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Huge Victory for the GOP – Bottom 90% Completely F’d!

Victory in our time!  

They said it couldn't be done, they said that people in a "Democracy" would never allow it to happen but, in the past 5 years we have actually taken 15% of the income AWAY from the bottom 90% of American wage-earners and re-distributed it to the top 10% and, since there are much less of them, it has boosted our top 10% incomes by 115% over the same period!  

In the words of the great Winston Churchill (as redefined by the Conservative Bible): "Never was so much taken from so many for so few."  As you can see from the chart above, the Reagan Revolution successfully reversed years of gains for the average American and began shoveling all of the economic progresss to the top 10% for the last 30 years but only in the last 5 has this policy gone into overdrive as we have begun to actively TAKE the money from the bottom 90%,  Look how rich that makes us – no wonder we are all voting to keep this policy going!  

As noted by Zero Hedge:

"Inequality in the U.S. today is near its historical highs, largely because the Federal Reserve’s policies have succeeded in achieving their aim: namely, higher asset prices (especially the prices of stocks, bonds and high-end real estate), which are generally owned by taxpayers in the upper-income brackets.

The Fed is doing all the work, because the President’s policies are growth-suppressive. In the absence of the Fed’s money printing and ZIRP, the economy would either be softer or actually in a new recession."

It's not just our Fed, of course, this morning we are getting more doveish noises from the ECB press conference as Draghi promises MORE FREE MONEY (for those of us with the credit scores or balance sheets to qualify) and that is already (8:30) pushing our Futures up half a point in pre-market trading.  We're still watching our bounce levels (and shorting /TF at 1,130), as there hasn't been any actual policy change to back up the BS.    

If you happen to be in the top 10% (family income over $160,000) and don't feel 125% richer, that's because you are simply "too lazy" to be in the top 1% (family income over $1,000,000) who are, according to a new study by the ECB, much richer than previously thought.  

Rather than holding 30% of the total household wealth in the US, as is often cited, the top 1% actually have more like 37% – over 20% more money than previously estimated while the top 5% (family income over $3M) hold over 60% of America's wealth.  This does not, unfortunately, leave much money for the other 95% – try not to be one of them!    

“We always suspected there was some low-balling of the top 1 percent,” said Joseph Stiglitz, a Nobel-prize winning economist and author of “The Price of Inequality. ‘‘There’s a growing sense that our system is rigged and unfair.’’

Of course, it's obvious that the people with greater incomes are able to accumulate more wealth.  After all, how much "wealth" can we expect a family of 4 to accumulate when they are living with the bottom 90%'s average income of $29,840 (every Dollar counts when the figure is that low!).  

396 Americans (the top 0.000001%) have $1Tn, 2.3% of America's wealth.  That still leaves $49Tn the other 309,999,604 of us but the top 3.1M take 37% of it ($18.5Tn) and another $18.5Tn goes to the next 31M people to round out the top 10% leaving just $12Tn for the bottom 279M people or $43,000 each compared to 1,225,806 for the average top 10%er, 5,967,741 for the average Joe in the top 1% and all of them are just a little jealous of the 396 guys who have an AVERAGE of $2.5 BILLION, EACH!!!

In fact, the chart above needs to be updated because, according to the OECD, the top 1% of Americans (15M wage earners) now take home 20% of the country's income vs the 10% illustrated on the chart above.  That's very much in line with the trend the ECB noted, that 15% of the bottom 90%'s wealth has been transferred to the top 10% (mostly the 1%) in the past 5 years alone.  

top-incomes.jpgSince no family can actually live very well in America on $29,840 a year, the bottom 90% tend to go into debt in order to get luxuries like cars, homes or college educations.  They borrow this money from the people who have it, the top 1%, and they pay the top 1% interest and that is how more and more money siphons up from the bottom 99% to the top 1%.  The poorer we make the bottom 99%, the more money they have to borrow from us to live and the more money we make – BRILLIANT!!! 

Lowering the tax rates on investment income insures the top 1% gets to keep the wealth that is transferred to them without having to "give back" unless they choose to.  Over the past 30 years, the rules have changed and the laws have been enacted that have, as you can see from the first chart, accelerated that wealth transfer to the point where we have set new World records for inequality – beaten only by biblical accounts of slavery but, don't worry, we'll get there!  

As long as we're on the winning side of this game, we should cheer on the status quo.  After all, it's very hard for us to get $1M from Carlos Slim, Bill Gates or the Koch Brothers (in fact, we tend to give them a lot of money) but it's pretty easy for us to get money from people who are poorer than us, isn't it?  That's how the system is designed and, if you want to "win", then you need to use the system as it's designed.

That's why NFLX's stock pops when they raise their prices and why almost any stock pops when they lay off employees or run tax inversion schemes.  We REWARD the kind of behavior that benefits the rich at the expense of the poor, including companies that are "clever enough" to destroy the environment without incurring any penalties.  That then incentifies companies to lobby to allow them to destroy more of the environment and move more labor overseas and evade more taxes – it's what we tell them to do when we vote with our investment accounts!  

We (in the top 1%) need to start caring about this stuff because we've reached a tipping point where we are now destroying the bottom 90%, which ultimately renders then unable to buy the goods and services we sell them.  Even those of us who wisely cater to the top 10% (I do) have to worry about their ability to pay us being compromised if their bottom 90% customers can no longer pay them.  The deflation we're seeing around the globe is just the tip of that iceberg our economy is heading towards.

So congratulation to the GOP for fostering 30 years of incredible gains for those of us on top of the food chain.  Unfortunately, I don't think America can stand another 4 years of these policies without a complete collapse of the bottom 90%.  Maybe we should care, just a little.  

FUN PROJECT:  Email this article to your Congressperson and ask them simply "What are you doing about income inequality?" and see what kind of response you get.  If you get a response at all, it is likely to be a form letter (you can add specific questions to check to see if anyone actually reads it) but, even those letters can be very amusing – send them to us, and we will print the best ones!  

 


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  1. Phil. RUT sitting right below 1,130 as we approach opening bell. Are we looking for it to hold this line today? 


  2. Phil- As of 8:30am we are back to watching and waiting on weak bounce lines. Would you remind us of those lines please? Also oil has run back up to 97.25ish. Any feeling for this one way or another? 


  3. Good morning!  

    1,130 on the nose for our /TF short.  Tight stops, of course. 


  4. Oil Lines

    R3 – 99.27
    R2 – 98.7
    R1 – 97.83
    PP – 97.26
    S1 – 96.39
    S2 – 95.82
    S3 – 94.95


  5. European markets did not like Draghi pinpointing economic risks posed by geopolitical crises circling the continent.


  6. Lines/Craigs – No new lows yesterday, so we're still watching:

    • Dow 17,100 to 16,400 is 700 points so 140-point weak bounce to 16,540 and a strong bounce would be 16,680
    • S&P 1,990 to 1,920 is 70 points so 15-point bounces (rounding) to 1,925 (weak) and 1,940 (strong)
    • Nasdaq 4,475 to 4,325 is 150 points so 30-point bounces to 4,355 (weak) and 4,385 (strong)
    • NYSE 11,050 to 10,650 is 400 points so 80-point bounces to 10,730 (weak) and 10,810 (strong)
    • Russell 1,200 to 1,110 is 90 points so 20-point bounces (rounding) to 1,130 (weak) and 1,150 (strong)

    That's why we called the RUT bearish at 1,130 earlier this morning (6:30) in anticipation of a move up that would fail (working well so far with /TF stopping out at 1,124). 

    Futures in a good spot to go bearish but not sure bearish is going to work today:  /YM 16,425, /ES 1,920, /NQ 3,875 and /TF 1,128.  I think if /TF tests 1,130 I'd like the short as long as /ES is under 1,920 and /YM under 16,450 and /NQ under 3,875 otherwise, it's short the laggard if 3 of 4 below those lines.  

    If they are above, we're back to watching and waiting on weak bounce lines. 

    Big Chart is ugly and only Dow has real support at 16,340 (200 dma) and we can't take a move up seriously if the Nasdaq can't get back over the 50 dma at 4,375.


  7. From: John Jakubowski [mailto:jjakubowski@wombatcreative.com]
    Sent: Wednesday, August 06, 2014 10:13 PM
    To: Phil Davis
    Subject: VXX

    Why These Funds Are Hazardous To Your Portfolio

    < http://www.etfdigest.com/davesdaily/#comment> 0

    August 06, 2014

    < http://www.etfdigest.com/images/stories/7-28-2014_11-33-18_AM_Scott_Murray.
    jpg>

    by Scott Murray, contributor to ETF Digest

    When markets sour and become more volatile, VIX based ETFs can appear to be
    attractive hedges to your portfolio. Yet it should be no secret by now that
    these ETFs that are supposed to hedge against market downdrafts frequently
    do little hedging and often lose a lot of invested capital. Notwithstanding,
    investors large and small still gravitate to these for a few reasons, and
    many of them are inappropriate for most investors. While they can provide
    quick returns if your timing is right, they are inevitably built to fail.
    Let’s break down what comprises the majority of them, how they are
    structured, and what few of them may actually present opportunities to
    invest smartly.

    Volatility exchanged traded products primarily hold VIX futures contracts.
    The VIX, or volatility index, is a current measure of the implied volatility
    of the S&P 500 over a forward looking 30 day period. Essentially, implied
    volatility is an estimate of how much the index is expected to move both up
    and down most of the time. A VIX reading of 16 indicates that the options
    market expects that a 1% move could occur in one day in the S&P 500, and the
    S&P 500 index options are priced to reflect this expectation. The VIX index
    is created using a complex formula related to the prices of index options on
    the S&P 500, and it rolls every day to represent the 30 days immediately
    ahead.

    VIX futures on the other hand, measure the anticipated price of the VIX at a
    certain date forward. The futures are traded going out several months to
    create a term structure of future anticipated VIX prices, not unlike oil
    futures. The term structure of these future dates looks like this:

    < http://www.etfdigest.com/images/stories/8-6-2014_4-32-03_PM_VIX.jpg>

    Courtesy: Vixcentral.com < http://Vixcentral.com>

    Here we see that at August 20th expiration the VIX is expected to be 16, in
    November it is expected to be 16.67. Currently, the curve is quite flat as
    the market expects that volatility in the near future, say through the end
    of the year, will not be much higher than it is today. It should be noted
    that these expectations are frequently wrong, not unlike a when there is a
    spike in natural gas or crude oil. The term structure of VIX futures prices
    only reflects market expectations using known information.

    Many institutional investors use the VIX futures and futures options to
    hedge large portfolios, but this is obviously complicated and can be
    expensive for the smaller manager and investor. The financial crisis and the
    perceived need for hedging tools as well as speculative products on market
    volatility seeded this list of ETFs, none of which were in existence before
    the financial crisis:

    < http://www.etfdigest.com/images/stories/8-6-2014_4-34-25_PM_VXX.jpg>

    Courtesy: etfdb.com < http://etfdb.com>

    As you can see, their performance this year is abysmal, and only buffeted by
    a recent rise in volatility, else it would be even worse. The cause of their
    futility is in the way that these are constructed using the VIX futures. The
    VXX, the largest volatility ETF in asset value, rolls its holdings of
    futures contracts every day from the contract nearest expiration to the next
    month’s contract. The vast majority of the time this roll results in paying
    a higher price for the next contract. The simple reason for higher prices
    going out in time is quite simple; the future is more uncertain the farther
    out in time you look.

    This is the major inherent flaw with these ETFs, in that most of the time
    they are rolling up the curve at higher prices. Generally, this roll results
    in a loss of 2-7% per month and at times this negative roll can be even more
    expensive. Consider a situation where the U.S. Congress is approaching a
    deadline to vote on a debt ceiling extension next month. The near month VIX
    future might be 13 while the following month could be 16 due to the upcoming
    event’s uncertainty. That term structure creates a negative roll of over
    20%, and if the event passes without any major surprises then these ETFs
    subsequently deflate with amazing speed.

    The result looks like this over time:

    < http://www.etfdigest.com/images/stories/8-6-2014_4-36-22_PM_VXX_ETN.jpg>

    Because the negative roll profit gained over time is cumulative, these
    inverse funds are capable of losing a large chunk of their value during
    short periodic volatility spikes. This structure prevents them from being
    excellent investments, because unforeseen events can dent them
    significantly. Agile investors can buy these on dips due to temporary
    heightened volatility and do very well most of the time.

    < http://www.etfdigest.com/images/stories/8-6-2014_4-37-25_PM_XIV.jpg>

    The bottom line is quite simply that long volatility ETFs are for day
    traders and inverse ETFs can be held for somewhat longer periods of time. If
    your crystal ball can anticipate upcoming periods of heightened volatility
    and avoid the almost constant negative roll yield, well then I suppose these
    funds are for you. New volatility ETFs are in the works due to the
    popularity of these flawed versions, and the hope is that their construction
    will be better suited to investors that can’t trade every day.


  8. What a loss when George Carlin died.  He was always ahead of his time.


  9. OMG!!!  In an SEC filing, Goldman Sachs said it had eight days of trading losses during the second quarter of 2014. 

    Phil – If Goldman Sachs cannot make money EVERYDAY, what chance do we have in this market? ;-)


  10. Great post today Phil


  11. GS/Diamond – WE have a great chance because WE practice BEING THE HOUSE, Not the Gambler!  It's not just GS, all Fund strategies are failing in this crap market (as noted in our morning news) :

    Summertime Blues:  Summertime Living Isn't Easy for Macro FundsGraham Capital, Rubicon Among Hedge-Fund Firms Feeling Heat of Poor Returns. The market's summer stumble has dealt a new blow to a group of macro hedge funds that seek to anticipate trends in global markets. Graham Capital Management LP has laid off more than 10% of its staff, or more than 20 employees, according to people close to the matter. Six funds at the firm, run by Kenneth Tropin, have posted declines of as much as 5.9% this year, the people said. Rubicon Fund Management LLP's Rubicon Global..

    Deals' Demise Wrecks Funds' BetsBusted Buyouts and Warning by Obama Sting Big Investors; It's 'Arbageddon'. On a day some traders dubbed "Arbageddon," hedge funds who bet on big corporate takeovers, known as arbitragers, suffered their worst rout in years after two deals fell apart and regulators indicated they may take steps to stymie others. In a rapid-fire series of moves over the course of 24 hours, 21st Century Fox Inc. dropped its $80 billion bid for Time Warner Inc., and Sprint Corp. abandoned its plans to acquire T-Mobile US Inc. Walgreen Co. wrong-footed other traders by deciding not to move offshore to lower..

    This is why I keep trying to steer you guys away from bets on chasing the silly volatile earnings pumps and dumps and the "arb plays" on these M&A deals and rumors mergers – it's a suckers game.  Yes, I do play them occasionally but ONLY when I think I have a very good feel for the deal and the mechanics involved.  Having sat through many M&As in my time, I can tell you thousands of things that can go wrong between an announcement and completion.  Deals announced recently have been more sloppy than usual, with 20% failing this year.  That's also a function of less qualified staff on hand at the investment houses to fix those bump along the way.  

    Thanks Jomp.  


  12. Phil – Notice the “wink” in my above post.


  13. Speaking of being the house and having balance, this is a new daily feature as I want to hammer this point home:  STP $134,384 (up 34%), LTP $590,025 (up 18%) and that's net $724K, up $3K from $721K yesterday and $719 the day before.  Why?  Because we SELL PREMIUM and we take trades on both sides and we don't really care which way the market goes from day to day.  

    If we could grind out $2,000 per day on $600,000 for 200 trading days (or 192 if you are GS), then we'd be pretty damned please with our returns, wouldn't we?  There's no magic "system", of course, that's why we need to stay on top of things (like giving up on CZR yesterday) but we watch our total balance and it helps us keep track of which way we're leaning so, when that macro picture shifts, we are able to shift with it.  

    Wink/Diamond – Yes but don't deprive me of a teaching moment!  wink


  14. It's a Momo world.  NFLX and TSLA both up about 20 points over last 3 days.


  15. Dollar pretty strong again today!


  16. I wonder what to make of that number:

    http://www.bespokeinvest.com/thinkbig/2014/8/7/jobless-claims-lower-than-expected.html

    The most impressive part of Thursday's jobless claims report, though, was the non-seasonally adjusted (NSA) number.  At a level of 247.1K, this was the lowest weekly NSA reading for the current week of the year in at least 25 years, and well below the average of 324.6K for the current week dating back to 2000.  It's hard to get much better than that.


  17. Phil: Have you been following the WAG story. Down from 71 to 59 in three days on all the headline news. I'm thinking of selling some long term puts, like the Jan16 60 puts. Premiums are jacked a bit


  18. What are the chances of that:

    http://qz.com/245588/when-us-companies-skip-the-country-to-dodge-taxes-their-shareholders-can-foot-the-bill/

    While it’s possible that Congress will simply block most corporate inversions, perhaps by raising the requirement for foreign ownership from 20% to 50%, a standalone bill is unlikely to pass as long as Republicans insist that tax reform be done in a single overhaul. That sort of effort, likely years in the future, is expected to result in a lower overall tax rate for corporations, but revenue will have to be made up elsewhere.

    The most efficient way to do so will likely involve increasing taxes on capital gains and dividends, just as the 1986 tax reform signed by President Ronald Reagan did. Rather than focus on the profits corporations make—and the tricky business of allocating them by jurisdiction in a world where companies supply chains and sales routinely touch dozens of countries—economists think (pdf) that taxing the profits they generate for their shareholders will make for easier collection and fewer economic distortions.

    Right, they'll raise the capital gain and dividend tax! 


  19. Phil – You should try to work a variation of your 9:38 A.M. post and your 9:45 A.M. post in tomorrows opening blog to further emphasize to your overall readership: what it is you are trying to accomplish and the way it’s working in the everyday real trading world. It succinctly sums up “WHY” you do it. Now that is a teaching moment!


  20. Random question for anyone that's used a crypto-currency (e.g. Bitcoin) before. How much is one taxed on the profits from mining? Or are you not taxed at all? (Hi Phil!)


  21. The notebook is fighting back:

    http://qz.com/245758/why-some-schools-are-selling-all-their-ipads/

    After receiving teacher and student feedback from the 2012–2013 school year, Hillsborough sold its iPads and will distribute 4,600 Chromebooks by the fall of 2014. The students in Harmsen’s class had been on Hillsborough’s iPad pilot team, and Harmstead admits she was a little disappointed when the district chose to go with Chromebooks. She said being on the pilot iPad team transformed her classroom approach after 24 years of teaching and made her a digital education advocate. But now that she’s spent a full year using the new device—a pared-down laptop that stores files on the Internet—she agrees with the decision.

    Other iPad pilot teachers came to see the benefits of laptop capabilities, too. “At the end of the year, I was upset that we didn’t get the iPads,” said seventh-grade science teacher Larissa McCann. “But as soon as I got the Chromebook and the kids started using it, I saw, ‘Okay, this is definitely much more useful.’ ”


  22. That's just scary – talk about a lost decade:

    http://qz.com/245521/the-italian-economy-has-gone-precisely-nowhere-in-the-past-14-years/

    Over the past nine years Italy has been in recession as long as it has been in growth. The economy has shrunk in 11 of the past 12 quarters. The Italian economy is still 9% smaller than it was at its peak in 2007. Perhaps most damningly, Italy’s economy is almost exactly the same size as it was back in 2000:


  23. Not sure Putin wants to cut exports to Europe:


  24. With 35,000 cars under their belt for 2014, TSLA is now close to  60% of GM's market cap and 45% of Fords.  Not bad for a company that still doesn't make money.


  25. FU TSLA!!!!

    FU NFLX!!!


  26. Dollar 81.70 and rising.  Indexes might be doing better if not.  Of course, Dollar up on Draghi promising easy money in Europe, so that's a market booster and a smart European investor borrows money at Germany's negative interest rates and uses it to buy Dollar-denominated assets, like US Equities to get away from that deflationary nightmare.  

    And, of course, when I say nightmare, I mean for people who sell things and people who own things – not for the people who consumer things and rent things.  That's why you never here of an economy collapsing because of (what's the opposite of "skyrocketing") deflation – for the bottom 90% who have no assets, it's not really a problem. 

    Jobless/StJ – Certainly the job picture is improving but a lot of that is because people have either given up and left the workforce or given up and accepted jobs that pay 20% less than the jobs they lost (or less).  At 2008 prices, for example, I can't afford another staffer but, at 2014 prices – I'm looking!  Of course it's summer and Aug is always a bottom for unemployment too, so we'll have to see how well the trend holds.  

    WAG/Jbur – As I said yesterday:

    WAG/Harip – Well, when a stock drops 15% in a single day, it's best not to bet that is the day to be a buyer – unless you are POSITIVE the news is being misinterpreted.  In this case, WAG has reversed it's decision to evade taxes due to adverse PR and threats of losing Federal contracts so now the benefit of their $15Bn acquisition of Boots is not so clear.  Boots is a fantastic chain in Europe so I don't think it's a bad deal but I also don't think there's too much synergy since it's two different continents with not all that much overlap so I'd just hope they get to about $50 and THEN it becomes a very nice long-term hold.

    If you don't mind riding it out, yes, I like them long-term but keep in mind you are looking at a chart that thought there would be a tax inversion and popped the company 20% and now there is no tax inversion and they fell back 20% – TO THEIR CORRECT VALUE.  A p/e of 20 is 33% higher than CVS and CVS didn't just try to swallow a $15Bn company.  

    Now, if you want to take advantage of the dip and sell the 2016 $52.50 puts for $4.70 for a net $47.80 entry against $5.20 of net margin for a 90% gain on margin over 18 months and the downside of owning WAG at $47.80 and then selling 2018 $45 puts and calls for about $5 to net into 2x at $42.80/43.90 – that's another 25% off the current price, so nothing wrong with that – as long as you are prepared to REALLY watch those short puts hit 100% or more losses if there is a bigger dip because you REALLY wanted to own 1x WAG at $47.80.  

    As I noted yesterday, it's not compelling enough for me to add it to our portfolios but that doesn't make it a bad play if you like this space and you are impatient.  

    It's like in poker – I like to see flops, so I bet more often on the first two cards not because it's smart, but because I enjoy the game more that way.  I adjust the rest of my strategies accordingly (I fold more often on the flop because I didn't have strong conviction on the initial bet and I also fold more often on the river so people don't know I was chasing a stupid hand for fun) and I still accomplish my goals.  If you are going to sit around trading all day – you need to enjoy yourself too!  

    Damn, GMCR back to flat!  

    Taxes/StJ – If they do that, then CEOs will simply pay themselves more and have less profits left over for ordinary shareholders.  VAT is the best way to fix the system but good luck passing that – especially in such a way as it doesn't punish the lower classes (I'm going to start saying that now as the American Press avoids the term like the plague to pretend we're a classless society).  

    Why/Diamond – I will – unless, of course, something more interesting comes up.  Like I was going to write about the ECB and what they might and might not do but I was only going to end up saying they will end up doing nothing with Draghi promising to do something amazing later – but it's a secret – and then, by the time the post was out, it would be old news.  Then I saw that note about how the wealth of the top 1% has been understated by 10% or more and that meant the bottom 90% lost (because the top 1% has 37% and the bottom 90% have/had 24% so 10% more for the top 1% is 12.5% less for the lower class) 12.5% and you KNOW how that pisses me off….

    Hey Kwan!  Long time…  If you deduct your time, the cost of the computer and the cost of the electricity and the space you need to run the whole thing (don't forget to allow for desks, chairs, tracking boards, monitors, printers and the machine that goes PING) – you'll almost certainly get a nice, fat net deduction at the end of the year, right BDC?  cheeky

    Notebooks/StJ – I could have told you that, both of my kids still use laptops more than the IPads.  

    Italy very sad.  

    Russia very crazy. 

    TSLA/Rustle – Making money is so last century.  It's the POSSIBILITY of making money people invest in now.  Actually making money is a negative, as you then have to base your calculations on what you actually make, rather than what you MIGHT make.  

    Like my kids – Maddie is going to be an artist and a single Picasso sells for $100M so, even if she is only half as good as Picasso and only sells 2 painting as year, she's good for about 50 x 2 x $50M = $5Bn.  Now, figure it will cost about $100,000 a year to make her happy so that's $5M so the net profit I expect from my daughter is $4.995Bn but I'll IPO her for just $1Bn and then I'll announce in a few months that, at her current pace, she is producing 3 paintings a year and her stock will go through the roof! 


  27. Phil,

    Should we get out of GMCR per your statement in yesterdays post?

    Thanks


  28. I'm officially back in TSLA with writing 270 calls for next week.  Can't resist with the RSI in mid 70's right now on it.  If I have to roll it up, I can easily roll to a 280 the following week.


  29. Phil/NLY

    Any play on NLY?

    "Today's close of $11.26 puts the stock at a 15.1% discount to book."

    Annaly on sale after big gain in book value

    Q2 core earnings of $300.4M or $0.30 per share vs. $239.7M and $0.23 in Q1, and $294.2M and $0.29 a year ago. Dividend is $0.30.

    Book value per share of $13.23 up from $12.30 at end of Q1. Today's close of $11.26 puts the stock at a 15.1% discount to book.

    Net interest spread of 1.26% gains 36 basis points from Q1.

    Agency MBS holdings of $82.4B up from $77.8B in Q1 (95% are fixed rate). CPR of 7% up from 6%.

    Commercial real estate paper holdings of $1.6B, flat from Q1. Commercial real estate holdings of $74.4M up from $40.3M.

    Leverage of 5.3x vs. 5.2x in Q1 and 6.2x a year ago.

    Conference call tomorrow at 10 ET

    Previously: Annaly Capital Management beats by $0.03

    NLY +1.2% AH


  30. Oops … so THAT is what that key stroke does! ;-)


  31. Phil: I have a  WYNN Jan 16 170 Put sold short at 11.40; a LVS Jan 16 60 Put at 4.90. Both are below my trade stops but I'm reluctant to close out the positions at a loss in this down market. Your thoughts?

    Thanks,


  32. Kwan – So far this is all I know about.

     

    http://www.irs.gov/pub/irs-drop/n-14-21.pdf


  33. Almost 100 point drop in the Dow in 15 minutes at around 11 am, what just happened?


  34. GMCR/$25KP, STP, Rookie – Not today as the short puts dropped to $7.75 and I'd really like to get $10 to avoid a complete disaster.  At $7.75, the $105 puts are $6 so we risk $1.75 if GMCR pops $5 higher, over $120 to about $124.  Since I don't think that's the right price for them and, since the 50 dma is $120 and, since the market is still weak, I'm inclined to risk the $1.75 additional loss in exchange for giving it a bit more time to play out.  

    TSLA/Rustle – Good spot ($255) to go short.  Prior high was $265 so figure a rejection there means selling Sept $260s for $11.75 is kind of a fun play – but VERY DANGEROUS.  

    NLY/DC – Always a play on NLY – BUY THEM!!!  They are in the Income Portfolio at net $9.71 (sold 2016 $12 calls and $10 puts) since 6/12 and drop a quarterly $300 dividend into our pockets on 1,000 shares (3%) while we wait to see if we're called away with another $2.29 profit (23%).  Why would anyone not want to own this stock, which has been a favorite of ours since it dropped back to $10 last year.  

    It's still a great deal at $11.40 with a p/e under 10 and the dividend ($1.20) looking very secure but, at the moment, I'd just sell the 2016 $12 puts for $2.55, which is 2 years worth of dividends in 18 months or, worst case, you end up owning 1x at net $9.45 and THEN you can sell 2018 $10 calls and $8 puts for another $1.50 or so and that would drop your net to $9.45-$1.50 = $7.95/8.98, which is 21% off the current price on 2x – worst case.  So I'd figure out how much NLY I want to own for $8.98 and then sell 1/2 of that in the form of 2016 $12 puts!  

    And, don't forget, the same guys manage CIM – one of our 3 top picks last year at $2.65.

    We discussed them yesterday and they are in the LTP.  

    WYNN/IHS – Oh dear, that's why we killed our short puts on them.  This is now the 3rd time we've gotten warnings on Macau.  Still, $170 is a good price on WYNN and I know you would NEVER sell a put on a stock that you didn't REALLY want to own at the net strike (because that would be crazy and dangerous and lead you to panic out of the position when there was a dip that spiked the option pricing, even though the stock was still 15% over your strike price), so, if you are in a 1x commitment, I'd stick with it but I wouldn't be as comfortable with owning LVS – especially IF it falls that far. 

    Woops, down goes the market.  Now we'll see if those lows hold.  


  35. Phil,

    TLT – 115+

    SLV – 19.13

    WFM – 37.88

    Any play on TLT?

    Thanks as always


  36. NATO saying "capable of defending allies" …is when i noticed swoon starting…not exactly sure…there is so much bad shit going on

    ISIS making inroads against kurds….largest dam captured.

    russia preparing retaliatory measures against industry

    the fact that putin appears willing to collapse russian economy for ukraine is so incredibly negative for the markets…and nobody cares yet…but they will


  37. Phil,

      I still have the Jan 15 CZR $7.50 sold puts. Would you close those out?


  38. TLT/Pat – I used to like it when it was more predictable (more than a year ago) but have since lost interest.  What is more manipulated than TLT, which flies up and down on each pronouncement from even minor officials?  If they want to give silver away again ($18.50 is our bottom on /SI) then we'll be liking those plays too but I don't think we'll see that again.  

    So much bad shit/Angel – You said it!  Damn was 2 days ago, in the recycled news bin now.  Russia retaliation is what I was talking about in yesterday morning's post – it's amazing how late people are to start paying attention to things!  It's not about Putin willing to collapse the economy – this is about his legacy (he's 62).  He could/should have taken Crimea and called it a day, now it's about saving face on both sides but it's his face we have to worry about as he's just a tiny bit psycho (and scary!).  You don't mess with a guy who has a stare like this:  

     photo putin_zps43535164.gif

    Keep in mind Khrushchev, in a similar situation (age 67 in 1961), was willing to take the World to the very brink of nuclear war!  

    CZR/Kevin – at .35, they have a lot more risk ($7.50 worst case) than reward.  It's fine to have a 20:1 disadvantage when you are 100% sure the stock won't drop 50% but, if there's even a 10% chance it could happen – why risk it?  


  39. SCTY hanging on to great expectations at $76 and we can sell 5 Sept $77.50 calls for $6.50 ($3,250) against 5 Jan $80/95 bull call spreads at $4.55 ($2,275) for a $975 credit in the STP.  

    If all goes well, they go down and the short calls expire worthless and we keep the credit plus whatever we salvage off the bull call spread.  If not, SCTY would have to pop 20% before we're in any real trouble and then we can still roll the position.  


  40. Tsk, tsk, no bouncing at all.  16,300 on /YM, 1,904 on /ES, 3,857 on /NQ, and 1,116 on /TF.  The S&P is flirting with a new low, the others still above. 

    Oil (/CL) just took off, back to $97.50 in a mighty jump from $98.75, still a good shorting spot ($97.50) until it breaks over but tricky into the weekend, of course.

    Gold $1,314, VIX over 17 again, TLT 115.34.  


  41. Great article from Noam Chomsky that goes into the history of the various nuclear showdowns we have had with Russia.  I'm not so sure they were all Russia's fault.

    http://www.salon.com/2014/08/05/noam_chomsky_how_the_bin_laden_raid_could_have_led_to_nuclear_annihilation_partner/?utm_source=twitter&utm_medium=socialflow


  42. CLF, sold 2 2016 10 puts for 1.34


  43. stjeanluc – Do you see any interesting earning plays tonight?  Thanks!


  44. AAPL back at $95 but failing it, good for SQQQ.  

    XOM failing $98.  

    SCTY short making money already but earnings tonight will tell the tale. 

    CMG giving up all of the week's gains. 

    GTAT $15.70.

    POLO is indeed loco!  

    XRT might get interesting if they fail $83 (we're already short at $85 in 2 portfolios).

    Very little move in /NKD at 15,075.  I guess it's Dollar strength but they also held up better than Asia today so worth watching.  

    S&P better have support at 1,905 on /ES, which is 1,910 on the index, which is $110 on SSO and you can buy SSO Aug (next week) $109/111.50 bull call spreads for $1.45 with 72% upside potential on a very small recovery next week.  A good upside play if you are too bearish or want to lock in bearish gains.  

    Earnings/Diamond – Rough to call against such a volatile backdrop. 


  45. palotay – That article is sobering!


  46. No kidding Diamond.  More like terrifying!


  47. Phil: Thanks for your thoughts on WYNN and LVS.


  48. LTP is mysteriously up 0.1% today.   That's kind of bothering me as we somehow seem to be winning to the downside in what is supposed to be a very bullish portfolio.  I can only assume the air is being let out of the short calls we sold while our generally in the money long positions gain a bit of premium to more than offset them.  STP, on the other hand, has dropped to 29.8%.  Hard to go by intra-day moves but WTF?  That won't be good if we get a sharp downturn and the STP fails to make enough gains.  TSLA and GMCR shorts are hurting us – the questions is:  Will they continue to hurt us if there's a real correction?  Probably not…

    Article/Diamond, Palotay – Sickening is more like it.  

    You're welcome IHS.  


  49. WAG/Phil:  Thanks for re-posting your comments and chart on WAG from yesterday. I know I read it yesterday but my caffeine and youth deprived brain didn't seem to remember.

    And you're right, of course, a 20% pull back on a 20% pop on the possible tax inversion means nothing about the true value of the stock.

    One of the things I most appreciate about being here on PSW is that you continue to drive in the concept of true company value, and what does and doesn't fall into that category.  Your perspective is truely appreciated.


  50. WHITE HOUSE SAYS ALL OPTIONS ARE ON THE TABLE IN REGARDS TO IRAQ-CNBC……..WHITE HOUSE SAYS THERE ARE NO AMERICAN MILITARY SOLUTIONS TO PROBLEMS IN IRAQ-REUTERS…HAHAHA


  51. thats all within three minutes

    "remain flexible with a high degree of decision reversion plasticity"

    HARVEY DENT'S WORDS TO SAL MARONI


  52. (SAL WAS SMOKIN PISSED)


  53. Iraq / Angel – What happened to you broke it, you own it? Of course, in this case it's "The previous administration broke it, and now we are getting blamed because we own it!"


  54. Earnings / Diamond – Big movers tonight are SCTY, ZNGA and NVDA. Of course, as Phil said, everything is a big mover right now!

    Phil posted his SCTY play earlier. ZNGA is a stock priced like an option. That leaves NVDA…

    Consensus Estimate – 0.19
    Whisper Number – 0.22
    Average Move – 9.0%
    Priced into Options – 7.2%

    BTW, the whisper on ZNGA is for them to make $0.02 compared to $0.00 as the estimate so maybe they pop, but they are not in my list of things to play with…


  55. And SCTY moves more than 12% on average!


  56. Iraq lets face it good or bad the man had it under control now as it was messed around with it is out of control. 


  57. On the hour

    01:01 PM ET

    • Dow -0.36%.
    • 10-yr +0.2%.
    • Euro -0.22% vs. dollar.
    • Crude +0.35% to $97.26.
    • Gold +0.43% to $1,313.80.


  58. Chesapeake upgraded at Stifel as production growth outlook improves

    12:48 PM ET · CHK

    • Chesapeake Energy (CHK -1.1%) is upgraded to Buy from Hold with a $34 price target at Stifel, which says Q2 earnings confirm its view that CHK is becoming well positioned from a capex efficiency perspective heading into 2015.
    • The firm thinks the stock’s current attractive valuation, combined with CHK’s increasingly cleaned-up and simplified balance sheet and the recent correction in gas prices and equities, provide a fine entry point heading into what it sees as a positive production growth and capex efficiency trajectory in H2 and above consensus expectations for 2015 production growth.


  59. Analysis: Price hikes not so smooth for Mondelez International

    12:47 PM ET · MDLZ

    • Mondelez International (MDLZ -1.8%) could be facing pricing power issues with some its key categories, according to Canaccord Genuity.
    • The investment firm warns that consumers might be resisting price hikes in chocolate and cheese products.
    • Power Brand sales growth slowed to 1.3% in Q2 for Mondelez from the 4.8% pace in Q1.


  60. SouFun soars after earnings, dividend, CEO change; EJ/LEJU also up

    12:40 PM ET · SFUN

    • Along with its Q2 results and special dividend announcement, SouFun (SFUN +7.1%) discloses CEO Richard Dai has resigned, and is being replaced by founder/chairman Vincent Mo. Dai has been with SouFun since 1999.
    • With Chinese real estate softness and fee cuts taking a toll, SouFun is lowering full-year revenue guidance to $727M-$$739M from $780M-$796M (consensus is at $742M). But some bad news has been priced in.
    • Q2 marketing services (ad) revenue +26.1% Y/Y to $74.3M. E-commerce services +8.1% to $48.6M (hurt by weak new home demand) , listing services +8.5% to $38.4M (secondary home weakness + fee cuts), other value-added services +97.6% to $3.6M (data services growth).
    • Gross margin rose 70 bps Y/Y to 82.6%. Opex grew 35.9% to $57.6M, exceeding revenue growth of 16.7%.
    • E-House (EJ +4.1%) and subsidiary Leju (LEJU +3.5%) are following SouFun higher. Both companies report on Aug. 20.
    • Q2 results, PR


  61. P-E giants reportedly settle collusion lawsuit

    12:35 PM ET · BX

    • Blackstone (NYSE:BX), KKR, and TPG Capital have reportedly agreed to pay $325M to make go away a lawsuit accusing them of conspiring not to outbid each other on buyouts. None will admit wrongdoing as part of the settlement.
    • The case was brought by investors who sold shares in 27 companies to a number of P-E firms. Goldman, Bain Capital, and Silver Lake all previously settled.


  62. Reuters: Freeport McMoRan considering sale of California oil assets

    12:34 PM ET · FCX

    • Freeport McMoRan (FCX -1.6%) is approaching prospective buyers about selling its onshore oil wells in California, which could fetch as much as $5B, Reuters reports.
    • The potential buyers could include other oil companies as well as P-E firms, according to the report.
    • FCX has been actively pursuing asset sales in order to reduce debt, which totals more than $20B.


  63. U.S. oil production could reach 14M barrels/day, Pioneer CEO says

    11:58 AM ET · PXD

    • Technological improvements will allow energy companies to scrape more crude out of the ground and drive U.S. oil production as high as 14M bbl/day, Pioneer Natural Resources (NYSE:PXD) CEO Scott Sheffield says.
    • The industry may not discover any more elephant fields, but operators will continue to find new opportunities in conventional plays, the CEO says, noting the industry is pursuing new techniques for boosting the recovery rate at wells up from the 2%-3% common today.
    • Only lower oil prices can stop the upward march in U.S. production, Sheffield adds, warning that a price collapse for domestic West Texas Intermediate crude would cause “a tremendous turndown.”
    • ETFs: XLE, ERX, VDE, OIH, ERY, XOP, DIG, DUG, IYE, IEO, PXE, PXJ, FENY, RYE, FXN, DDG


  64. Cliffs Natural appoints Goncalves chairman, CEO after proxy battle

    11:11 AM ET · CLF

    • Not a surprise, but Cliffs Natural Resources (CLF -0.9%) appoints Lourenco Goncalves as Chairman, President and CEO, effective immediately.
    • Goncalves replaces Jim Kirsch, who served as Chairman since last July, and Gary Halverson, who served as CEO since February.
    • Goncalves was one of Casablanca’s board nominees elected last week, and the CEO of Metals USA during 2008-13 was the hedge fund’s hand-picked choice to run the company.


  65. Kurdistan oil producers plunge as Islamic militants advance on the region

    10:58 AM ET · GUKYF

    • Shares in Kurdistan-focused oil producers plunge as Islamic State militants extend their gains in northern Iraq.
    • Shares in Gulf Keystone Petroleum (OTCPK:GUKYF -7%) fell as much as 13% to their lowest level since 2010; the company, which is producing oil from the Shaikan field in Kurdistan, says its operations remain “safe and secure” but has stepped up security at its facilities.
    • Genel Energy (OTCPK:GEGYF -8.3%), headed by former BP boss Tony Hayward and one of the biggest independent oil producers in Kurdistan, also fell sharply; its operations at Taq Taq are more than 60 miles away from the fighting east of Mosul.
    • Shares in Norway’s DNO (OTCPK:DTNOF -9.1%), another Kurdistan-focused oil explorer, continue to fall and have lost ~20% of their value this month.


  66. Notes from Annaly earnings call; stock up 1.2%

    10:47 AM ET · NLY

    • You’ve got to take risk to earn money, says Annaly Capital (NLY +1.2%) management, pressed on the earnings call for its somewhat aggressive stance even as it believes short-term rates are set to rise.
    • There just aren’t a lot of great values out there in fixed-income at the moment, says the team, and the mREITs may be one of the last cheap asset classes (Annaly trades at a 15% discount to book).
    • Earnings call presentation slides
    • Sterne Agee upgrades Annaly to a Buy following the earnings beat and big rise in book value. Compass Point reiterates its Neutral rating, saying the removal of hedges was behind the big Q2.
    • Previously: Annaly on sale after big gain in book value
    • Previously: Annaly Capital Management beats by $0.03


  67. Windstream slips; subscriber losses take a toll in Q2

    10:31 AM ET · WIN

    • Windstream’s (WIN -2.3%) total service revenue fell 2% Y/Y in Q2 to $1.42B. Enterprise/small business service revenue rose slightly to $749M, but consumer fell 2.8% to $317M and carrier fell 6% to $155M.
    • 10.7K business customers were lost Q/Q, lowering the total to 368K (-8% Y/Y). Consumer voice lines fell by 32.9K to 1.67M (-6% Y/Y), consumer broadband subs by 16.6K to 1.15M (-3%), digital TV subs by 4.8K to 394.1K (-5%), and carrier special access circuits by 4.9K to 88.5K (-14%).
    • Adjusted free cash flow was $126M, better than net income of $14M. While revenue fell 2%, costs/expenses rose 2% to $1.3B.
    • Windstream is affirming full-year guidance for -2.5% to 1% revenue growth, $800M-$850M in capex, adjusted free cash flow of $775M-$885M, and a dividend payout ratio of 68%-78%.
    • Shares remain above where they traded before the telco’s July 29 REIT announcement.
    • Q2 results, PR


  68. Natural Gas gives up gains after inventory data

    10:30 AM ET · UNG


  69. Consumer Comfort Index edges lower

    10:29 AM ET


  70. Mortgage rates edge slightly higher

    10:19 AM ET

    • The average rate for a 30-year fixed-rate mortgage ticked slightly higher to 4.14% from 4.12% in the prior week, according to Freddie Mac’s latest report.
    • The average rate for the 15-year fixed-rate mortgage rose to 3.27% from 3.23% in the prior week.
    • A year ago, the respective 30-year and 15-year rates averaged 4.40% and 3.43%.


  71. Statoil fails to make commercial discoveries in Arctic drilling campaign

    10:09 AM ET · STO

    • Statoil (STO -0.4%) says it failed to make a commercial discovery in the third and final well in its Arctic drilling campaign in the Barents Sea.
    • STO says it had ended its three-well drilling campaign in the Hoop area, and the Apollo, Atlantis and Mercury wells all contained non-commercial volumes of oil and gas.
    • The campaign in the Hoop area follows disappointing results from a five-well program seeking to boost oil volumes for the Johan Castberg project further south in the Barents Sea, which consists of the Skrugard and Havis deposits.


  72. SunEdison +12.1% on systems growth, pricing; SPWR, SCTY also up

    10:05 AM ET · SUNE

    • SunEdison (NYSE:SUNE) recognized revenue from 54MW of solar systems in Q2, below guidance of 60MW-80MW. But it also retained 164MW on its balance sheet, better than guidance of 100MW-120MW.
    • The company now expects to finish 1GW-1.15GW of solar systems in 2014, at the high end of prior guidance of 900MW-1.15GW. Revenue is expected to be recognized from 290MW-310MW (down from 460MW-580MW), and 710MW-830MW are expected to be retained (up from 440MW-570MW).
    • In addition, SunEdison forecasts average 2014 project pricing of $2.50-$3.00/watt, better than prior guidance of $2.40-$2.75. That’s providing a lift to EPS, which beat consensus by $0.40 in Q2.
    • Solar project pipeline rose by 700MW Q/Q in Q2 to 4.3GW, and backlog by 100MW to 1.1GW. 475MW of the pipeline is under construction, up from 463MW at the end of Q1 and 200MW a year ago.
    • Gross margin was 4.6% vs. 3.8% in Q1 and 5.9% a year ago. An aggressive construction pace led free cash flow to total -$80.2M. SunEdison ended Q2 with $954.7M in cash/equivalents, and $5.39B in debt. ~$3.5B of the debt is directly tied to solar systems financing.
    • Peers SunPower (SPWR +4.2%) and SolarCity (SCTY +2.8%) are also rallying. SolarCity reports after the bell.
    • Q2 results, PR


  73. Wendy’s roundup: 135 Canadian outlets to be sold, new buyback plan

    10:04 AM ET · WEN

    • Wendy’s (WEN +0.9%) announces it will sell 135 company-owned restaurants in Canada to franchisees.
    • The shift to a higher mix of franchisee-operated outlets is a recurring theme in the restaurant industry due to the steady cash flow provided.
    • The company has also authorized a $100M share repurchase program.
    • Earlier: Q2 results, Q2 details


  74. U.S. food companies address Russia ban

    09:46 AM ET · SAFM

    • Sanderson Farms (SAFM -1.3%), Pilgrim’s Pride (PPC -0.9%), and Tyson Foods (TSN -0.4%) see some selling pressure after Russia bans food imports from the U.S.
    • Execs with all three companies have addressed the Russia issue over the last few weeks and indicated contingency plans are in place for meat exports.


  75. Indictments delivered against Melco Crown’s Taiwan office

    09:45 AM ET · MPEL

    • Melco Crown (MPEL -4.7%) discloses that its Taiwan branch office and some employees at the location have been indicted for violations of breaking local banking laws.
    • The company says it doesn’t believe the indictment will have any material impact on its financial position.


  76. Himax jumps on strong guidance; Lenovo deal confirmed

    09:40 AM ET · HIMX

    • Himax (HIMX +5.1%) expects Q3 revenue to be up 12.1%-17.1% Y/Y, better than a consensus for 9.1% growth. EPS guidance of $0.102-$0.117 is above a $0.10 consensus. Opex is expected to be up ~20% Y/Y.
    • TV LCD driver ICs are expected to fuel Q3 growth – Himax expects Y/Y large-panel driver IC growth for the first time since Q4 2012. Driver shipments for 4K TVs are expected to more than double Y/Y, with strong growth expected to continue in later quarters.
    • In addition, smartphone-related sales are expected to “rebound strongly” from Q3 levels due to higher orders from a Korean customer (likely Samsung) and solid Chinese demand. Tablet driver demand remains weak, while automotive demand is expected to see steady growth.
    • Non-driver sales are expected to see nearly 20% Q/Q growth, with momentum continuing in 2015. Himax sees image sensor sales more than doubling in 2014, and touch controllers growing strongly again in Q3. An LCoS microdisplay deal with Lenovo (previous) is confirmed.
    • Q2 gross margin -50 bps Q/Q and -40 bps Y/Y to 24.2%. Small/medium-panel driver sales -3.5% Y/Y to $107M, large-panel sales -21.1% to $50.8M, non-driver products +21.6% to $38.6M.
    • Q2 results, PR


  77. 21st Century Fox earnings call: No acquisition plans of any kind

    09:18 AM ET · FOXA

    • 21st Century Fox (NASDAQ:FOXA) gave a clear heads-up to any media companies thinking Fox might be making an offer for them after pulling its Time Warner bid.
    • COO Chip Carey says the company doesn’t have any interest in a TWX replacement deal.
    • Ditto that thought for CEO Rupert Murdoch: “We have no plan to go out on the acquisition trail. All of our best businesses, we’ve built them ourselves.”
    • There are plenty of shots taken by the execs at the TWX board and the read is that chances for a reworked offer are slim to none.
    • Earnings call transcript
    • A few content-heavy names which have been bantered around as a possible Fox target are Lions Gate (NYSE:LGF), CBS (NYSE:CBS), and AMC Networks (NASDAQ:AMCX).


  78. 21st Century Fox higher after profit soars at film unit

    09:07 AM ET · FOXA

    • Shares of 21st Century Fox (NASDAQ:FOXA) move higher in early trading after the media company tops estimates with its Q2 report.
    • Fox’s filmed entertainment unit knocked out $339M in operating income, over double the level of last year. The latest installments of the X-Men and Rio franchises provided the firepower.
    • FOXA +5.5% premarket


  79. Improved efficiency from Southwest Airlines in July

    08:59 AM ET · LUV

    • Southwest Airlines (NYSE:LUV) reports revenue passenger miles rose 6.6% in July to 10.63B.
    • The carrier’s load factor improved 3.2 percentage points as capacity was tightened during the month.
    • Passenger revenue per available seat mile was 4% higher Y/Y.


  80. Transocean’s Q2 profit soars on lower costs, higher dayrates

    08:56 AM ET · RIG

    • Transocean (NYSE:RIG) +2.9% premarket after its Q2 earnings rose 91% Y/Y and easily beat Wall Street consensus, helped by higher dayrates and reduced operating and maintenance costs.
    • Total average dayrates during Q2 increased to $410K from $382.8K in the year-ago quarter, but overall fleet utilization was 78%, down from the year-ago utilization rate of 80%.
    • Total operating and maintenance expenses fell 10.6% Y/Y to $1.2B, in part due to lower shipyard expenses.
    • RIG’s effective tax rate declined Q/Q, which resulted from “idle time on certain rigs in high-tax jurisdictions.”


  81. Radian +5.9% after strong results

    08:41 AM ET · RDN

    • Q2 adjusted pretax operating income of $74.2M vs. $16.2M a year ago. Mortgage Insurance segment income of $92.9M vs. $15.9M, and Financial Guaranty segment loss of $18.7M vs. income of $300K.
    • Risk-to-capital ratio of 18.7:1, with statutory capital of $1.5B up from $1.4B at end of March and $1.2B a year ago.
    • New insurance written during Q of $9.3B, down from $13.4B a year ago. In July, another $3.9B was written vs. $5.3B a year ago.
    • Mortgage insurance provision for losses of $64.3M vs. $136.4M a year ago. Loss reserves of $1.7B down from $1.9B at end of March and $2.7B a year ago. Total number of primary delinquent loans off 38% Y/Y.
    • Conference call at 10 ET
    • Previously: Radian Group EPS of $0.78
    • RDN +5.9% premarket


  82. Duke Energy profit jumps, raises full-year earnings outlook

    08:39 AM ET · DUK

    • Duke Energy (NYSE:DUK) +1.2% premarket after reporting better than expected Q2 earnings that rose 80% Y/Y, helped by higher revenues from its rate-regulated utilities.
    • DUK also says its international energy business, which recognized a tax benefit from reorganizing operations in Chile, boosted performance for the quarter.
    • Adjusted income at DUK’s regulated utilities segment was $689M, up 17% from $590M in the year-ago period, driven by a nearly 7% gain in revenue to $5.17B from increased pricing and unusually warm weather.
    • Raises FY 2014 EPS guidance to $4.50-$4.65 from $4.45-$4.60 vs. $4.57 analyst consensus estimate.


  83. Phil, looking for some other small plays for my smallish portfolio.  I have a small ARO position and small AAPL position and about 80% still in cash, this is just a small fun money portfolio just over $10k right now.  

    Other suggestions for my small portfolio?  I haven't seen much new in the 25kp lately.  How about a small NLY position you outlined above, selling the 2016 $12 puts?


  84. You're welcome Jbur.  We picked a very good year to emphasize the basics, I think.  

    White House/Angel – I love the absolute certainty that we will or will not take military action!  

    Maroni, Angel.  

    Pottery barn rule/StJ – As you can tell from Yodi's comment, the beauty of American politics is people do forget who actually caused a problem and then blame the people who have to clean up the mess.  It actually encourages making a mess when you know your party will be out in the next term. 

    NVDA/StJ – I don't have a handle on them this Q.  Business is all over the place and, if they were still around $20, I'd be happy to short but back at $17.50, could go $2.50 either way.  

    ZNGA is beyond help.  They perpetrated what was essentially a massive fraud when they went public, front-loading future earnings onto their books and then, when the expansion didn't cover the future shortfall, the whole thing fell apart REALLY FAST.  So who in their right mind would own this stock?   Oh, did I mention they used the bogus numbers to do a quick secondary while the CEO cashed out?  No one was arrested, but at least they have a different CEO now.  

    Zynga CEO Admits to Being a Scammer | The Escapist

    Zynga Sued Over Alleged Misleading Financial Statements …

    "Fraud" lawsuit refiled against Zynga – The Business Journals

    As I have said about a few companies recently:  There are 9,000 other stocks to trade – why bother with this one?

    NLY/Dforser – Only if you like getting checks for 3% of your investment every quarter!  I haven't found much for the $25KP in a while but I'll make a big effort next week to add one or two.  


  85. Intra-day weak bounce is failing (weak bounce off the additional downturn) – that's not good!  


  86. Phil – Is NUE a possible candidate for a butterfly transaction? It is middle of range, modest volatility, with long dated options. Future prospects good, though not a high flyer… option strikes aren't great, but probably workable… Provides diversification to the portfolio too.  Your thoughts… Thanks, Eric


  87. ROFL, this is funny! 

    NUE/Eric – Ugh, another thing I need to do homework for next week!  I mean adding another butterfly, not NUE in particular.  I liked them a couple of years ago, when they were cheap but now they are trading at a pretty good premium.  The long-term flatline has squashed the short-term option premiums so they aren't going to be a big money-maker and, of course, they COULD have a 10% event pretty easily and we can only cover about 5% in a given month.  

    OIH, on the other hand and for example, is at $53 and you can sell the Sept $53 puts and calls for $3.15 against the long 2016 $55 calls ($4.15) and $50 puts ($4.80) for net $5.80 with 525 days to sell after selling 43 (about 10%) for $3.15 so our expectation is that we can sell over $30 of premium against our $5.80 long for a potential 500% ROI, which gives us a lot of cushion!  

    With NUE, you are looking at a stock that has not been volatile but may become more so while with OIH, we have a stock that has been volatile (pumping up the premiums) but May not be in the futures because, in fact, when you look at the bigger picture (which is what we're playing), OIH is rock steady moving up the 200 dma with barely 10% max deviation – that's perfect for us, especially as it generally returns to the norm.  

    Notice we are making "W" patterns at the day's lows.  Now, into the close, we want to see the down leg of the "W" mirrored to the upside.  If that pattern doesn't hold and we have a broken W, that is a bearish sign and 3rd time at the bottom is likely to break or we just gap down below it tomorrow. 


  88. Ok, puts gone less than optimal (rare scenario here) question.  Say you "hypothetically" have some NAK $2 puts with 10 days on them before they assign to you.  As long as owning the shares didn't whack your portfolio weight wise, wouldn't it be better to let them assign, then sell calls against them and work your way back up vs closing the puts and just being out the cash?

    Plus by owning shares outright, one would gain the additional benefit of Phil being able to use you as being an example of being overweight on a purely speculative play……..so you have to factor that in too……lol


  89. They don't show you Cheney shooting this deer and the worker "by mistake" after the video:

    https://www.youtube.com/watch?v=wIrnrnkajPM&feature=youtu.be


  90. Oh boy. RIG trying to break support.


  91. NAK/Steve – Well you sold the Aug $2 puts for what, 0.50?  NAK is  at .77 and your net is $1.50 if assigned.  The Aug $2 puts are, in fact, $1.25 and you can roll them to 2x the Feb $1 puts at .40 for net .45 per current long and you reduce your basis on 2x to $1 but you'll be pissed if it goes up because you won't make any money (net).  Of course, when you are down 0.75 and get out even, that's kind of a win, isn't it?  

    As to owning the stock instead – well, as long as you REALLY want to own them, then you take the assignment at $2 less the .50 you collected (just guessing, of course) and then you are in 1x at net $1.50 and you can sell the Feb $2 calls for .15 and the $2 puts for $1.30 and that drops your net to 0.05/1.03 on up to 2x (if assigned again) so that actually makes more sense than rolling to 2x because, if you end up getting called away at $2, you make $1.95 x 1x, much more than you would have made on the puts.  Even if you get assigned the Feb short puts early, the assignment is net .70 and you make 0.07 – not much but better than nothing and then you can sell them again.  

    If you want to be less aggressive, if you sell the Feb $1 puts instead for .40 with the $2 calls for .15, then  your $1.50 net drops to .95 on 1x and still 0.975 if assigned again.  Since you are just as screwed on a big drop and have no upside on this option – I'd stick with the 2nd choice.  Keep in mind, since you make your losses back at $1+, you could go with 1/2x on option 2 and still make a nice profit at $2 and out even(ish) at $1+.

    Deer/Rustle – Deer in distress make really strange noises.  We have them all over our mountain and you can hear an adult from a mile away.  

    RIG/Griffin – The Barron's trounce on that one:


  92. Thanks Phil – so I wait for the assignment and go with option 2…..great learning experience all around will pencil it out so I might retain some of it!


  93. 1900 threatened on Es


  94. Phil - additional index/etf put ideas if we break SP1900?


  95. NAK/Steve – Sure, saves fees.  Mechanically, you will be assigned, say, 1,000 shares of NAK at $2,000 less the $500 you collected is $1,500 and they are currently $770, so you are out $730.  You can put a stop on 500 at 0.74 and cover the rest by selling the Feb $2 calls for .15 ($45) and the Feb $2 puts for $1.30 ($650) and now your net on the covered 500 is ($750 – $45 – $650 =) $55 while your net on the other 500 is $750 and you have a stop at (500 x .74=) $370.  

    So, assuming you stop out with no more than the $380 loss, that would increase your cost basis on the remaining 500 to $380 + $55 ($435) or 0.87 so a call away at $1 would get you even (.13 profit) on the whole trade while $2 makes you over $500 and, since you only risked assignment on 1/2x, your worst case is being back in 1,000 at $500 + the $435 you netted out on the first round or 0.935 on 1,000.  Of course, if .75 holds and they head higher, you can end up doing very well.

    See, W's broke and gave a great signal we would head lower – who says TA is hard?  cool

    Puts/Terra – I don't know why people don't believe me when I say SQQQ day after day?  Still no change just because they are down 0.65% now but getting more chasey each time.  


  96. Phil – Classic TA herd mentality on display.


  97. OIH / Phil – That play looks an awful lot like our FAS Money play… OIH is a decent index for that type of plays.


  98. Reminder

    The low support I posted a while back was IWM 108.63 which is usually about .7 to .9 below RUT. If that fails hold on to any large tree.


  99. Phil,  on that NAK, aren't you ignoring the huge commission on assignment?  The few brokers I've been with have been $20 per contract for assignment which is pretty significant when you're applying a 10%+ loss on every sub-$2 share before paying the initial commission for initiating the position…


  100. JPH – Per contract or for the whole assessment? Fidelity and Schwab charge a single stock purchase fee for assignments ($7.95 and $8.95 respectively). A per contract charge is rather excessive.


  101. Yes JPH, time to get a new broker!  Should be roughly flat $5.

    Herd/Diamond – The beautiful sheeple.  

    OIH/StJ – I've been watching them for a while, wanted to get in when oil got stable in lower range.  This is probably a good time as I doubt $90 will break on oil and I doubt $105 will come back.  

    Holding on/Shadow – Looks like we have a reprieve today into the close.  


  102. Phil,

    Do you think fuel is a good buy? They have almost revenue = market cap like situation


  103. Great goal line stand by Team Green! :-)


  104. Pop tomorrow?  Don't see the downside catalyst materializing this week.


  105. FUEL/Harip – A little interesting on the dip but I'd give them a chance to get more interesting first.  No indications of a quick turnaround and you have to account for the possibility that their product simply does not work all that well (poor results vs others) or (giving them the benefit of doubt), that it does work but needs tweaking.  It's a very crowded space but, as you note, they took in $240M last year and lost 20M and this year they are on track to lose another $20M but on about $400M in sales.  It's pretty easy to imagine they can make $40M instead one day and fully justify the $500M market cap but that's SPECULATION and reality is they disappointed people for the 2nd earnings in a row and last time they looked like a bargain at $19 from $30, now $16 from $25.  This trend is not your friend.  

    Damage seems limited to down 0.5% for the day.  

    /NKD bouncing at 15,000 – that's a fun long if you are looking to play something bullish overnight (with stops below, of course).

    LOL ZZ – You don't see a downside catalyst?  At this point, I'm pretty sure they need an UPSIDE catalyst to stop the car from rolling downhill:

    ZNGA already getting whacked.  Nothing too dramatic.

    SCTY down 3%!  That was easy….


  106. zeroxzero pop tomorrow

    That is a dangerous call, usually red is 2 days but by next week hit bottom and a pop or look out below. Too much money has been withdrawn by the in crowd. I saw a couple large blocks sell today.


  107. BTW Because I can't really do anything I check the blog and my charts a few times so spotting large blocks in the middle of the day isn't usual. When I was in positions I watched all day for the big blocks and always posted, only a few times because you have to be lucky as they disappear in the blink of an eye.


  108. Ubiquiti Networks beats by $0.05, beats on revenue • 4:03 PM

    Ubiquiti Networks (NASDAQ:UBNT): FQ4 EPS of $0.56 beats by $0.05.

    Revenue of $156M (+54.1% Y/Y) beats by $4.97M.

    Shares +4.27% AH.

    Press Release


  109. The thing that should scare everyone especially the Fed is real estate. Starter homes are not being built and small resale homes are even more dead. This shows people are not upgrading to bigger better. This is showing the same contraction as consumer sales except it says way more. I live on about $20k per year without a house or car payment and I assure you I couldn't with either so what does the average family do with $29K? NOTHING!!!!!!! In most areas of the country maybe 10% make $50K and way more under $20K. I am sure a few of the $29Ks have a subprime auto loan but no house. Nothing works until housing starts a real comeback and that is not happening.


  110. SCTY now up AH! I guess we have to wait until tomorrow now.


  111. Dow bouncing off its 200 DMA. This is very similar to what happened back in January and in October 2013. That 200 DMA acted as a trampoline then for strong rebounds, will it be different this time?

    On $SPX, 1900 was a good resistance line in April and May – will it turn to support now? The 200 DMA is at 1862, getting there would mean a lot of damage technically on the Dow since the correlation between the 2 indices is quite high. That might also mean a bounce of 4300 for the Nasdaq (our 7.5% line). And 10500 for the NYSE which has been an S/R line since March. And the rising 200 DMA is at 10454 – close enough. Russell is the most damaged so far and we have to look at 1100 for support – a decent line going back to 2013.


  112. Solar City now up after hours.  That Musk gives great CC!  

    SolarCity: Where the Sun Always Shines, No Matter What

    [$$] SolarCity's Loss Doubles on Higher Costs

    SolarCity Loss Widens as New Rooftop Installations Surge

    If we can somehow cross breed Elon Musk and Jeff Bezos and put them in charge of an IPO for the United States (which also never makes money but is a good concept), we could IPO the country for 10x sales and raise $180Tn to pay off the debt and then we could buy another country like Australia to show how fast we're growing and we can draw up plans for a tunnel that goes through the Earth and connects us in a 17 minute commute…

    UBNT/Wombat – Very impressive.

    Big Chart – Amazing how we can go from an unbreakable-looking market to this in just a couple of weeks.  Dow tested that 200 dma – a gap down can avoid the bounce.  Nas, on the other hand, tested the 50 dma and was soundly rejected – these are not good technical signs. 


  113. A good quote today:

    Rick Ferri, “Volatility is not only common, it’s necessary. A good dose of higher VIX creates the pause that refreshes. It shakes out the weak investors and sets up a return premium for those of us who can withstand the annoyance.”  (Rick Ferri)


  114. SCTY / Phil – Where is John Chambers when you need him with a short position!


  115. Looks like they lose money on every deal but make it up on volume:

    The company is expected to lose more than $1 billion over the next three years on rooftop power projects for homes and commercial buildings. Customers sign decades-long contracts to buy the output, and SolarCity is pouring the revenue into new installations.

    The company installed 82 megawatts of panels in the first quarter. It acquired a solar manufacturer, Silevo Inc., to ensure a steady supply of panels as its chairman, billionaire Elon Musk, predicted annual demand would eventually reach “tens of gigawatts.”

    But I guess if they install gigawatts of solar panels, it will eventually pay off with these long leases! 


  116. Borrow more…

    http://www.businessinsider.com/german-negative-yield-2014-8

    As tensions remain high on the Ukraine-Russia border, German bond prices have been rallying, pushing yields lower and lower.

    Earlier Thursday, the yield on Germany's two-year bond actually went negative, touching -0.004%.

    In other words, investors are effectively paying the German government to hold their money.


  117. I have been reading on a strategy based around the VIX to give short and long signals. That actually looks somewhat promising but I have to do some more research.


  118. Yeah, it's like building any utility company – huge infrastructure build-out followed by decades of profits, only their infrastructure is distributed to the roof of each owner (and thus does not create a long-term asset for them, nor does it sit on land they pay tax on or have to maintain) so, one day, long, long from now, I will be loving this company as a long-term dividend payer but, for now – 40 quarters in the desert before they turn a profit makes a valuation ($7Bn) of 35 times sales ($200M) incomprehensible.  

    Damn man, I'll hold their money! 

    OK, I'm loving this Reel Physics show – must stop watching – too many numbers in my brain now…


  119. Phil / Shadow:  Ah, I see I've earned a bit of ridicule for my unwarranted optimism.  You are correct in suggesting that I am no "technician," having never learned the difference between a spastic toad pattern and a despairing duck divergence.

     

     On the other hand, being an optimistic sort — never having understood the appeal of the alternative — I would venture that U.S. equities offer the last clear chance for the denizens of the EU, South America, Japan, much of Asia and other assorted foreigners of making a buck [which happens to be strengthening] these days.  [North] America may be somewhat skint these days, but viewed from across large bodies of water [my usual position] it seems a placid province of painless profitability, particularly its name-brand large caps, and everyone loves a sale [e.g., German investors who must now pay their banks to hold balances in depreciating Euros].  But "you pays your money", etc.


  120. stjeanluc – Re: VIX strategy to give short and long signals …

    If you are referencing Connors VIX Reversal (CVR) signals, they are indeed very interesting. What has happened since July 30th is very curious as there appears to be some type failure or divergence at play, although I do think that we are now over due for a bounce.

    My setup: I have a $VIX chart in Stockcharts.com with a 10-day SMA and 10% envelope (with S&P plotted behind the price) as well as a $VIX RSI indicator with a 5 period setting above the price.

    It will be interesting to find out what you are researching.


  121. VIX / Diamond – Look at what that guy is doing with his NeuroShell add-on:

    http://noxapredict.com/manual/ame/

    Check out the examples. I looking at different indicators as I don't have the add-on that he sells. I'll have to do some backtesting.


  122. Phil/NLY

    Hi!

    Just saw your post on NLY.

    I have some AGNC

    How does it compare?

    should I sell and exchange into NLY?

    The numbers though suggest a similar financial picture for both companies.

    i was actually hoping to add to AGNC stock at these levels, although premiums are not that great for selling puts and calls and the spreads are too wide on buy/sells.

    thanks


  123. Maya, I have been a long term investor in NLY and AGNC.  Both recently had good earnings.  I sell puts and hold the stock.  I don't sell calls because when I did, the stock got called away on the ex-dividend date and I never got the divi.  Had to re-buy the stock, a real pain.


  124. I saw the question asked a couple days ago but didn't catch an answer, regarding old SHLD options.  My interpretation of these options is that the price is a combination of 100 SHLD and 30 LE.  If correct, this would equate to a $47.14 price on the old SHLD options at today's close. Seems about right for the way they are priced.


  125. Thanks a lot jelutuck.  That is helpful.


  126. stjeanluc – Please post an update after your backtesting. Thanks!


  127. IBM released a new chip. Sounds very interesting, especially regarding power usage. 

     

    http://www.technologyreview.com/news/529691/ibm-chip-processes-data-similar-to-the-way-your-brain-does/


  128. palotay – IBM’s R&D is simply unbelievable!

    Full disclosure: long-term long IBM! :-)


  129. Jelutuck/NLY

    thank you for your input.

    selling calls on these is an art, requiring some timing luck and strategy, but it can be done if timed right.


  130. From Bloomberg, Aug 8, 2014, 5:12:25 AM

    Aug. 7 (Bloomberg) — President Barack Obama speaks about his authorization of air strikes against militants in Iraq if they threaten U.S. personnel and his strategy in the country.
    U.S. aircraft today dropped supplies to Iraqis threatened by fighters from the Islamic State extremist group near Sinjar, a city close to the border of Syria. (Source: Bloomberg)

    Global stocks fell and bonds rose,
    sending German yields to a record low, as President Barack
    Obama
    ’s authorization of air strikes in Iraq boosted demand for
    haven assets. The Swiss franc strengthened with gold and oil,
    while Turkey’s lira led emerging-market currencies lower.

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

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


  131. From Bloomberg, Aug 8, 2014, 5:09:18 AM


    Aug. 7 (Bloomberg) — Tom Frieden, director of the Center for Disease Control & Prevention, Ariel Pablos-Mendez, assistant administrator of the Bureau for Global Health in the U.S. Agency for International Development, and Bisa Williams, deputy assistant secretary of the Bureau of African Affairs in the U.S. State Department, testify about the Ebola virus outbreak in West Africa.
    They speak before the House Foreign Affairs Subcommittee on Africa, Global Health, Global Human Rights and International Organizations. (This is the prepared statement portion of the hearing. Source: Bloomberg)

    The worst Ebola outbreak on record is
    a public health emergency that threatens nations outside the
    four in West Africa where the virus is spreading, the World
    Health Organization
    said.

    To read the entire article, go to http://bloom.bg/1oKitO0

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


  132. From Bloomberg, Aug 8, 2014, 4:24:45 AM


    Customers browse dried pasta products for sale at the Campo de Fiori outdoor market in Rome, Italy. Photographer: Andrey Rudakov/Bloomberg

    Mario Draghi says Italy can only blame itself for its third recession since 2008.

    To read the entire article, go to http://bloom.bg/1ov00jY

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


  133. From Bloomberg, Aug 8, 2014, 3:35:16 AM


    Aug. 8 (Bloomberg) — Valuations in the Russian financial markets are creating some opportunities for investors even amid the country’s broader structural challenges, according to Deutsche Bank emerging-market strategist John-Paul Smith.
    He speaks with Mark Barton, Caroline Hyde and Manus Cranny on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

    Russian President Vladimir Putin chose a funny way to punish his American and European adversaries.

    To read the entire article, go to http://bloom.bg/1oi42ly

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


  134. From Bloomberg, Aug 8, 2014, 3:51:02 AM


    Aug. 8 (Bloomberg) — Frederic Neumann, an economist at HSBC Holdings Plc in Hong Kong, talks about Japan’s economy, central bank and government policies.
    The Bank of Japan maintained record stimulus after recent production and export data highlighted weakness that could challenge Governor Haruhiko Kuroda’s push to stoke faster inflation. Neumann speaks with Angie Lau on Bloomberg Television’s “Asia Edge.” (Source: Bloomberg)

    The Bank of Japan maintained record
    stimulus after recent production and export data highlighted
    weakness that could challenge Governor Haruhiko Kuroda’s push to
    stoke faster inflation.

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

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


  135. From Bloomberg, Aug 8, 2014, 3:04:06 AM

    African Bank Investments Ltd. (ABL), which
    plummeted this week after surprising investors with the need for
    more funding, is now counting on shareholders or the government
    to stave off collapse.

    To read the entire article, go to http://bloom.bg/1sj03a3

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


  136. From Bloomberg, Aug 7, 2014, 10:59:39 PM

    The Reserve Bank of Australia cut
    growth and inflation forecasts amid a steeper drop in mining
    investment and reiterated interest rates will remain on hold.

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

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


  137. From Bloomberg, Aug 7, 2014, 7:04:54 PM


    Russia’s threat to bar European and North American airlines from overflying Siberia, the latest salvo in tit-for-tat sanctions over Ukraine, is forcing carriers to consider new routes to and from Asia. Photographer: Tomohiro Ohsumi/Bloomberg

    Russia’s threat to bar European and North American airlines from overflying Siberia, the latest salvo in tit-for-tat sanctions over Ukraine, is forcing carriers to consider new routes to and from Asia.

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

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


  138. From Bloomberg, Aug 8, 2014, 4:42:48 AM

    Warning signals are starting to flash
    for Europe’s biggest money managers as a selloff in the U.S.
    high-yield bond market shows signs of crossing the Atlantic.

    To read the entire article, go to http://bloom.bg/1oKxb7R

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


  139. From Bloomberg, Aug 8, 2014, 4:25:57 AM


    Aug. 7 (Bloomberg) — President Barack Obama speaks about his authorization of air strikes against militants in Iraq if they threaten U.S. personnel and his strategy in the country.
    U.S. aircraft today dropped supplies to Iraqis threatened by fighters from the Islamic State extremist group near Sinjar, a city close to the border of Syria. (Source: Bloomberg)

    Crude oil prices rose as U.S.
    President Barack Obama authorized airstrikes in parts of Iraq,
    OPEC’s second-largest producer, while Chevron Corp. said it was
    withdrawing some workers.

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

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


  140. From Bloomberg, Aug 8, 2014, 3:54:26 AM


    Aug. 8 (Bloomberg) — Valuations in the Russian financial markets are creating some opportunities for investors even amid the country’s broader structural challenges, according to Deutsche Bank emerging-market strategist John-Paul Smith.
    He speaks with Mark Barton, Caroline Hyde and Manus Cranny on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

    Some of Finland’s biggest exporters have been thrown into survival mode as they struggle to work out how to cope with Russian import bans unveiled yesterday.

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

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


  141. From Bloomberg, Aug 8, 2014, 12:50:31 AM


    A passenger checks in at the Malaysian Airlines first class counter at Kuala Lumpur International Airport in Sepang, Malaysia, on Friday, Aug. 8, 2014. A Malaysia airlines jet was shot down in Ukraine in July, four months after a jet en route to Beijing from Kuala Lumpur vanished.

    Malaysian Airline System Bhd. (MAS) will be
    delisted after sovereign wealth fund Khazanah Nasional Bhd.
    offered to buy out minority shareholders in a restructuring plan
    for the national carrier that suffered two disasters this year.

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

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


  142. Watch this video at http://bloom.bg/XJfYlf

    Why the ECB Spooked the Markets Today

    Aug. 7: Russell Investments’ Steve Wood explains how the ECB is affecting financial markets today.

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


  143. Watch this video at http://bloom.bg/1y6ILeF

    Bull Market Alive, Buy the Dips: Hank Smith

    Aug. 6 (Bloomberg) — Haverford Trust’s Hank Smith and Citi Private Bank’s Steve Bodurtha discuss the selloff in U.S. stocks with Trish Regan on “Street Smart.” (Source: Bloomberg)

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


  144. Watch this video at http://bloom.bg/1ybJTxs

    China’s July Exports Rise 14.5% on Year

    Aug. 8 (Bloomberg) –- Bloomberg’s Tom Orlik discusses China’s record trade surplus and what it means for the economy with Angie Lau on “Asia Edge.” (Source: Bloomberg)

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


  145. From Bloomberg, Aug 8, 2014, 4:38:30 AM

    Gold advanced to a three-week high as
    unrest in the Middle East spurred demand for a haven.

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

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


  146. From Bloomberg, Aug 8, 2014, 5:15:45 AM

    Residents gather next to the rubble of a destroyed building in the Shejaiya neighbourhood of Gaza, on Aug. 7, 2014. Photographer: Roberto Schmidt/AFP via Getty Images

    Israeli aircraft pounded the Gaza Strip today after militants fired rockets into the country’s south, shattering a cease-fire and reigniting the region’s monthlong conflict.

    To read the entire article, go to http://bloom.bg/1siKO0U

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


  147. From Bloomberg, Aug 8, 2014, 3:18:05 AM


    Elvira Nabiullina, chairman of Russia’s central bank. Photographer: Andrey Rudakov/Bloomberg

    Russian memories of hyperinflation
    are giving the central bank scope to keep raising interest rates
    should prices spiral following a government ban on U.S. and
    European food imports.

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

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


  148. From Bloomberg, Aug 8, 2014, 4:49:05 AM

    From his perch as Vladimir Putin’s adviser for building ties with fellow former Soviet republics, Sergei Glazyev perceives the world shifting to a war footing.

    To read the entire article, go to http://bloom.bg/1kNzs2M

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  149. From Bloomberg, Aug 8, 2014, 5:00:07 AM

    Cupertino, California-based Apple, which has 78 percent of its $40.7 billion overseas, caused a stir last year when it said it would take on $17 billion in debt to make dividend payments. Photographer: Jerome Favre/Bloomberg

    Income inequality has company — make that companies. A new wealth gap is opening among U.S. corporations, where cash holdings are growing more concentrated as the rich get richer.

    To read the entire article, go to http://bloom.bg/1oKz4RR

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  150. From Bloomberg, Aug 8, 2014, 12:01:00 AM


    Aug. 7 (Bloomberg) — Tom Frieden, director of the Center for Disease Control & Prevention, Ariel Pablos-Mendez, assistant administrator of the Bureau for Global Health in the U.S. Agency for International Development, and Bisa Williams, deputy assistant secretary of the Bureau of African Affairs in the U.S. State Department, testify about the Ebola virus outbreak in West Africa.
    They speak before the House Foreign Affairs Subcommittee on Africa, Global Health, Global Human Rights and International Organizations. (This is the prepared statement portion of the hearing. Source: Bloomberg)

    Tekmira Pharmaceuticals Corp. (TKMR) said U.S. regulators have paved the way for the company to possible give its experimental Ebola drug to people infected with the deadly disease.

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

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  151. From Bloomberg, Aug 8, 2014, 5:16:38 AM

    Exxon Mobil Corp. and its Russian
    partner OAO Rosneft will start exploration drilling in Russia’s
    Kara Sea tomorrow, undeterred by souring relations between the
    U.S. and Russia.

    To read the entire article, go to http://bloom.bg/1oKF9Oa

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  152. From Bloomberg, Aug 8, 2014, 4:48:23 AM

    Treasuries rallied, pushing benchmark
    yields to the lowest level in more than a year, as investors
    sought the safest assets after President Barack Obama authorized
    U.S. air strikes in Iraq.

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

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  153. From Bloomberg, Aug 8, 2014, 3:53:04 AM


    Aug. 7 (Bloomberg) — President Barack Obama speaks at a news conference about his decision to authorize air strikes against militants in Iraq if they threaten U.S. personnel and dispatch planes to drop food and water for trapped civilians. (Source: Bloomberg)

    President Barack Obama authorized limited airstrikes against Sunni militants in Iraq, potentially reengaging the U.S. military in a conflict that Obama pledged to leave behind when he first won office.

    To read the entire article, go to http://bloom.bg/1sDglZ1

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  154. From Bloomberg, Aug 7, 2014, 7:58:18 PM

    A man walks out of a mobile phone store displaying an advertisement for Apple Inc.’s iPhone 4 in Mumbai, India. Photographer: Adeel Halim/Bloomberg

    Apple Inc. (AAPL), which has struggled in emerging markets because of the price of its new iPhones, has devised a strategy for India that’s starting to pay off: It’s pushing older models that offer cachet at affordable prices.

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

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  155. Watch this video at http://bloom.bg/1yaGD5G

    CDC Chief Testifies on Ebola Outbreak (Statement)

    Aug. 7 (Bloomberg) — Tom Frieden, director of the Center for Disease Control & Prevention, Ariel Pablos-Mendez, assistant administrator of the Bureau for Global Health in the U.S. Agency for International Development, and Bisa Williams, deputy assistant secretary of the Bureau of African Affairs in the U.S. State Department, testify about the Ebola virus outbreak in West Africa.
    They speak before the House Foreign Affairs Subcommittee on Africa, Global Health, Global Human Rights and International Organizations. (This is the prepared statement portion of the hearing. Source: Bloomberg)

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


  156. Watch this video at http://bloom.bg/XD7E6s

    Boris Johnson on Plan to Run for U.K. Parliament

    Aug. 6 (Bloomberg) — London Mayor Boris Johnson discusses his plan to run for a seat in Parliament at next year’s U.K. election, ending speculation about his political ambitions.
    He speaks with Guy Johnson on Bloomberg Television’s “The Pulse” following a speech on European policy at Bloomberg’s European headquarters in London. (Source: Bloomberg)

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  157. From Bloomberg, Aug 8, 2014, 3:59:35 AM


    Bank of Japan Governor Haruhiko Kuroda. Photographer: Kiyoshi Ota/Bloomberg

    Strategists are raising their yen
    forecasts at the fastest pace among major currencies on
    speculation the Bank of Japan will delay extending its monetary
    stimulus program until next year at the earliest.

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

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  158. From Bloomberg, Aug 7, 2014, 11:01:00 AM

    Elon Musk, Chairman of Tesla Motors Inc. Photographer: Noah Berger/Bloomberg

    Four years ago, Tesla Motors Inc. (TSLA) Chairman Elon Musk invited a fan to his California home and let him take the Roadster sports car out for a spin. His guest: Akio Toyoda, president of the world’s biggest automaker.

    To read the entire article, go to http://bloom.bg/1shN8Fn

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  159. From Bloomberg, Aug 8, 2014, 2:20:07 AM


    Apple depended on Greater China for about 16 percent of its $37.4 billion in revenue last quarter, according to data compiled by Bloomberg. Photographer: Brent Lewin/Bloomberg

    Apple Inc. (AAPL) products were left off a
    Chinese government procurement list after the company failed to
    submit documents that included a pledge not to violate state or
    public interests, according to government officials familiar
    with the process.

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

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  160. From Bloomberg, Aug 8, 2014, 12:27:04 AM

    Stock investors who missed this
    year’s 20 percent rally in the S&P BSE Sensex (SENSEX) Index will get a
    chance to buy at cheaper levels in the next two months,
    according to BlackRock Inc.’s India joint venture.

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

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  161. From Bloomberg, Aug 7, 2014, 12:01:00 AM


    An offshore oil platform and wells are silhouetted by the setting sun in the Gulf of Mexico. Photographer: Derick E. Hingle/Bloomberg

    Energy companies are taking their controversial fracking operations from the land to the sea — to deep waters off the U.S., South American and African coasts.

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

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  162. From Bloomberg, Aug 7, 2014, 7:01:00 PM


    Properties stand on a cul-de-sac in the Worcester Park district of London. Acadata noted that recent housing surveys show more people think it’s a good time to sell property rather than buy. Photographer: Simon Dawson/Bloomberg

    U.K. home prices rose to a record
    last month as sales reached the highest in seven years,
    according to Acadata.

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

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  163. From Bloomberg, Aug 8, 2014, 3:33:59 AM

    U.S. retail sales probably increased
    in July for a sixth straight month, signaling the economy’s
    rebound in the second quarter will persist as the job market
    strengthens, a report in the coming week is expected to show.

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

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  164. From Bloomberg, Aug 8, 2014, 2:21:29 AM

    Vietnam may change rules to quicken bad-debt sales that have been stalled by a reluctance to accept losses, hampering an economy that risks missing its growth target this year.

    To read the entire article, go to http://bloom.bg/1ovo6eA

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  165. From Bloomberg, Aug 7, 2014, 5:23:04 PM

    Is President Vladimir Putin trying to bring back the bad old days?<inline id=”selection-marker-2″ class=”redactor-selection-marker”></inline>

    In announcing new sanctions on Russia last week, President Barack Obama was at pains to insist that the standoff over Ukraine doesn’t mark the beginning of a new Cold War. No doubt he’s right — but commentary on the Ukraine crisis has continued to embrace the Cold War analogy anyway. International observers have done so, too. So have some Russian commentators: “Russians Will Suffer in Putin’s New Cold War,” warns the opposition Moscow Times.

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

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  166. From Bloomberg, Aug 7, 2014, 12:23:14 PM

    There are several takeaways from European Central Bank President Mario Draghi’s news conference today, none of them heartening to those who fear the euro region is sliding into a deflationary spiral.

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

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  167. From Bloomberg, Aug 7, 2014, 12:03:41 PM

    The look of a lender.                                                                    

    China’s “trust companies” are a growth industry, notable not for imparting stability to the $9.2 trillion economy, but for the red flags they raise. One figure stands out: the $343 billion these nonbank lenders owe in interest and principal repayments this quarter alone.

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

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  168. From Bloomberg, Aug 7, 2014, 9:58:24 AM

    Thanks, but I’ll have the tainted chicken.

    Can tofu, fish paste and a deep-fryer save East Asia’s fast-food eateries?

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

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  169. Overseas

    06:00 AM ET

    • Japan -2.98%.
    • Hong Kong -0.23%.
    • China +0.31%.
    • India -0.99%.
    • London -0.71%.
    • Paris -0.44%.
    • Frankfurt -0.87%.


  170. BMW next to lower spare parts prices in China

    04:50 AM ET · BAMXY

    • BMW (OTCPK:BAMXY) is now the latest foreign automaker in China to cut its spare parts prices.
    • The company says that it will lower its prices by 20% on average on more than 2,000 spare parts due to the anti-monopoly probe of China’s National Development and Reform Commission.
    • Many foreign automakers have announced price cuts in recent weeks including Mercedes-Benz, Jaguar Land Rover and Audi.


  171. Pfizer facing spike of Lipitor lawsuits

    05:55 AM ET · PFE

    • Pfizer (NYSE:PFE) is facing an increasing amount of lawsuits by women who state that the pharmaceutical giant knew about the serious side effects of its anti-cholesterol drug Lipitor but never adequately warned the public.
    • Lawsuits began to be filed after the FDA in 2012 warned that Lipitor and other statins had been linked to a “small increased risk” of diabetes. In the last five months, lawsuits have shot up from 56 to almost 1,000.
    • The recent spike followed a decision by a federal judicial panel to consolidate all nationwide Lipitor diabetes lawsuits into a single Federal courtroom in Charleston, South Carolina. Pfizer opposed the consolidation, arguing it would promote copycat filings.
    • PFE -0.9% premarket


  172. Gross receives backing despite Pimco declines

    04:13 AM ET · AZSEY

    • Bill Gross received the support of his management team at parent company Allianz (OTCQX:AZSEY) this morning, despite the 15th straight month of outflows from his Total Return Fund (NYSEARCA:BOND), which recorded an $830M outflow in July.
    • Allianz CFO Dieter Wemmer states that that Gross’ fund is still delivering reasonable returns.
    • Pimco outflows continues to weigh on Allianz’s results despite the German firm posting a 10.5% rise today in second-quarter net profit.


  173. Donetsk People’s Republic leader resigns

    03:40 AM ET · RSX

    • Prime Minister of the self-declared Donetsk People’s Republic, Alexander Borodai, has resigned, as approaching Ukrainian forces encircle Donetsk.
    • The rebel leader will be replaced by Alexander Zakharchenko, and suggests deepening divisions within the Russian-backed separatist movement.
    • The West this past week has grown increasingly concerned of Russia’s buildup along Ukraine’s eastern border, and threatened yet another round of new sanctions if it does not change course in backing the rebels.
    • ETFs: RSX, RUSL, RSXJ, ERUS, RUSS, RBL, RUDR


  174. Post continues buying spree

    03:14 AM ET · POST

    • Post (NYSE:POST) has agreed to buy American Blanching for $128M, in another deal aimed at diversifying its portfolio. Post has been on a buying spree since 2012 when it spun off Ralcorp Holdings, and most recently acquired Michaels Foods for $2.5B in June.
    • The deal, expected to close in FQ1, is expected to contribute about $135M to net sales annually.
    • The company reported a FQ3 loss yesterday due to the expenses related to its recent of acquisitions.
    • POST -10.1% AH


  175. GSK investigators charged in Chinese court

    02:36 AM ET · GSK

    • Chinese prosecutors have charged British investigator Peter Humphrey and his American wife Yu Yingzeng with illegally obtaining more than 200 items of private information connected to their investigation into the bribery allegations of GlaxoSmithKline (NYSE:GSK) in China.
    • Humphrey is expected to plead guilty to the charges, which carry a maximum sentence of three years in jail.
    • China has recently strengthened its privacy laws and substantially increased its anti-trust probes of foreign companies based in the country.


  176. Friday’s economic calendar

    12:00 AM ET


  177. High-yield bond funds post $7.1B outflows, highest on record

    Yesterday, 07:12 PM ET · HYD

    • High-yield bond funds and ETFs totaled record outflows of $7.1B in the week ended Wednesday, Lipper reports, which shatters the previous record single-week outflow (set during the June 2013 bond-market swoon) of $4.6B.
    • It’s the fourth straight week of billion-dollar outflows, with an average outflow of $3.15B during the period; the full-year reading is now $5.9B in the red, with 43% of the withdrawal tied to ETFs.
    • Equity investors should care, Zero Hedge writes, because “bond managers are reaching desperately for protection in the CDS market – which is now at six-month wides – but in the end are forced to liquidate holdings as ETF flows dominate.”
    • ETFs: HYD, JNK, HYLD, SJB, IHY, ANGL, HYLS, PGHY, HYXU, UJB, XOVR, QLTC, IJNK


  178. Lululemon founder reaches truce with activist; shares jump

    Yesterday, 06:34 PM ET · LULU

    • Lululemon (NASDAQ:LULU) founder Chip Wilson has agreed to sell half his 27.7% stake to P-E firm Advent International for $845M, thus avoiding a potential proxy war.
    • In addition, Advent managing partner David Mussafer and managing director Steven Collins will join Lululemon’s board. Mussafer will also be named co-chairman; Michael Casey remains independent chairman.
    • Shares +6.1% AH.


  179. Universal Display reiterates guidance; materials sales +32%

    Yesterday, 05:38 PM ET · OLED

    • Universal Display (NASDAQ:OLED) reiterates it expects 2014 revenue to “reach the high end” of a $190M-$205M guidance range (consensus is at $205.7M). The reiteration comes in spite of top customer Samsung’s recent struggles.
    • Q2 materials sales +32% Y/Y to $35.9M; they grew 38% in Q1. Royalty/license fees +33% Y/Y to $28.1M; Samsung made a $25M payment.
    • Materials gross margin was 66.6%, down from 72% in Q1 and 69.3% a year ago. GAAP costs/expenses +28% to $35.3M, with R&D spend totaling $10.5M.
    • $7M was spent on buybacks, following the June launch of a $50M buyback program.
    • Shares +0.8% AH. Q2 results, PR


  180. U.S. poultry, nut producers face sales hit from Russia food ban

    Yesterday, 05:34 PM ET · TSN

    • Industry officials say Russia’s ban on food imports from the U.S. could cut revenues for some producers of poultry, nuts and other agricultural products, but the overall impact on the U.S. farm sector is expected to be muted.
    • Poultry processors could be hit hardest, as the group collectively sends ~7% of annual export volumes to Russia, the second-biggest buyer of U.S. chicken after Mexico; Tyson Foods (NYSE:TSN) says other countries could pick up the slack and minimize any financial hit, while Sanderson Farms (NASDAQ:SAFM) CFO Mike Cockrell notes that U.S. exports to the country have waned since the 1990s.
    • Exporters of tree nuts, fruits and vegetables also face a potential reduction in revenues if growers aren’t able to find alternative export markets to Russia; California, which produces nearly 90% of U.S. tree nuts, could take a hit.


  181. SolarCity’s Q2 deployments in-line; big growth expected in Q3

    Yesterday, 05:02 PM ET · SCTY

    • SolarCity (NASDAQ:SCTY) deployed 107MW of solar systems in Q2, +102% Y/Y and in-line with guidance of 105MW-110MW. 218MW of systems were booked, up sharply from Q1′s 136MW. Cumulative deployments are at 756MW.
    • Deployments are expected to rise to 135MW-150MW in Q3. 2014 and 2015 deployment guidance is still at 500Mw-550MW and 900MW-1GW.
    • Q3 operating lease/incentive revenue is expected to total $50M-$55M (up from Q2′s $43.2M), and EPS guidance is at -$1.10 to -$1.20 (below a -$1.00 consensus).
    • Cumulative energy contracts +28% Q/Q and +114% Y/Y to 128.9K. Cumulative customers +27% Q/Q and +102% Y/Y to 141K.
    • Estimated nominal contracted payments rose by $811M Q/Q to $3.31B. Retained value forecast rose by $513M to $1.8B; that equals $1.72/watt, up from a prior $1.56/watt.
    • Thanks to a breakneck construction pace, Q2 net cash flow was -$117.6M. SolarCity ended the quarter with $577.1M in cash, $246M in regular debt, and $230M in convertible notes, and $53M in solar asset-backed notes.
    • Shares +0.7% AH. Q2 results, PR.


  182. Fairway Group misses by $0.11, beats on revenue

    Yesterday, 04:52 PM ET · FWM

    • Fairway Group (NASDAQ:FWM): FQ1 EPS of -$0.22 misses by $0.11.
    • Revenue of $198.3M (+6.2% Y/Y) beats by $1.39M.
    • Press Release


  183. Tumi Holdings EPS in-line, beats on revenue

    Yesterday, 04:46 PM ET · TUMI

    • Tumi Holdings (NYSE:TUMI): Q2 EPS of $0.18 in-line.
    • Revenue of $124.58M (+15.1% Y/Y) beats by $0.27M.
    • Press Release


  184. Stocks slip as geopolitical concerns overshadow strong jobless claims data

    Yesterday, 04:25 PM ET

    • Stocks slumped in choppy trading amid geopolitical concerns, driven by short-term traders adjusting positions on headlines about developments on the Russia-Ukraine border and talk of U.S. efforts to drop emergency aid into Iraq.
    • As a result, the S&P 500 ended the session below its 100-day MA, while the Dow settled just above its 200-day MA after crossing that level for the first time since February.
    • Defensive utility stocks were the only industry group in the S&P 500 to finish with gains.
    • Crude oil prices rose on concerns about global supplies after Islamic State militants advanced to the Kurdish region of Iraq; Brent crude gained 0.8% to $105.44 per barrel while WTI crude added 0.4% to $97.34.
    • Treasury prices surged, pushing benchmark yields to their lowest closing levels in more than 13 months; the yield on the 10-year note tumbled 6 bps on the day to 2.415%, its lowest level since June 19 of last year.


  185. Zynga -11.6% AH on bookings miss, guidance cut

    Yesterday, 04:17 PM ET · ZNGA

    • Citing “the delayed launch of new games and new features,” Zynga (NASDAQ:ZNGA) now expects 2014 bookings of $695M-$725M, below prior guidance of $770M-$810M and an $800.9M consensus. EPS guidance of -$0.01 to $0.00 is slightly below a $0.02 consensus.
    • Q3 guidance is for bookings of $165M-$175M and EPS of -$0.01 to $0.00, below a consensus of $212.4M and $0.01.
    • Q2 bookings of $175.1M missed a $191.2M consensus, and were down 7% Y/Y. Monthly active users totaled 130M, up from 123M in Q1 (aided by NaturalMotion) but down from 187M a year ago. Daily active users were 29M vs. 28M in Q1 and 39M a year ago.
    • Along with its results, Zynga has announced a deal with Warner Bros. to offer Looney Tunes-themed infinite runner games, and deals with the NFL and Tiger Woods to offer sports games.
    • Cost cuts are keeping Zynga from posting huge losses on account of its top-line weakness: GAAP costs/expenses fell 16% Y/Y in Q2 to $219.5M, with R&D spend dropping 25% to $93.7M.
    • Zynga ended Q2 with $1.15B in cash/investments, up slightly Q/Q
    • Q2 results, PR


  186. More on CBS Q2 results

    Yesterday, 04:13 PM ET · CBS

    • CBS (NYSE:CBS) saw revenue decline in Q2 as it lost some TV licensing revenue from the shift of the NCAA Men’s Basketball Championship semifinals to Turner.
    • Profit was lower in the Entertainment segment compared to a year ago, $341M vs. $391M.
    • Cable network revenue was flat compared to last year.
    • Revenue growth by type: Advertising -7% to $1.64B; Content licensing and distribution -9.4% to $903M; Affiliate and subscription fees +6.7% $586M.
    • The company boosted its share buyback allowance to $6B.
    • CBS +0.5% AH


  187. Revolution Lighting drops following Q2 results, 2H guidance

    Yesterday, 04:00 PM ET · RVLT

    • Revolution Lighting (RVLT -6.6%) expects Q3 revenue of $24M-$26M (up from Q2′s $17.5M) and total 2H14 revenue of $55M-$60M. It expects to become cash flow positive in Q4.
    • Thanks in part to the Value Lighting acquisition, Q2 sales rose 136% Y/Y. Gross margin fell to 32% from 49% a year ago due to mix changes; Revolution expects a ~35% GM going forward.
    • The LED lighting system provider ended Q2 with $1.7M in cash and $34.1M in current assets. It expects to obtain a $25M credit facility from a major bank in Q3.
    • Q2 results, PR


  188. Barrick Gold seen at “turning point,” with or without Newmont Mining

    Yesterday, 03:32 PM ET · NEM

    • Newmont Mining (NEM +0.1%) may still be open to a merger with Barrick Gold (ABX +0.3%), but Newmont may need Barrick more than Barrick needs Newmont; in fact, RBC analysts think ABX is “reaching a key turning point” and sees a strong operational rebound in 2015.
    • In raising its price target for ABX shares to $25 from $23, RBC also lifts its NAV estimate to $14.77/share from $14.05, driven primarily by cost improvements achieved YTD that should carry forward.
    • With company-wide all-in sustaining costs tracking below the guidance range YTD and key mines production expected to begin a rebound in 2015, RBC estimates operating free cash flow of $1.5B in 2015; the firm says ABX also offers upside optionality through its Goldrush and Turquoise Ridge projects in Nevada.


  189. Transocean gives up early gains, analysts say it’s not out of the woods

    Yesterday, 03:16 PM ET · RIG

    • Transocean (RIG -0.2%) gives up all its earlier gains following its Q2 earnings beat amid a second straight quarter of revenue efficiency at or above 95%, as analysts say RIG has much more recontracting risk than peers, leaving H2 results susceptible to increased idle time for rigs that roll off contract.
    • Cowen analysts say RIG’s various strategic moves likely will not offset the decline in rates and utilization they have seen recently and expect to continue into 2015; also, given the recent pullback in contracting activity in the floater market, RIG likely will need to stack older deepwater assets and even some ultra-deepwater assets before the bottom of the fixture cycle.


  190. ICSC: Retail sales momentum to roll on in August

    Yesterday, 03:00 PM ET · XLY

    • ICSC says the pace of retail sales growth will stay strong in August.
    • The research firm thinks back to school spending is more back-end loaded this year and retail sales will benefit from increased consumer confidence in the economy.
    • Though some big-name retailers such as Costco and Target have missed sales marks this week, there’s also been some surprises from mall retailers and restaurant chains.
    • Related ETFs: XLY, XRT, VCR, RTH, RETL, IYK, IYC, FXD, SCC, FDIS, UCC, PMR, UGE, RCD, SZK


  191. Agrium -2.2% on longer than expected potash mine downtime

    Yesterday, 02:58 PM ET · AGU

    • Agrium (AGU -2.2%) is lower despite Q2 earnings that easily beat estimates, as the company said in today’s earnings conference call that it will keep its only potash mine shut down three to four weeks longer than expected after a breakdown last week.
    • AGU says the downtime will lead to a $40M loss on its wholesale potash operations in H2, due to fixed costs and limited production.
    • AGU last week halted production at its Vanscoy mine in Saskatchewan due to a mechanical failure on its main hoist system, which prompted a decision to bring forward a planned turnaround to tie in its capacity expansion project.
    • Shares had been strong early after Q2 earnings and revenues beat estimates, as AGU’s retail operations posted record Q2 sales of $6.4B, up 15% Y/Y.


  192. Chevron cuts Kurdistan staff, Exxon said to be evacuating

    Yesterday, 02:28 PM ET · CVX

    • Chevron (CVX -0.2%) says it is reducing overseas staff working in the Kurdish region of Iraq as Islamic State militants push their offensive closer to the area.
    • Unconfirmed reports say Exxon Mobil (XOM -0.8%) also is evacuating staff from Kurdistan.
    • The capture of Qara Qosh, east of Mosul, brings the militants within 40 miles of the province of Erbil, where the capital of the Kurdistan Regional Government is located.
    • Brent crude prices rose above $105/bbl today on the reports, as well as a decline in U.S. oil inventories; West Texas crude moves past $97.
    • Earlier: Kurdistan oil producers plunge as Islamic militants advance on the region.


  193. GM hopes for better demand for new Volt

    Yesterday, 01:55 PM ET · GM

    • General Motors (GM -0.8%) plans to unveil its next-gen Chevrolet Volt at the North American International Auto Show in Detroit during January.
    • There has been some speculation that a lower-cost version of the Volt will be offered by the automaker.
    • Sales have been disappointing for the plug-in EV and are down 9% Y/Y through July.


  194. Analysis: Price hikes not so smooth for Mondelez International

    Yesterday, 12:47 PM ET · MDLZ

    • Mondelez International (MDLZ -1.8%) could be facing pricing power issues with some its key categories, according to Canaccord Genuity.
    • The investment firm warns that consumers might be resisting price hikes in chocolate and cheese products.
    • Power Brand sales growth slowed to 1.3% in Q2 for Mondelez from the 4.8% pace in Q1.


  195. Chesapeake upgraded at Stifel as production growth outlook improves

    Yesterday, 12:48 PM ET · CHK

    • Chesapeake Energy (CHK -1.1%) is upgraded to Buy from Hold with a $34 price target at Stifel, which says Q2 earnings confirm its view that CHK is becoming well positioned from a capex efficiency perspective heading into 2015.
    • The firm thinks the stock’s current attractive valuation, combined with CHK’s increasingly cleaned-up and simplified balance sheet and the recent correction in gas prices and equities, provide a fine entry point heading into what it sees as a positive production growth and capex efficiency trajectory in H2 and above consensus expectations for 2015 production growth.


  196. Good morning!

    /NKD dropped 200 points (1.5%) on sharp rise in the Yen as people fled into that "safety" overnight.  Since it was already down 200 in the Futures to 15,000, that led to a headline drop of 3% for the day!  Shanghai didn't care and was up 0.3% while Hang Seng was down 0.25% and India was down 1% with Singapore.

    Italy is up 0.6%, Spain up 0.2%, UK down 0.6%, Germany down 0.85% and France down 0.3% heading into lunch.  Our Futures were overreacting earlier but calming down now as Obama only really providing support in Iraq, not starting a new war. 

    Nonetheless, I can't see gambling on oil (now $98) but I'm very happy with gold at $1,320 as the Dollar falls to 81.42.  Silver held that $20 line and now $20.16, copper $3.17, Nat gas $3.89 and gasoline $2.78.

    I'm liking /ES bullish as it crosses over the 1,900 line with tight stops below.  /YM will confirm and also makes a long over 16,300 and then /NQ 3,850 seals the deal and /TF 1,110 has to hold, of course (1,105 was the overnight low). 


  197. Ridicule/ZZ – Not ridicule, just warning you I didn't see a bullish signal at the time.  That's my job, you know…  It's all well and good to be an optimist (I'm an eternal one), but it doesn't mean it's a good idea to drive off a cliff because you have faith.  I'm more of a making the best of a bad situation kind of optimist and I try to only worry about things that are real (like not Ebola) but not worrying is not the same thing as ignoring.  I know the US looks good and Europe looks good to us as does China and even Japan relative to the nightmarish reality their economy actually is.  

    In 2007/8 I used to say the whole World was suffering from the syndrome where everyone thought only their economy had problems and the rest of the World was doing great – which led to massive misallocations of capital to emerging markets and Asian markets – until the disaster was fully realized and there was nowhere to hide.  Things are nowhere near as bad now, but that bias remains – the grass is always greener on the other side.

    1,902.50 giving /ES trouble – that's not a good sign – be careful!  

    AGNC/Maya – They are the 3rd REIT that we like.  It's just that they haven't been on sale since last year, so we haven't talked about them.  Good time to reprint my general commentary on REITs:

    REITS/DC, ZZ – There's nothing wrong with REITs as a LONG-TERM investment.  I like AGNC and NLY and I'll like BXP and VNO if they get cheaper.  I like them because they buy when the market sucks and then they wait a decade for the market to come back and that suits me just fine for my investment horizons (I've got a good 20 years to retirement) so what do I care of NLY is is at $15 or $11 in 2013?  In 2000, they were at $8, in 2002, they were $20, in 2005, they were $11, in 2008 $20, in 2008 (later) back to $13…  

    Meanwhile, they paid out about $2 a year in dividends so 25% of the original $8 x 13 years is 325% of the money back with 20 more years to go (not including beneficial option sales, of course).  That's why I find these discussions a bit silly – you don't buy REITs or Trusts as short-term plays, you accumulate them over time and, if you are really smart, you DRIP back 1/2 your dividends into more stock whenever they are below your original entry point to knock down your basis and increase your holdings.  

    Don't play REITs like day trades or momentum stocks – they are playing for the long haul, not trying to maximize their share price every Q.  You can sell NLY 2016 $10 puts for $1.95 right now with the stock at $11.74, that's a nice return right there (25% against your net $8.05 entry and no less than 50% on margin) or you can buy the stock and sell the $10 calls for $2 as well and then you own the stock for net $7.79/8.90 and that makes the $1.40 dividend 18% while you wait to see if you get called away with an additional 28% gain at $10, which is 15% LOWER than the current price. 

    Our last trade on them was for the Income Portfolio way back last October, but we cashed them in when we purged the portfolio earlier this year and AGNC just never went on sale since. 

    Also good to keep in mind:

    Submitted on 2014/02/14 at 2:20 pm

    Cores/Scott – Well my value list changes depending on what's cheap but, when they are low in the channel, I also like SHLD, RIG, VLO, F, GE, T, CHL, GLW, SPWR, IBM, BA, BRK.B, COST, DIS, INTC, MCD, PFE, X, CLF, HMY, DBA, XLF, FCX, CAT, BRCM, BTU, NLY, AGNC, FTR, RRD, BAC, JPM, ISRG…  I'm sure there's a few more, but that's a good start.  

    SHLD/Jet – that's the right way to look at them.  

    IBM/Palotay – That's why I like them long-term, they do a lot of exciting R&D.  

    And what Diamond said!  


  198. Phil, do you think any of those Kurdistan oil plays are buys? ISIL is a threat to humanity and we will not let them commit genocide in the north(more than they've already done). I think the oil plays are safe for the near-term…. At least all but the ones ISIL already has. 

    Interesting how Israel defending itself and killing 2000 Palestinians (many of whom were terrorists) is news and inspires anti-Semitic protests across the world while ISIL is probably killing 1000s of people a day (many Muslims) and yet there are no protests? The turmoil across the Middle East and Northern Africa will not end until moderate Muslims in these countries start violently opposing these radical jihadists and take back their country- there is no appeasement. Until then, there will be a lot more of what we have today. 

    anyways, just my 2 cents. Hope you all are doing well. I'm roasting in west Texas. Two more months until Hawaii!!!