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Mandalay Monday Mayhem – Biggest Mass Shooting in History Starts the Week Off with a Bang!

‘Horror show’: Vegas eyewitnesses recount chaos of Mandalay Bay shootingAnother day, another mass shooting.

At least 50 people are dead and 200 are injured as a gunman (American male, 64) opened fire on the crowd from the 32nd floor of the Mandalay Bay hotel in Las Vegas, which overlooked the concert.  According to the NRA, if only the crowd were all armed as well, they could have opened fire at the hotel and then the hotel residents, packing their legally purchased firearms, could have returned fire on the crowd and later we could sort through all the bodies and figure out who started it.  Wouldn't that be better than just banning the guns?

As it is, this is simply horrific and yet another concert tragedy to bookend the Summer of 2017.  The bombing in Manchester in May was terrorism, this was just a pissed off white guy, opening fire on a country music crowd, of all things. There's no amount of concert security that can protect you from automatic weapons fire from a hotel across the street. 

All of Las Vegas went into lockdown following the incident, with flights grounded and guests ordered to remain in their rooms while police ran down leads on possible accomplices or other planned attacks.  Thankfully, nothting else has happened – but this one was more than enough!  

Typically, the markets seem unphased by tragedy – and there was plenty of it over the weekend beginning with the massive unfairness of the Trump Tax Plan, which turns out to be exactly what we thought it would be – yet another transfer of wealth from the poor to the rich.  As I have pointed out before, the rich have not gotten so rich that any attempt to increase their own wealth comes at a horrific cost to the "losers" in the equations – which is pretty much anyone not already in the Top 1%.  

The new tax framework, which the White House rolled out Wednesday, is heavy on cuts for corporations, which tend to reward shareholders, as well as reductions for business owners. As a result, its benefits are skewed toward the wealthy – just over half of the cuts, which total $2.4Tn over a decade, would go to the Top 1% of taxpayers, who would see their after-tax incomes jump about 8.5% on average during the first year of the plan. In contrast, the Middle 20% of taxpayers would enjoy just a 1.2% bump.  By 2027, 30% of taxpayers earning between $50,000 and $150,000 and 60% of those making between $150,000 and $300,000 would owe more to the government. Meanwhile, nine in 10 members of the Top 1% would get a tax cut.

Related image

There's nothing amazing about what Trump and his Top 1% are doing to this country.  What's amazing is that by simply eliminating any negative views of Capitalism from our education system (and most TV and Film) for a few decades and by pushing forth the idea that anything that smacks of Socialsim (an economic system where the needs of SOCIETY are taken into account) is considered anti-American – has led us back to an economic situation this country hasn't sufferred through since we supposedly learned our lessons in the 1930s.  

Of course, how can anyone be expected to know what happened in the early 1900s (other than a film version) when no one reads books anymore – or goes to movies where robots aren't crushing each other?  Of course, kids better toe the line or they face serious jail time these days.  In that same excellent movie (that nobody saw), then humble Harvard Professor Elizabeth Warren lays out the issues that drove her to run for public office but Warren too has been "radicalized" by the elite-owned media and painted as a fringe outsider – rather than an intelligent, concerned citizen.  

THAT is a person who SHOULD be in Washington, looking out for the people's interest but, because she's a Democrat, the "deplorables" hate her automatically and hate what she says – even though what she is saying is that they are being treated unfairly and she wants to help them.  If you think that must be frustrating for Elizabeth Warren – try being Hillary Clinton!  

Of course, mankind has a history of nailing our would-be saviors to crosses rather than allowing them to change the status quo so Hillary and Elizabeth are in good company (don't forget, Jesus' big crime was annoying the bankers).  Meanwhile, the people turn to false profits – as promised by Team Trump and all seem ready to completely ignore the facts – and math – and accept a tax structure that will put the nail in the coffin the Middle Class is being buried in.  Needless to say, this will not end well. 

Meanwhile, our job is to become as rich as possible because it is really going to suck to be anything less in Trumpmerica.  The longs in our portfolios are doing very well (see our weekend portfolio reviews) and there's still time to grab the index puts we featured in last week's PSW Reports.  Unfortunately, it's a bit late now to follow our oil short (/CL) using the Futures at $52.50 as we just crossed below $50.50 for gains of $2,000 per contract from the top.  On Thursday, we featured an options trade, using the Ultra-Short ETF (SCO) as an alternative:

If you don't trade Futures, you can play the home game with the Ultra-Short ETF (SCO), which is down about $32.50 and we can assume things calm down in a month and go with a November spread like:

  • Buy 10 SCO Nov $32 calls for $2.50 ($2,500)
  • Sell 10 SCO Nov $37 calls for $1.50 ($1,500)

That's just $1,000 on the $5,000 spread and makes $4,000 (400%) if SCO is over $37 in mid-November and it was at $40 at the beginning of the month, when oil was $47.50 so we're looking for a 10% correction in oil between now and Nov 17th (option expiration day).  For those of us who lose money on Oil Futures shorts, rather than stay on the roller-coaster, we can shoot to get even by playing with 1/4 of our loss, rather than letting the whole thing ride with all the current uncertainty.

SCO is already blasting over $35 this morning and our spread is looking good with the Nov $32s already at $4.40 while the short $37s are $1.95 so net $2.45 ($2,450) is up $1,450 (145%) in just two market sessions and well on the way to the full $4,000 gain so still not a bad play from here – if you don't mind picking up our scraps.  If you don't like to miss the first 145% of a planned 400% gain – you can subscibe to the PSW Report for only $3/day and you will have these morning Reports delieverd to you, in progress, at 8:35 each morning.  

Making 145% in two trading days is a great way to move on up towards the Top 1% and, believe me, they did NOT make their money by putting in overtime at the plant (perhaps by ordering it, though).  Ridiculous gains like these are a direct result of the kind of market manipulation we track at PSW and it's getting worse and worse as the rich get richer and more powerful and Trump has his regulators looking, not just the other way – but for ways to HELP distort the markets, which the President considers the primary measuring stick of how he's doing.  

Keep in mind, our index hedges are hedges, which we expect to LOSE money on if the market keeps climbing.  The trick is to have plenty of long plays to back them up and, again, we had plenty of those ideas in the last few weeks of Reports as well.  In fact, we also did a Top Trade Alert Review over the weekend and our March/April/May period saw 13 alerts sent out, 10 of which were winners (76%) for a net gain of $24,665 so far.  

There should be some buzz in the security space this week – especially as I'm sure the idea will be raised about hotels screening bags like airports do.  Companies benefitting from this would be Analogic (ALOG) and OSI Systems (OSIS) and the penny stock, View Systems (VSYM) is also interesting at 0.02 but all these require more research before I would call them a pick, though I'll toss $500 and VSYM just for fun!  Consider it a Vegas craps roll…

The Fed's Robert Kaplan will speak at 2pm this afternoon and then Yellen will come to bat Wednesday at 3:15 and then 9 Fed speakers on Thursday and Friday, so one has to wonder what they are worried about?  Non-Farm payrolls is the Big Kahuna on Friday Morning but it's nothing but record highs today – including Russell 1,500 – so don't say you couldn't get a good entry on the Ultra-Shorts (TZA).

A few earnings are trickling in as well:

Be careful out there,

- Phil


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  1. That tax cut better be huge to support these valuations!

  2. Speaking of tax cuts, it was funny to see Mnuchin and Mulvaney on the Sunday shows trying to spin their ways out of questions. When asked what percentage of the tax cuts would go to the top 1%, they answered that not all the details were final so it would only be speculation. And then when asked to prove that Trump would not benefit personally (as he claimed), they said that people would be provided enough information in due time! What a joke!

  3. Good Morning.

  4. CMG breaking below 300 again.  Let's see if this one sticks.

  5. That SCO play is a home run already

  6. TEVA – Off to a good start.

  7. SGYP – up again today…. i see no news, however they are due for any update in Q4 – wondering if word has come back?

  8. STJ….markets don't care.  Joke's on us.

  9. So true Pharm!

  10. Go TEVA!!!

    please no tease!!!

  11. Anyone know why GM is up and M is down?

  12. As Phil pointed out, what's with RH's put prices, and where would you go?  $25 or  $45 or both?

  13. Paddock had a history???

    "The gunman was previously known to local police for past run-ins with law enforcement, according to people familiar with the investigation. However, police in Las Vegas had only minimal interactions with Paddock before the shooting, Lombardo said at a news briefing." – WaPo

    But no he did'nt???

    "He was a resident of Mesquite, Nevada, some 130 kilometers (80 miles) northeast of Las Vegas. Mesquite and Las Vegas police both said they had never had any contact with Paddock and he was not known to the authorities." – Israel Times

  14. He took his own life???

    "Paddock, 64, was found dead in his hotel room by Las Vegas SWAT officers who responded to calls about the shooting, police said. They believe he took his own life." – WaPo

    Police shot him to death???

    "Police said Paddock was killed after a SWAT team responded to reports of multiple gunfire from the Mandalay Bay, a hotel-casino next to the concert venue." – Israel Times

  15. Vegas Police detained and released his domestic partner???

    "A woman, Marilou Danley, 62, who had earlier been named as a person of interest, was detained, but Las Vegas police later said she was released without charge and is not believed to have had any connection to the shooting." – Israel Times

    How could Vegas police do that, if she was found outside of the country???

    "In the initial chaotic aftermath of the shooting, authorities had searched for a woman named Marilou Danley, described only as Paddock’s “traveling companion.” Lombardo said during a news briefing Monday morning that investigators spoke with Danley, who was found outside the country, and do not believe she was involved in the shooting."

  16. FU M!!!!!wtf?

  17. rustle, are you short on CMG?  i thought the board here was long!

  18. Police and counter-terrorism officials in Las Vegas were already on high alert.

    Last week Islamic videos calling for attacks were posted featuring multiple destinations including Las Vegas.

    Such videos had surfaced as early as MAY.  

  19. They have been on high alert since 9.11.01…..

  20. Good morning!  

    Big spike up at the open but it's Monday so we won't know what's real until tomorrow.  

    Taxes/StJ – What gets me is that this Administration has lied about EVERYTHING since day one but people are still willing to believe them about tax cuts.  What has happened to this country?   This isn't just bad policy, this is TERRIBLE policy – yet no one seems to be able to stop it.  

    CMG/Rustle – Flushing out weak hands ahead of Burger roll-out.  

    Here's How Chipotle Plans to Save Its Burger Chain

    I think earnings (10/24) will be BTE and that will be the last we'll see of $300.  Not many analysts expect much out of them.  

    Trump is about to speak – I wonder how he can screw up a speech about a national tragedy?

  21. Interview and tweet, woman celebrating 21st birthday was in front row. Says another woman came during show & told everyone they were going to die.

  22. I do believe that the tax package will not pass, much like ACA repeal.  Washington does not want Trump to succeed.  But still, you have to wonder what the hell is going on in this country.

  23. Mary Lou Danley – visiting Dubai in 2016.

  24. Phil, whats "BTE"??? Better than ever?

  25. /NG, below $3.  Is it a good time to go long again?   This futures play seems to be like a broken record. 

  26. CMG/Lunar

    Had long puts last week on it which did well, no position this week on it at all and will wait for earnings before taking a solid position either way.  Right now I've been going short on spikes as I think the company is still overvalued, think earnings will not be good and queso is a disaster even though Ackman said he loves it and so does his staff, and if he wasn't the largest shareholder they'd be gagging from it.

  27. SGYP/Batman – Just people guessing, I think.  

    SGYP/Jet – Still in the OOP.  We're looking for $4 in 2019.

    Good team effort there!  

    Trump made a good statement on the shooting.  Stuck to the facts with a good tone.  

    GM/Baron – I see nothing.  Nothing on M either – strange moves.  

    RH/Baron – The recent, violent moves (75% up, 40% down, 60% up) is what's creating the crazy put pricing.  If they can move that much in 4 months, what will happen in 16 months?  Anything is possible so both puts and calls have crazy pricing.  They are good for $3/share in earnings so anything below $30 is kind of silly and you can sell the 2019 $30 puts for $3.50 to net in for $26.50 – that's the way I'd go to start a position or raise cash.

    ISIS/Naybob – They wan to seem like they are more dangerous than they actually are.  Still, we'll have to wait and see what the facts are.   As to Danley, she was a high-limit casino hostess – going to Dubai to schmooze wealthy gamblers was her job.  

    BTE/CRS – Better than expected.  

    /NG/Joseph – Safer to wait when it's below $3.  Not too much support down to $2.50 if it really breaks.  

  28. Phil,

    What are you doing with /TF shorts? I need to double down to try and get out. Is this s good spot to do that?

  29. how is this news? At leas tit wasn't first graders "this time."

    When the general public can purchase weapons of mass destruction I don't even know how this can even be news anymore.

  30. Phil – morning post / socialism – military spending is socialism by definition (taking money from the public to provide for a common service run 100% by the government). How do they get away winning the messaging on this, when they're actively doing it? Socialism is bad if you get healthcare and "not bad" when get Freedom Isn't Free bumper stickers?

  31. Crypto gets an index fund

  32. I think is God punishing USA for Trump?  Massive hurricane floods, fires, killings  I'm sure if this happened under Obama some Right Wingers would be saying that. 

  33. txchili – always my interpretation of these things. Where mathematics and policy collide

  34. CBI – New recovery high. 

    Think the Jan 19 $12.50 puts look interesting.

  35. 58 dead and over 500 injured now in shooting.  Officially deadliest in US History.

  36. A Rare Joint Interview with Microsoft CEO Satya Nadella and Bill Gates

  37. As Japan’s Stocks Rally, Is the Recovery Finally Here?

  38. Las Vegas Shooting Leaves at Least 50 Dead, More Than 400 Injured

  39. Phil – That Little Shiite Sunni Thing – While the Las Vegas strip was getting lit up in a different sense,  one should remember Muharram is not just a month, it is when "Ashura" mourns the "Death of Imam Hussain".  Google that last quoted phrase for reference.

    Friday sundown till Saturday sundown, marked the annual celebration where Iraqi Shiite Muslims take part in a traditional mourning event to mark the killing of Imam Hussein in 680AD.

    Imam Hussein’s death was part of a dispute over who should succeed the Prophet Mohammed, which eventually developed into a bitter schism between the Sunni and Shiite branches of Islam.

    Unless you have an aversion to seeing a lot of bloody self flaggellation, and children getting gashed with swords, here are photos of the event.  Question: What are the odds of the worst mass shooting in recent US history occurring the day after that celebration?  In the big scheme of things, probably not so much, one would hope.

    Gibbs Rule #39 and 39A are invoked and Out.

  40. this "pension bomb" is meaningless. They are simply going to wipe them out.

  41. Casino stocks slide after deadliest mass shooting in modern US history

  42. Gerrymandering, a Tradition as Old as the Republic, Faces a Reckoning

  43. Phil/FTR/CMG

    Good morning!

    FTR: I have 3000 shares at $17.64 and have received 2 dividends. I am afraid to sell calls at this the same time, I have some concern about possible BK. What would you do? I could sell the Jan $12 calls for $1.20 but that would not get me anywhere close to even and more likely, stock would be called away.

    CMG: sell the Jan $250 puts for $6?? I like the burger idea and together with the double bottom on the chart, it looks like a potential winner….only thing would be nice to protect oneself from a drop to $250 if earnings crap out…ideas?

    Thanks, as always for your analysis.

  44. It's interesting that Clark County DA, Steve Wolfson, stated that this was a "WMD" "A Weapon of Man Destruction" and that he was "pleased" this "does not involve politics, republican or Democrat, but as Nevadans"….

    My sense is that we had a senior citizen – Not a trump supporter –  fearful and mad as a wet hen, who lashed out at what he considered a gathering of 'them'.


    Quiet and Reserved until they're not…..

  45. It is in the best interest of Las Vegas that this incident be of a domestic nature….even trump knows that….

  46. M – might be sympathetic follow of JWN which has reports the privatization talks are 'faltering'

  47. Too bad for my Twins, whose 18th birthday was yesterday, to have this as a reminder of 'Things that happened on October 1st'


    They were born in Las Vegas.

  48. NVCR/Scott from Friday….using magnets to treat Glioblastoma.  It is approved, but only helps live a few months longer.  I would not want to live a few months longer with Glio.  That's just my choice. Not really interested in the technology nor the stock.  Not really sure what the technology presents in patent coverage either.  

  49. “I could stand in the middle of Fifth Avenue and shoot somebody and I wouldn’t lose any voters.”

    I'll count "1020" in that group. Sheesh the garbage I have to read on this board.

  50. This market does not give a hoot about anything happening in the world.  Must be the Russians keeping it propped up.

  51. BDC…woke up on the wrong side of the bed. surprise

  52. Bio – Have you had your run today?


    Try not to read between the lines. If you need me to clarify my comments, just say so….

  53. Another thing Bio. It would amaze me after all these years on the board with me, that you could somehow miss-understand my comments to call them "garbage"…..Not Cool.

  54. PFE – Jan 2019 32/40 BCS with 32Ps for net $2.22ish.  ITM

  55. I love you 1020….always remember that! heart

  56. Phil,

    I have some notes on DIS as a new trade with 85 puts and 80/95 spread; that seems too low after  today 

    Also, how do I get into the butterfly portfolio?  The only one that seems obvious to me is COST.


  57. Thanks Pharm!  :)


    I needed that….

  58. 10/2/2017, 12:31:25 PM ET

    Deutsche noted today, that they expect autonomous vehicles to produced sooner than expected at GM following a meeting with management. 

    They see the large player from Detroit well-positioned to benefit from an autonomous future.

    The gains today follow a large price target increase and bullish commentary on the stock from Deutsche Bank, on Sept 25th.

    Deutsche released research with a price target of $51/share on the stock.

    "GM's AV's will be ready for commercial deployment, without human drivers, much sooner than widely expected (within quarters, not years), and potentially years ahead of competitors," wrote analyst Rod Lache.

    Today the company released its plans for and "All Electric Path to Zero Emissions"

    The company told investors about its plans to introduce 2 new all-electric vehicles that will be released in the next 18 months.

    It believes these 2 models will be the first of 20 to be released between now and 2023. 

    Finally, the co introduced its Silent Utility Rover Universal Structure (SURUS), a fuel cell powered heavy duty truck, which "could be used as a delivery vehicle, truck or even an ambulance."

    Shares are up 4.4% since the Deutsche Bank research claiming GM up on more  Deutsche talk

  59. Unreal Pharmboy. For one comment? Really?

  60. Phil / BID – What are your thoughts on BID?  I was looking at starting a position with 2019 puts.  TIA

  61. General Motors continue to rise on headlines co will release 2 new electric vehicles in the next 18 months  (41.96 +1.58)

    10/2/2017, 12:10:10 PM ET


    Here's the headline a few minutes earlier

  62. emailmike,

    Don't know if its appropriate to jump in on a query to Phil, but I see BID up to resistance, and low volume on the way up  so I would wait to see what happens this week first.

  63. More on the ridiculous laws on firearms in Nevada…

    Drink'n, Gambl'n and Machine Guns…what could go wrong? :(

  64. Nasdaq is rolling over and /TF back below 1,500.  

    Dow still flying:

    /KC looking bottomy.

    /KCH8 is at our long goal at $130.

    Palladium getting killed – it's the only metal that's down much, for some reason:

    /TF/Japar – Just hanging on for now, want to see how 1,500 goes this week.  I'm not adding more but my break-even is still 1,471, which is now 2% down from here so not likely I'd get it in a day.  I'd rather put money into long /KCH8 than more /TF shorts!  

    Public/BDC – Yes, well with 320M people, there's bound to be hundreds of psychopaths and there's no way to control that but, if they couldn't get hold of weapons that can kill hundreds of people in minutes – then we could limit the damage they can inflict.  Instead, the solution will be to turn every place more than 12 people congregate into a security checkpoint because people MUST have guns — no matter how many Billions of Dollars we then have to spend to look for those guns and no matter how inconvenient it makes everyone's life and no matter how many people die.  America – F Yeah!  

    And this, ladies and gentlemen, is our future:

    Just get used to it!  

    Socialism/BDC – It's all about having a low-educated population rendered incapable of critical thought (met any philosophy students lately?) and taught to digest information in sound bytes.  I read an article recently that pointed out how ridiculous it is that a country full of people who profess to value freedom above all else submit themselves to dictatorships at work in exchange for money.  People trade freedom for comfort all the time and these guys have gotten really good at selling it. 

    God/TX – Maybe:

    Fuck you, Mr. President.

    Everything's broken.


    Muslims/Naybob – Not sure why you are so gung-ho to tie it into Muslims.  American's are perfectly capable of being psychos without anyone's help.  It was also Yom Kippur so I guess we can tie this into the Jews as well.  Probably less Jewish country music fans than Muslim ones…

    Paramedics from the Magen David Adom ambulance service treated over 1,500 Israelis over Yom Kippur, the Jewish Day of Atonement and the holiest day of the Jewish calendar

    Those crazy bastards – solid evidence if ever I've seen any!  

    FTR/Maya – Well, it's at $12.10 and you are in at $17.64 ($52,920), so what if you sold 1,500 for $12.10 ($18,150) and sold 15 2019 $15 puts for $7.05 ($10,575) and 15 2019 $13 calls for $1.75 ($2,625).  That would put you in 1,500 at net $21,570, which is $14.38/share less $1,800 x 2 dividends you collected drops your net to $11.98 so, even if you get called away at $13, it's a small profit plus more dividends ($900/qtr now) but you've deleted your loss, cut your exposure and your worst case is now owning 3,000 shares again but now at ($11.98 + $15)/2 = $13.49.

    To summarize, we take $31,350 off the table and drop your basis from $17.64 to $13.49 – in the worst case!  Aren't options fun?

    CMG/Maya – Well I wouldn't get too excited about burgers as there's a lot of competition and they aren't even leveraging the Chipotle name but sushi burritos can still double their business – as can many things, including simply not making people sick for maybe 12 consecutive months.  If you are not in CMG, why not just pick up the 2019 $320 ($/42.50)/$370 ($26) bull call spread at $16.50 and then, after earnings, if CMG pops, you will be in good shape for a $33.50 potential gain (200%) and, if earnings are bad, THEN you can sell $250 puts and use that money to roll the long calls lower (if you are still enthusiastic).  

    THEM/1020 – I love all the speculation because people don't want to wait for an investigation to turn up some facts.  

    Paddock's brothers were stunned to learn Monday that their sibling was the suspected perpetrator of the largest mass shooting in modern American history.

    Eric Paddock of Orlando, Florida, said he had "no idea" why his 64-year-old brother committed the shooting.

    “Mars just fell into the earth,” he told NBC News. “We’re completely dumbfounded.”

    Eric Paddock said his brother was retired and was "just a guy" who went to the hotels, gambled, and went to shows.

    Stephen Paddock's brother Bruce Paddock, who lives in California, said his family grew up in Sun Valley, California. Their father, Benjamin Paddock, was on the FBI's Top Ten Most Wanted list for robbing banks.?

    Bruce, who said he hadn't talked to Stephen, who lived in Mesquite, Nevada, about 80 miles northeast of Las Vegas, in approximately 10 years, said his brother made money through apartment buildings, which he owned and managed with his mother, who lives in Florida.

    He added that his brother was a laid-back, "never-in-a-hurry" type of guy. Bruce said his brother was a law-abiding citizen who never did anything violent prior to the shooting.

    The shooting is not believed to be connected to international terrorism, NBC News has learned.

    The suspect was a licensed pilot, who owned two planes. He also had a hunting license from Alaska.

    Between 1985 and 1988, he worked for a predecessor company of Lockheed Martin. Public records show he was employed as an "internal auditor."

    I know people want to believe a regular person wouldn't do this – but they can.  Always better when we can blame outsiders for our problems, right?  

    M/Scott – That's as good a reason as any.  Both are down about the same. 

    Twins/1020 – But they didn't stay in Vegas?  cheeky

    So much for a sell-off.  Just have to buy those friggin' dips.  Dow up 113 now.

    PFE/Pharm – Why now?

    Butterfly/Baron – LOL, you're right, the Butterfly Portfolio doesn't really have many butterfly plays anymore as they have matured and we also got more bullish in our adjustments, so a lot of them are simply long plays now.  If you remind me on Weds am, we can go over the portfolio and discuss it in the Webinar.  New butterfly trades are few and far between and the current market environment isn't really good for new ones.  

    GM/Baron – They are wrong, autonomous vehicles will make Uber (or whoever) super-cheap and people will be able to rent cars by the minute.  I have a budget down the street from me and they deliver a car now but if they could stock 100 cars for our 12,000 person town (or whatever number reliably handles demand) then probably, out of 4,000 homes with 2 or more cars, we could eliminate 2,000 cars or about 20%.  Add that to Uber as a fill-in and what kid is going to want to work their ass off to pay for a car for no actual reason?  I'd say this will cut auto demand by 1/3 over time (at least) – especially new car demand.  

    Keep in mind it's a $300/month payment and $150/month insurance and then gas etc so $500/month to own a cheap car for my kids or they take an Uber pretty much anywhere in the country for $5-8 and share costs with their friends most of the time.  Are they going to need a ride 100 times a month?  I did this experiment with my girls over the summer – giving them total use of Uber to do anything they wanted and Maddie, who has friends with cars, didn't even hit $100/month and Jackie was between $150-$250.

    Maddie has decided she doesn't want a car at all and a couple of her friends have given up cars and switched to Uber after seeing her enjoy her summer more than they did.  Jackie wants to drive but that's because none of her friends work and she hasn't actually done it yet.  We'll see how it plays out for her (16 in Feb).

    I don't think that's atypical – I think the auto industry, long-term, is in big, big trouble since it basically makes no sense to own something you only use 2 hours a day when it can be rented out far more efficiently.  The reason Uber has a $60Bn valuation is because their investors are looking at that future, where swarms of driverless cars (saving them 30% and driving ride costs below $5 around here) will be sent wherever the demand is projected to be by AI systems.  

    Bid/EMike – Old favorite but we got in in the $20s so $47 doesn't seem cheap to me.  They go through huge cycles and I prefer to simply wait for them to hold a few bad auctions so analysts can proclaim that the 300 year-old industry has suddenly died out (happens every time) and the stock goes off a cliff and we jump in and buy.  Other than that, they tend to be a total crap shoot.  

  65. Wow, time is flying today – 1:30 already?

    And what Baron said!  

  66. Twins/Phil  Leaving Las Vegas was the best decision the Twins ever made…. ;)

  67. PFE…why now?  Because that graph has a cup with handle formed…and why not?

  68. Phil/FTR


  69. Phil,

    I have a 17 year old son with a neurological impairment, and even he understands that a car is a crazy expense, risk and nuisance.

  70. Just to be clear on my comments regarding the Senior Sniper and Las Vegas. 

    I feel an Isis inspired attack would have major short and long term consequences to the economy and people of Las Vegas and Nevada….

     …We have become desensitized to domestic terrorism, which means it could have little to no effect on the Las Vegas economy.

  71. How many days in a row can IWM go up 1%? And what do we know now that we didn't 3 weeks ago? 

  72. The shooter's brother states…

    "I don't know how he could stoop to this low point, hurting someone else," Bruce said.

    He added that his brother was a laid-back, "never-in-a-hurry" type of guy. Bruce said his brother was a law-abiding citizen who never did anything violent prior to the shooting.

    Just like the shooter from Illinois that shot congressman scalise – Quiet and Reserved until They're Not….

  73. From briefing

    ~~Fed's Kaplan (Voter) says will have to take a hard look to see if the Fed should raise rates in December; believes can be patient in removing accomodation

  74. 515 people injured by one guy in a matter of minutes from 2 blocks away.  Wow!  

    Image result for gun retail stores supermarkets

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    Why not/Pharm – Seems a little toppy to me but, then again, I shorted the RUT 2.5% ago!  

    You're welcome Maya.  

    Cars/Baron – Uber technically doesn't allow under 18s but they seem fine if the girls use my account (and others too seem to find this).  I guess they don't want to advertise it as a "feature" but if I had Uber, I'd work on a child-certified driver program – I'm sure it can be done.  Or maybe it's a gap another company can fill.  As a parent, the time I save picking my kids up and dropping them off alone is worth way more than I pay.  Also, it's quite a comfort knowing my kids will never be stranded somewhere and also that they are free to make better decisions at parties or on dates that are not going well.  

    Terror/1020 – I don't see any evidence that ISIS was involved.  I don't think a single incident has an effect on anything.  If, on the other hand, a series of whatever were targeted – people would begin to change their habits a bit.  My Mom already called me and said to be careful at the concert tonight.  I promised her I'd duck if the bullets start flying.  From spending many summers in England I got used to being somewhere that had just blown up or somewhere that blew up not long after I left.  IRA bombings went on for years and people just basically ignored them – the whole "Keep Calm and Carry On" thing.  What else can you do?  My Mom lived in London during the blitz.  Her house was blown up, my Dad's house was blown up.  The thing is, you used to have to be at war for something like that to happen – now we do it to ourselves…

    Related image

    IWM/Mkucs – Clearly the default setting is UP.  Not sure what could derail it at this point. 

    Quiet and reserved/1020 – Well that's it then, let's start rounding them up!  cheeky

    Kaplan/Albo – Well that's good for a boost.  

    ISM was strong because Prices shot up 15% due to hurricane constraints.  Usual assumption is stronger pricing means more demand so this whole report needs to be watched carefully for a down move next month:

    • ISM Manufacturing Index60.8 vs. 58.0 consensus and 58.8 prior.
    • Employment 60.3 vs. 590..9 prior.
    • Prices 71.5.0 vs. 62.0
    • New Orders 64.6 vs. 60.3
    • Production 62.2 vs. 61.0

    Fed's Kashkari: Central bank rate hikes behind too-low inflation

    • Forget "transitory" factors, says Minneapolis Fed President Neel Kashkari, it's the Fed's decision to tighten policy over the past few years that's causing inflation to undershoot the 2% target.
    • He suggests not hiking rates again until core PCE inflation returns to 2% on a year-over-year basis (from the current 1.3%).
    • His comments suggest a December showdown with the FOMC hawks (including Janet Yellen) who have more or less promised one more rate hike this year.
    • Saudi officials steering efforts to prepare the kingdom for the post-oil era are on high alert after the nation's economy contracted for two consecutive quarters for the first time since the global financial crisis.
    • It's not unexpected, but notable, as OPEC members cut oil production to bolster prices.
    • GDP shrank 1% in Q2 after contracting 0.5% in the first three months of 2017.
    • Issuance of leveraged loans has topped $400B this year, according to Leveraged Commentary & Data – the earliest in a year it's ever topped that benchmark.
    • At that pace, issuance for the full year would be $539B vs. the previous record of $456B set in 2013.
    • In days-old, but significant news, a district court in Texas ruled that the Obama administration overstepped its authority when it cracked down on business inversions in 2016. The ruling, in a case brought by the U.S. Chamber of Commerce and the Texas Association of Business, said the IRS rule against the tax-reducing maneuver was "arbitrary and capricious" because it was instituted without notice and opportunity for comment, violations of law-making standards.
    • After the Treasury Department action, the number of proposed inversions dried up, including Pfizer's (PFE +0.9%) proposed $160B combination with Allergan plc (AGN +2.8%).
    • The U.S. Treasury and the plaintiffs have yet to comment publicly on the ruling.
    • Source: Reuters
    • The dollar index (UUPUDN) is higher by 0.6% on the session. It's been on rise since trading started on Sunday evening, and added to gains after stronger-than-expected prints on U.S. manufacturing and construction spending.
    • A team at Goldman – noting futures markets pricing in little more than one rate hike between now and the end of 2018 - says markets are being much too conservative, particularly with a sizable tax cut looking like it may be on the way.

    General Motors ramps up all-electric push

    • General Motors (NYSE:GM) says it will introduce two new all-electric models derived from the Chevrolet Bolt EV within 18 months.
    • The company has a long range plan to unveil 20 different all-electric models by 2023.
    • "General Motors believes in an all-electric future," says product development boss Mark Reuss.
    • "Although that future won't happen overnight, GM is committed to driving increased usage and acceptance of electric vehicles through no-compromise solutions that meet our customers' needs," he adds.
    • Previously: GM +4% on buzz over autonomous vehicle program (Oct. 2)

    SoftBank, Tencent behind $2B investment in Indian ride-hailing company

    • Indian ride-hailing company Ola announces a $2B funding round from a group including SoftBank (OTCPK:SFTBFOTCPK:SFTBY) and Tencent.
    • SoftBank has invested in several Indian start-ups including a $1B investment in e-commerce company Snapdeal and $70M in Grofers, a grocery delivery company. 
    • SoftBank is currently in talks to invest in Uber if the board issues don’t derail the effort. 
    • Previously: Reuters: Uber loses Northern European head (Oct. 2)
    • The acquisition by MasterCraft (MCFT +3.4%) of NauticStar in ~$79.8M deal has investors looking at the boating sector with renewed interest.
    • Malibu Boats (MBUU +3.1%), MarineMax (HZO +0.6%) and Brunswick (BC +1.7%) are all higher on the day.
    • Source: Press Release
    • Morgan Stanley check in on the railroad sector, citing some broad concerns on pricing and the risk to earnings growth.
    • The firm sees CSX (CSX -2.8%) as the weakest of the bunch, downgrading shares to Underweight from Equal-weight.
    • Union Pacific (UNP -0.8%) is lowered to Equal-weight from Overweight due to its exposure to coal and auto.
    • MS is more optimistic on Canadian National (CNI -0.6%) and Canadian Pacific (CP -0.6%) due to the expectation for higher volume of Canadian crude oil transport.

    • Nomura thinks MGM Resorts (NYSE:MGM) will see an elevated level of cancellations in Q4 due to the mass shooting near the Mandalay Bay hotel resort, but that the financial impact will be recorded as an one-time quarterly charge and be limited over the long term.
    • MGM is still one of the favorite stocks of Nomura casino sector analyst Harry Curtis.
    • The note from Curtis advises investors that all the positive aspects of the MGM growth story are still in play.
    • Morningstar analyst Dan Wasiolek is also weighing in on MGM. "Barring another tragic event in the gaming region the impact to travel and operators in the region could likely prove short-lived and pullbacks like these can be long-term add opportunities," says Wasiole.
    • Shares of MGM are down 4.79% on the day on volume almost 4X normal activity.
    • Previously: MGM Resorts down after mass shooting in Las Vegas (Oct. 2)
    • Previously: MGM Resorts responds to Las Vegas mass shooting tragedy (Oct. 2)

    Department store sector reeling on Nordstrom news

    • Department store stocks are lower after the Nordstrom family is reported to have hit some roadblocks in its effort to take the department store chain private.
    • J.C Penney (JCP -6.7%), Macy's (M -5.2%), Dillard's (DDS -4.6%), Kohl's (KSS -2.7%) and Sears Holdings (SHLD -3%) have all shed some of their gains fueled recently by M&A speculation.
    • Previously: Nordstrom slides on report of go-private obstacles (Oct. 2)

    EU drawing up patent fee guidelines that could target Qualcomm

    • The EU is drawing up guidelines on how much money patent holders like Qualcomm (NASDAQ:QCOM) can charge for the use of the patented technology.
    • Regulators will decide between a patent fee model, which charges based on how valuable the technology is to the final product, or a flat, fixed rate. 
    • Qualcomm charges according to the patent fee model and has previously charged Apple a percentage of device sales for the use of Qualcomm chips.
    • Qualcomm’s model started an ongoing legal war between Qualcomm and Apple. 
    • The EU hopes to finalize guidelines by year’s end. The guidelines won’t be legally binding but could form the backbone of future laws.  
    • Previously: Apple wants court to invalidate Qualcomm's business practice (June 20)
    • Previously: Qualcomm wants a court to block iPhone imports, sales (July 6)

    Disney +1.5%, Altice USA +1.1% after deal averts channel blackout

    • Walt Disney (DIS +1.5%) is the Dow's top gainer today, and Altice USA (NYSE:ATUS) is outstripping the broader market as well, up 1.1%, after word that the two averted a blackout on Altice's Optimum systems with an agreement in principle on a carriage deal.
    • Optimum has 3.1M subscribers in New York, New Jersey, Pennsylvania and Connecticut.
    • The fact that the deal happened at all, likely with higher fees charged to carry ESPN, is a "very bullish sign for Disney," writes analyst Michael Nathanson. "The Altice renewal is the first deal in the next cycle of ABC/ESPN affiliate agreements and should serve as a template for the next wave of deals."

    KGI ups time it would take Android makers to catch up with iPhone X camera

    • KGI Securities analyst Ming-Chi Kuo says Android devices will need up to two and a half years to catch up with the camera tech in Apple’s (NASDAQ:AAPL) iPhone X.
    • The estimate bumps up from the previous forecast of one to two years after Kuo watched official tech demonstrations of Apple’s TrueDepth camera.
    • KGI revised iPhone X shipping estimates for this year to 30M to 35M units, down from 40M, but maintains a “positive outlook” on future iPhone shipments.  
    • In other Apple news, grocery chain Safeway plans to have all 912 locations ready to accept Apple Pay at the checkout by the end of October.
    • Apple shares are down 0.71%.  
    • Previously: WSJ: Samsung earns $110 on each iPhone X (Oct. 2)
    • Previously: VirnetX shares up 33% on potential Apple case ruling (Oct. 2)

  75. Oil $52.50 to $50 is 5% (kind of) and the weak bounce is 0.50 to $53 and strong is $1 to $53.50 – so let's watch that:

    /NG did find a floor at $2.90.

    Now we'll see if /RB holds $1.55.

  76. Mandalay Bay still closed – people can't even go back to their rooms.  Whole strip is shut down around the area - bodies still being removed and active crime scene.  Other hotels still on lockdown – those guys are lucky by comparison.

  77. So is this year's PSW convention being done somewhere safe like Idaho?

  78. Phil,

    Wanted to talk to you about PSW investments and PSW Hedge Fund. Sent Greg an email but haven't heard back.

  79. Phil & Barron / BID – Thank you, much appreciated!

  80. Phil/oil

    In your comment above: oil to $50 from $52.50 (5%sorta)…weak bounce should be $50.50 and strong should be $51.50….

  81. Strong bounce should be $51

  82. NVCR/Pharm – thanks.. and down they go..

  83. Well, looks like we'll finish at the highs again – other than Nasdaq.

    I'm off to the concert so have a good night!  

    Convention/Rustle – We're trying to work out NY in the spring but fuzzy details so far.

    PSWI/Japar – Sorry, I did reply but it didn't send – resending now.  

    You're welcome EMike. 

    Bounce/Maya – Yes, a $2.50 drop means 0.50 bounces so $50.50 and $51.  Don't know what I was thinking at $53.50!  

  84. GILD – Closed near high for he day, 

    Nice rebound from Thursdays big selloff.

  85. the

  86. tsla-- manufacturing bottleneck… but they know how to handle it..

    good grief!

  87. VIX – barely even a blip at the open.

  88. Phil – "Muslims/Naybob – Not sure why you are so gung-ho to tie it into Muslims.  American's are perfectly capable of being psychos without anyone's help."

    I never made that conclusion or said that. I commented on the convenience of the appearances. I agree we don't need any help, that's the whole point.  It looks like an attempt on the part of Israeli radio and press to be a false flag.

     "shooter had 10 guns & 2 platforms set up to shoot from + cameras set up to see police arriving"   How does a 64 year old manage to single-handedly get all the above through a web of cameras and security systems that make the NSA look like nothing? Trust me, you deal an SBD in a casino elevator, and they know it. 

    Hotel was booked months in advance, this took some planning and aforethought, premeditation. Police originally stated two suspects, not one and according to eye witness accounts in this detailed video, multiple shooters, no doubt.  More than meets the eye? Lone shooter Oswald or the grassy knoll? TBD and Out.

  89. More lies from Mnuchin and co. And covering their tracks:

    In an interview on Fox News last month, Treasury Secretary Steve Mnuchin made a sales pitch for the GOP’s tax reform plan—specifically, its plan to cut corporate taxes. “Most economists believe that over 70 percent of corporate taxes are paid for by the workers,” he said.[...]

    Five years ago, the Obama-era Treasury department found the exact opposite. A research paper on the topic concluded that corporate tax cuts would overwhelmingly benefit owners of capital, rather than workers. Those findings have been removed from the Treasury Department’s website, reported the Wall Street Journal late last week.[...]

    In 2012, the Congressional Budget Office came to a similar conclusion about corporate tax cuts. The CBO found that about 75 percent of the burden of corporate taxes are borne by owners, and only 25 percent by workers. In 2013, the nonpartisan Joint Committee on Taxation performed it own analysis, and came to the exact same conclusion as the CBO.

    Otherwise, it doesn't benefit the top 1%!

  90. 6 Things Not To Do Post-Equifax

  91. Brother: Las Vegas gunman was wealthy real-estate investor