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Tree-Topping Tuesday – Putting Tinsel on the Markets

Good morning!  

I feel like I work at Pravda when I say "Markets are heading up this morning" – doesn't matter what's real, that's the news we're going to report.  The crops are always new records, factory production is always up and the 5-year plan is always on track…

Nothing can be further from the truth than the Shanghai Stock Exchange, which opened down 2.5% flew back to positive and then decided to finish down 3% after all – manipulation failed for the day over there. 

Problems in China are caused by their FAILURE to just lie back and accept the market manipulation going on on that side of the World.  Goldman Sachs (GS) has been finally chased out of metals trading as a Senate subcommittee began examining their "alleged" manipulation of commodities and, over in China, the Securities Regulatory Commission is probing the same kind of index manipulation that is commonplace in our own markets

Of course, if you want to see EPIC manipulation, you can't beat da boyz at the NYMEX, where they canceled all but 1,693 out of over 300,000 FAKE!!!! open orders that were placed in January, effectively shorting the US of over 20M barrels of oil in January.

Each contract represents 1,000 barrels scheduled for delivery to Cushing, OK, where the weekly inventory reports are tabulated and, by cancelling 99.4% of all the orders – the CRIMINALS at the NYMEX have deprived the United States of America of an economically vital resource in order to create an ENTIRELY ARTIFICIAL shortage of oil next month that their MEDIA LACKEYS will spin as an indication of demand increasing.  

I'm NOT joking, this is an act of economic terrorism that is happening right now, in this country, that will affect YOU in two weeks (the first January inventory report on the 7th) and will drive up the price of oil through market supply manipulation followed by a propaganda campaign that will sucker people into taking long positions (off the hands of the Banksters who are currently stuck with them) based on false information that will be spoon fed to you by the Corporate Media – in between commercials for Banks and Oil companies.  

Lenin never had it so easy!  

We also have other interesting Official Party Data to discuss as the 3rd revision of our Q3 GDP has come in at a whopping 5% – I'll bet you didn't realize how great things were this summer, did you?  Turns out they were twice as good as last summer (2.7%) and 25% better than the original estimate (3.9%).  Mostly the revision came from a huge upward revision to Corporate Profits, from 3.2% to 5.06%.  Household spending also doubled, from 1.2% to 2.5%, adding 1.2% to GDP all by itself, as lower gas prices left more money in consumers' pockets – a trend that should continue into Q4.  

HOWEVER, November Durable Goods also came out today and they were DOWN 0.7% vs up 3% expected.  Ex-Transport, they were down 0.4% vs up 1.1% expected – so a disaster all around.  This uncomfortable fact is being swept under the GDP rug though it should be of great concern as it comes into play on our next GDP report – and now we've set the bar very high.  

Also worrying are some very weak numbers in Core Capital Goods, with orders flat at 0% vs 1% expected and shipments up just 0.2% vs 1.3% expected.  Nonetheless, the markets are flying up to new highs in the Futures, which will make for some very exciting shorts as the strong Dollar should pressure the indexes lower (along with rumors of Fed TIGHTENING, as our economy begins to look like China), but we're not expecting a big drop until after New Years.


We're still waiting to see if 11,000 can be taken back on the NYSE as THAT would be a bullish sign and we already got Russell 1,200 back with the S&P and Nasdaq already out in space, more than 10% over their Must Hold Lines (Nasdaq almost 20%).  

We already made some bullish plays on oil in our Live Member Chat Room to take advantage of the scam and, shorter-term, we can play the TNA Jan $78/80 bull call spread for $1, which pays 100% if the Russell holds 1,200 for the next 24 days (in case you think you're too bearish).  

This morning, however – we're shorting the Futures here (9am) at 17,995 on /YM, 2,085 on /ES, 4,310 on /NQ and 1,207.50 on /TF.  

As long as the S&P is over 2,080, that shouldn't be a problem and Dow 18,000 would confirm it nicely – it's a good way to cover if you are too bearish and we can still go long on oil (/CL) at $55.50 and, of course, there's our Secret Santa's Inflation Hedges – with 5% GDP, I think it's going to be a good year for them after all.  


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  1. Craig GILD as I said before it is always a risk buying a falling knife but you could scale in with little and see


    Phil GMCR I hear you but do not count the chicken before they hatch not many people like to drink cold coffee!!!

  2. Wow, just wow…. Just taking off like a rocket after that GDP number. Didn't expect that 5% number. Tough sledding ahead though as durable goods orders fall 0.7%. 

    And so much for oil climbing this morning – it's cratering now!

  3. Oil Lines

    R3 – 61.37
    R2 – 59.95
    R1 – 57.97
    PP – 56.55
    S1 – 54.57
    S2 – 53.15
    S3 – 51.17

  4. Good Morning!

  5. We will now use fairy tale math to grade the budget:

    The incoming leaders of the new Republican-controlled Congress have opted against reappointing Doug Elmendorf as head of the Congressional Budget Office, Bloomberg News reported Monday citing an "aide briefed on the decision." The move helps clear the way for so-called "dynamic scoring" — a Holy Grail of conservative GOP budget wonks who don't like the way the costs of tax cuts are currently calculated.

    If you don't like the results, just change the math! It's just unreal – the real results of all the tax cuts have been deficits as far as the eyes can see and no huge boom as promised except for the income of the top 0.01%. And yet:

    Dynamic scoring calculates budgets through a controversial view that tax cuts both create economic growth and counter lost revenue. Currently the CBO does not use dynamic scoring.

    So there you go, don't believe your lying eyes!

  6. Good morning!   

    What craziness but I like the shorts at these levels.  17,980, 2,082.50, 4,308 and 1,207 at the moment.  Oil down to $55.25 so $55 would be a nice long or back over $55.50 but I wouldn't mess around in between. 

    More good news:

    LOL – Thank God I'm a guy!  

    Speaking of listening to our forefathers:

  7. Phil/BTU

    I had the Dec 10/11 BCS from early November with a net entry of .65.  I then rolled the 10's down to the Jan 9's (for .75) and now the short Dec 11's have expired.  I'm left with the Jan 9's at .18.  So, I've spent 1.4 between the original cost and the roll.  

    I'm thinking to roll to the March 8's for .70 and selling the March 11's for .2.  

    That would put me net 2.10-.2, so 1.90 for a $3 spread out to March. 

    Does that sound like a good idea?  What would you do with this now?


  8. Someone is not optimistic over Russia:

    Russia faces a “full-blown economic crisis” next year that will trigger a series of defaults and the loss of its investment-grade credit rating, a respected former finance minister has warned.

    Real incomes will fall by 2-5 per cent next year, the first decrease in real terms since 2000, said Alexei Kudrin, a longtime ally of President Vladimir Putin and widely tipped to succeed Dmitry Medvedev as prime minister.

    And this is not an opponent of the regime!

  9. Darth Cheney / Phil – And the thousand of disabled veterans now needing help!

    And the victims of 9/11 as well since presumably like Benghazi, it was a terrorist attack which could have been prevented. Tough to believe that we had a psychopath as VP for 8 years!

  10. Quote of the day:

    “Risk-aversion is one of those behaviors that may not seem all that rational in terms of building wealth, or increasing the number of offspring,” he says. “But . . . if you engage in more conservative behaviour, it’s much less likely that nature will eliminate you.”
    (Andrew Lo)

  11. GMCR/Yodi – I'm sorry I took the bear put spread as I would have certainly cashed out a put on thi nice move down.  You're right, they are sooooooooooo dangerous but I think recalling 6M units ($1Bn) at Christmas for a company with $5Bn in total sales is not something they will quickly bounce back from.  

    Not to mention my original premise that $140 was way too much for these guys in the first place.  The Jan $144/140 bear put spread is still just $2.60, only 0.20 more than yesterday's bet and a lot safer-looking now.  

    Budget/StJ – Yes, that CBO nonsense is VERY concerning.  So many states have already proven that dynamic scoring is total BS but facts simply don't concern these guys.  

    ROFL – /TF 1,205 already right at the bell – KA-CHING!!!!

  12. Budget / Phil – Yeah, how did those tax cuts work for Kansas? Let's try that for the entire country. These guys feel that they are entitled to their own facts!

  13. BTU/Jeff – Very disappointing on that one.  That's the move we made in the $25KP and it's down a lot but I'm not in the mood to throw more good money after bad on that one though your idea is fine for sticking with it.  I do think eventually it will hit, but it's not the kind of play we make in the $25KP.


    I'm not quite sure what short-term catalyst we'd expect on BTU between now and March, just keep that in mind.  Mostly it's going to move on changes in carbon regulations – right now there's fear that extreme changes will harm the industry and I'm betting (long-term) they aren't going to be so bad but it's a coin flip really.  

    Russia/StJ – Well, what has changed for the better since the collapse?  Just some Central Bank intervention that is burning off what little fire-power they had left.  Oil should come back, but not so much that it's going to save them.

    Oil just popped back over $55.50, by the way – so game on for the longs and, don't forget, we pressed all our USOs with rolls AND double downs yesterday, so this was a big bottom call for us.  

  14. Excerpt from Briefing Trader on GDP number.  May be a good time for financials ?

    "~~The data included most notably a big 5-handle on GDP. If you could go back 10 or 20 or 30 years and tell someone we were posting 2 quarters with an average GDP above 4.5% and the Fed had interest rates at 0%, someone would lock you up and toss away the key. But here we are. Sure, inflation is super low. But the hubris of thinking things are that simple is a problem in my humble opinion."

  15. Phil/BTU 


  16. Steenbarger -Two hidden virtues of successful traders

  17. CNBC propped T Boone Pickens up today to talk up oil.  He has lost a tremendous amount of money in the last few years on oil and natural gas.  He's lost over 400mm.  He is worth about 800mm now.  Not feeling bad for him at all, but that's a decent percentage of your worth in 2 years.  It might even be lower if he was long oil and gas with no hedges in the last 2 months.  He's going to try really hard to convince people to go long oil.

  18. Krugman on Yellen:

    Suppose the Fed waits too long. Well, inflation ticks up — probably not much, since the short-run Phillips curve looks very flat. And the Fed has the tools to rein the economy in. It would be annoying, unpleasant, and no doubt there would be Congressional hearings berating the Fed for debasing the dollar etc.. But not a really big problem.

    Suppose, on the other hand, that the Fed raises rates, and it turns out that it should have waited. This could all too easily prove disastrous. The economy could slide into a low-inflation trap in which zero interest rates aren’t low enough to achieve escape — which has happened in Japan and is pretty clearly happening in the euro area. Also, there is now very strong reason to suspect that a protracted slump will inflict large losses on the economy’s future productive capacity.

    And if someone tells you that these risks aren’t that big, consider this: we used to be told that 2 percent inflation was enough to make the risks of hitting the zero lower bound minimal — less than 5 percent in any given year. In fact, however, of the roughly 20 years since inflation dropped to circa 2 percent, 6 years — 30 percent! — have been spent in a liquidity trap. This says that we should be very afraid of missing our chance to escape from the trap out of an urge to normalize monetary policy too soon.

  19. Wow, CLR with MASSIVE cuts in spending.  Dropping rigs from 50 to 34 and dropping CapEx from $4.6Bn to $2.7Bn.  That does not bode well for OIH.  

    HACK is a new ETF that's very popular at the moment (hacking security companies).  

    Boy they picked a great time to start (or maybe they had a hand in things?).  

    Cheney/StJ – There's something really wrong with this country when a man like that can take power at all.  

    /TF 1,203 – this is why I love sticking with these plays!  

    Kansas/StJ – Another Republican hero.  Brownback must balance the budget and is $280M short and here's his cut proposals (no tax increases, of course):

    $96 million diverted out of the Kansas highway fund

    *$14.5 million diverted out of the Kansas Endowment for Youth

    *$55 million diverted out of the Kansas Department of Health and Environment

    *$40 million diverted out of KPERS, the public pension system

    *Department of Transportation loses $7.8 million

    *Kansas Bioscience Authority loses $5 million

    *Kansas Highway Patrol loses $1 million 

    *Department for Children and Families loses $4 million

    *Department for Aging and Disability Services loses $600,000

    *Department of Health and Environment loses $775,000

    *Department of Agriculture loses $200,000

    *Department of Wildlife, Parks & Tourism loses $500,000

    Other states are not jealous of Kansas' economic situation; in fact, the ones whose leaders were considering such dramatic tax cuts have shied off, having seen their effects on the Kansas economy. Moody's and Standard & Poor have both downgraded Kansas' credit rating. The Kansas Supreme Court found that the state has not been adequately funding its public schools. And job growth in Kansas is lagging behind both the nation and surrounding states. 

    There's also the matter of the $280 million state budget shortfall projected for fiscal year 2015. Where's that money going to come from? It should probably come from Charles and David Koch. They're the ones pushing hardest for these disastrous, discredited economic policies, and their parting with $280 million (they're worth about $100 billion combined) is roughly equivalent to you or me purchasing a breakfast burrito at Burger King. 

    Financials/Albo – I'm telling you, inflation hedges.  Though XLF is already testing $25.  

    Very good qualities, Scott.  For my part, I read constantly and reject hundreds of ideas before finding a trade.  

    TBoone/Rustle – Only $800M?  That's surprising.  I could hear the desperation in his voice as he was BS'ing $100 oil.

    Speaking of BS – Cramer in super-pump mode again.  

    Nas falling harder than /TF, /NQ down below 4,290 again so that's the stop, of course.  

  20. T-Boone / Phil – Talk about front-running trades… Which of course happens all the time on CNBC! There is no enforcement anyway and the SEC budget will probably be another victim of the new Congress.

  21. MAT still struggling:

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  22. And just think…Kansas just RE-elected Brownbeck after his own party supported the Democrat!  That's $$!

  23. Phil

    GDP- should the materials not see a rise, with cheap money everywhere and US economy supposedly heating up….and free money will start warming other economies in EU, China etc?

    GILD- what happened ? $1B in orders cancelled?

  24. Not a good chart for oil services:

    Rig count will probably go down if history repeats itself. I am guessing prices will go down with that as well.

  25. Craig GILD down an other 4$ today I scale in an other call @ 29$

  26. OIH – If you're chart above is any indication, I'd look to buy the April 35 Puts.  Thoughts?

  27. Bloomberg running a segment essentially attacking Elizabeth Warren for daring to speak out against the poor, defenseless banks – sickening.  

    Krugman/StJ – His problem is he acts like politicians actually give a damn about promoting general economic health.  The Fed doesn't give a crap about what's best for the country, only whatever maximizes the wealth of the top 1% and the banks they own.  

    Brownback/Pharm – That's all Koch money, they OWN that state.  

    Materials/Maya – I would think so.  We've been making that bet since summer in the LTP – no luck yet but I still have faith – LONG-term.  

    GILD/Maya – The short story is that ESRX signed an exclusive discount deal with ABBV for a supposedly not-quite-as-effective version of GILD's Hep-C drug, Harvoni.  It's not so much about the single lost sale (hence little positive effect on ABBV), but about the potential new trend of price competition in the biotech space, which is good for consumers but bad for the manufacturers.  

    Services/StJ – I think they are jumping the gun a bit to the downside.  Keep in mind, price is not so relevant in this case, the demand for 90Mbd is still there and it still takes X amount of rigs to drill 90Mbd – the price of the oil is not really a major factor.  The rigs will be shut down in expensive fields and moved to less expensive fields but, on the whole, the rigs are still needed somewhere.  

    1,200 on /TF – I love this game!!!  You know that's going to be bouncy – don't be greedy!  

    Lined up with laggard 17,975, 2,077 and 4,280.  Break below 4,280 and 2,075 signals next leg down (and 1,200, of course).  

    OIH/Tshroy – See above, I think oil is done going down (in fact our /CL longs are now up $700 at $56.20 already).  

  28. All:  There  is more to the GILD story than just the ESRX deal.  The EU has price controls, and ABBV can move that market where the EU can then somehow buy the HepC drug for a discount.  Something GILD told the EU to stuff it, effectively shutting down that market.  This could have a long term affect on EU pricing, thus, ABBV gaining a huge share the EU.  With JNJ, MRK and BMY also in the race, as I have said…it will be a pricing thing, no matter which one is 'better/faster/etc'.  They all "work".

  29. Phil/Pharmboy,

    On GILD: would you recommend a sale of the 2017 55P, or is there too much price control/competition in this hep-C space….thanks for the help as always..

  30. From Bloomberg, Dec 23, 2014, 9:34:19 AM

     A Home Depot Inc. store in Emeryville, California. Photographer: David Paul Morris/Bloomberg

    The Dow Jones Industrial Average rose above 18,000 for the first time as faster-than-forecast growth in gross domestic product boosted confidence in the economy as the Federal Reserve pledges patience with interest rate increases.

    To read the entire article, go to

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

  31. From Bloomberg, Dec 23, 2014, 9:19:14 AM

    A Tesla Motor Inc. associate works on the Model S electric car at the company’s factory in Fremont, California, U.S., on Wednesday, April 11, 2012. Photographer: David Paul Morris/Bloomberg

    The U.S. economy roared into overdrive in the third quarter as consumer and business spending fueled the biggest expansion in more than a decade.

    To read the entire article, go to

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

  32. From Bloomberg, Dec 23, 2014, 7:54:52 AM

    Ice sits on a valve control wheel connected to pipe work at OAO Gazprom’s Bovanenkovo deposit, a natural gas field near Bovanenkovskoye on the Yamal Peninsula in Russia. Photographer: Alexander Zemlianichenko Jr./Bloomberg

    Total SA (FP) and its partners will use a record 16 ice-breaking tankers to smash through floes en route to and from the Arctic’s biggest liquefied natural-gas development.

    To read the entire article, go to

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

  33. From Bloomberg, Dec 23, 2014, 12:00:23 AM

     (Bloomberg) — Geoff Lewis, Hong Kong-based global market strategist at JPMorgan Asset Management, talks about the outlook for the crude oil market and energy companies. He speaks with Angie Lau and Rishaad Salamat on Boomberg Television’s “Asia Edge.” (Source: Bloomberg)

    The oil price decline of 2014 upended the geopolitical chessboard. Worth watching in 2015 will be who can recover and dominate play — OPEC, Vladimir Putin or U.S. shale drillers.

    To read the entire article, go to

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

  34. From Bloomberg, Dec 23, 2014, 2:00:03 AM

    Virtually worthless?

    It’s been a bad year for the Russian ruble and a terrible 12 months for the Ukrainian hryvnia. But it’s been a catastrophic 2014 for Bitcoin, the virtual currency. While acknowledging that my currency forecasting prowess means I’m driving a desk rather than tanning on a beach, the gyrations do seem to offer some valuable lessons .

    To read the entire article, go to

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

  35. From Bloomberg, Dec 23, 2014, 10:33:35 AM

     Russia’s central bank is seeking to ease pressure on the ruble, which has depreciated 40 percent against the dollar this year, spurring deposit outflows and a move into dollars and euros. Photographer: Andrey Rudakov/Bloomberg

    Russian lawmakers pushed through more measures to restore faith in the banking system after the ruble’s collapse forced the biggest bank rescue this year.

    To read the entire article, go to

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

  36. From Bloomberg, Dec 23, 2014, 5:22:56 AM

     Opposition Leader Alexey Navalny, who says the trial is staged, has used social networks to invite his supporters to a “popular gathering” on Jan. 15. Photographer: Alexander Zemlianichenko Jr./Bloomberg

    The blocking of a Facebook Inc. (FB) page promoting a Russian opposition rally highlights the challenges the social network faces as President Vladimir Putin cracks down on the Internet amid a looming economic downturn.

    To read the entire article, go to

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

  37. From Bloomberg, Dec 23, 2014, 8:06:52 AM

    Here’s an early Christmas present for the economists of Wall Street.

    To read the entire article, go to

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  38. SWIR – has morphed into a crazy MoMo….it is grt for once to be on the right side of a Momo….I reckon this beauty will be swallowed by one of the big boys pretty soon

  39. From Bloomberg, Dec 22, 2014, 7:11:49 PM

    Patrick Kron, chief executive officer of Alstom SA. Photographer: Chris Ratcliffe/Bloomberg

    Alstom SA (ALO) executives won several billions of dollars worth of business in Saudi Arabia a decade ago by making at least $49 million in illegal payments in part through middlemen the company called “Mr. Paris” and “Quiet Man.”

    To read the entire article, go to

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

  40. From Bloomberg, Dec 23, 2014, 11:07:56 AM

     New York traffic. Photographer: Mark Genney/Getty Images

    Planning a trip in the eastern U.S. this holiday season?

    To read the entire article, go to

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

  41. From Bloomberg, Dec 23, 2014, 11:04:51 AM

    German 10-year yields were about three basis points from a record low, outperforming higher-yielding peers, as Greece’s failure to elect a president boosted the anti-austerity opposition’s chances of ousting the government.

    To read the entire article, go to

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

  42. From Bloomberg, Dec 23, 2014, 10:46:56 AM

    Dec. 22 — Canaccord Genuity Securities’ Tony Dwyer and Bloomberg economist Carl Riccadonna discuss the state of the U.S. housing market with Bloomberg’s Trish Regan and Matt Miller on “Street Smart.” (Source: Bloomberg)

    Remember when nobody wanted to touch U.S. subprime-mortgage debt? That’s just a distant memory as it delivers some of the bond market’s best returns.

    To read the entire article, go to

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

  43. From Bloomberg, Dec 23, 2014, 10:39:07 AM

     Oleg Nodelman, the founder of EcoR1 Capital LLC, named his biotechnology focused investment firm after an enzyme important in cloning. Photographer: Amanda Gordon/Bloomberg

    Oleg Nodelman draws on an eclectic group of ideas for investing inspiration.

    To read the entire article, go to

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  44. From Bloomberg, Dec 23, 2014, 9:21:09 AM

     Gazprom needs rubles for investments and understands that these actions help stabilize the exchange rate, Deputy Chief Executive Officer Alexander Medvedev told reporters in Moscow yesterday. Photographer: Francois Guillot/AFP via Getty Images

    The ruble advanced after the Russian government called on some companies to sell foreign exchange received from exports, while tax payments boosted demand for the currency.

    To read the entire article, go to

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

  45. From Bloomberg, Dec 23, 2014, 8:30:01 AM

    Orders for U.S. durable goods unexpectedly declined in November as corporate investment stagnated and demand weakened for military equipment.

    To read the entire article, go to

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

  46. From Bloomberg, Dec 23, 2014, 10:20:43 AM

    Dec. 23 — U.S. new-home sales unexpectedly dropped 1.6 percent in November to a four-month low. The decline to a 438,000 annualized pace followed a 445,000 rate in October that was weaker than previously estimated, Commerce Department figures showed today in Washington. Olivia Sterns reports on Bloomberg Television’s “Market Makers.” (Source: Bloomberg)

    Purchases of new U.S. homes unexpectedly declined in November to a four-month low, underscoring a lack of momentum this year in residential real estate.

    To read the entire article, go to

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  47. From Bloomberg, Dec 23, 2014, 11:07:18 AM

    Gold futures fell for the second straight day as the U.S. economy expanded more than estimated, crimping demand for the precious metal as an alternative investment.

    To read the entire article, go to

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  48. From Bloomberg, Dec 23, 2014, 11:02:31 AM

    European stocks climbed for a sixth day amid better-than-expected U.S. economic growth, with energy companies accounting the most for the rally.

    To read the entire article, go to

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  49. From Bloomberg, Dec 23, 2014, 6:16:18 AM

    A pedestrian carries shopping bags while walking along Oxford Street in London. Falling oil prices and slowing inflation are helping to support domestic demand, the main driver of Britain’s economy this year. Photographer: Matthew Lloyd/Bloomberg

    Consumers drove the U.K. economy to a seventh straight quarter of growth in the three months through September as the euro-area slump held back exports and investment plunged.

    To read the entire article, go to

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

  50. From Bloomberg, Dec 23, 2014, 9:59:22 AM

     Consumers are being buoyed by a surge in hiring that’s put employment on course for the biggest gain since 1999, and long-awaited wage growth. Low gasoline prices and little inflation provided Americans with more discretionary income to put toward the holidays.Photographer: Peter Foley/Bloomberg

    The American consumer said farewell to 2014 feeling the most confident since January 2007, indicating a strong start to the New Year for the world’s largest economy.

    To read the entire article, go to

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

  51. From Bloomberg, Dec 23, 2014, 10:14:55 AM

    Plenty of holiday shoppers here in France.

    As the European Central Bank gets ready for quantitative easing, overriding German arguments that buying government debt creates moral hazard in debt-laden countries, it is reacting to the threat of deflation. Yet slow-growing prices aren’t at the heart of what ails the euro area, and QE won’t fix the deeper problems that are.

    To read the entire article, go to

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  52. From Bloomberg, Dec 23, 2014, 9:19:08 AM

    Welcome to the gun show.

    The third issue of “Trigger” magazine, a fledgling editorial product of “Guns & Ammo” features a story on John Hinson, a Civil-War-era vigilante in Tennessee who, the story relates, meticulously assassinated Union Army officers after two of his own sons had been killed and beheaded. The piece is written with unabashed admiration for Hinson’s arbitrary justice:

    To read the entire article, go to

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  53. From Bloomberg, Dec 23, 2014, 10:30:31 AM

    The home office of Doral Bank, the San Juan, Puerto Rico-based lender struggling to meet regulatory mandates, was raided by the FBI in a search for evidence related to “several ongoing investigations,” the agency said.

    To read the entire article, go to

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  54. From Bloomberg, Dec 23, 2014, 12:34:34 AM

    Nice job on Sony. But now what?

    There is little doubt that President Barack Obama meant business when he said the U.S. would respond to North Korea’s hacking of Sony Pictures Entertainment computers. It’s unclear whether or not Monday’s shutdown of the North Korean Internet was part of that response. Regardless, Kim Jong Un’s regime may soon have cause to regret its assault on Hollywood.

    To read the entire article, go to

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  55. From Bloomberg, Dec 22, 2014, 6:12:36 PM

    There’s that pearly white smile.

    The headline out of Friday’s news conference was that the president was happy. Barack Obama’s post-midterm-election scowl was gone, replaced by the wide smile that once charmed the country. Emerging from his bunker, he blithely engaged reporters (all of them women), calling out a “bless you,” when he heard a sneeze.

    To read the entire article, go to

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

  56. XRT is crazy! Up $1.45

  57. If only the US did the same thing with Trip Advisor and definitely with YELP

  58. Good point Pharm – and a good call on the changing dynamics.  

    GILD/Jasu – I think there's a major fundamental change in the business model that needs to shake out – I don't think I'd try to catch the knife just yet. 

    SWIR/Checho – Well they just acquired Maingate for $90M, which was about 7% of their market cap, that's what the pop is about as it was a good cash acquisition.  

    Great job pointing them out earlier this year!  

    Submitted on 2014/04/02 at 12:19 pm

    SWIR/Checho – I don't know too much about them but it does sound like a good space to be in.   They are growing well and dropping more and more to the bottom line and haven't been rewarded for it yet (in the 2014 rally), so an interesting idea:

    A low-risk way to play SWIR would be selling the 2016 $15 puts for $2 and buying the $22.50/30 bull call spread for $2.50 for net .50, which gives you 100% of the upside over $23 and your worst case is you own them at net $15.50, which is a 33% discount to the current price.  I think that's worth 10 of these spreads in the Income Portfolio as we commit to owning $15,500 worth of the stock or making up to $7,500 at $30.  Margin on this spread is very low too

    XRT/STP, Tshroy – I think we should pull the trigger and buy back the March $91 puts at $1.85

  59. TRIP/Rustle – That's great news, this fake review scam is so annoying.  

  60. Phil

    Is that correct on SWIR  ?


  61. And I am but a lonely scientist…I wonder how much these geezers make in figuring out this stuff?

    As to my GLD trade, still holding on with my finger nails, or the nails that I have not chewed off.  Will roll after the first of the year.  I did buy another leg into them at 25c.  FWIW. 

  62. From Bloomberg, Dec 23, 2014, 10:26:14 AM

    Consumer spending rose more than forecast in November as incomes (PITLCHNG) increased and gasoline prices dropped, indicating the biggest part of the U.S. economy is strengthening as the year ends.

    To read the entire article, go to

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

  63. Qcmike / swir – not a new trade idea. Its a trade idea from April 2014. One that seems to have paid off handsomely. 

  64. Good article about future drug pricing here.

  65. pfehl

    my bad


  66. ACHN getting creamed on this news.  The Jan15 15/19 BCS that I (we) were in was up yesterday and I forgot about noting to sell it as I was finishing work.  Today it is down to 40c from the 1.40 entry…. :( . Yesterday it was up to $2!

  67. Phil/XRT, i have the March $100/93 put spread.  purchased for net $4.40.  now would you suggest buying back the 93's?  thanx.

  68. S/Phil – any thoughts on future/growth for Sprint with new programs such as Ting ( coming out to offer inexpensive plans. I have to say i'm tempted. Next phone in the family will probably give Ting a try.

  69. Pharm/EPZM – Are you accumulating below $15 (IPO Price)?

  70. jeddah – I am not playing/adding any biotechs right now.  Rotation is going to be heavy out of many, and thus the new high fliers  and IPOs will get hit.  RCPT is one that I am pondering, as they have a MS drug that is much like NVS and BIIB. And as I look, they are down >10%.  This is going to be a blood bath for those 'me too' companies….and will not help valuations at all.  BlueBird is in a space buy themselves, as is Biomarin.  PLX should also benefit to a great extent in both price and biosimilars market spaces. 

  71. And what BAC said! 

    SWIR/QC – That was our trade from April, nice 1,400% gain.  

    And what Pfehl said.  

    Geezers/Pharm – I think the non-owners generally get screwed.  Maybe make millions but that drug alone was worth $20Bn to GILD, so a crappy percentage for the guys who actually do the work. 

    Pricing/Pharm – Think it's a good enough reason to short IBB?  

    Miles to fall…

    S&P puts Russia on negative credit watch – already at junk so sub-junk.  

    XRT/Lunar – Sure, same logic.  If we assume the spike doesn't hold then it's a good time to buy back or, if it does hold, we may want to sell higher puts and roll to a better position anyway.  

    S/Scott – I can never get a good handle on them.  Not sure if it's "good" that they offer inexpensive plans and end up the low-margin provider.  Good if you are a consumer but maybe not as a shareholder.  In my town, which is generally 80%ish, we have a T-Mobile store and a Sprint store that are always dead with VZ and T always packed to the point where people ask me why TMBLP and S even bother – I don't consider that a strong sign.  When your reputation sucks, cutting prices only proves you deserve it to a lot of people.  

    Sprint -2% AH; Moody's downgrades debt rating

    FCC set to fine Sprint $105M for cramming charges

    Sprint plunges to new post-SoftBank lows on downgrade

    Can Cutting Subscriber Bills In Half Solve Sprint's Problems?

  72. Cancer is going to be another area where pricing is going to be called into question, and a company better have a case for their mechanism of action being different than another.  Time will tell there.

  73. Thx Pharm.. great insight.  Would you avoid SGEN too?  they have been beaten down for a while but may continue down with the rest of the herd?

  74. DXD/Phil – I have a handful of Jan2015 $22 calls, now down ~50%. Tryign to decide if should just close them, or roll them down to Jan $21 at .33 for the roll. What I think (but can't know) is that the market will be inflated through end of year..just hold it's place for the most part, and then new money starts coming in with the new year, and up and away it all still goes..

  75. Russia/Phil

    If they are on the negative credit watch, well that should be good for another 1000 on the dow.  Maybe Greece will be in trouble again too so we can climb 1500.  And if Germany and China slow down even more, 21,000 here we come.

  76. SGEN is a different scenario in my mind.  They have competition in the cancer space with the PD-1 checkpoint inhibitors and JUNO CAR-t, but they also have novel areas as well. 

    All of this does put a damper on the entire sector. 

    GWPH….lol.  Smoke weed.  Don't take a pill. 

  77. DXD/Scott – I think I'd wait until Friday, at least, before upping a commitment for just 3 weeks.  

    LOL Rustle, I think you are really getting the hang of how these markets work.

  78. S / Phil – They seem to be lacking ideas… T-Mobile is much smaller than VZ and T, but they seem to have a good marketing strategy that is working better than Sprint it seems.


  79. S/phil,stj – thanks.. wouldn't be buying them right here in any case. looks like a still falling knife. (kind of like GILD).

  80. SNA – just another one of many strong stocks, totally off my radar, that just keep going up and up and up and up… 

  81. For the not to weak at heart GMCR my new strangle June 15 160/105 c/p for a credit of 10.27 just go for max two off . PM margin 1350.00 for two options

  82. Marks/Scott – Good stuff.  

    Ideas/StJ – That's what people with no ideas do, they cut their prices.  TMobile had some really good deals on IPhones and trade-ins and cancelling plans – I think that's why they popped.  Almost got me to go to the TMobile store, in fact…

    SNA/Scott – I prefer the ones that are down.  Costanza is a good model but hard to build a fund around (makes for tough prospectus wording). 

    GMCR/Yodi – Giving them 2 earnings periods to break you but seems like a reasonable range. 

    • Several independent movie theater complexes have announced that Sony Pictures (NYSE:SNE) will make The Interview available for Christmas Day screenings.
    • There has been no confirmation from the movie studio.
    • Some reports last week indicated that insurance coverage was a factor in the decision by Sony on pulling the movie entirely. Under that assumption, any partial screenings of the film disproportionately drops the amount of coverage Sony would have for a loss due to the hacking incident.
    • Halliburton (NYSE:HAL) yesterday disclosed details of its sometimes-tense courtship of Baker Hughes (NYSE:BHI), showing that the companies had to bridge a $3.3B gapbefore reaching agreement for HAL to acquire its smaller rival for cash and stock that valued BHI at $34.6B.
    • BHI wanted $36.1B in stock and cash, which was 10% above HAL’s initial offer of $32.8B, and the companies eventually met in the middle during final, over-the-weekend negotiations.
    • Separately, an email yesterday from BHI CEO Martin Craighead to all employees did not mention layoffs but noted serious business concerns, saying pricing pressure on its products and services will intensify next year, and "market conditions will demand tough decisions from us in the months ahead.”

  83. GMCR I Like the spread and gives me two free tickets to Germany. 

  84. Having as well an eye on NFLX set up one for my son in Aug14 490/300 today showing a credit of 2344.00 due in Jan15! My new one Jun15 420/240 for a credit of 17.72 Comments welcome.

  85. The above is a matter of patients like a Praying Mantis.

  86. Any good candidates for "January Effect" stocks ?  I'm looking at LOCO and EYES, both IPOs earlier this year.  Both were hot IPOs and both stocks are down more than 50% from their highs.  May not have bottomed, so will look to scale in ala Yodi. :-)

    Would love to hear some other ideas.


    Might be another good bounce candidate (speculation).  That's a pretty optimistic report, but who knows.

    Stock catching some bids.

  88. 12/22/2014

    Cenovus Energy Inc., Calgary, is trimming its capital spending in response to falling crude prices and will slow development of some of its thermal oil sands projects in Alberta. The company has budgeted capital spending for 2015 of $2.5-2.7 billion (Can.), compared with an expected $3-3.1 billion this year. It based the 2015 budget on a price of $77/bbl (US) for West Texas Intermediate crude oil and a discount against WTI for West Canadian Select crude, the marker for Canadian bitumen, of $16.50/bbl. The budget assumes a futures price for natural gas on the New York Mercantile Exchange of $3.95/MMbtu.

  89. January effect/Albo – Well, the January effect is usually the re-buying of stocks after selling for tax purposes into Dec so you want to look for stocks that take inexplicable dips into the year's end (not many at the moment, just 6 of the S&P 500 are red today).  GTATQ is a total wild card at this point.  

    18,004, 2,081, 4,287 and 1,199 in case anyone's keeping track.  

    Oil just tested $57.50 and shame on anyone who wasn't happy with $2,000 per contract on /CL for the day!  

    CAPEX/Sibe – We'll have to take a close look at earnings to get a handle on how deep the cutbacks will be.  

    • Continental Resources (CLR +4%) shares are up nicely after the company announced plans to cut 2015 capital spending by 40% while increasing production by as much as 20%.
    • Even though Harold Hamm is pulling in his horns a bit after monetizing all of CLR's crude oil price hedges in late October and early November – only to see crude prices continue to fall – the CEO remains calm and confident about the future of the oil business: "I’ve seen this six or seven times,” he says.
    • Guggenheim analysts raise their share price target to $48 from $44, as CLR's growth rate guidance is higher than expected considering the lower capex; the firm says expectations for SCOOP drilling and cost efficiency improvements are notable.
    • Stifel maintains its Buy rating but cuts its target to $50 from $55, as the firm estimates oil would have to average $70/bbl for CLR to achieve cash flow neutrality in 2015 (

    New-Vehicle Sales To Jump Nearly 10 Percent In Best December Since 2004; Kelley Blue Book Forecasts 16.9 Million SAAR In 2015


    Sales Volume 1

    Market Share 2




    YOY %



    YOY %

    General Motors (Buick, Cadillac, Chevrolet, GMC)







    Ford Motor Company (Ford, Lincoln)







    Toyota Motor Company (Lexus, Scion, Toyota)







    Fiat Chrysler (Chrysler, Dodge, FIAT, Jeep, RAM)







    American Honda (Acura, Honda)







    Nissan North America (Infiniti, Nissan)














    Volkswagen Group (Audi, Volkswagen, Porsche)







    Total 3











    Sales Volume 1

    Market Share




    YOY %



    YOY %

    Full-Size Pickup Truck







    Compact Car







    Mid-Size Car







    Compact SUV/Crossover







    Entry-level Luxury Car







    Total 2








  91. Low gas prices driving people right back to Trucks and SUV's.  

    Electric cars about 10,000!  surprise

  92. GTATQ flying on that news, back towards 0.50 from 0.38.  

  93. Your Corporate Media at work, washing brains since 1986:

    In a shameful display of race baiting and deceptive editing FOX "News" has been caught red-handed trying to make protesters that were chanting "We won’t stop,…


  94. Dow 18,000:

    A trader works on the floor of the New York Stock Exchange.

    From Ukraine to Ferguson, from the Ebola epidemic to the chaos in Syria, the year’s most gripping photographs.



    Woops, and there goes /ES – good time to short /YM on that 18,000 line (tight stops over).  

  95. The WMT $80 calls stopped out today.  FYI. 

  96. There's that DOW STOCK GUY again! :)

  97. WMT/Palotay – I don't stop out on just a spike up.  Especially on a low-volume day.

    588/DC – I know!  That's why I thought it was funny, he was on some web site under an 18,000 headline. 

  98. Well, for those of you taking tomorrow off, have a Wonderful Christmas Time!  

    Here's what me and my girls like to watch on Christmas Eve:

  99. I was at Mall of America yesterday shopping & looking at what was going on. Many, many stores empty ie COH, M & the designer clothes sections were completely empty in  JWN. The rack of JWN was busy but the lower priced articles were of such poor quality no one seemed impressed & very few lines on checkout. The cashmere wraps etc were paper thin from China, of course. The teens are buying only name brand and like Zumz (seems to be popular.) "Noone buys from LLBean," I was told & talk about name conscious. Sears was busy & the stores were poorly manned & lines were long. Fwiw-shopping with a sixteen year old grandson is interesting. The Sears was for children at the Woman's shelter & they wanted Barbie, Frozen & football stuff for the boy. My brother died in Calif last night so I'm in slow motion today. Take care everyone.

  100. Poorly manned/Pirate – I saw a lot of that this year.  I was explaining to Jackie how I'd rather pay 30% more at Macy's or Bloomingdale's, where they have actual staff, because it essentially costs me $300 an hour to wait in line so she now gets the idea that I refuse to go to any store with a line.  To some extent, I think a lot of the retailers are "showrooming" their own stuff – expecting people to browse but then order on-line.  When I make the effort to go to a store, I expect to be taken care of – otherwise I would just stay home and order from AMZN.  

    Also, it is stunning to me that, 10 years later, no other stores have copied the Apple Store by giving roving check-out systems to their sales people.  The efficiency level of an Apple store compared to the big-box retailers is like a factor of 10 but no one is adopting it, though Bloomie's has a lot of kiosk registers that apparently any wondering saleperson can use and Macy's was so empty that there were about 1 staff person per customer anyway…

    So sorry about your brother, best to you and the family.  

  101. Merry Christmas all.

  102. /TF jammed back to 1,200 at the close but I'm off to the mall so no play for me.  /NQ dove back to 4,277, 17,980 on /YM and 2,078 on /ES and, most importantly, NYSE 10,952 is FAIL!  

    Later all. 

  103. Sorry for your loss Pirate!

  104. Phil/Sectors,

    Which sectors have the potential of doing well in next year? happen to see sector performances and TQNT in semi-conductor seem to have done well. but they are having negative cash flows??

    thanks as always.


  105. If we're really having 5% GDP growth, then you'd think materials will begin to catch up a bit.  Energy should be good for a turnaround too.  I'd need to check some charts to find others. 

  106. Thanks for your kind thoughts. We had a lot of fun growing up & I treasure those memories.  Forgot to mention that COLM was busy. Being a skier my grandson likes their stuff too,  but REI is a favorite.



    Sorry to hear about your brother

    I know you will find comfort in the memoirs 

    Best to you and your family




  108. pirateinvestor - Sorry to hear about your brother.  I know it's a tough time for you and your family. 

  109. Pirate,

    Loss for your loss. 

  110. That Dow Guy 588's picture, a different one,  covered a half page  in the San Diego paper last Sunday. Pic was labeled "GettyImages"  They sell all kinds of photos for all kinds of uses. Hope he gets a buck or two every time that runs.

  111. Yodi, always interesting with your picks, keep it up

  112. pirate, sorry to hear about your brother

  113. Burr, waiting for that elusive spike up to buy some UVXY puts, very wide spreads – how do you manage your entry, closer to the asked? 

  114. From Bloomberg, Dec 23, 2014, 12:01:00 PM

    UBS Group AG is flagging risks from China’s $1 trillion worth of unhedged foreign debt as forecasters see bets against the greenback unwinding in 2015.

    To read the entire article, go to

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

  115. From Bloomberg, Dec 23, 2014, 6:52:08 PM

     Damage to wingtips and tails is a common outcome when planes touch while taxiing, and that was the case in the LaGuardia episode. Photographer: Andrew Theodorakis/Getty Images

    Fog and rain delayed thousands of pre-Christmas travelers at U.S. airline hubs, while scores of other passengers were inconvenienced when their jet clipped another plane at New York’s LaGuardia Airport.

    To read the entire article, go to

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

  116. From Bloomberg, Dec 23, 2014, 4:24:55 PM

    Keurig Green Mountain Inc. will recall about 6.6 million of its Keurig MINI Plus brewing systems in the U.S. and 564,000 in Canada, according to the U.S. Consumer Product Safety Commission. Source: Keurig/CPSC

    Keurig Green Mountain Inc. (GMCR), a maker of home-brewing machines for beverages, is recalling more than 7 million coffee-making systems after reports of people being burned by hot liquid that sprayed from the devices.

    To read the entire article, go to

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

  117. From Bloomberg, Dec 23, 2014, 7:25:21 PM

    Japan’s Topix index rose for a fourth day following a public holiday as the yen fell after the U.S. reported the fastest economic growth in 11 years.

    To read the entire article, go to

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

  118. From Bloomberg, Dec 23, 2014, 6:49:24 PM

    Crude traded near $57 a barrel in New York after rebounding as economic growth surged at the fastest pace in more than a decade in the U.S., the world’s biggest oil user.

    To read the entire article, go to

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

  119. From Bloomberg, Dec 23, 2014, 6:14:22 PM

    Alibaba Group Holding Ltd. (BABA), China’s biggest e-commerce company, fell in New York, extending the first monthly decline since its September debut as an agreement preventing early investors from selling their shares expired.

    To read the entire article, go to

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

  120. From Bloomberg, Dec 23, 2014, 6:00:00 PM

    Huang Haidong misses the flush times in 2010 when his refinery in eastern China couldn’t produce diesel fast enough to fill the trucks lined up outside.

    To read the entire article, go to

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

  121. From Bloomberg, Dec 23, 2014, 11:01:00 AM

     In a closed-door speech made at Tsinghua University in May, Zhou Xiaochuan, governor of the People’s Bank of China, said forward guidance adopted by the Fed when it was running out of policy options may not serve China, which still has room to send clear messages via policy moves. Photographer: Brent Lewin/Bloomberg

    The People’s Bank of China is turning to a hidden hand as it seeks to stimulate the world’s second-largest economy without worsening debt risks.

    To read the entire article, go to

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

  122. From Bloomberg, Dec 23, 2014, 7:02:04 PM

    Yes, indeed, Christmas.

    Well, folks, start popping that corn. Sony Pictures announced today that “The Interview” will come out in theaters on Dec. 25. “We have never given up on releasing ‘The Interview’ and we’re excited our movie will be in a number of theaters on Christmas Day,” Michael Lynton, chief executive officer of Sony Entertainment, said in a statement. “At the same time, we are continuing our efforts to secure more platforms and more theaters so that this movie reaches the largest possible audience.” So this movie is going to be released, in at least some theaters, and possibly on video on demand.

    To read the entire article, go to

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

  123. From Bloomberg, Dec 23, 2014, 12:59:24 PM

    Enemy Number One.

    Dave Weigel at Bloomberg Politics got the scoop: Congressional Republicans have decided to oust the head of the Congressional Budget Office, economist Douglas Elmendorf, despite an impressive show of support for him from many conservative economists.

    To read the entire article, go to

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

  124. Nasdaq hurt by the biotechs today!

  125. The Obama Boom – If Obama were a Republican with these numbers, the GOP would be renaming airports after him:

    In addition, the top 1% never had it better! Their wealth has increased 400% in 30 years, they own a larger portion of the total wealth than ever in history.

    But that Commie also made it possible for 7M people to get health insurance by raising taxes of the top 1%. He also wants to raise the minimum wage to what it was in 1980 inflation adjusted and wants to talk to Cuba! And wants fight climate change. So he is an evil dictator…

  126. Last night I went to meet my wife for dinner in Ann Arbor (east side). There was very little traffic on what is normally a very busy area-especially three days before Xmas. Washtenaw Avenue is full of smaller outdoor retail mini-malls with restaurants and retail (Whole Foods, Barnes & Noble, Burlington, Nordstrom's Rack Lululemon, etc.).   I stopped at Nordstrom's Rack and saw very little traffic in store.  I bought a few things and went through the checkout within five minutes. We later went (8:30) to one of our favorite eateries and there was only 5-6 tables being used.  I am not sure if it was the time of night, but the traffic I encountered was remarkably sparse in this part of my town.  

    Note:  I returned to Nordstrom's Rack on the following day to pick up something my wife was looking at the previous day that was under key and lock. I searched all over for an associate to help me secure what I wanted; there was no one on the floor which is surprising for NR!  I finally found a young women in the dressing area and asked if they were short-staffed today and she said yes.  

  127. Sjl, good one to send to my conservative friends

  128. Joe Cocker, dead at 70. One of the greats

  129. Phil,

    Why didn't BHI react to news they have reached terms with HAL?

  130. Good morning all members,

    Wishing you all a happy fest of seasons and a healthy and successful new year.

    Will be tracking to Germany soon again to go for my next knee op. So will be watching the market for me at a better time as I have free during the day and only trade in the later afternoon and evening hours.

    All the best Yodi

  131. Happy Holidays!

    Best to you all and wishing everyone a safe holiday for you and your families!  Good luck Yodi with your travels, operation, and trading..

  132. Good morning!

    As you can see from the Nikkei, today is not a day to be taken seriously – nothing but manipulated, low-volume BS across the World.  

    Hang Seng would have finished red but they closed at noon while India gave up their whole 300 points in the last hour, when no one was looking.  

    China Stocks Fall on Bets Government Taking Steps on Bubble Risk. China’s stocks fell, extending the benchmark index’s biggest loss in two weeks, amid speculation the government is taking measures to cool the world’s best-performing major stock market over the past month. Citic Securities Co. and Haitong Securities Co., the nation’s biggest securities firms, slid more than 3 percent. Some brokerages raised the threshold for margin trading and short selling to control risks, the 21st Century Business Herald reported, while data showed new stock-trading accounts dropped 29 percent last week. China Life Insurance Co. and China Minsheng Banking Corp. slumped more than 3 percent to drag down a gauge of financial shares by the most among industry groups. The Shanghai Composite Index fell 0.4 percent to 3,020.84 at 9:47 a.m., after plunging 3 percent yesterday.


    China Brokers’ Profit Seen at Risk From Government ActionChina’s surging stock market is raising the prospect of government action to prevent an equities bubble, a potential threat to brokerage earnings that are projected to hit a seven-year high this year. UBS Group AG says regulators could act to limit the use of credit in buying stocks. In 2007, authorities raised a trading tax following a sixfold increase in the Shanghai Composite Index over two years. The securities regulator this month cautioned investors on buying shares and started inspecting some brokerages’ margin finance businesses. ?

    Some brokerages raised new account thresholds for margin trading and short-selling businesses to control risks, the 21st Century Business Herald reported.  The Shanghai index’s 30-day volatility reached the highest level since May 2010, while trading volumes were 9.2 percent below the 30-day average. The gauge’s 14-day relative strength index, measuring how rapidly prices have advanced or dropped during a specified time period, reached 79.6 this week. Readings above 70 indicate a price may be poised to fall.

    China’s Shadow-Banking Boom Is OverTighter Government Rules, Jump in Stock Market Curb Informal-Lending Sector. Following years of explosive growth, China’s shadow-banking industry is experiencing a sharp slowdown after Beijing tightened its grip on the sector, which has been a key source of funding for the economy but also has added to rising debt levels and other risks in the financial system.

    • Uber CEO Indicted in Seoul

      South Korean prosecutors have indicted Uber Technologies Inc. Chief Executive Officer Travis Kalanick and his Korean partners for violating a public-transport law.

    Over in Europe, Italy and Germany are closed with the rest doing a half day, but check out France's half day – it's a good thing they stopped it! :

    European Shares Mixed

    This is how you get distorted positive news in the midst of a crisis:  Russians Race to Secure Mortgages Before Costs SpiralRussians are racing to take out mortgages on concern that borrowing costs will rise further after the ruble’s weakness prompted the central bank to increase interest rates. The number of people applying for mortgages at Bank VTB 24, a retail unit of state-controlled VTB Group (VTBR), almost tripled in the first two weeks of December compared with the November average, according to Andrey Osipov, head of the Moscow-based bank’s home-loan department. The bank is lending as much as 2.5 billion rubles ($46 million) each day, he said. ?

    Russian Bank Squeeze Captured by Gap in Rates: Chart of the DayThe rate at which Russian banks borrow from each other is the highest on record relative to the central bank’s benchmark as policy makers squeeze liquidity to boost the ruble and trust between commercial lenders deteriorates.

    U.K. Recovery Slower Than Previously Thought

    The U.K. economy has grown less since recession struck in 2008 than previously thought, after fresh data showed economic growth in the first half of this year was weaker than earlier estimates implied.

    Belfast Closes In on Setting Own Corporate Tax

    • MBA Mortgage Applications:
    • Composite Index: +0.9% vs. -3.3% last week.
    • Purchase Index: +1% vs. -7%.
    • Refinance Index: +1% vs. flat.
    • Fixed 30-year mortgage rate decreased to 4.02% from 4.06%.

    The Fed is heading for another catastrophe. America’s Federal Reserve is headed down a familiar — and highly dangerous — path. Steeped in denial of its past mistakes, the Fed is pursuing the same incremental approach that helped set the stage for the financial crisis of 2008-2009. The consequences could be similarly catastrophic.

    • Giving up some of the previous session's gains, crude prices are on the decline after trading near their highest prices in almost two weeks.
    • The gains yesterday came as revised Commerce Department data reported U.S. GDP surging 5% in Q3, its strongest growth in more than a decade.
    • Brent crude is down $0.39 at $61.30 after settling up $1.58 in the previous session. WTI is down 0.7% at $56.70, paring a 3.4% gain yesterday.

    20 Stunning Facts About Energy Jobs In The US

    Coca-Cola(KO) Is Reportedly Cutting Jobs, Canceling Parties, And Telling Executives To Stop Taking Limos

    First Oil, Now Earnings Revisions Scream Recession

  133. Getty/Gerry – I think the whole point to using Getty is you don't have to pay for them so more and more, web publishers only want to use Getty images.

    Obama/StJ – Poor guy gets no respect.  

    Shopping/DC – My trip to the mall was very uneventful yesterday.  We got a parking space in short order and it wasn't very crowded – kind of like a normal Saturday on a Tuesday.  Pandora was the most crowded store in the mall, they actually had a line to get in – AAPL didn't have a line but was busy but the poor MSFT center had twice as many salespeople as customers, which made it creepy as they all hover over the few people who were looking at the stuff.  Even worse for MSFT, they had 6 big screes hooked up to XBoxes and only two were being played!  

    BHI/Nols – There's no change, just a clarification of how the deal was arrived at.  I like it because it solidifies the rationale and indicates that HAL is unlikely to let it go but it will be months before anything really happens (hopefully when oil gets stronger in the spring).  

    Merry Christmas to you too Yodi, Nols and everyone else, of course!  

  134. Phil,  Good Morning.  I hate to make you talk shop on Christmas Eve but I was poking around and came across 2017 BHI $55/$57.5 BCS for .60.  This is a $1.90 return (316%) and seems very likely to me.  What am I missing?  Could sell the $45 or higher puts to cover the cost and then some.  Bad idea?

  135. No, it's a fantastic idea if it fills, good catch!  I wouldn't sell puts, you can do that if it goes bad but, if not, then what's wrong with 316%?

  136. Sibe- I think you got something wrong. I am getting a price of 3.90 (3.30/4.50 bid/ask) so I may be missing something, but thats what I see on TDAmeritrade