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$20 Trillion Tuesday – Our National Debt Grows as Fast as our Markets

Dow 22,000, S&P 2,500, Nasdaq 6,000, Russell 1,420 and National Debt $20Tn.

It's an interesting combination.  American's also have $18.5Tn in personal debt, that's been climbing at a rate of about $500Bn per year this century (up 124% since 2000) and accounts for 2.5% of our GDP, which is growing at less than 2% so the ENTIRTY of our economic growth is debt-financed.  Even more so becasue our Government is going $1Tn per year into debt too, that's 5% of our GDP ($19.3Tn) in Government debt and that does not include the $500Bn a year the Fed has been adding to its balance sheet through the continuing QE program – that's another 5%.

So, 12.5% of our MAYBE 3% GDP growth is nothing more than deficit spending which means the real economy is DOWN 9.5% if, like Greece, we were forced to balance our budgets.  Of course, balancing our budgets is out of the question because your share of the National Debt is $208,079 and, if you have a family, we're looking over $800,000 just to pay off your Government's share – before you even begin to do something about your own mess.

Logically then, this debt is uncollectable.  Most people don't have $800,000 and aren't likely to get it in the near future.  Even if we made the Top 10% pay 10x, that's "$8M" for our top 1M families, which would be $8Tn but only the Top 0.01% have that kind of money and good luck getting President Trump to pay that bill!  

Image result for national debt by country 2016Where is the end game here?  And it's not just the US, of course.  In fact, our debt to GDP ratio is a relatively calm 104% while China and Japan are in the 250% debt to GDP range though, "officially", China doesn't have much debt – which makes it much scarier when they are in denial.

What can't be denied is that the US has 29% of the World's debt and we're also about 25% of the World's GDP – so not completely out of proportion but it's still a huge problem for Global Lenders.  Japan is really out of control, holding 20% of the World's debt against 6% of the GDP.  

Getting back to the debt clock above, the key figure to watch is the US Federal Spending, which is just about to cross the $4Tn mark while Federal Tax Revenues are $3.3Tn, leaving us about $700Bn short but that's under the current Tax Plan, which Trump wants to change to collect far less money.

At the same time as the Government wants to stop collecting taxes from the richest Americans and the Corporations they own, they are opening up the debt ceiling to allow more borrowing AND the Fed is looking to raise interest rates – all of which are factors that can drive up our borrowing costs.  Greece borrowed more and more money at low rates and only ran into trouble when the lending rates skyrocketed and they could no longer pay their debts.  In the case of the US, we only paid $266Bn on $20Tn in debt in fiscal 2017 (Oct 1st – Sept 30th), which is an average of 1.33%.  We can keep doing that forever, right?  After all $266Bn is "only" 6.6% of our Federal Spending.  However, we are paying the lowest rate of interest since 1945 and the historical average is closer to 5%:

5% would be $1Tn in interest alone, each year, in addition to the $700Bn a year we already overspend by.  So this is what ComradeTrump is about to do to your country:  

  1. He will collect less taxes from wealthy Americans and Corporations, $500Bn to $1Tn less – depending on the estimates
  2. He will push to raise the debt ceiling to accomodate the tax cuts
  3. He will NOT meaningfully cut expenses (it's simply not possible) 
  4. That will cause the US's debt rating to go down, which will increase our borrowing costs
  5. An additional $750Bn in interest and $750Bn in tax cuts will double our National Debt in 10 years

That's the 5-step plan to destroying this country and it's not the sort of thing we'll be able to recover from – unless you have $1.6M under your mattress to pay off the 2027 debt bill.  From there, it only gets much, much worse and, if rates spike up, like they did after WWII FOR THE NEXT 40 YEARS, then at 10% interest (1/2 of what Greece was paying) with $40Tn in debt, the interest on the debt alone ($4Tn/year) would be more than the Government is currently collecting in tax revenue.

So, what then?  Do we double taxes or continue to ignore the debt?  This isn't Global Warming folks, this isn't something you can ignore so your Grandchildren can endure lives of suffering at your expense – this is going to happen in the next 10 years and that doesn't mean you have 10 years – it will simply get incrementally worse each year for 10 years until it's completely unsustainable.  

Image result for japan debt service tax revenue 2016The "good" news is, this thing won't take us by surprise.  It's very likely that whatever will happen to us will happen to Japan first.  They are already 250% of their GDP in debt and, if not for the ultra-low interest rates, their interest payments would already be out of control.  Japan is 1,000,000,000,000,000 Yen in debt – that's on QUADRILLION Yen and it already takes 43% of the tax revenues to service it.  How is that possible?  Well they just go further and further into debt, borrowing money to pay the interest on the debt they don't have enough money for.  We do it too – it just doesn't seem as severe – yet….

As you can see from the chart, Japan, in the 80s, to boost their economy, cut tax revenues and made up for it by issuing bonds (debt) and, unlike we are being promised, the revenues did not increase – they went lower and lower as Corporations and wealthy individuals found more and more loopholes while expenditures rose (especially interest on debt, which went from the 6% we have now to 43% they have now) and now the Government has to borrow as much money as they collect in taxes and they are still 15-20% of their GDP short every year.  That would be like us having a $3-4Tn annual shortfall on top of paying $4Tn in interest while the Government spends $4Tn a year to keep the country running.  How long can it last?  Watch Japan closely and we'll have the answer.  


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  1. Good Morning,  

    LB initiated at outperform by Bernstein,  Price target announced at $57.00  per share. 

  2. Another dip to but it seems – number 47 and counting it seems!

  3. Oil… how bout that…bought more USO calls yesterday morning out to Sept 29. 

  4. More than play money now. Doesn't the drop in the dollar boost oil? Still a $6 spread, new normal?

  5. AAPL – big day today….  there have been lots of negative articles in the last 3/4 days.  It looks like a concerted effort to lower or cap the stock price…. or at a minimum set the stage for more negative news after announce – No supply ( which isn't new but there saying much worse this year), China sales will be lower due to price, fewer people are planning to buy,  public does not have a good view of what the phone offers….  technical issues with finger print / face recognition.   Even Gene Munster is saying to sell cause stock is headed lower by 5%

  6. Good Morning.

  7. /NQ 6000, I bought some Oct QQQ 150 puts for 4.46. Barely any premium, will take them off for a small profit if we get rejected. 

  8. Good morning!  

    DAX popped 12,500, which is bullish and EuroStoxx over 3,500, also bullish so no shorting until they fail AND we're back below 6,000 on /NQ.

    I do still have 4 /TF shorts at 1,416 avg.

    Oil is all over the place.

    LB/Learner – LOL, an odd time to come out with that call though still plenty of room to run I guess.

    Spread/Mkucs – There's nothing normal about a 15% spread.  

    AAPL/Batman – Can't wait to see my new phone!  I do agree they are in for a correction but, long-term, still a buy.  

    QQQ/Jeff – Good plan.

    Added 2 more /TF to bring me to 6 short at 1,417.6.

  9. 22,100 on /YM is a good shorting line (tight stops above) and, of course, 1,420 on /TF and 6,000 on /NQ (DAX just failed).  

  10. so how about interest rates go negative and your debt becomes an income stream? Globally, we are all playing the fiat currency game, the truth us they are all just relative to each other (and we've seen negative interest rates already). Ultimately if the rich won't pay taxes they will pay for the bulk of gov't operations eventually somehow; they're the ones with all of the money afterall.

    Paying interest on debt is so 1990's. Imagine adding it to cash flow. It'll be all the rage in the 2020's.

  11. How can you long oil on this news?

    Hurricanes Add to Problems for Oil BullsHarvey and Irma will hurt energy demand in large areas of the South, even as drilling continues and crude in storage is abundant.

    Irma leaves 6.2 million Florida homes in the dark — over 60% of the entire state - My brother in Boca has no power but my Mom has hers.  She went to the supermarket and the shelves were half-stocked. 

    Over Half Of Florida Without Power As State Braces For "Lengthiest Restoration In US History"

    This is what Miami looked like on a MISS!  

    Remember Houston? On Repairing/Rebuilding 100,000+ Damaged Houses

    China Set to Unveil Cap-And-Trade Auto Emission, Mileage RulesChina will soon unveil a mandatory cap-and-trade credit program for electric cars, starting the countdown for carmakers to be in compliance with stricter rules on emissions and fuel economy, according to the country’s state-backed auto association.

    VW to Build Electric Versions of All 300 Models by 2030Volkswagen AG Chief Executive Officer Matthias Mueller announced sweeping plans to build electric versions of all 300 models in the group’s lineup as the world’s largest automaker accelerates the shift away from combustion engines and tries to draw a line under the emissions-cheating scandal. Speaking on the eve of the Frankfurt auto show, the CEO laid out the enormity of the task ahead, vowing to spend 20 billion euros ($24 billion) to develop and bring the models to market by 2030 and promising to plow another 50 billion euros into the batteries needed to power the cars.

    Tesla(TSLA) opens its first two 'city center' Supercharger stations in Chicago and Boston

    Transocean Says Deepwater Is Competitive With Shale At $50 Oil 


    • OPEC's estimate of its oil production is expected to show a decrease in August as the group's biggest member, Saudi Arabia, pared output, sources told Bloomberg.
    • Crude futures are heading lower, however, dipping 0.5% to $47.85/bbl, as refiners in the U.S. continue to come back online after Hurricane Harvey forced them to shut down two weeks ago.

    That's only 13 years until, essentially, the end of the oil era.  

    • Redbook Chain Store Sales+4.5% Y/Y vs. +4.4% last week.
    • Month-to-date sales up 4.4% through September 9.
    • September sales are expected to increase 4.3%.


    Home-Improvement Retailers Scramble to Restock in FloridaBig-box retailers are increasingly intertwined with recovery efforts after natural disasters.

    Here's everything to expect from Apple's(AAPL) iPhone event on Tuesday

    Apple(AAPL) iPhone X will be in 'severe short supply,' KGI says

    Two factors will prevent a stock market correction, Goldman Sachs(GS) says

    Whole Foods(WFM) Price Cut Leads To 25% Surge In Customers, Channel Checks Reveal

    Crackdown Begins: Chinese Banks Are Suspending North Korean Transactions

    Confusion Grows Over China "Bitcoin Exchange Ban": 3 Largest Exchanges Have Not Received Any Official Notice

    Citi Warns Trading Revenue To Tumble 15% In Q3 Due To "Subdued Volatility"

    • The bank lays out its case for how it can achieve an additional $5B in revenue over the next three years.
    • Of that $5B, $2B is seen coming from actual lending. Goldman's (GS +1.9%) retail lending platform (named Marcus) recently crossed $1B in loan originations, and expects to hit $2B by the end of the year. Deposits have topped $15B.
    • Goldman also sees an opportunity to boost the beleaguered FICC business by $1B over three years. Among the necessary steps: Deepening penetration with asset managers and banks (FICC sales fell 15% Y/Y in H1 with asset mangers, and 17% with banks/brokers).
    • Goldman ranks in top three in FICC with just 30% of asset managers and 29% of banks. This compares to 56% of hedge funds and 36% of insurance companies. "There are market share gaps to close," says Goldman.
    • Presentation slides

    McDonald's opens sharply lower

    • McDonald's (NYSE:MCD) is down 2.84% in opening trades without any major news announcement out from the company.
    • There is some indication that a negtive note from M Science on comparable sales may be playing a factor.

    FDA accepts Teva's marketing application for expanded use of Trisenox under Priority Review

    • The FDA accepts under Priority Review Teva Pharmaceutical Industries' (TEVA +5.5%) supplemental New Drug Application seeking approval to use TRISENOX (arsenic trioxide), in combination with retinoic acid, for induction of remission and consolidation in patients with newly diagnosed low-to-intermediate risk acute promyelocytic leukemia (APL) characterized by a particular genetic profile [t(15;17) translocation].
    • TRISENOX is currently approved for induction of remission and consolidation in patients with acute APL who are refractory to or relapsed from retinoid and anthracycline chemo and whose APL has the same genetic profile cited above.

    Guggenheim hikes PT on Netflix to $210

    • Guggenheim slides its price target on Buy-rated Netflix (NASDAQ:NFLX) to $210 from $190 as it points to the streaming force's strength in Asian markets.
    • The firm also likes the long-term upside from Netflix's structural competitive advantages.
    • NFLX +0.28% premarket to $182.25 vs. a 52-week trading range of $93.26 to $191.50.

    NAND flash market could grow 63% by 2020

    • The NAND flash market could top $65B by 2020, which would represent a 63% growth on this year’s expected $40B, according to ChinaFlashMarket research via Digitimes.
    • NAND will represent more than half of the overall storage market expected to reach $120B in the next three years compared to $95B in 2017. 
    • SSDs will represent 43% of the NAND flash memory market this year with embedded storage products coming in second with 42%.
    • 2017 NAND chip market leaders by share: Samsung, 37%; Toshiba, 21%; Western Digital’s SanDisk, 14% (NYSE:WDC); Micron (NASDAQ:MU), 13%; SK Hynix, 12%; Intel, 3%. 
    • Toshiba is currently trying to offload its NAND unit with a consortium including Western Digital and another containing SK Hynix standing as the top bidders. 
    • Micron shares are up 1% premarket. 
    • Western Digital shares are up 2.64% on continued Toshiba talks.   
    • Previously: Reuters: Toshiba still considering chip unit bidders (Sept. 12)
    • Semiconductor industry revenue reached $101.4B in Q2, up 6.1% on the year, according to IHS Markit research via Digitimes. The quarter marked the industry’s highest growth in three years.
    • The memory chip market was up 10.7% to $30.2B with DRAM up 14% and NOR flash memory up 12.3%.
    • Advanced Micro Devices (NASDAQ:AMD) and Nvidia (NASDAQ:NVDA) led the industry in revenue growth with revenue up 24.7% and 14.6%, respectively, on the previous quarter.
    • AMD shares are up 0.96% premarket.
    • Nvidia shares are up 0.53% premarket.
    • Previously: Jefferies expects cryptocurrency demand to continue for Nvidia, AMD (Sept. 11)
    • Global billings for semiconductor manufacturing equipment hit $14.1B in Q2, up 35% on the prior year’s quarter, according to SEMI research via Digitimes.
    • Regionally, Korea had the largest sequential growth with billings up 36% to $4.79B. Taiwan came second in terms of billings with $2.76B but that figure was down 21% sequentially. China grew 25% to $2.51B and Japan was up 24% to $1.55B. Billings in the US and Europe both decreased on the quarter to $1.23B (-3%) and $660M (-29%), respectively. 
    • Recode reports that Uber (Private:UBER) and SoftBank (OTCPK:SFTBYOTCPK:SFTBF) have “entered a new stage” regarding a potential massive investment.
    • SoftBank’s previous attempts at acquiring shares from a current investor were tabled as Uber worked to find a new CEO. 
    • New CEO Dara Khosrowshahi appears open to the idea as he holds a board seat at Fanatics, which received $1B from SoftBank.
    • The investor willing to sell to SoftBank is likely not Benchmark, which has launched a legal case against Uber’s former CEO accusing him of fraud and trying to get him off the board. 
    • Recode says that SoftBank had previously approached Benchmark with $45B offer. 
    • Previously: SoftBank invests $1B in sports e-commerce company (Aug. 8)
    • Previously: Axios: SoftBank might invest $4B in self-driving car start-up (Sept. 11)

    Samsung Galaxy Note 8 pre-orders totaled 650K in 5 days

    • Reuters has the numbers to add color to Samsung’s (OTC:SSNNFOTC:SSNLF) statement last week that Galaxy Note 8 pre-orders exceed all prior Note models.
    • Pre-orders totaled 650K over five days from about 40 countries. Sales topped those of the ill-fated Note 7 by 2.5 times.   
    • The company proceeded with the Note 8 despite the battery malfunctions of its predecessor because 85% of Note users expressed brand loyalty even after the problems.
    • The Galaxy Note 8 was introduced on August 23 and hits stores Friday.  
    • Previously: Samsung says Note8 preorders top previous Note models (Sept. 8)
    • With equities at record highs, traders are looking to Apple (NASDAQ:AAPL) today to help extendthe market rally.
    • The tech giant is expected to unveil its widely anticipated iPhone X and other products starting at 1 p.m. ET, at an inaugural event by its new $5B Cupertino campus.
    • Selling more than 1.2B iPhones since unveiling its flagship smartphone in 2007, Apple's next device is expected to break the $1,000 price barrier.

  12. Congratulations TSLA, you're the first auto company to have a fatality with autopilot:

    Won't affect stock price that much except maybe to slow it down today.  Truck gets unveiled next week and they will start taking $5,000 deposits for it.  If it does well like the Model 3, Musk will be tweeting a count every hour.  If it doesn't, he won't say a word.

  13. Gold

    ~~Bridgewater's Ray Dalio on CNBC- Reiterates cautious view of the World given geopolitical situation; Focus of interview is based around his cautious view on the World and belief that gold needs to be a hedge in one's portfolio

    ~~ Reiterates gold should be 5-10% of portfolio just for diversification reasons

  14. Oil… with that spread they will ship it. Shipping gas too… hurricanes are over, people are still gonna drive and they had an excuse to jack up gas prices. You see any decline? Also an up swing in cycles… speculating, I think we break 50 soon. Only going to Sept 29, not calling a new bull market, just a rally.

  15. XLF has closed a big gap, small one at $25.04 but I think a good short here. Markets holding, so far… Short IWM here too… everything is, after all, awesome. Isn't it?

  16. Nice bump on FTR! 

    Latch… I know there's bears out there… I'm not one.

  17. Negative rates/BDC – THAT must be Trump's brilliant secret plan.  Rates are going to be NEGATIVE 10% and the more debt we have, the more money we'll make!  What could possibly go wrong?

    We should change the debt limit to the "debt target" so we feel better every time we hit it

    China now spends 4x more per Yuan of GDP than they did in 2007.

    There is a psychological bias to believe that exceptional events eventually give way to a return to “normal times.” But the world economy is far from a return to pre-2008 normality, with most of the obstacles to more robust recovery to be found on the demand side.

    After years of falling global growth forecasts, 2017 has witnessed a significant uptick, and there is a good case for slight interest-rate increases. But the advanced economies still face too-low inflation and only moderate growth, and recovery will continue to rely on fiscal stimulus, underpinned if necessary by debt monetization.

    TSLA/Rustle – Unless there's a serious defect, I'm not going to get worked up about the occasional autopilot fatality.  It's bound to happen to all the car makers as the bugs get worked out.  I'm in no hurry to get a version 1.0.

    Oil/Mkucs – May see a tremendous build this week and next.  Not sure how that gets you to $50?  On the bright side, all of Florida just took a 16-hour round trip to get away from the storm – it's like a holiday weekend demand-wise.  

    And what Latch said.  Too many cross-currents to call but I will call $50 unlikely.  

  18. Rickards thinks Trump goes back to a 40% gold backing the dollar, gold goes to $5k… by end of year! Seriously, listening to him live now… he's convinced it will happen

  19. While everyone is focused on the new iphone today, CMG quietly does their national roll out of queso. For you non-cooks out there, its basically just velveeta and pico de gallo. 

  20. Russia and China are talking trading oil in a gold backed currency… could really hurt the petro dollar

  21. It's time for a net worth tax – if we collect on the top half of the $80.3T US net worth, that's $800B. It's probably not worth the effort to collect on $1,000 or less, so everyone the 50-60% of the country worth <$100k net worth gets a pass until next year.

    The walmarts are worth ~$150B. With no additional income whatsoever, after 25 years they'd still have $116.6B, even with this tax in place.

    My point above is this is largely occurring regardless via market forces. The super rich aren't investing (holding mostly in gov't bonds) that drive their prices up so high they don't return any yield.

  22. I pay absolutely no attention to AAPL or their products…..

  23. …and a seat at delivering alpha for 5k?….please….

  24. FTR nice bump… ex div on the 14th

  25. "Trump" and "Plan" do not belong in the same sentence. This man has absolutely no "plan".

    Gerson: "Those Republicans who believe that Trump is being cynical, disloyal or politically calculating continue to misunderstand the man. The president has no discernible political philosophy or strong policy views to betray. His leadership consists mainly of instincts, reflexes and prejudices, which often have nothing to do with self-interest. He has a genius for fame, which usually involves attention-attracting unpredictability and transgressiveness. Trump reads events moment by moment, making him a cork on the waves of cable coverage. Any choice he makes is correct by definition, because he has made it. And any person—on his staff or on Capitol Hill—who does not precisely mimic his political gyrations is disloyal and should be punished. "

    Go read the entire article, it's the best thing about him that's been written yet.

  26. 1020 – you don't pay attention to the world's most valuable company?

  27. It's time to cut up the gov credit card! The world is on to our exporting increasingly worthless dollars, it won't go on forever. George Carlin said… Imagine a couple deeply in debt, having a meeting and deciding to spend more. That's congress.

  28. tax/BDC

    I like the concept but who determines net worth?  Are we talking hard assets?  Companies you might own which usually have a varying and subjective net worth?  And who would determine a companies value?  Even a sports team can be valued at x then you find out it was really valued at y when it is sold.

  29. rustle — anyone with accounting and GAAP experience actually realizes it's not that hard. If anyone has filed 501 reg D for example,t hat's a good start. The truth is all accounting could needs to become double ledger, even for households (I do double ledger accounting at home of course). Every income has an expense to someone else and it all nets to equity ("net worth" for individuals). This can all be down by AI now, it's not like we need pencil sharpeners. Abstract assets and goodwill are always going to exist, and to your point, be hard to value, but a point in the other direction, how does Forbes so accurately track the top 400 billionaires?

    Van Gogh's sunflowers and the the Pittsburgh Steelers are going to be worth a lot more though, that's for sure…

  30. taxes/BDC

    But it would be fair for collections which can also vary sharply year to year.  Imagine paying 1% on a collection that then drops 50% in next couple years.  Or going back to businesses again, you could be paying a tax on a business you own that could be worth substantially less a year from now.  And you could very little liquidity if most of your funds are tied into that business which would then affect the business.  You could have an additional flip tax of 1% when a company is sold on top of capital gain tax which would be, I believe, a more accurate and fair way.

  31. Trump OWNS the fed now. He will be appointing a majority to the board and a new head. No telling what he might do, but he will say it's for the little guy and they will cheer. 

    Taxes… there is nothing fair about our government taxing us dry and spending twice that.

  32. Wealth tax, US constitution comes into play, article 1 sections 2, 9

    The United States Constitution prohibits any federal direct tax on asset holdings (as opposed to income tax or capital gains tax) unless the revenue collected is apportioned among the states on the basis of their population

  33. There are now some 2020 options.

  34. Mike – that's interesting – so the Constitution is saying is go ahead and federally tax assets and then give it to the states pro rata. That would be bad for red states, since they take more than blue states. So, I'm all for that. I'm looking at you Kansas – you sleep in the bed you make!

  35. BDC I think it means figure out what to tax and then how much tax will be collected and then apportion amount to states by census, meaning CA pays the most meaning it’s complicated and unlikely to be used

  36. Phil

    Did we decide to wait?


    Lithium/QC – Going to read up on it this weekend to see if there's a sideways play but no particular extractors seem like a good way to play so far.  

  37. Rickards/Mkucs – Think he's long gold?  wink

    Queso/Stock – They should have gone for sushi burritos – would have doubled their revenues.  It would have been a very small change to what they do now but a whole other revenue stream.  

    Image result for sushi burrito

    China/Mkucs – OK, so the summary of that conversation is Russia says "Hey China, give us $250M worth of gold a day from now on, thanks."  Forgive me if I'm dubious.  

    Net worth/BDC – It's the only real way to tackle the debt at this point but we need to have realistic taxes in the first place to balance the budget first.  Going back to the debt clock, total assets are $133Tn and we already know the Top 10% have 80% of the wealth and the Top 1% have 60% so really, all we have to do is tax the Top 1% 10% ($8Tn) twice, maybe 5 years apart, and we're pretty much caught up and they'd still have 44% of the assets in a debt-free America.  

    AAPL/1020 – Well prepare to be bored as I'll be going play by play at 1pm.

    Worthless Dollars/Mkucs – I can't imagine what you mean:

    Isn't that insane?  We've increased our Monetary Base 500% in 17 years!

    Now I hate to get all anti-Capitalist but notice that median income hasn't budged in 17 years and there's actually FEWER people working now despite plenty of population growth yet housing prices have doubled.  Why is that?  It's because the best way to extract money from citizens is to get them to buy a mortgage but, once everyone has a mortgage (see " Interest Scams and How to Avoid Them – Mortgage Madness!" ), how does the bank make more money?  By pushing up the prices of the homes, which forces the people to borrow more money, putting them more in debt to the banks.  

    Every step of the home process is geared up to accomplish the banks' agenda and the net effect is a home used to cost us 5 year's salary and now it costs us 10 year's salary (avg) and, since you actually end up paying 200% of your home's price after interest (and the Government gets taxes too) then 1/4 your working life is paying interest to the bank alone!  That's how you create a nation of wage slaves – who are then forced to borrow money for things their parents used to be able to afford.

    What else can we jack up the prices of that people have to have?  College, Medicine, Autos….  All the leading inflationary items and now smart phones are blasting over $1,000 too (4 to a family every 2 years).  It's amazing how all this passes generally without comment – as if that's the way things are supposed to be.  

    Value/Rustle – Well for companies, I'd hold them to whatever they claimed for their own purposes over the past 10 years, not what they tell you AFTER they find out you're going to tax it.  People are trickier but the rich ones usually have insurance and apply for credit (or divorce) and list out their assets at some point.  

    That's another concept that escapes most Americans – the rich are as rich as they are BECAUSE they've been undertaxed for 40 years so it's not "unfair" to ask them to pay more for a while – they were the primary beneficiaries of the mistaken system that led to the massive debts in the first place.  

    Complicated/Mike – Well that's just one problem in getting it done. There's a few hundred other problems in Congress as well as the executive branch before we even get that far…  

    Lithium/QC – I think the train left the station on the plays we looked at.  I have not found a better alternative yet.  Maybe nickel instead?

  38. Nas is red but other indexes are running wild still.  /TF 1,422 and I'm up to 10 short at 1,419 now.  

  39. Debt – what if US revalued its gold in Fort Knox to today's price? We'd get an extra $400 billion as per Rickards.  It's been done twice , last time in 1953 by Eisenhower.

  40. That's why Mnuchin went to check on it – it's how Trump will claim they have extra money to cut taxes with. 

  41. yes, lots of theories about that visit — quite rare.  Another factoid, is that if they decided to use 40% gold backing the money supply, as was the law back then – gold would be………….wait for it……..$10,000 for an extra $1 trillion.  Boom! problem solved….oh wait a minute, look at that inflation!

  42. Got gold?

  43. Phil, been sitting with remaining FTR position, hoping (not a strategy, I know) it would improve.  Hold 533 shares (basis 38.20), short 40 Jan $3 puts (.75) and short 20 Jan $4 puts (.90).  Divvy on Thursday.  Advice please.

  44. Lithium- ALB

    Train leaving station. 

    Awoo- Choo Choo !

    Thanks, Phil

  45. AyePhone/Phil   Can't Wait!  ;)

  46. FTR/Taihu – Well we doubled down to get to $19 on the last set.  That's an achievable goal.  The puts are the old prices, I take it.  So illiquid now, you may as well leave them and see where they cash out.  

    Apple time!  

  47. Phil – good points especially on the 40 years of relative benefit. We're just common folks blathering on a stock board, so no need to overdo it but we are blue-skying this which our elected officials can't be bothered to do, might as well put all the cards on the table. My point was "the market" (macro-economic pathology) will self-adjust to provide for a wealth tax – if you've got a billion dollars sitting around doing nothing, you're going to have $990M sitting around a year from now (-1% interest rate). If the government took 1% and you had $1B earning a "real" interest rate of 2% in ahealthy, balanced-budget economy, you'd actually net +$10M but that's just crazy talk that the gov't force economic activity (via business grants and loans, universal health care and education) because billionaires can't be bothered to invest in start-up businesses.

    Boston marathon application accepted. Time to start training again, ug. I paid $185 for this torture!

  48. CTL – California, the last of the states to approve the merger with LVLT is expected to approve on October 12th clearing the way for the merger to be completed shortly thereafter. 

    Sold 20  of the CTL 2020 $20 puts for $6.40.

  49. "There's not a day that goes by that we don't think about him. Memories have come rushing back as we prepare for today and this event. It's taken some time, but we can now reflect on him with joy instead of sadness."

    Huge presence of foreign press at this event – hasn't been in the past.  Interesting that people can tell because they have instantaneous translator apps running on their phones.  

    "We're here today to talk about some incredible products, but before that, I'd like to take a moment to talk about what's happening in Florida and Texas."

    Classy guy!  

    New office

    This is cool, it's like the science fiction movies we used to watch when we were kids:

    "Designed to be seamless with nature, open and transparent, it brings the outside in. Powered by 100 percent renewable energy, and we have one of the world's largest onsite solar installations, right here."

    Apple stores are now called "Town Squares" – soon they'll run for Mayor.  New designs have outdoor plazas too:

    Imagine what great deals they get willing to spend money on mall space these days.

  50. flat-earth is so boring. I'm going to start a Flat Saturn society. Is NASA in on the conspiracy of a "round" Saturn? I'm just asking questions!

    Who's in?? Global warming deniers welcome!

  51. biodieselchris 

     I am in for the Flat Saturn society. 

     Can we have flat hats?

  52. Apple has really been trying to turn its stores into… something else. More than "genius bar." Now it's offering boardrooms for entrepreneurs, classes for customers to learn stuff like photography, workshops for teachers. Everyone trying to reinvent retail.

    Today at Apple is the umbrella for all of these programs with in house Apple Pros and local artists etc. This position was created to be the ‘liberal arts’ version of the Apple Genius.

    This whole event is like they are putting on a Broadway show – so impressive with so many people speaking and presenting in a well-coordinated fashion.

    Here's the new Chicago store:

    Not sure where this is but wow!  

    "Since the launch of the Series 2, Apple Watch has experienced phenonomeal growth." Up 50 percent year over year.

    Apple Watch is now the number 1 watch in the world, above Rolex, Fossil, Omega, Cartier.

    97 percent customer satisfaction rate. "This is blow-away!"

    Lots of focus on Watch health apps but mentions that Passcode Keys are a bigger feature. 

    Apple Watch can now also detect arrhythmia, when your heart beats irregularly

    Williams says that Apple Watch is looking to track afib. By the way, this is something Fitbit has said it's looking into as well, along with sleep apnea.

    Apple Heart Study is announced. Data from Apple Watch will analyze situations like arrhythmia. You’ll be able to participate in the study with Stanford by downloading an app from the App Store.

    Wow, new watch has cellular built in – that came fast!  

    Image result for dick tracy watch

    Well, it took a long time but now it's moving fast….

    Same number as your phone – that's very nice!  

    So it's now the world's smallest smart-phone.  Siri too.  

    Siri talks on the Apple Watch now, not just text. This is enabled by a new Dual-core processor that has 70% more power. The wireless W2 chip uses 40% less power. There’s a barometric altimeter built in for stair climbs and snow activities. 

    This is just the first product – AAPL may go over $1Tn during the conference at this rate!  

  53. He hasn't said so, but sounds like independent cellular connectivity?

  54. Yes, it's a stand-alone cell/watch.  

  55. Is the watch now untethered from the phone?

  56. yes!

  57. That's big!

  58. Lots of styles now:

    Yep, no phone required.  There's your low-cost IPhone roll-out for everyone in India, China and Africa.  

    This company is just friggin' amazing!  

  59. Now it's time to destroy the Fire Stick…

    Eh, nothing special so far.  The question is what kind of viewing plan do they have?  

    Ah, 4K movies for the same price as HD – that's good.  Even upgrades your previously purchased movies and TV shows.  That's a good move because it gives you confidence to buy things moving forward, knowing they will keep you in the best format available.  

    This is useful, the TV guide screen gives you game info live:

  60. we need 4k content!!!!!!!!!!

  61. Bitcoin

    ~~JPMorgan CEO Jamie Dimon says bitcoin is a fraud that will eventually blow up.

  62. Apple TV works with the home kit so you can always check on the house from your phone (which is tied to the TV..):

    IPhone time!  

    So far the changes to iPhone 8 are what you'd expect from an annual smartphone upgrade. Stronger glass. Improved speakers. An A11 "bionic" chip.

    25% louder speakers than the iPhone 7. 

    The iPhone 8 features an A11 Bionic processor. 4.3B transistors, 6 core, two high performance cores, 4 high efficiency cores (70% faster than A10). And a new 30% faster GPU.

    Aaaaand the camera specs are much better. 12MP, 83 percent more light. For people who don't get into the weeds of CPUs and GPUs and CoreML, this camera is going to be the thing.

    AR integrated into phone:

    Now they are demoing some crazy AR game – can't even explain it but cool.  

  63. Yes, wireless charging.

    $699 for the 8, $799 for the 8+ also shipping 9/22.

    OK, here's "one more thing" 

    "It is only fitting that we are here in this theater on this place to reveal a product that will set the tone for the next decade." 

  64. Weiss "emergency" summit today… 

    Less than six weeks from today, the most powerful historic cycles known to science will converge, forming a powerful financial supercycle.

    It will happen at the end of October 2017. It will bring together four massively powerful financial cycles and the rising cycle of war. And it will have enormous power.

    When cycles like these came together in the early 1930s, the world was plunged into a Great Depression that lasted more than a decade.

    So, war and depression in 6 weeks, mark your calendars!

  65. Face ID unlocks the phone.  Sucks if you've been in a terrible accident and need to call an ambulance….

    This is how the phone sees you:

    When you look at the phone it projects 30k invisible IR dots, the cameras fire, and it checks that pattern against the stored image in real time.

    That's just the stuff they use to recognize your face – state of the art security.  

    FaceID works if you change your hairstyle, wear a hat, wears glasses. It adapts to you if your face changes over time, like if you grow a beard. Works day and night. Can't be spoofed by photos.

    They even went to Hollywood and had people there make masks to try to fool the face ID.

    They say touch ID fails 1/50,000 but Face ID is 1/1,000,000 – says evil twins will be able to access your phone.  

    A side benefit is they can now use your face to animate your emojis

    The killer app will be to make a business face/dressed emoji for answering work calls when you're not dressed.

    I don't know, on the whole, I'm not going to rush out and buy an X until I can play with it and make sure I like all the changes.  I care more about battery life and phone quality than all this other noise.  

  66. No specific details, mind you… but if you sign up today, normally $5k, just for you, only $2k, for 5 full years!

    LOL, no, that's 2 years of Phil, but thanks anyway for the warning.

  67. Apple stock down a bit now.   I guess not having the full Dick Tracey watch was a letdown.

  68. On the whole, not killer enough to break AAPL over $165 so market is pulling back a bit.

    Still, the watch is the big news and will drive massive sales as long as the battery lasts all day.

    OK, IPhone X has 2 more hours of battery – that's good.  

    Have to wait for Nov 3rd for the X. 

  69. Phil – "Current accounts/Naybob – We produce Dollars and ship them overseas.  God knows no one is putting them to use in this country!  $180Bn worth of our deficit is oil imports and $200Bn is IPhones – the rest is just noise in a $19Tn economy."   "5% would be $1Tn in interest alone, each year, in addition to the $700Bn a year we already overspend by."


    Judging from this AM's diatribe, yesterday's Nattering's about running current account deficits large and long enough, must have had some subliminal value:-)


    How about the NATURE of our debt, the difference it makes, and how measuring debt as a % of GDP can be misdirection?  Indeed, our major export is debt and dollars, and we are the masters of making something out of nothing, but that's also at the heart of the problem. FYI, I don't know where that blogger got Japan with 43% of revenue going to interest payments. The World Bank shows 12.5% of Japan's tax revenue going to interest payments.


    Turning Japanese, comparing US to Japan, there are MAJOR structural differences in the balance of payments and flows.  Around 90% of Japanese government debt is domestically held. The government’s external debt (including the BoJ) was less than $1T in 2015, and only 10% of the outstanding debt.


    Japan's central bank holds the bulk of their bond and a large chunk of domestic equities markets as assets. Japan's $1T foreign held debt stands in comparison to $6.1T for the US, or 31% being held by a variety of foreign officials.  In addition, 30% of US corporate debt is held by foreigners.


    Growth of the US debt by owner and % since 1970.  The growth of the blue area (foreign from 12.4B and 4.4% share to 6.1T and 31% share.  The decline of the green area share (private investors) from 76% to 28%. With 6.1T or 31% held by foreigners, even small increases in the cost of loan funds, drastically increase the amount of revenue necessary to service the debt, and further choke off the economy.


    Almost all of Japan and China's debt is owned by the central bank and the domestic financial system. If they chose to not repay, the government would simply have to recapitalize the debt, in essence defaulting on itself. Those producers of output who run surpluses, have been investing the proceeds domestic and foreign.


    Japan and China buy their own short term bonds, and our long bonds. This shortens the maturity of their public sector debt, and given the term premium on long term bonds, lowers the amount of interest payments on that debt. They lend us money long term to monetize their short term debt. How does that happen with much higher Debt/GDP??


    We on the other hand, have been like Norm who sits on his chat IPhone ass at Cheers, running up a huge tab.  Leaving US with far less latitude in defaulting and a "mortgaged" future to look forward to. Indeed Phil, our rent seeking banks have a cottage industry, the public's housing ATM.


    Lower real wages, home ownership, increased income inequality, poverty and a lower standard of life are what the children have to look forward to. Revenues must be increased, but when you've been sold down a river by a bunch of outsourcing corporate and thieving financial turncoats, how do you do that? Better get hoppin Uncle Sammy, my friends are thirsty and Out.

  70. It wasn't too long ago that about every analyst and every pundit on CNBC called the Apple Watch a failure.

  71. Wow, instead of one must-have killer product, this holiday season has many choices from AAPL. 

    too many imo. 

    Phil, looks like the market is not that impressed with this.

    Even though the iphoneX is cool, doesnt look like a must-have…  pricey too…

  72. These new iPhones look good and maybe at $349 the SE can make a dent in some low cost markets. I just can't justify spending $1000 on an iPhone X when you can buy a great Android phone for less than $500 if you stay away from Samsung and LG. They already have super HD resolution and edge to edge screens. Maybe not all the bells ans whistles but I would bet that most buyers don't use 50% of the features they have. The watch looks cool though… 

  73. Apple… shucks, I was hoping for teleportation. Maybe next year. 

  74. Phil will gasoline likely have a big draw due to refining shut downs? If so, do futures traders look ahead to how quickly they got back online and ignore an anomaly?

  75. I think AAPL did a good job, and now has three product that I don't have that I'm likely to get – 1) The new watch, the AirPods, and the Homepod. I think thats about $900, and that does not include the rest of the family. I think AAPL is a buy!

  76. ALB/Randers – Up 50% this year already – I'd say it left!  

    CTL/Albo – Of course this will put them massively in debt and open to attack.  

    BitCoin/Albo – Well that's a strong statement but, then again, there's no one to sue him.  

    Weiss/Mkuscs – I'm just curious to see how many people they rope in with that stuff.  I've got to learn to advertise like those guys.  I love the way they pick something that went up 2,000% and say – NOT that they actually picked it (because they did not) – but that, HAD they told you to play it, then you would have made a lot of money!  So you'd better subscribe in case they do happen to tell you about something that makes money.

    Good review on them:

    I have been a subscriber to Weiss Research products since college, and am now 61 years old.

    I purchased a Marijuana report for $47 that was basically a “infomercial” for a more expensive service. In the report was information anyone could get on their own, online. I called to complain about this shameful deal, and was told that because the 30 day refund period had expired, so I could not be given a refund. (So they said it was my fault for not getting around to it sooner!). However, I was told by a gentleman who called me back after asking to speak to a supervisor, that it WAS “in fact” a lead in (marketing ploy) to get less sophisticated investors to buy the more expensive deal, and that it was not designed for more “sophisticated/experienced” investors such as myself. (I have that recorded) At that point I said fine, keep the novice’s $47, and give me back mine! He then said he could not violate company policy on a refund (which is total BS), but wanted to extend an olive branch (for ripping me off) by giving me his personal contact info, so that he might do something for me down the road with the company.

    Think about that. You rip me off, and then think I am going to do any business ever again with Weiss. How foolish is that? Weiss used to be a quality outfit, that operated with quality service, and INTEGRITY.

    Their current writers, and performance leaves much to be desired. The fact that there is no longer any integrity left, is shameful. Irving Weiss is rolling over in his grave. Shame on you Martin Weiss & your current morally compromised company.

    I suggest AVOIDING this company at all costs.

    RIP Larry Edelson who was a good man at this company for many years.

    Shame on the rest of the organization.

    Debt/Naybob – Trade deficits are not debt but feel free to take credit for convincing me.  As to Japan, well 1 Quadrillion Yen is roughly $10Tn and 1.3% of $10Tn is $130Bn and Japan's GDP is $5Tn and they've got to be collecting close to $1Tn so 13% of collections does sound right, not sure where that guy got the number but the US numbers were worked from scratch and they are not pretty either.

    Watch/Rustle – Well, now that it's stand-alone it's a whole new ballgame.  I hate things around my wrist but I might ditch my phone and just keep a watch around my neck.  

    Impressed/Learner – I think the hype over the 8 & X was overdone and people are simply missing the news on the watch.  Either way though, people have been waiting for this cycle to buy and they'll buy.  It's not so much about capturing new customers as it is about getting 400M people to trade in their old phones over the next couple of years.  

    Justify/StJ – To me, it's $58/month vs $35/month and I can't justify not having the best phone to save $300/yr.  I guess it depends what matters to you – I don't like fancy cars and I tend to keep my home computer until it breaks but my phone and my IPad have to be the best. 

    Teleportation/Mkucs – TSLA will announce that as soon as they need more money.  cool

    Image result for musk teleporter








    Gasoline/Craigs – I imagine there will be but exports (2.5Mb/d) were also shut in so where will the balance be?  I'm as curious as you are to see tomorrow's report but, even if it's a big draw – it's obviously a blip that will correct so I hope there is a big draw and /RB spikes and THEN we can short it.  

    AAPL/Deano – Certainly a buy, those products extend them 3 more years at least.  The IWatch is now an IPhone Nano.  

  77. Interesting how quick does the air go out of AAPL

  78. Disney delays release of Star Wars 9 from May to Dec 2019 but JJ Abrams will direct so net good news. 

    • Amid creative turmoil on the new round of Star Wars films, J.J. Abrams is returning to the director's chair to take over on the ninth episode, the final film of a planned new trilogy.
    • He'll write and direct the picture and is replacing Colin Trevorrow, who exited the project due to creative differences and reported issues over the film's script.
    • Abrams was the guiding force in Disney's (DIS +0.3%) plans to create a new sequel trilogy in the franchise (as well as spin-off stories), and directed the first of the new films, Star Wars: The Force Awakens -- which became a box-office and merchandising smash.
    • Meantime, Lucasfilm has parted ways with four of the six directors it's chosen to make new Star Wars films (only two have been released as yet, The Force Awakens and spin-off story Rogue One).
    • “With The Force Awakens, J.J. delivered everything we could have possibly hoped for, and I am so excited that he is coming back to close out this trilogy,” says Lucasfilm President Kathleen Kennedy.

    Air/Yodi – Well, only a slight disappointment at $160.50

    Hard to pay $5,000 for a conference if it's printed 5 mins later (before you can get home to trade from the conference!):

    • Jeffrey Smith, CEO and CIO of hedge fund Starboard Value says generic drug maker Perrigo (PRGO +4.4%) is his "best idea."
    • He cites the "consistent and defensible" growth of its U.S. OTC business and progress in its international consumer segment. Generics have been facing downward price pressures for some time, but he adds that the company is in the midst of a strategic review that may entail an outright sale, partnership or spinoff.
    • Shares have rallied almost 40% since bottoming at $63.68 on August 9.
    • Addressing the Delivering Alpha conference, Jim Chanos is taking aim at the fracking industry.
    • Continental Resources (NYSE:CLR), he says, may be struggling to make its interest payments. In fact, he says, the company struggles to generate free cash flow at any time.
    • Shares have dipped about 3% since Chanos' remarks, now flat on the session.
    • Pharmacy benefits manager Express Scripts (ESRX -1.4%) is under pressure in apparent reaction to comments from celebrity investor Jim Chanos on CNBC. He has had a negative view on the company and Mallinckrodt (MNK +0.2%) for some time now. At a conference in May, he called the companies' use of third parties "a really questionable practice" and referred to their partnership as a "murky alliance."
    • Automatic Data Processing (ADP +0.6%) is still pushing back against Bill Ackman in a slow-developing proxy fight, saying that the revelation of Ackman's actual common share holdingsshows he overstated his ownership.
    • An 8.3% stake held by Ackman's Pershing Square is still mostly held in unexercised call options, with common-share holdings at just 2%.
    • “In referring to Pershing Square as the company’s largest owner with an 8.3% stake, Bill Ackman is misrepresenting the degree of his investment in ADP,” the company says.
    • It says that exercising the remaining options would cost Pershing Square about $2B, and that the firm will only be able to vote its 2% stake at the annual general meeting on Nov. 7.
    • Operational limitations of Tesla's (TSLA +0.8%) Autopilot played a "major role" in the fatal 2016 crash of a Model S, according to the NTSB.
    • Those limitations at the time of accident included the system's ability to monitor driver actions and to limit use of Autopilot to the type of roadways for which it was designed.
    • Full NTSB document on the case (.pdf)
    • Separately in Tesla world today, Kynikos founder James Chanos reiterated his firm's bearish view on EV automaker at the Delivering Alpha conference.
    • "I don't know if we will be able to achieve that," says Treasury Secretary Steven Mnuchin when asked if a 15% corporate tax rate is a possibility. According to the Washington Post, negotiations appear to be centered on 23% – roughly halfway between the current 35% and the hoped-for 15%.
    • Any cut, of course, appears at if it will be tied to the elimination of at least some corporate and personal tax deductions (though the mortgage interest deduction appears to have become another third rail of American politics).

    Dimon: Bitcoin a fraud

    • Addressing the Barclays conference, JPMorgan CEO Jamie Dimon says he would fire any trader for stupidity for trading bitcoin. The craze, he says, is worse than tulip bulbs.
    • Bitcoin is lower by 1.9% on the session.

    CB&I wins storage project in Asia

    • Chicago Bridge (CBI +4.2%) has been awarded a contract valued at approximately $50M for a storage project in Central Asia.
    • The scope of the work includes the engineering, fabrication and construction of nine flat bottom tanks.

    Restaurant stocks recover from pre-Irma slide

    • Restaurant stocks with a high mix of locations in Florida are showing some gains as the statewide impact from Hurricane Irma becomes clearer.
    • Cheesecake Factory (CAKE +2.8%), Buffalo Wild Wings (BWLD +4.4%), Ruth's Hospitality Group (RUTH +4.2%), Brinker International (EAT +4.2%), Red Robin Gourmet Burgers (RRGB+2.9%), Sonic (SONC +2.5%) and Darden Restaurants (DRI +1.7%) are among the restaurant names recovering from last week's slide.
    • Restaurant ETF: MENU.
    • The hit to McDonald's (NYSE:MCD) today is based off of M Science CEO Michael Marrale's update that "we are below" consensus estimates on U.S. comparable sales.
    • M Science catches a lot of attention in the restaurant sector due to its heavy focus on data tracking in its research reports.
    • Source: Bloomberg
    • Shares of McDonald's are 2.80% lower after being down as much as 3.4%. The stock is the worst performer on the day of the 48 publicly-traded restaurant stocks with a market cap higher than $50M.
    • Previously: McDonald's opens sharply lower (Sept. 12)

    AT&T spreads free HBO to more wireless subscribers

    • In some pre-merger synergy (and to match a T-Mobile (TMUS -0.1%giveaway of Netflix service), AT&T (T +1.3%) says it's going to be offering free HBO (TWX +0.3%) to more of its wireless subscribers than previously.
    • The carrier had begun offering its Unlimited Plus subscribers free HBO earlier this year, but will now give the service to its midmarket Unlimited Choice plans as well.
    • “This is how we move down market,” says CEO Randall Stephenson.
    • Speaking at the Goldman Sachs conference in New York, Stephenson also said AT&T should be "well down the path" of building a new ad platform in coming months, after which it expects to command a multiple of going rates with more tailored advertising.
    • AT&T's $85B takeover of Time Warner is still waiting on approval from Brazilian regulators and the U.S. Dept. of Justice.

    Netflix would spend $20M/hour for right content

    • The upper limit of what Netflix (NFLX +1.3%) would spend for content is north of $20M per hour, according to CFO David Wells.
    • "Certainly, we can support that level of quality if the [audience] is there,” maintains Wells.
    • By comparison, HBO's popular Game of Thrones is estimated to cost $10M per content hour.
    • Wells spoke today at the Goldman Sachs Communacopia Conference, where he once again reiterated that broadcasting live sports is not part of Netflix's strategy.
    • Netflix came up today during Apple's event (live updates) in Cupertino. The streamer will have 4K capabilities on the Apple TV later this year.
    • Previously: Guggenheim hikes PT on Netflix to $210 (Sept. 12)

    Energous plunges after Apple announces different path to wireless charging

    • Apple (NASDAQ:AAPL) will kick off its launch event at 10 am Pacific ((1 pm Eastern)). The event will stream live from the official website but only when using an iPhone, iPad, or the Safari browser.
    • We're expecting three iPhone models including a premium model with an OLED panel and a roughly $1K price tag.
    • Other product announcements could include an Apple Watch with cellular connectivity and a 4K-enabled Apple TV.
    • Check back for live updates once the event begins.
    • Update: Apple Watch product announcement starting with some stats from CEO Tim Cook.
    • Per Tim Cook: Last quarter, Apple Watch grew 50% on the year. Apple Watch is now the number one watch in the world. Customer satisfaction rate is 97%.
    • Update: The WatchOS 4 upgrade is coming September 19 with updates to the activity trackers, new heart rate features, and an Apple Heart Study with Stanford and the FDA that will help notify users of potential atrial fibrillation.
    • Watch Series 3 does have cellular connectivity via an electronic SIM and a dual-core processor with 70% faster performance and enough power for Siri to finally talk on the device. Bluetooth and Wi-Fi are powered by a custom W2 chip offering better power efficiency. Watch includes altimeter for things like running stairs and hiking and a streamlined antenna. All of this comes without a notable size difference from the Series 2.
    • Pricing: $399 with LTE, $329 without. Series 1 bumps down to $249.
    • Watch launches September 22, pre-orders start Friday.
    • Update: Moving into Apple TV and 4K confirmed.
    • The 4K HDR boasts the A10X Fusion chip that powers the iPad Pro and offers double the CPU performance compared to last model and 4x the graphics performance.
    • As expected, Amazon app for TV not ready at launch but coming later this year.
    • Apple will sell 4K videos on iTunes for same price as HD and will automatically upgrade any past iTunes movie purchases to the better picture quality.
    • The tvOS and TV app updates offer more of a focus on live games, news, and sports shows with potential alerts when favored content like a sports team’s game is on.
    • Pricing starts at $179. Pre-orders start Friday, ship September 22.
    • Update: The iPhone 8 and 8 Plus have glass on the front and back with an aluminum band that matches the finish, which come in Silver, Space Gray, and a new gold finish.
    • Sizes are 4.7 and 5.5 inches, respectively, both with updated Retina HD displays featuring the color-enhancing True Tone technology.
    • The inside has the new A11 Bionic chip and a six-core CPU with two high-performance cores that offer speeds 25% faster than the A10 and the other four cores offering a 70% improvement. The phones also feature Apple’s first self-made GPU that’s optimized for the company’s Metal 2 graphics framework.
    • Camera specs improved on the 7 and 7 Plus but major difference is the calibration to work with ARKit.
    • Wireless charging confirmed.
    • Both models start at 64GB and end at 256GB. The iPhone 8 starts at $699 and the iPhone 8 Plus starts at $799.
    • Update: The premium model with the OLED screen is officially the iPhone X, pronounced iPhone 10 for the anniversary.
    • The iPhone X comes in Space Gray and Silver and a 5.8 inch “Super Retina” display that’s meant to tamper some of the potential issues with OLED screens.
    • Features: HDR display, Dolby Vision and HDR10, one million-to-one contrast ratio, 3D Touch, and True Tone display.
    • The Home button is gone and replaced by swiping. Access Siri either through voice or the enlarged side button.
    • Confirms facial recognition for unlocking, called Face ID.
    • Front-facing TrueDepth system features: Infrared camera, flood illuminator, proximity sensor, ambient light sensor, speaker, microphone, and dot projector.
    • Face ID will recognize you with a hat, glasses, makeup, haircut, etc. and reportedly won't be tricked by a picture of you.
    • Can use Apple Pay through side button and Face ID.
    • Face ID also works with third-party apps that worked with Touch ID.
    • Face-controlled Animojis, or animated emojis, confirmed. Create and share within Apple Messages.
    • Camera improvements: Dual optical image stabilization (wide-angle and telephoto), better low-light zoom, improved video stabilization, Portrait selfie modes.
    • Update: Camera salso includes Portrait lighting and quad-LED True Tone flash.
    • Specs: two performance cores, four high-efficiency cores; Apple-designed performance controller, GPU, ISP, and video encoder. Battery lasts 2 hours longer than iPhone 7.
    • Wireless charging mat with charging happening through the back using the Qi standard. Same charging works for the other new iPhones and the Watch Series 3.
    • Pricing: Comes in 64GB and 256GB and starts at $999. Order October 27 with shipping on November 3, which backs up rumors of production delays. No comments about potential scarcity.
    • Apple investors are taking just a tiny bit of profits after the stock's 39% run higher this year. Shares were up on the session into the event, but are now lower by 1%.

  79. Made a quick 12% on my QQQ's today with that little dip. Might get to reload tomorrow. 

  80. AAPL – The watch does seem to be the story.  Call me a skeptic on the new phones and how they will do.  I went from the Apple 6S to the Galaxy 8+ and couldn't be happier.  Great performance, battery life camera, OLED screen, wireless charging, not gouged on GB's, touch ID and face recognition.  Voice recognition so much better than Siri which I use much more often for search.  Got it for free and $300 back from my carrier so was also a great deal.  I find iTunes only so so as a music subscription and love the Spotify integration with google chromecast and other google services.  I know not many people will switch and Phil you are right about security and that Apple always works, but for me the switch was fine.  I did have a couple of apps I used on Apple that weren't android compatible though and that sucked.     

    I think the China and India story is what will determine Aapl's  near term success.  The Apple app economy seems less important over there and WeChat is killing it with probably over 1 billion monthly active users in the next quarterly report, and half of the users spend more than 90 minutes per day on it.  No need for the Apple app store and expensive phones.  Yes, some will surely want to show off their expensive iPhones but 10's of millions of them in China?  WeChat is much stronger than when the iPhone 6 came out so the Apple upgrade cycle may not be as strong in China.  

    Also will be Interesting to see if iWatch will add iPhone stickiness.  My guess is yes.

  81. Priorities / Phil – That's correct. I can justify spending the money on a better computer and/or screen but not on a phone or car (anymore). I guess AAPL knows who they are selling these iPhone X to – the top 10% who can afford them. 

  82. API reports crude up 6.2 MBA, gasoline down 7.9mb, distillates down 1.8 mb. Phil I know we must wait for EIA but do you have any comments about these numbers? If these numbers were accurate for instance what might you think prices would do? I don't know how the storm skewed numbers will affect traders, so I'm looking for your experienced opinion please. 

  83. Is there any opportunity to make a buck trading oil or gasoline tomorrow or should we stay away if it looks like this?

  84. I have one short CL at 38.24.  and two short TF at 1417.5

  85. Latch I am going out on a limb and saying you meant 48.24 for you oil short. I am stumped as to which way this will go from here although tempted to short. I will just wait and see what happens overnight I think.


    Just be careful, the build is expected. Everyone knows we had a hurricane. As we get closer to the Aramco ipo the Saudies will pull out the stops to keep oil up, and unless we can drag brent down with us we have a $6 spread that should help keep us from going much lower. I respect Phil's opinion but there's a lot of reasons for higher oil, or at least steady oil. I'm not in futures, but swing trading USO options… just don't expect much of a fall tomorrow.

  87. API seems like what was expected so no change and no particular reason to trade, though I'd lean short, if anything. 

  88. Phil, you said  ~~CTL/Albo – Of course this will put them massively in debt and open to attack.

    I don't understand why you are negative on this name.  If anything, I think it's compelling at this level.  Both companies are profitable and CTL has an 11% yield.  What attack are you referring to ?

    From CTL on the LVLT merger :

    ~~Expect to Achieve $975 Million in Annual Run-Rate Cash Synergies that will Enhance Ability to Invest in Advanced Networks
    •Transaction Expected to be Accretive to Free Cash Flow in First Year Following Close and Significantly Accretive on an Annual Run-Rate Basis
    •Expect to Maintain CenturyLink's Annual Dividend of $2.16 Per Share

    ~~ LVLT has almost 10 billion in net operating loses (NOL) which will shield earnings quite a bit. 

  89. How Trump Is Destroying America

  90. Amazon and Apple both want James Bond

  91. How the hurricanes hurt OPEC

  92. thanks craig — yes 48.24…

  93. Toys “R” Us’ Potential Bankruptcy Threatens $3.6B in CMBS

  94. Got out of CL last night .. appreciate the comments. 

  95. Good morning!

    Oil/Latch – We got a pop this morning on more  OPEC extension talk, now $48.70 is a tempting short but I'd rather see $49 or below $48.50 to get started.

    Honey badger up and up:

    Coffee blasted off too:

  96. Hi Phil, I was enthralled with the Apple's New Products session.  First I had seen a One Republic performance. Tight group. Unfortunately the sound system wasn't good. Do you have a recommendation for a Jan 20 trade? Thanks.  PS. I think it is at a great long buying point.

  97. Apple :


    Another year, another failure for Liquidmetal (LQMT) to become the supplier  carcass of Iphone or Iwatch…8 years in a row..

    A amorphous metal body  has  lightness and durability, and resistance of carbon fiber, Apple has been in deals with them since  Jobs days , all the sim extractor (1 billion) are made by them, but no way to get the real business…shame!.