for the Russell and Nasdaq!

  190. Elio Motors promises a weird $6,800 car

  191. Costco makes up with Apple, starts selling iPhone and iPad online at discounts of up to $120

  192. Amazon Is Quietly Launching A Local Takeout Service To Rival GrubHub, Seamless And DeliveryHero

  193. Google upgrades Glass with double the memory, bigger battery

  194. Most people want a bigger iPhone—some are even willing to pay extra for it

  195. Happy Weekend!

  196. "I don't think you can put a timer on when your kids become aware, the key is to help them make good decisions along the way."


    You're so right Phil – Along with Wombat's thoughts of teaching "kindness, curiosity and saving" and you have a formula for success….


    ….and that "goth" thing will fade when boys become more interesting….. :)

  197. A Startup Cruise Is Creating A Way To Turn Any Vehicle Into A Self-Driving Car For $10,000

  198. Yo Still Exists and Now Has More Than 1 Million Users

  199. Apple, Google, Samsung to take on diabetes with wearables — report

  200. Good Morning y'all!  A wonderful post on the importance of developing procedural memory.  Very eye-opening, particularly for new traders, explains why 10000 hours or whatever are needed:

  201. Wappler – I know Pradeep's blog is full of great lessons for your newer traders…..good guy as well!

  202. JPH1121/Builing up networth,

    I can recommend the blog of Mr. Moneymoustache (, a guy who was an engineer at Cisco and other places and retired in his thirties.  Very common sensical info on how to save money and live a smaller footprint life.  Wish I had read that blog 20 years ago!

  203. 1020/stockbee,

    It looks like a great site – have you been following it for a while?

  204. Next week could be interesting – thin trading because of the holidays but tons of economic data. Thursday we'll have jobs in the US but the markets close early!

  205. Wappler – Yes, I have. While the site is in no way as engaging as PSW, it is a great community.

  206. Good morning!

    Off to Tomahawk Lake Water Park today – kids love that and I kind of like it too…  

    MONIF/Jcrist – Sorry, I forgot all about them.  They're not really a penny stock ($1.5Bn company), just a penny ADR.  They just completed an acquisition that people were not too pleased with and that's depressed the stock and I really the Last Second Ticketing part of the deal but, with AAPL, GOOG and everyone else getting into this space (mobile banking and payments) I worry that their diversification is more defensive than offensive.  

    On the other hand, with everyone and their brother trying to get into mobile payments and MONIF "only" at $1.5Bn, they themselves make a nice acquisition target for a company looking to get into the space.  It seems to me that they are spending a lot of money BECAUSE they are getting a lot of business (huge deal with TEF last year) and contracts like that (5-years) mean they have to invest up front in anticipation of capturing the long-term revenue stream.  

    So, yeas, I like them at 0.96 but I'd like them more if they get back over $1 as the trend is not their friend at the moment.  Back around 0.70, they get too good to pass up and I'm not saying that will happen – just that that's probably the worst case so, if it's a long-term investment, nothing wrong with scaling in at these levels.

    Big Chart – Not the same as a Spitting Cobra, could be bullish consolidation but we had two strong-volume Fridays in a row that DIDN'T move the market higher, but not lower either – very hard to say.  Don't mean a thing unless we either make new highs or lose the 5% lines on the Dow and S&P.  NYSE 11,000 has failed and didn't even hold long enough to qualify as a spike (though it did manage to confirm the line as a strong support/resistance level). 

    Goth/1020 – Believe me, I'm in no hurry for it to end – the longer I don't have to worry about my daughter in some boy's car, the better!  

    Procedural Memory/Wappler – I like that, very interesting.  

    Next week/StJ – That retail sales info from Europe while we're closed can be dangerous.  Canada GDP can confirm or deny our drastic reduction – health care not a factor for their consumers.  Usually we get NFP on Friday, having it Thursday on a half day will be interesting. 

  207. Interesting analysis of SHLD:

    I estimate that between now and the end of 2016, Sears needs to come up with $2.7 billion in cash just to cover its pension obligations, interest on its outstanding debt, and capital expenditures for their current store base. Where will this money come from? That’s the problem for the stock right now, and why I see more short-term pain ahead for Sears Holdings shareholders. Even if we were to assume that Sears’ retail stores breakeven on an operating cash basis (which they are not doing right now, hence why this capital is not going to come from operating profit), the company still needs to come up with several billion dollars.

    Management has announced they are exploring monetization options for both Sears Auto Centers and its ~50% stake in Sears Canada, but even if both were sold they are unlikely to fetch more than $1.2 billion in a very optimistic scenario. That leaves another $1.5 billion to find somewhere. Sears Holdings currently has about $600 million of cash in the bank, so further asset sales or more debt will be required simply to get the company funded for the next two and a half years. After all of that cash goes out the door, the asset base left for shareholders will be materially smaller than it is today.

    This is why I am waiting on the sidelines, despite the clear value in Sears’ vast real estate portfolio. As long as the company continues to burn through cash operationally, more and more assets will need to be sold simply to cover capital needs. Even if they continue to lease out space to other retailers, it simply is not enough to help financially in any meaningful way. By waiting things out, but continuing to monitor the situation closely, I am hoping that over the next couple of years, more and more assets are shed out of necessity, and I might have an opportunity to buy the stock at a lower price, and with more of the assets concentrated in the owned real estate (the debt holders and the pensioners can have Sears Canada and Sears Auto Centers — they’re not good businesses). If that happens, there might be a time down the road when the price investors have to pay, relative to the assets and liabilities on the books, represent an attractive investment opportunity. Since I don’t see things getting better in the short term, I think it’s too early to invest in Sears Holdings for the real estate.

  208. Bank for International Settlements warns on ‘euphoric’ markets

  209. Phil, 

    Thanks for MONIF. I will continue to scale in.

  210. Anyone know how to get into mining jobs here in the US?  A few friends are heavy into tech and are interested.  

    Article that stirred them up:,7,121,122,201,401,641,1009

  211. Burrben – That article is from 2011!!!! Iron ore has collapsed since, from $182 USD per ton to under $93 USD per ton! I very much doubt those salaries exist today.

  212. Duh!  I should have done some critical reading before posting it.  Are any of those jobs in oil/gas/mining still around that pay really well?  

  213. From Bloomberg, Jun 29, 2014, 8:54:17 PM

    Asahi Soft Drinks Co. employees work as boxes containing bottled beverage move along the production line of the company’s Mount Fuji factory in Fujinomiya, Shizuoka Prefecture, Japan. Photographer: Akio Kon/Bloomberg

    Japan’s production rebounded in May, indicating that manufacturers are riding out a sales-tax increase as Prime Minister Shinzo Abe seeks to steer the economy through its aftermath.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  214. From Bloomberg, Jun 30, 2014, 4:17:18 AM

    European stocks were little changed,
    with the Stoxx Europe 600 Index heading for a fourth straight
    quarterly gain, as investors awaited data on U.S. home sales.
    U.S. index futures were little changed, while Asian shares rose.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  215. From Bloomberg, Jun 30, 2014, 5:02:45 AM

    June 30 (bloomberg) — Marshall Gittler, head of global foreign-exchange strategy at IronFX Financal Services Ltd., discusses the implications of euro-zone inflation on European Central Bank policy, the U.S. economy and currency recommendations.
    He speaks from Limassol, Cyprus, with Anna Edwards and Mark Barton on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

    Mario Draghi’s latest stimulus tool
    contains a hidden message: If you think interest rates will rise
    before 2018, take the money now.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  216. From Bloomberg, Jun 30, 2014, 2:23:28 AM

    June 30 (bloomberg) — Marshall Gittler, head of global foreign-exchange strategy at IronFX Financal Services Ltd., discusses the implications of euro-zone inflation on European Central Bank policy, the U.S. economy and currency recommendations.
    He speaks from Limassol, Cyprus, with Anna Edwards and Mark Barton on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

    The options market isn’t convinced
    European Central Bank President Mario Draghi will succeed in his
    aim to weaken the euro.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  217. From Bloomberg, Jun 30, 2014, 4:30:01 AM

    June 26 (Bloomberg) — Bank of England Governor Mark Carney speaks at a news confernece in England about the U.K. housing market and the introduction of measures to limit riskier mortgages that may lead to an unsustainable buildup of consumer debt.
    The BOE’s Nils Blythe, Andrew Bailey, Jon Cunliffe and Spencer Dale also participate. (Source: Bloomberg)

    U.K. mortgage approvals fell in May, dropping to the lowest level in 11 months, and the cost of new borrowing increased, adding to evidence that the property market may be cooling.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  218. From Bloomberg, Jun 29, 2014, 3:53:01 AM

    This image made from video posted by Iraqi0Revolution, a group supporting the al-Qaida breakaway Islamic State of Iraq and the Levant, on Wednesday, June 11, 2014, which has been verified and is consistent with other AP reporting, shows a militant standing in front of a burning Iraqi Army Humvee in Tikrit, Iraq. Photograph: Iraqi0Revolution via AP video

    Iraqi forces backed by helicopter gunships and tanks kicked off an offensive to retake Tikrit from Sunni militants, who seized the northern city after sweeping south from Mosul earlier this month.

    To read the entire article, go to

    Sent from the Bloomberg iPad application. Download the free application at

  219. From Bloomberg, Jun 30, 2014, 2:35:04 AM

    Hong Kong police are pictured at the entrance of a local police college where crowd control drills are conducted in Hong Kong on June 25, 2014 ahead of planned July 1 protests. Photographer: Philippe Lopez/AFP/Getty Images

    Hong Kong is bracing for a mass rally tomorrow that will be a litmus test of popular opposition to China’s insistence on controlling a leadership election.

    To read the entire article, go to

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  220. From Bloomberg, Jun 29, 2014, 7:17:14 AM

    More than 780,000 votes, most of
    them electronic, have been cast in an unofficial poll in Hong
    on how to choose the territory’s next leader.

    To read the entire article, go to

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  221. From Bloomberg, Jun 30, 2014, 3:18:10 AM

    French President Francois Hollande, Ukrainian President Petro Poroshenko and German Chancellor Angela Merkel talk at the EU summit after the signing of the EU’s Association Agreement with Ukraine, in Brussels, on June 27, 2014. Photographer: Guido Bergmann/Bundesregierung via Getty Images

    German Chancellor Angela Merkel and French President Francois Hollande, in a telephone call lasting more than two hours, stepped up pressure on Russia and Ukraine to resolve their territorial dispute.

    To read the entire article, go to

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  222. From Bloomberg, Jun 29, 2014, 9:39:23 PM

    Pedestrians and shoppers cross a street outside the Pavilion Mall shopping center in downtown Kuala Lumpur. The government introduced a goods and services tax of 6 percent, which takes effect in April 2015, to boost revenue after running a fiscal deficit since 1998. Photographer: Sanjit Das/Bloomberg

    The world’s longest-running equity
    rally is losing steam.

    To read the entire article, go to

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  223. From Bloomberg, Jun 30, 2014, 4:09:49 AM

    BNP Paribas, France’s largest bank, is poised to plead guilty today in Manhattan federal court, ending years of investigation by accepting a record penalty for violating U.S. sanctions against rogue nations, people familiar with the case have said. Photographer: Balint Porneczi/Bloomberg

    June 30 (Bloomberg) — BNP Paribas SA won a reprieve during final talks to settle a criminal probe into U.S. sanctions violations, giving the bank six months to prepare for a ban on handling certain dollar transactions, according to a person with direct knowledge of the matter.

    To read the entire article, go to

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  224. From Bloomberg, Jun 30, 2014, 5:00:00 AM

    The euro-area inflation rate held
    steady in June at less than half the European Central Bank’s
    target, underscoring the challenge faced by Mario Draghi as he
    tries to stoke prices and ignite growth.

    To read the entire article, go to

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  225. From Bloomberg, Jun 29, 2014, 6:00:30 PM

    A woman works online in her cubicle at an office in Beijing. Photographer: Frederic J. Brown/AFP/Getty Images

    Chinese banking regulator Li Jianhua literally worked himself to death. After 26 years of “always putting the cause of the party and the people” first, his employer said this month, the 48-year-old official died rushing to finish a report before the sun came up.

    To read the entire article, go to

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  226. From Bloomberg, Jun 30, 2014, 3:10:56 AM

    Hedge funds got more bearish on
    wheat as predictions for ample global supplies spurred the
    largest rout in prices since 2011.

    To read the entire article, go to

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  227. From Bloomberg, Jun 29, 2014, 12:00:00 PM

    Cranes stand at a residential construction development in the Haizhu district of Guangzhou. New-home prices last month fell in half the 70 cities tracked by the government for the first time in two years, the Bureau of Statistics said on June 18. Photographer: Brent Lewin/Bloomberg

    The most-actively traded Chinese
    companies in the U.S. are on pace to report the smallest profits
    in two years as growth in the world’s second-largest economy
    decelerates to the slowest since 1990.

    To read the entire article, go to

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  228. From Bloomberg, Jun 27, 2014, 10:49:13 AM

    Laszlo Birinyi, president of Birinyi Associates, Inc. Photographer: Jin Lee/Bloomberg

    One thing making people nervous about stocks these days is the fact the U.S. market has gone more than two years without a correction, or a 10 percent drop.

    To read the entire article, go to

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  229. From Bloomberg, Jun 28, 2014, 12:01:00 AM

    Consolidated Edison Inc. (ED) will ask
    technology-savvy hipsters and churchgoers in Brooklyn and Queens
    to power down and save $1 billion.

    To read the entire article, go to

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  230. From Bloomberg, Jun 27, 2014, 2:25:02 PM

    June 18 (Bloomberg) — Mark Yusko, Chief Executive Officer and CIO at Morgan Creek, and Bloomberg’s Michael McDonald examine the challenges for university endowments as Harvard University faces dwindling returns and the resignation of Harvard Management Chief Executive Officer Jane Mendillo. They speak on Bloomberg Television’s “Market Makers.”

    Matt Ciaschini, who oversaw $700
    million of natural resource investments at Harvard University’s
    endowment, has resigned, bringing departures at the money
    to at least four in the past two months.

    To read the entire article, go to

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  231. From Bloomberg, Jun 27, 2014, 4:53:58 PM

    Forty-nine percent of consumers in a June survey by RBC Capital Markets LLC in New York said they would need an increase in wages to step up spending, up from 46 percent a year ago. Photographer: Patrick T. Fallon/Bloomberg

    Janet Yellen and her Federal Reserve colleagues are finally succeeding in their efforts to generate higher inflation. Now they must do the same for wages to prevent U.S. households from getting squeezed.

    To read the entire article, go to

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  232. From Bloomberg, Jun 30, 2014, 4:31:46 AM

    Prime Minister David Cameron told reporters on June 27 after the vote, “In a Europe crying out for reform, we’ve gone for the career insider.” Photographer: Alain Jocard/AFP via Getty Images

    U.K. Prime Minister David Cameron’s
    failed bid to block Jean-Claude Juncker’s appointment as
    European Commission president is a “catastrophe for the
    national interest,” Shadow Chancellor Ed Balls said.

    To read the entire article, go to

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  233. From Bloomberg, Jun 30, 2014, 12:00:02 AM

    South Korea topped the U.S. on government-backed export credit last year with an economy one-fourteenth as large. Germany helps Airbus Group NV compete against Boeing Co. with loan guarantees. China supports exporters of petrochemicals and electronics.

    To read the entire article, go to

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  234. From Bloomberg, Jun 29, 2014, 10:38:42 PM

    June 23 (Bloomberg) — Adrian Mowat, Hong Kong-based chief Asia and emerging-market strategist at JPMorgan Chase & Co., talks about Russia and South Korea stocks.
    Mowat also talks about China and Japan’s economies. He speaks with Angie Lau on Bloomberg Television’s “Asia Edge.” (Source: Bloomberg)

    Russian stocks in Moscow, London and
    New York are headed for the biggest quarterly gain since
    September amid signs the Ukraine crisis is winding down and as
    oil prices surged on rising tension in the Middle East.

    To read the entire article, go to

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  235. From Bloomberg, Jun 29, 2014, 11:03:21 AM

    Yes, this is a litigious society.

    America, as the legal theorist Mick Jagger once observed, is a litigious society. Now, to prove him right yet again, comes House Speaker John Boehner, Republican of Ohio.

    To read the entire article, go to

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  236. From Bloomberg, Jun 29, 2014, 11:03:20 AM

    The uncertainty over a broken immigration system will persist, further frustrating U.S. businesses and taking a toll on the economy.

    Conservative Republicans think the immigration issue has turned to their benefit, removing even the slim prospects for any action this year. If they’re right, it’s only for the short term.

    To read the entire article, go to

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  237. From Bloomberg, Jun 27, 2014, 3:18:47 PM

    Not even close.

    British Prime Minister David Cameron has sustained what looks like his biggest political defeat. Knowing he was destined to lose, he forced a vote among European leaders on whether Jean-Claude Juncker should lead the European Commission. He lost 26-2, with only Hungary’s Viktor Orban backing him.

    To read the entire article, go to

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  238. From Bloomberg, Jun 29, 2014, 9:51:41 PM

    June 25 (Bloomberg) — Japanese Prime Minister Shinzo Abe talks about the nation’s economy and government policies.
    Abe, speaking yesterday in an interview with Bloomberg News at his official residence in Tokyo, said the deflation that wiped out much of Japan’s growth the past 15 years has ended and will be thwarted by new government policies designed to encourage business expansion. (This is a translated excerpt. Source: Bloomberg)

    Bank of Japan Governor Haruhiko
    Kuroda says inflation will get back on track toward his target
    after a slowdown in the summer. Bond traders are skeptical.

    To read the entire article, go to

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  239. From Bloomberg, Jun 30, 2014, 3:25:29 AM

    June 30 (Bloomberg) — Lim Say Boon, the Singapore-based chief investment officer at the private banking unit of DBS Group, talks about stocks, U.S. bonds and investment strategy.
    He also talks about Federal Reserve policy with Rishaad Salamat on Bloomberg Television’s “On the Move.” (Source: Bloomberg)

    Emerging-market stocks rose, with a
    benchmark gauge heading for its biggest quarterly advance since
    September 2012, while the yen gained and South Korea’s won hit
    an almost six-year high. Oil fell on speculation violence in
    Iraq won’t curb output from OPEC’s second-biggest producer.

    To read the entire article, go to

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  240. From Bloomberg, Jun 29, 2014, 6:03:22 PM

    Help the shellfish.

    When it comes to climate change, almost all the attention is on the air. What’s happening to the water, however, is just as worrying — although for the moment it may be slightly more manageable.

    To read the entire article, go to

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  241. Good morning!  

    Cash, Cash, CASH!!!! is what I'm feeling today.  I'm sorry but, the more I read, the more I worry.  I know the solution is to stop reading or drink more but, as a responsible adult with two teenage girls, I'm worried!  

    It's the EOQ and maybe we'll drift in here in a very low-volume holiday week but the macro news just gets worse and worse:

    Central Banks Face Bumpy Road to Normalization, BIS Says. Central banks shouldn’t procrastinate and must be ready for a rough ride as they exit emergency policy measures, the Bank for International Settlements said. “It will be difficult to ensure a smooth normalization,” the BIS said in its annual report released today. “The prospects for a bumpy exit together with other factors suggest that the predominant risk is that central banks will find themselves behind the curve, exiting too late or too slowly.

    Central Bankers Who Bemoan Low Volatility Share Blame, BIS SaysCentral bank policy makers have expressed concern this year that low market volatility is masking future risks. In fact, they’re helping cause the issue they bemoan, the Bank for International Settlements said. Record-low interest rates and unconventional monetary easing by the Federal Reserve, European Central Bank and the Bank of Japan reduced price swings across markets, the BIS wrote in its annual report published today. That’s prompted investors to take greater risks to maintain returns, even amid an uncertain global recovery, according to the BIS, which that acts as a central bank for the world’s monetary authorities. ?

    How The Fed Distorts Everything

    Axel Merk: The Fed's Next Move? "If You're Not Concerned, You're Not Paying Attention"

    Hedge fund correlation risk alarms investors. The industry’s correlation with equity markets rose sharply in the two years leading up to the financial crisis.


    The Truth About First Quarter S&P 500 Earnings  – A change to pension accounting, which helped "revise" US GDP by $500 billion higher, said revision also flowed through to reported corporate earnings, not just non-GAAP EPS but also GAAP, and EPS for the S&P500 were revised retroactively higher virtually uniformly by about $1.5 per quarter.  In other words, had it not been for the pension accounting fudge which helped raise LTM S&P 500 GAAP EPS from $100 to $106, the P/E of the S&P would be nearly 20x as of Q1. 

    Q2 Economic "Hope" Misses The Point

    ECB Rates Allow Zombie Loans to Stymie Credit, BIS SaysLoose monetary policy makes it easy for euro-area banks to keep bad debt on their books, potentially delaying the flushing out of sour loans, the Bank for International Settlements said in its annual report. The European Central Bank’s record low interest rates and ample liquidity have boosted banks’ lending margins, allowing them to gloss over losses in their business, the Basel, Switzerland-based BIS said in the report, released today. That’s what makes it so crucial to find other means to fix banks’ balance sheets, such as the ECB’s asset-quality review, it said.

    Europe's Fragile Recovery Is Stalling As Germany Sputters

    Slowing China Economy Dims Profit Outlook to 2012 LowThe most-actively traded Chinese companies in the U.S. are on pace to report the smallest profits in two years as growth in the world’s second-largest economy decelerates to the slowest since 1990. Analysts covering stocks listed on the Bloomberg China-US Equity Index (HSCEI) estimate that on average they will post earnings of $5.64 per share this year, which would be the lowest profits reported since 2012, data compiled by Bloomberg show. They’ve cut revenue forecasts by 7.9 percent in the past 11 weeks. 

    China's Crackdown On Corruption May Now Be Weighing On Growth

    Hong Kong’s China debt trapOpinion: Are the city’s banks getting too cozy with mainland Chinese finance.


    Kuroda Optimism Questioned as Price Outlook Drops. Bank of Japan Governor Haruhiko Kuroda says inflation will get back on track toward his target after a slowdown in the summer. Bond traders are skeptical. The market for inflation-linked debt shows expectations for annual consumer-price increases of 1.25 percent over 10 years, the lowest outlook since April 1 and compared with the BOJ’s goal of 2 percent, according to the so-called break-even rate. The gauge has retreated from as high as 1.39 percent on June 3 as data showed slumping household spending, falling wages and slowing exports. The equivalent U.S. rate was 2.25 percent.

    USDJPY Nears 2014 Lows As Goldman Warns Economic "Downside Risks Are High"

    BofA(BAC) Fears The End Of 'The Japan Trade'

    Goldman(GS) Warns Political Risks Are Set To Surge

    BIS Damps $2 Trillion Emerging Market Company Debt SpreeMore than $2 trillion of foreign borrowing by emerging-market companies since 2008 is leaving them vulnerable to a sudden drop in funding at the first sign of trouble, according to the Bank for International Settlements. Bond investors willing to lend generously when conditions are good can pull out in a crisis or when central banks tighten monetary policy, analysts led by Claudio Borio, head of the monetary and economic department, wrote in the BIS annual report. Emerging-market companies that lose access to external debt markets may then be forced to withdraw bank deposits, depriving domestic lenders of funding as well, they said. ?

    Home-Bias Risk Identified by BIS in Bond RegulationsNational supervisors may be encouraging domestic banks to buy their own governments’ bonds because the regulators are able to specify how risky the assets are, the Bank for International Settlements said. Financial institutions in Ireland, Portugal and Spain may be benefiting from a home bias that lowers the amount of capital they need to put aside to compensate for risks tied to the assets they hold, the BIS said in its annual report today. The trend is less evident in Austria, Britain and France, it said.

    The Sectarian Genie Is Out Of The Bottle From Syria to Iraq

    Fear Thaws Out for Investors as Online Brokers Defy FunkWith U.S. stocks stuck in the sleepiest funk since the dawn of the Internet, one group is waking up: online and discount brokers.

    A Recovery Stymied by RedistributionPublic policy intended to make layoffs less painful actually made layoffs cheaper and more common?

    Let's Take A Look At The Latest NYSE Margin Debt Data In Historical Context:

    Click to View


    Standard of living costs for families rise five times more than earnings since before recession, figures showA couple with two children would now need just under £40,600 between them to afford a decent lifestyle, study finds.

    Martin Armstrong Warns Civil Unrest Is Rising Everywhere: "This Won't End Pretty"

    Even The Editor Of Facebook's Mood Study Thought It Was Creepy

    As I've said before – this is not the kind of news we should be reading at all-time market highs.  There are gross distortions in the markets being created by Central Bank policies and those policies rely on people's faith in their ability to produce endless supplies of fiat currency without drastically devaluing faith in the currency.  To some extent, the fact that people no longer understand the monetary system works to their advantage but it also means that those same people can completely lose faith for uncontrolled reasons at some undetermined point and they would have a very hard time restoring that faith.

    Remember I said we'll see the signs when other countries begin to have crises.  Well, here's #1 on our hit parade:

    1. EurActiv ‎- 4 hours ago
      Bulgaria's leaders have asked citizens not to panic and withdraw their savings when banks reopen today (30 June), following runs on two …
      Wall Street Journal‎ – 2 days ago‎ – 42 minutes ago

    This is how Iceland started 7 years ago and, when nothing really bad happened right after it, people said "see, it's just an isolated incident" and they bought even more equities because they were "bullet-proof."  

    1. South China Morning Post (blog) ‎- 4 days ago
      The list of Chinese companies defaulting on their bonds continues to grow, with word that timber firm China Forestry Holdings (0930.HK) has …

    Unfortunately, you have to dig for this stuff because the MSM either buries it or doesn't report it at all.  The Billionaires that own your media do not want you to sell before they are done selling and they certainly don't want their own stock holdings to go lower and the Government pressures them anyway to bury the bad news.  

    You would think this stuff would be discussed – you would think it would be on the cover of magazines you are reading but it's not – it's as if none of this is happening.


    Click on the image and read the front page of the WSJ.  Their reporters have access to the same news we do and their editors get to decide what's important enough to make their front page.  This is the "financial" paper half the investing World relies on!

    Anyway, so happy Monday to you, let's just be careful out there and PLEASE make sure you have an exit strategy – that's all I'm trying to say…



  242. Phil:

    What do you think of Bob McDonald as the new VA chief? I don't know much about him, interested in your thoughts.  Good/Bad? 

  243. McDonald/Jeff – I don't know why he wants to deal with that mess but he's a good guy (West Pointer, Airborne Ranger), was a good CEO and is a good choice to go in there and bust heads.  The VA does have to be run like a buisness.  McDonald is only 60 so this will be as much his legacy as PG was – I can't believe he'd take this job if he didn't have a very clear vision of how to fix it and, of course, an equally clear indication that Obama CAN and will support him in doing whatever it takes to get this on track by 2016 elections.  

    Once a country has socialism, national health care, and gay marriage, soccer is usually next.



  244. Trading and Cognitive Bias