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TGIF – Quad Witching Madness

I love CASH!!! 

We cashed in most of our Member Portfolios so I'm not at all worried about what will happen today.  It's the end of the quarter for options and Futures (2 kinds of each) so "quad witching" and these days can have some violent swings – though we're not expecting anything dire.  We still thought it was a good idea to take advantage of this triple market top – JUST in case Q 4 Earnings don't go well or the Trade Talks don't go well or Brexit doesn't go well, etc.

Just because we moved to CASH!!! doesn't mean we can't still find fun things to trade.  We've been watching McDermott (MDR) collapse for the last few days and yesterday morning, I sent a Top Trade Alert out to our Members saying:

MDR – Fortunately, we got out of ours a long time ago as we never wanted them, we just liked CBI, who they merged with.  Needless to say, the merger has not gone well (which is why we didn't want to ride it out) and now they are calling in restructuring experts.  MDR says it "is taking positive and proactive measures, as we have done in the past, intended to improve its capital structure and the long-term health of its balance sheet."   You can take them at their word (as no one is) or you can imagine this is a sort of cover-up for their emergency measures to stave off some sort of disaster that's looming.

I do watch them (because they took away my CBI) and last year they took a $2.7Bn hit on write-offs and such and this year they lost about $190M in the first two Qs and it's doubtful they turn that around by the end of the year but they have $455M in cash and I bet they end up down less than $100M for the year with a profit in Q4.  

Assuming that's true – then $1.65/share is just a $300M valuation for a company doing $10Bn in business but $7Bn of that is CBI's biz and people are extrapolating MDR's poor performance to CBI's $7Bn – that's not likely to be the case but this year, as we expected, is a transition year and numbers look like crap and, if the economy tanks, then their timing is likely to kill them but, if we keep things together, they just got $4.5Bn worth of contracts from Aramco and another one from Qatar but probably just $100M for that one.  Still, that's business for the next 6 months on top of the normal stuff they have going on – there are possibilities so I like them as a flyer. 

At the moment, I'd buy the 2021 $1 calls (now $1.35) and wait on selling the $2 calls (now $1.05) as long as we hold $1.50 on the stock.  Hopefully we pop back over $2 and we can get $1.25 for the $2.50 calls (now 0.95 with a 0.75 delta).

Congratulations to all the players out there as it didn't take very long for MDR to get an unsolicited for their Lummus Technology division and the stock is testing $3 this mornng and, hopefully, will have a nice short squeeze to pop us over $3 for over 100% gained in a day.  See – we can ALWAYS find fun things to do with our cash!  That trade idea (at 11:20) was a substitute for people who missed our 9:48 am call, which was:

The MDR 2021 $1 ($1.50)/2 ($1.25) bull call spread is 0.25 or maybe 0.40 at the most – that's a fun way to play.

In both cases I'd take half off the table and put a stop on the other half if MDR fails to hold $2.50 to lock in most of the gains.  It's not that we love the stock – it's just that we thought it was oversold so we took advantage of the crazy-low options pricing.  That's the great thing about our Member Chat Room – so many smart people watching the market and exchanging ideas – we are often able to catch things like this – even when it's not something we usually pay attention to.

We have 3 Fed speeches today but NY Fed's John Williams, who just injected over $200Bn in to the markets in two days (including another $75Bn this morning!) to bring overnight rates down from a Greece-like 10% to 2%, has already made his speech and it didn't move the market.  $200Bn (so far) is the cost of the Fed lowering rates when they didn't need to be lowered on Wednesday – and that was just a 0.25% reduction – Trump wants another 1.75% cut and even beyond that – to negative rates, where the Fed would PAY the banks to borrow money – which is effectively constantly printing money for the sole benefit of the Banksters and their Top 1% clients (of whom Trump happens to be one).  

Image result for total us public debtAs we sit at market all-time highs, we have to consider how we got here and we did so on a mountain of DEBT.  We've added $12Tn in the past 10 years to our total debt and the pace is, if anything, accelerating.  That's $1.2Tn a year of debt in what is now an $18.5Tn economy so 6.4% of our 3% annual growth rate is DEBT!  That's NOT good.  

Of course, we've been worried about debt for a long time and the US, now at $22.5Tn in total debt, is "only" 121% of our GDP in debt while Japan is close to 250% of their GDP in debt.  As you can see from this debt map (from last October, when we were "only" 105% in debt) there are no other major economies in the deep red zone but Greece is still there and Portugal is still there and France, Spain the UK, Canada and Brazil are all just outside our "Ring of Economic Death" (Italy is as bad as we are) and ALL OF US are still borrowing money and debasing our currencies like crazy yet no one seems to think this is going to end badly. 

Image result for debt to gdp by country

Even as I write this, I remember making the same warnings back in 2007 and no one cared then either.  Now we're 120% more in debt and, despite a little market set-back in 2008 – we are valuing global corporations at new all-time highs – indicating that now one things we can't go another 100% in debt over the next 10 years.  Russia has little debt and the Arabs have little debt along with their bankers in Luxembourg and Hong Kong literally has NO debt (0.1%) so we know where to put some money to work over the next 10 years

The thing is, in a World that's only growing at a 2.9% pace (see yesterday's PSW Report) and with almost every single country running a deficit to keep up even that smallish growth rate, who exactly are we going to be borrowing all this money from?  As big of a disaster as George Bush was, he generally ran "only" $300Bn deficits until his last two budgets (2008 and 2009), when he jumped to $459Bn and $1.16Tn respectively.   Obama's first budget was 2010 and that was a $1.55Tn deficit and $1.3Tn in 2011 and $1Tn in 2012 and his last budget had a $666Bn deficit in 2017.  That was during an economic crisis and deficit spending totaled $6.8Tn over 8 years.

Trump started his 2018 budget with a $780Bn deficit and this year we already passed $1Tn last month so figure $1.2-1.4Tn for year 2 and even more coming over the next two years. So Trump is on a path to match Obama's 8 years of deficit spending in just 4 years – especially if he adds new tax cuts and stimulus (and loses his tariff money).  Where is all this money going to come from?

Just like in 2007, none of this stuff seems to matter – until it suddenly does.

Have a great weekend, 

- Phil



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  1. Good Morning

  2. Scandals / Phil – What is fascinating about all these scandals, besides the inherent fatigue of the daily revelations, is that the administration is simply making the argument now that even if there is an underlying crime, Congress doesn't have the right to investigate this president. They even made that case in court yesterday. They are claiming executive privilege for people who are not even employees! It's a dangerous precedent for the democracy because I imagine that the GOP will be impatient to investigate the Warren administration, but if you are sitting idle when precedents are being set, you can't complain when they blow up in your face. And then we end up with a system with unfettered presidential powers. How that's not worrisome for true conservatives is beyond me!

  3. Federally funded markets again…

  4. The farm bailout because of tariffs is now bigger than the automakers bailout that conservatives railed about in 2009:

  5. Bail out of farmers….LOL   I own quite a bit of farmland and received the 15 bucks an acre and it is barely a drop in the bucket.  More like nicer toilet paper. My plea has been since the Carter administration days…QUIT USING FOOD AS A WEAPON!

  6. Good Morning!

  7. Good morning!  

    Seriously, read this Oct, 2007 post I wrote:  Tuesday Morning

    I didn't try hard with titles back then…  Anyway, it's the same old song now as it was then and yes, I was worried far too early but it wasn't for no reason, was it?

    Why is the retail sector down 7% for the year if everything is so great?  I know, I'm supposed to switch my brain off and just go with the flow but even Superman can be more effective if he knows to look out for glowing green rocks.  The rational approach to this sort of market is to participate in the rally, enjoy it while we can, but keep a lookout for signs of weakness that undermines the overall strength.  As I said back on August 22nd: "We (US equities) may actually be the least sucky place to put your money in the second half of ‘07."

    That's still what the bullish premise is for US Equities – we're not as sucky as the rest of the World but is that a real investing premise?

    Notice at no point in this conversation are we discussing fundamentals!  This rally is nothing more than hyper-inflated capital looking for a place to go and US equities represent a fairly liquid, fairly tangible asset that can absorb Trillions of overseas dollars without becoming too unstable (we hope).  Just as we diversified into emerging markets when our economy was on fire in the late 90's (leading to disaster but that's another article), other countries will diversify into the pokey US markets, especially with a fire sale on the dollar.

    And that's what Trump wants again – he wants the Dollar to be devalued to prop up his economy into the elections.  You KNOW he'll have no problem taking the credit for it – even though it's actually a net negative.

    Big Chart – RUT with a nasty rejection but it was a 10% run from the Must Hold so 2% (weak) and 4% (strong) retraces are still bullish if they hold and this is not even 2% yet.  The other indexes could be consolidating for moves up or they could be topping – very hard to tell.

    Precedents/StJ – There are no precedents, unfortunately.  People who worry about precedents are people with honor and integrity – the GOP points to things that help them as if they were the gospel and completely ignore anything that doesn't align with their current thinking.  The entire law is becoming a joke and, at some point, the Dems need to realize they have to play like that too or they'll never win and that's exactly how we end up with those unfettered powers – whoever is "in" gets to make all the rules and that's that. 

    QE/StJ – Wow, that turned fast, didn't it?   And how much has it helped the market?

    You can see exactly why they jumped in in Sept.  

    Bailout/StJ – Exactly my point above – no integrity whatsoever.  

    Good point Willsons.

  8. Selling MDR calls to cover stock from yesterday (those calls are pretty rich!) and MJ puts…

  9. I bought the MDR stock too and it's up over 1K In a day. Been trying to sell calls-going 3.5 as this might have legs until Oct where I expect the correction. Maybe-maybe not.

  10. ALBO / MDR – thanks for this one! 

  11. Yes thanks for the heads up Albo. Couldn't resist BYND. Goes up and down like a yo-yo and I make some both ways. Like a slot machine! But more consistent with upgrades and downgrades daily.

  12. Batman & Pirateinvestor- You're welcome.  Glad it worked out. 

    Yes, BYND is a wild one !

  13. Jeffrey Gundlach Webcast from this week – He has great data he reviews I highly recommend it.


    Webcast  ( you can skip to about 10mins in)

  14. IIVI – Received approval from China to proceed with the merger of  FiNSR.

    Expects s to close on or about Sept 24.

  15. MDR/Ati – Good exit, the 2021 $1 calls peaked out at $2.20, now $2 but the $2 calls are $1.90 so no point even collecting the $2 if you bought the $1s for $1.35 and can just cover for $1.90 (+0.55) and then wait to see if you get your other $1.

    BYND/Pirate – You are braver than I am! 

    Rosengren agrees with me:

    Fed's Rosengren contends that rate cuts aren't costless

    • Wednesday's Fed monetary policy statement made it clear that views among the Federal Open Market Committee are diverging enough for dissenting votes from two sides of the 25 -basis point rate cut that occurred.
    • Boston Fed head Eric S. Rosengren takes the more hawkish view that rates didn't need to be cut, the second time in as many meetings that he, along with Kansas City President Esther L. George, dissented from the majority decision.
    • "The stance of monetary policy is accommodative," he said in a statement. "Additional monetary stimulus is not needed for an economy where labor markets are already tight, and risks further inflating the prices of risky assets and encouraging households and firms to take on too much leverage."
    • Lowering rates isn't costless, he added. He'll describe his views in more detail at a speech he's giving later this morning.
    • St. Louis Fed President James Bullard already weighed in earlier today with his argument for a 50-bp cut, saying that moving aggressively now is warranted to head off downside risks.
    • In about three weeks, we'll get a more detailed picture of the range of views expressed by the FOMC participants when the Fed releases minutes from the meeting.

    Bullard explains his vote for 50-basis-point rate cut

    • The outlook for slower U.S. economic growth, elevated trade policy uncertainty, manufacturing appearing to be in recession, and estimates of rising probability of recession led St. Louis Fed President James Bullard to vote for a 50-basis point in the federal funds rate at the FOMC meeting this week, he explains.
    • The FOMC cut its benchmark interest rate by 25 bps on Wednesday. His was the sole vote to cut by 50 bps, while two FOMC participants voted to keep rates unchanged and seven voted for the quarter percentage point cut.
    • He also points to the inverted yield curve and that U.S. government bond yields remain higher than almost every country in the G-7. In addition, inflation still remains stubbornly below the FOMC's 2% target even with a strong labor market.
    • "It is prudent risk management, in my view, to cut the policy rate aggressively now and then later increase it should the downside risks not materialize," Bullard said in a statement on the St. Louis Fed website.
    • "Although I disagreed with the committee’s decision to lower its target range by only 25 basis points, I remain confident that the committee will continue to monitor economic developments and respond accordingly as economic circumstances dictate," he said.

    New York Fed takes up $75.0B in Treasurys, securities

    • In its fourth day of overnight repo operations to help maintain the federal funds rate within the target range of 1.75%-2.00%, the New York Fed takes up $75.0B, the full amount of Treasurys and securities in the offer, vs. the $75.55B submitted.
    • In yesterday's operation $83.9B were submitted.
    • By collateral type, it accepted $59.15B of Treasurys, or $59.6B submitted, at stop-out rate of 1.80% and weighted average rate of 1.823%.
    • The New York Fed accepted all $15.35B of mortgage-backed securities submitted at stop-out rate of 1.81% and weighted average of 1.866%.
    • $0.5B of agency securities were accepted out of $0.6B submitted at 1.86 stop-out rate and weighted average of 1.860%.

  16. Phil,

    Carvana (CVNA) is at $77. I am bearish on it. How do you build a butterfly kind of position around it.

    Let's say I think it drops to $50 by 2021. How can I play that. Is this a good way to create a position?

    Buy 2 Jan 2021 $100-$50 Bear Put spreads for approx $27 each.

    Sell 15% off the price and approximately 60 days out options - 

    Sell 1 Nov $90 Call for $3.50

    Sell 1 Nov $65 Put for $3.0

    Repeat it every 2-3 months.

    Is that a viable way to do it?


  17. MDR—-thank you—I got out of all

  18. SOFR – so if you subscribe to my theory that fiat currency does not provide for enough money to efficiently match the now dominate knowledge economy, the SOFR rate explosion was a predictable consequence.

  19. Fed now says they will do Repos every day through Oct 10th?!?  Something is wronger than we were led to believe! 

  20. Long-Term Portfolio Review (LTP) – Part 1:  $1,724,780 (up 245%) is a very nice way to finish off our slightly less-than 2-year run, adding just under $500,000 since our last review, which was down $319,238 from the 7/19 review and what did we do?  We ADDED to our positions while they were down and we doubled down and we rolled down and we bought back short calls – not on all of them – but on the ones we had the most faith in.

    THAT is why we now have a net $200,000 (ish) gain since July 19th – well that and the market's insane ability to snap back from pretty much anything.  Again, this is why we cashed out – we could just as easily lose $300,000 next month so we'd have to spend $100,000 more (at least) protecting the LTP in the STP and, right now, we can just quit with a combined $2.5M from a $600,000 start – that's up over 300% in our paired portfolios in 2 years – why risk it at all?

    I will note the "keepers" – which means for me they are going straight to our Watch List and, IF they get cheaper – THEN I may want to start a new position but I'm very happy with where we've gotten to and, as I noted yesterday, the current global uncertainty is going to require a different kind of portfolio than the ones we've used for the past two years – and a lot of contemplation.

    • HMNY – Dead but the shares are still there so no point in selling for $576 – keeper.
    • NAK – Keeper, very speculative.
    • CANE – Was that even supposed to be in the LTP?  Oh well, quick profit.
    • Short Puts – As I noted in the Webinar, we sold $200,000 worth of short puts and they are up about $85,000 and that's about the right amount to be carrying after 2 years (we sell 1 or 2 each month) and then this Jan comes along and 4 of them expire and so on and so on.  This is the bedrock of the LTP strategy – just sell $5,000+ worth of puts each month on stocks you REALLY want to own if they get cheaper and you get paid if they never do get cheaper.  I did a big review in the Webinar and we'll start fresh next year.  
    • FTR – Keeper.
    • CZR – Huge winner after struggling and happy to take this money and run.
    • DIS – About $30,000 left to gain on this spread but not worth keeping with $45,000 to cash out. 
    • GOLD – It's a $20,0000 spread at net $8,700 so plenty of room to run and I have faith and it's a great inflation hedge so – keeper.
    • ARR – I'm torn on this one.  I think the REITs will come back but, if you were to cash most of the LTP and keep ARR, it's a disproportionate risk (same with all REITs) so not a keeper.
    • NRZ – Like ARR, I like them and love the dividends but not worth the risk.
    • T – It's going to be called away at $30 whether you keep it or not.

    • AAPL – Still my favorite stock.  This is a $120,000 spread that's in the money netting $32,837 so of course it's a keeper!  10 Sept $190 calls at $32 would have to be rolled to 10 March $220 calls at $14.80 and 10 March $200 puts at $7.60 but that's a very nice $30 ($300,000) roll on the short calls for net $9,600.
    • ALB – Finally went green.  If I were to keep it I'd drop to 10 long calls and cover them.
    • ALK – $30,000 spread in the money at net $6,050 and it's risky with high oil prices but generally a keeper for the same reasons we liked them in April.
    • BBBY – Finally profitable but too crazy to keep in a risky market. 
    • BHC – Very disappointing.
    • BNS – Great dividend payer at the money so keeper.
    • C – A $30,000 spread about 50% realized but too risky to keep.
    • CAKE – I love them but no – they just can't gain traction.

    • CELG – This one you can keep until they get called away when the deal closes.  We should have sold 100,000 more puts when they dipped down to $88 in July!
    • CHK – What a crazy couple of days!  Good riddance.

    • CLF – If there's a China deal, this one could explode and, if not, I still like them so keeper.  
    • CMG – Quitting while we're ahead!
    • CPRI – I was going to write disappointing – I didn't realize they had popped so much.  See – that's a new one and already up $8,750 off our $300 credit entry so 3,050% gain in 3 months is not bad…  It's a $30,000 spread netting $8,450 and they were stupidly undervalued so – keeper. 

    Of course, if the LTP wasn't full of keepers then we would have been doing something very wrong, right?

    DAL – Why do we own another airline?  Snip!  

    ETM – Very disappointing.  

    F – Their guys will strike next.

    FCX – Another one that will pop on China trade and our position reflects that anticipation but the risk is already there in CLF, which has covers so – snip!  

  21. So all the portfolios are cashed out except the Butterfly which is the one I am most interested in starting over?

  22. ARR- to clarify- I have smallish positions in  a couple of accounts so are you suggesting a "sell" across the board or just not keeping it for this portfolio?

  23. Who could have predicted 10 years ago that MSFT would be the most valuable company in the world? IMO, a bit too expensive now, but they are building the right balance of hardware and services it seems. The cloud is where the money will be made moving forward (for the top guys) and they are well positioned. 

  24. Albo – ended up doing two 10,000 share buys on MDR, covered 15,000 so probably “stuck” with mere double-up on those. Lol. Haven’t decided how to play the remaining 5000 shares yet. But thanks VERY MUCH for the idea.

  25. A buddy just pointed this out….


    Antonio Brown is the Donal Trump of Football

    They both have a history of attacking woman

    They don't pay their bills

    They both lie 

  26. Dawgdaddy – Great trade !

  27. Google signs up to $2bn wind and solar investment

  28. Bought back some MDR at $1.90.

  29. Sold new purchase at $2.12.  Keeping everything else.

  30. CVNA/Vkat – A bearish Butterfly?  Well, you start by playing a bear put spread but the goal of your long spread is simply to protect the short-term puts and calls you will sell so something cheaper like this:

    • Buy 2 2022 $80 puts for $30 ($6,000) 
    • Sell 2 2022 $60 puts for $18.50 ($3,700) 
    • Sell 1 2022 $100 call for $22.50 ($2,250) 

    So there you have a base spread set up that pays $4,000 at $60 or less and you get if for net $50.  Then you go about selling your puts and calls though I would start tighter as you have 2 years to roll:

    • Sell 1 Jan $85 call for $7.20 ($720) 
    • Sell 1 Jan $65 put for $5.70 ($570) 

    Now you've collected $1,290 against your $50 spread for the first 119 days out of 854 so you have 6 more shorts at $1,290 = $7,740, which is more than you could make ($5,600) on your $100/50 bear put spread and you still have the a $4,000 bear spread on top of that (and the first $1,290) so potential is there for $13,000 in profits against no cash.  Of course you'll end up adjusting but you've got $5,400 sitting around for that compared to the other play.

    MDR – That's why we ALWAYS sell into the initial excitement.

    Butterfly/Tangled – The beauty of the butterfly is we are always starting over.  The long-term positions are nothing but backstops – ask any time for a current entry (like the one just above) and then the short-term put and call sales change constantly anyway.  So it's kind of pointless to start it over, it's a quarter by quarter portfolio for the most part.   Hemp Boca is still active as well.

    ARR/Just not in this portfolio for our purposes.  Nothing is "wrong" with ARR – other than they are a REIT and REITs are out of fashion at the moment.  

    MSFT/StJ – Yeah that Ballmer was a genius! 

    Image result for steve ballmer msft stock price

    Image result for steve ballmer msft stock price

    MDR barely holding $2 now.

  31. Long-Term Portfolio Review (LTP) – Part 2:

    • GILD – Tempting but no.
    • GIS – Glad it turned green.
    • GNC – Tempting but too risky.

    It's not about how much we could make on the trade but is THIS spread so compelling that I would buy it right now for the current price – that's what a keeper is.

    • GPRO – Disappointing.
    • GS – Net $34,425 on a $50,000 spread that's well in the money is also tempting but they aren't immune from downturns.

    • HBI – You know I love them but I'd rather see earnings.
    • IBM – Trade of the year so keeper if you want but I'd cash out these and go with the one we put up yesterday.  
    • IMAX – I think they are ready to pop into next Qs earnings (end of Oct), should be at $25 so if you cash 20 of the Jan $19 calls for $3.70 ($7,400) and roll the other 20 to the March $20s at $3.30 ($6,600, $800 in pocket) and sell 20 of the March $25s for $1 ($2,000), that's $10,200 off the table and the $10,000 spread is the keeper.

    • IP – Tempting.
    • LB – Arrrgh!  I'd buy back the 2021 $30 puts at $12.80 ($38,400) and sell 50 of the 2022 $25 calls for $3.75 ($18,750) so 1/2 covered with the year-longer calls so that's about $20,000 to keep the long spread without as much downside risk.  I'd just hate to not be there when it pops.  Earnings not until 11/20.  
    • LMT – Stock of the Decade for 2020 and deep in the money on the $17,500 spread at net $115 but the Sept short $360 calls at $33.55 ($6,710) have to be rolled to the Jan $370 calls at $32 ($6,400) for $310 out of pocket and, if you do that every quarter for the next 12 months you'll have the short $410s but, if Jan doesn't work, you can just sell puts to and widen the spread.

    • M – Too risky but I'll be back for more.
    • MJ – Super disappointing and not getting better so snip!
    • MO – Vaping worries so out.
    • MT – will blast off on China but we already have a bet like that.
    • MU – I love them but will revisit later.  Hopefully after a pullback.

    • NLY – My favorite REIT is a keeper. 
    • NYCB – Solid dividend payer, right on track is a keeper
    • PLAY – I think it's good long-term but no guarantees.
    • RH – Only $32,325 out of $50,000 potential and $39 (30%) in the money is a keeper.

    • SKT – My other favorite REIT – keeper.
    • SKX – Amazingly, this $28,000 spread that's $8 (27%) in the money is only net $12,625 so keeper!  
    • SPWR – We should just make a portfolio for these kind of plays – it's a $40,000 spread that's $3 (25%) in the money and just net $21,690 – keeper!  

    • STMP – What a gem this was!   No one liked them in May except me.  $17,000 out of $25,000 is good enough for 4 months.

    STT – Nice comeback – no reason to be greedy.   

    • T – We had this plus the dividend play.  Not worth keeping.
    • TGT - Miles in the money on the $43,750 spread, now net $33,760 and we have many ways to make 33% in 16 months so not worth keeping.
    • THC – Keeper but I'd sell 15 Jan $26 calls for $2.85 ($4,275) for a 60% cover to lock in the gains.

    • UCTT – Great comeback – goodbye! 
    • WBA – You know that's a keeper!  
    • WHR – 15% in the money on the $45,000 spread at net $27,369 is a China trade worth keeping.

    • WPM – My precious!   A $37,500 spread at net $30,305 is not worth keeping but we are always sorry to let them go and we always get an opportunity to play them again so – fingers crossed.

    Remember – We are not "keeping" anything in the LTP, OOP, STP or Money Talk Portfolios.  When I say "keeper" I recognize that not everyone is happy to be in cash for a whole quarter so these are the trade ideas I love the most but I have plenty of confidence we'll find things just as good to add to our new portfolios – maybe even those trades if they don't get too expensive.

  32. Which portfolios will you be recreating when conditions warrent?

  33. Woops, down 100 while I was reviewing.  What's that about?

    Related image

    Nas down 1% (so is AAPL).

    Good news/bad news: Data agrees with Fed's Powell

    • While Fed Chair Jerome Powell repeated on Wednesday that he continues to see continued moderate U.S. economic growth as the most likely outcome, the sparse economic data that came out this week backs up that view.
    • For the most part, economic reports came in stronger than estimates, though some showed growth slowing from the previous readings.
    • Stronger-than-expected: The labor market remains strong this week, the September Philly Fed business outlook, and August housing data came in surprisingly strong.
    1. September Philly Fed business outlook of +12 beat the +11 expected, however that moderated from the +16.8 in August.
    2. Initial jobless claims rose only by 2K to 208K, less than the 215K expected. Continuous claims fell by 13K to 1.661M vs. consensus of 1.672M.
    3. Existing home sales in August, up 1.3%, slowed from the 2.5% rise in July, but, at 5.49M, came in better than the 5.38M expected.
    4. August housing starts rose 12.3% M/M to 1.364M, exceeding the 1.251M expected; however July housing starts were revised downward to 1.215M from 1.241M; building permits also came on stronger than expected at 1.419M vs. 1.300M consensus.
    5. August industrial production increased 0.6% to 109.9 from July, beating the consensus estimate of +0.2%; capacity utilization came in stronger than expectations at 77.9% vs. estimate of 77.6%.
    • In-line: August leading indicators came in flat at 112.1, matching consensus.
    • Weaker-than-expected: Not surprisingly, manufacturing disappointed. And the Q2 current account deficit, which is not the freshest data, also came in below expectations.
    1. September’s Empire State manufacturing survey, up 2.0, fell short of the 4.9 estimate and slowed from the 4.8 increase in August; as new order and shipments growth weakened; number of employees increased to 9.7 from -1.6 in August. 
    2. Q2 current account deficit of $128.2B came in wider than the $125.8B consensus; and the Q1 deficit was revised to $136.2B from the earlier read of $130.4B.
    • Coming up next week: On Monday, September manufacturing PMI and services PMI; on Tuesday, Conference Board September consumer confidence; on Wednesday, August new home sales; on Thursday, the third estimate of Q2 GDP, August pending home sales; on Friday, August durable goods orders, August PCE price index, September Michigan consumer sentiment.

    Rosengren sees low rates increasing risk in commercial real estate

    • Boston Fed President Eric Rosengren points to commercial real estate, and co-working spaces specifically, as one area where the cost of low interest rates may take a toll.
    • "It's important to think about the potential for runs on commercial real estate stemming from a situation where short-term leases might not be renewed in recession, and long-term leases are no longer economically viable," he said in a speech.
    • "Interest rates play into the situation, as low rates potentially  lead to a reach for yield, and building owners are more willing to lease to SPEs to get higher returns (rents) at a time when capitalization rates are quite low," he added.
    • According to Rosengren's view, the Fed's monetary policy stance is already accommodative, and he clearly states that he disagrees with the market's view that the economy needs more stimulus to continue the U.S.'s economic expansion.
    • "The data we have in hand suggest instead that the recovery would continue apace even with little monetary policy accommodation," he said.

    New York Fed ramps up repo operations to boost liquidity

    • To address liquidity issues in order to keep federal funds rate within the target range, the New York Fed will conduct daily overnight repurchase agreement operations daily for an aggregate of at least $75B each until Oct. 10, 2019. – OMFG!
    • It will also conduct three 14-day term repo operations for an aggregate amount of at least $30B each, the New York Fed said in a statement. The term repo operations will take place on Tuesday, Sept. 24; Thursday, Sept. 26; and Friday, Sept. 27.
    • For Monday, Sept. 23, the overnight repo operation will be for an aggregate amount of up to $75B.

    Walmart snuffs out e-cigarette sales

    • Walmart (WMT +0.3%) decides to stop selling e-cigarettes after the increase in lung disease cases and deaths linked to vaping.
    • "Given the growing federal, state and local regulatory complexity and uncertainty regarding e-cigarettes, we plan to discontinue the sale of electronic nicotine delivery products at all Walmart and Sam’s Club U.S. locations," reads a statement from the retailer.
    • Juul (JUUL) products were sold at Walmart up until the decision.
    • Altria (MO +1.5%) pared its earlier gain following the development.

    U.S. rig count drops another 18 for fifth straight drop

    • The total count of active drilling rigs in the U.S. sheds another 18 to 868 for its fifth consecutive weekly decline, Baker Hughes reports in its latest survey.
    • The weekly count of oil rigs plunges 14 to 719 while gas rigs fall by 5 to 148; one rig is classified as miscellaneous.
    • WTI October crude oil is little changed by the report, now +1.3% to $58.92/bbl.

    Peabody sinks after nixing previously announced tender offers

    • Peabody Energy (BTU -7.5%) plunges to new all-time lows, declining alongside coal peers such as Arch Coal (ARCH -5.2%) Consol Energy (CEIX -1.5%) and Warrior Met Coal (HCC -3.2%).
    • BTU said last night it had terminated previously announced tender offers for $1B in outstanding senior notes, claiming "the debt markets do not accommodate a path toward completing certain cash tender offers for outstanding senior notes and achieving the company's refinancing objectives in an economic fashion."
    • BTU says it will pursue alternative means to accomplish its longer-term objectives.
    • Earlier this week, BTU said it upsized its revolving credit facility with $215M of additional commitments for an aggregate facility size of $565M and extended the maturity date for $540M of the facility to 2023.

    McDermott hires Kirkland & Ellis to advise on restructuring – WSJ

    • McDermott (MDR +33.2%) trims big early gains after WSJ reports the company has hired the Kirkland & Ellis law firm to advise on efforts to restructure its balance sheet.
    • Meanwhile, WSJ also says a group of lenders has hired Jones Day as counsel and is seeking to appoint a financial advisor, and a group of bondholders has hired Houlihan Lokey as a financial advisor.
    • MDR had jumped as much as 73% after saying it is exploring the sale of its Lummus Technology business, a move that could provide some much needed liquidity as the company seeks to cut a debt pile which has grown to ~$4.3B following its 2018 deal for CB&I.
    • MDR's plan to sell the Lummus unit "could help solve its liquidity crisis, but only if it stems the tide of cost increases on 'focus' projects, which continue for another few quarters," says Bloomberg industrials analyst Scott Levine.

    Texas oil refineries cut rates after storm

    • A day after Tropical Storm Imelda caused major flooding on the Texas Gulf Coast, Exxon Mobil's (XOM) biggest crude distillation unit at its Beaumont refinery is running at reduced rates, Total's (TOT +2.5%) and Valero's (VLO +0.1%) Port Arthur refineries have cut output, and Motiva's refinery is trying to restart a flooded reformer, Bloomberg reports.
    • Beaumont's 240K bbl/day CDU-B will operate at reduced rates for several more days while several hydrotreaters remain shut a day after flooding forced their closure and the shutdown of XOM's neighboring chemical plant, according to the report.
    • The TOT and VLO Port Arthur refineries reportedly cut production because they cannot get trucks in and out to haul away excess sulfur.
    • Motiva's Port Arthur refinery is said to be restarting a catalytic reformer that shut down yesterday as high flood waters threatened the plant.
    • The four refineries are in Jefferson County, Tex., which was inundated with 43 inches of rain.

    Skittish trading on Netflix

    • The selling pressure on Netflix (NASDAQ:NFLX) continues with shares down 5.82% on the day and 8.66% for the week.
    • The latest data read tilts to the negative side, with Evercore ISI warning today of an "uncertain picture" on the streamer's Q3 international subscriber growth.
    • Netflix earnings are less than a month away, with October 16 the big day for investors to circle.

    Three Mile Island nuclear plant shutting down today

    • Exelon (EXC +0.7%) will shut the last reactor at Pennsylvania's Three Mile Island power plant, site of the worst nuclear accident in U.S. history, at noon local time today.
    • EXC announced in May that it planned to shut the 45-year old unit in September after the Pennsylvania legislature failed to take action on a bill that would have subsidized nuclear power operations.
    • EXC bought the 837 MW Unit 1 at Three Mile Island some 20 years after accident at Unit 2, which is owned by FirstEnergy.
    • Elsewhere in Pennsylvania, EXC continues to operate two reactors at Peach Bottom and two at Limerick, FirstEnergy operates two reactors at Beaver Valley, and Talen Energy owns two at Susquehanna.

    Drug makers up after McConnell thumbs down on Pelosi price pricing plan

    • Members of Big Biopharma are in the green as investors exhale after Senate Majority Leader Mitch McConnell (R-KY) warned House Speaker Nancy Pelosi (D-CA 12th District) that her plan to allow Medicare to negotiate drug prices for at least 25 of the most expensive drugs will be dead on arrival.
    • Senate committees have passed their own versions but the GOP is not united on the issue. Deep-pocketed drug makers are spending millions on lobbyists to ensure that there will be no substantial constraints on prices.

  34. Witch/Tangled – Well the STP/LTP but not the OOP as it's really kind of redundant and Money Talk yes when I'm next on the show in Dec/Jan although they are bugging me to do a regular show, so who knows where that will end up.

    Unless we have a nice crash, I plan to restart right after New Year's.

  35. Phil (from the end of yesterday): 

    I already started the new portfolios (that's how I build a Watch List and a Buy List) and PowerOpt doesn't seem to save the old data but I'll be happy to put you in charge of it in the new cycle, maybe every month when I do the reviews if you think it's something you want to work on?

    I'd be willing to take a crack at it for the new portfolios – I'll shout surrender if I have to. But I always believe "the lessons of history are repeated until learnt". Txs.

  36. Phil/Indices down…

    Maybe due to the witching day…

    One more question…even though fed cut the rate by 0.25 the mortgage rates moved up by 0.25. what could be the reason? Are they trying the squeeze in as much as they can before they have to reduce it further?


  37. Thanks Winston, looking forward to it.

    Rates/Pat – Keep in mind the Fed is adjusting short-term rates and the Mortgage rates reflect the consensus over 30 years so the reluctance of the Fed to go more than 0.25 down now means people betting on lower rates over longer-periods of time had to cover.

  38. Mortgage rates- I also read the current market opinion is that QE4 will focus on treasury purchases and not MBS like the last round

  39. Rates/Phil,

    sorry still did not get it. When the rates increase the mortgage rates increase eventually. Was expecting the same when it goes down. Will it go down a bit and stabilize after some time?

    What would have happen if the people do not have to cover it? Does the direction of the mortgage rates depends upon the people bets? I actually wanted to refinance and thought I should wait till after the rate cut but I got that wrong.



  40. thanks for MDR In at 1.60 out at 2.52 this morning for 1000 shares 

  41. Phil/CVNA – Thanks for the detailed post about CVNA.

  42. MBS/EMike – The Fed isn't touching MBS at the moment but those rates are still tied to Fed Funds Futures. 

    Rates/Pat – There is speculation in 30-year rates based on what will happen over the next 30 years and aggressive Fed cutting was priced in and now people are less certain the Fed will be super-aggressive going forward based on the last statement and comments made after it.

    Image result for fed funds rate 5 years

    Even in the 10-year and 2-year there is some speculation.  As to refinancing, I'd just wait a bit, we'll probably stabilize in-between somewhere.  

    Good job getting out, Bert.

    McDermott, California Resources take bondholders on wild ride

    • A sharp rally in the bonds of three distressed energy companies – McDermott International (MDR +28.5%), California Resources Corp. (CRC +13.3%) and PG&E (PCG -5.7%) - dominates today's trading in the corporate bond market, WSJ reports.
    • MDR's 10.625% bond due 2024 has more than doubled in price and is today's most actively traded corporate bond, with ~$245M in face value changing hands, according to the report.
    • MDR's bonds already were trading at distressed levels of ~$0.70 on the dollar before Wednesday's news that it had hired a restructuring advisor, and prices plummeted on Thursday to a low of $0.16 on the dollar; the bonds bounced to $0.35 on the dollar this morning before sliding back to $0.31.

    Fitbit +9.8% on reported sale talks

    • Fitbit (NYSE:FITgains 9.8% on a Reuters report that the company is talking with an investment bank about a potential sale.
    • FIT has not yet decided it will pursue a sale. Investment bank Qatalyst Partners reportedly advised the company to explore its options for several weeks, saying FIT could attract interest from PE firms and Alphabet.

    Semis slip after China cancels farm visit

    • The Philadelphia Semiconductor Index drops 1.4% as the tech sector (NYSEARCA:XLKdips 0.9% after China canceled a visit to U.S. farms scheduled for next week, raising concerns about US-China trade tensions.

    Stocks fall after Chinese delegation cuts U.S. trip short

    • All three major U.S. stock averages dip into the red after a Chinese trade officials canceled their trip to visit farms in Montana, returning to China sooner than expected.
    • Also President Trump told reporters earlier that he doesn't think he needs a trade deal with China before the 2020 election.
    • The Nasdaq sinks 0.9%, while the S&P 500 and Dow each slip 0.4%. All three had started the session in positive territory.
    • Among S&P 500 industry sectors, information technology (-1.0%) and consumer discretionary (-0.8%) led the decliners, while healthcare (+0.5%) and utilities (+0.2%) held onto gains.
    • 10-year Treasury rose, pushing yield down almost 3 basis points to 1.76%.
    • Crude oil's rise moderated to 0.9% to $58.63 per barrel, vs. a 1.2% increase at midday.
    • The Dollar Index gains 0.3% to 98.53.

    Frontier signals upcoming plan to cut $17B debt load – WSJ

    • Frontier Communications (FTR -1.9%) is closing in on restructuring talks, telling bondholders it's about to present a detailed plan to cut its $17B debt load, according to The Wall Street Journal.
    • That would likely come through formal negotiations with a single group to represent all bondholders.
    • And with a diverse group of bondholders, a heavy restructuring in that manner could put it on a path to Chapter 11.
    • On the other hand, the company is still generating free cash flow, and doesn't face significant debt maturities until 2022.
    • One school of bondholder thought has pushed for a discounted exchange of bonds for new secured debt, while another has warned against such a swap as a violation.

  43. I don't pretend to understand this "repo" thing. It's apparently a liquidity issue and thus, could be very dangerous across the board. But the question is then, why would liquidity be a problem? Who is not doing what is normal? 

    Color me perplexed. 

  44. Rates/Phil…Thanks a lot

  45. Repo/pstas – yeah, I did a search on it, found a couple of semi-helpful articles. It apparently has to do with interest rates shooting up overnight and squeezing cash reserves, so the NY Fed is pumping bucks in to help out. That's about as much as I got out of the articles. Phil seems very concerned, though….

  46. I'm not VERY concerned but a lot more concerned than I was.  At first, the brushed it off saying that companies paying Corporate Taxes coupled with a very high monthly note auction (the money has to come from somewhere) AND low tax collections this time of year led to a large drawdown in cash reserves so the cost of borrowing cash overnight (the overnight lending rate) jumped higher as banks MUST have the cash (it's a balance-sheet thing) so the price just goes higher until everyone has what they need.

    So the Fed steps in and fills in the liquidity gap so more funds are available until the bidding for overnight money goes back below 2% (in-line with the Fed Funds rate) otherwise the Yield Curve might bleed out from overnights into 3 and 6-month bills and then we have a disaster on our hands.

    What's concerning is that they now seem to think it's going to take a whole month to normalize.  Now, it sounds like it's $75Bn x 10 days or $750Bn (and that's what a lot of articles you read will say) but it's OVERNIGHT lending and the vast majority of that money is put back the next day and then the Fed puts it out again the next night.  

  47. So, it is a "temporary" cash demand/balance problem. Bank cash levels drawn down for qrty tax payents; cash demand for a big upcoming Vegas weekend, whatever. Thus, it would appear the usual source for bank cash if coming up short and the Fed is the backstop. I wonder who is sitting on cash that would otherwise be available for banks? 

  48. I thought the narrative has been a good portion of the Fed printed money ended up staying at the Fed, that's why money velocity dropped. If true there should be no problem for these banks/companies to get cash (especially for short term purposes)? Exceptions may happen when there are "huge" IPOs or buyouts/buybacks using LOC. Corporate taxes, note auctions, etc.    

    They shouldn't do this, but one hypothesis could be they parked their cash into T bonds, therefore, running tighter than normal?  Still wondering what is different this quarter that is unplanned – normally they plan short term needs well.  Unless this is just a symptom of something else.

  49. AIMT -Swing trade put on Sept 6 closing out today.

  50. Cash/Pstas – A lot of it is being drained off by Trump's incredible debt financing.  He's drawing down $50Bn a month more than Obama was – that's sucking up the reserves as cash converts to notes – especially since the banks are covering for lack of foreign demand as Trump has made enemies of all the people who used to buy our debt.  Then, on the other side, he's cut corporate tax rates almost in half and collections are down from $400Bn (which was crazy low anyway) to less than $250Bn so another $15Bn a month of cash is missing there and then the lower taxes on the Top 1% is another $10-20Bn a month not coming in….  

    Keep in mind Trump's budget numbers are lies, we were $750Bn in debt as of May and things have gotten way worse since then:

    Image result for us government revenues by month 2019

    That's a run rate of $2Tn in annual debt! 

    Image result for us government revenues by month 2019

    Scary, isn't it?

    Money/Mito – True, that's why the Fed can just drop $75Bn into the overnight bin and yes, they make money on that (at the overnight rate) so not a negative for the Fed but the banks have to pay to borrow the money – so earnings hit to them.  

    AIMT/Albo – What a ride!

  51. Wow, today went by fast! 

    Not a good-looking close unless we get a last-minute stick.

    Have a great weekend everyone,

    - Phil

  52. Something I read the other day, cannot recall where:

    "we borrowed from tomorrow; spent it and now tomorrow is today"

    Buckle up!

  53. Have a good weekend Phil & the rest – fun making money with you all this week!

  54. Phil – and UVXY is in the 23's!!! I'll tell ya, it's like we're in ostrich land right now. No one wants to believe what's really coming. I've never felt it quite this bad before. Never have I been a big fan of playing volatility (because it's just pure gambling trying to predict the future), but it feels like one of those old liquid fueled rockets, sitting there, all de-gassing and intimidating, like you know what's about to happen with the impending rumbling and violence, but for right now it's just a cold, inanimate object for a few more moments.

    Somebody's going to make a bunch of money on volatility in the next two months.

  55. Repo – thanks, Phil, very helpful.

  56. Could be good for AMD:

    German website Winfuture is claiming that the next generation of Surface Laptop could be using AMD processors instead of the Intel CPUs found in every other Surface device. If true that’d be a big boon for AMD and a bit of an embarrassment for Intel.

  57. The market has spoken: Coal is dying

  58. Climate Change Is Devastating the Lush Gardens of Versailles

  59. I'd say it's a function of the drop in unemployment since the less-educated tended to be among the unemployed so if Unemployment dropped fell from 10% under Bush to 3% thanks to Trump's genius, that's 7% of mostly the less-educated going from $0 to whatever they are making now.   

    Image result for unemployment over time

    Even so, when you look at the actual gain (14% over 6 years) – it's barely keeping up with inflation so hard to get excited about "significant gains" – more like a very skewed report by someone using statistics to put out a narrative that gets headlines (or has a political agenda).

    Interestingly, other articles by Richard Fry are:

    Latino Children: A Majority Are U.S.-Born Offspring of Immigrants

    Sharp Growth in Suburban Minority Enrollment Yields Modest Gains in School Diversity

    Latinos Account for Half of U.S. Population Growth Since 2000

    How Far Behind in Math and Reading are English Language Learners?

    Hispanics and the Social Security Debate

    Younger generations make up a majority of the electorate, but may not be a majority of voters this November

    V. Racial and Ethnic Interaction in Suburban Schools

    There's an awful lot of Trump talking points in this guy's work – kind of interesting.  He also made this chart:


    The wealth of U.S. households increased by $1.9 trillion in the second quarter of 2019. Powering the wealth gain was an $0.9 trillion increase in the value of directly and indirectly held corporate equities and a $0.3 trillion increase in the value of real estate



    Fed reports that U.S. aggregate net worth reached $113.5 trillion as of 2019Q2. After Lehman it bottomed out at $60.2 trillion in 2009Q1. So in nominal dollars wealth has risen 88% during the recovery. Pretty good run over 10 years


    Census Bureau estimates that 16.8% of 25- to 34-year-olds lived in parent's home in 2019, unchanged from 16.7% in 2018, but up from 11.8% in 2007 before the Great Recession.

    My stepbrother, Steve, lived at home until he was 35 – was quite the scandal at the time, but he bought his first home with CASH!!! so kind of smart, really….  I never came back for a day after college – went straight to NYC…


    Ah HA!  Just as I suspected – he retweeted these:

    19% of U.S. adults on Twitter follow Trump

    57% of U.S. military veterans approve of the way Trump is handling his duties as commander in chief, with 48% saying his administration’s policies have made the military stronger.

    People are less careful about what they retweet than what they tweet.  Methinks there is a little bias to this guy.

  60. Speaking of Tweets, AOC is on the job:


    Imagine a Congresswoman actually caring about communities and their citizens?  

  61. These social media-aware young Congresspeople are going to kill the old, white men on the GOP if they don't get their act together (let's hope they don't).  

    Speaking of kids – protests all over the World this weekend ignored by most of the media so as not to offend their advertisers:


    Don’t trust the liquidity – GnS Economics “If China & central banks manage to resuscitate the asset markets, but not the real economy, which is unfortunately quite probable, the end-result cannot be anything less than a crash, as in 1929” Weekend Reading

    US Banks Have $1.4T in Excess Reserves Yet Need Daily "Emergency" Fed Actions. I smell an excess leverage, borrow-short, lend-long scheme that has seriously gone awry. Parties no longer trust the collateral.

    Trump claiming this morning that his effort to strong-arm Ukraine was a "perfectly fine and routine conversation" is a disturbing admission that his malfeasance has become "routine." Democracy is in the ICU, and some of the hospital staff are trying to smother it with a pillow.

    Trump says: "How dare that man report on my illegal activities – THAT is the issue you should be paying attention to!"

    Image result for heston it's a madhouse animated gif

  62. This is the very definition of an impeachable offense:

    President asked Ukraine president — eight times — to work with his personal lawyer to investigate Biden's son

    In recent months, Mr. Giuliani has mounted an extensive effort to pressure Ukraine to do so. He said he met with an official from the Ukrainian prosecutor general’s office in June in Paris, and met with Andriy Yermak, a top aide to Mr. Zelensky, in Madrid in August. Mr. Giuliani said in an interview this month that Mr. Yermak assured him the Ukrainian government would “get to the bottom” of the Biden matter.

    The August meeting came weeks before the Trump administration began reviewing the status of $250 million in foreign aid to Ukraine, which the administration released earlier this month. Mr. Giuliani said he wasn’t aware of the issue with the funds to Ukraine at the time of the meeting.

    Joseph Maguire, a retired Navy vice admiral serving as the acting director of national intelligence, is to appear before both the Senate and House intelligence committees next week about the complaint, though it remains unclear if he will be willing to divulge details about its underlying substance.

    Stymied Democrats in Congress continued to mull potential avenues to obtain the complaint. Rep. Adam Schiff (D., Calif.), chairman of the House Intelligence Committee, said he was considering a lawsuit to obtain the complaint or withholding funding from the Office of the Director of National Intelligence. Mr. Schiff has accused Mr. Maguire of violating the law by not sending the complaint to Congress, as required under the federal whistleblower statute.


    “It’s been very hard for the director of national intelligence to explain why he is the first ever in that position to withhold an urgent whistleblower complaint from Congress,” Mr. Schiff said Friday.

    And let's not forget how Maguire got the job (unconfirmed by the Senate in a hugely important Government role) as Coats was forced out on 8/19:

    Outgoing Director of National Intelligence Dan Coats disrupted a meeting his deputy, Sue Gordon, was holding on election security to urge her to resign from her post.


    The abrupt interruption on Thursday, reported by CNN, happened shortly before Gordon submitted her letter of resignation later that day.

    She was next in line to be acting spy chief when Coats first announced his intent to retire late last month, but reports indicated the president was going to pick someone else to oversee the U.S. intelligence community until a permanent replacement was approved by the Senate.

    Democrats criticized the president for overlooking Gordon, arguing his refusal to pick the veteran intelligence official to be acting spy chief underscored his disdain for someone who might advise him on national security matters that clash with his views.

    Coats and Gordon are both slated to resign on Thursday.

    Trump chose Rep. John Ratcliffe to be his nominee to replace Coats, but he announced last week he was dropping Ratcliffe as his pick amid scrutiny over the Texas Republican's credentials.

    Speaking with host Joy Reid, Jonna Mendez said she saw the first warnings signs that something was up in the U.S. intelligence community when the president forced DNI head Dan Coats and his top deputy out.

    “Through the lens of someone who spent 27 years at the CIA, the thing that caught my eye instantly was Dan Coats’ resignation follow by Sue Gordon,” Mendez explained. “The fact that Dan Coats went into a meeting and said ‘Sue, you’ve got to resign’ and that she did, truncating a career that clearly hadn’t reached its zenith.”


    “This was clearing the decks in the intelligence community, taking the top man out and his deputy out, giving Trump an opportunity to select and choose another acting head of a huge organization,” she added. “Now there’s an acting director in charge of that who of course has taken charge of this whistleblower information and refused to release it to the Congress.”

    “One of the great ironies of how democracies die is that the very defense of democracy is often used as a pretext for its subversion. Would-be autocrats often use economic crises, natural disasters, and especially security threats—wars, armed insurgencies, or terrorist attacks—to justify antidemocratic measures.”

    “Democracies may die at the hands not of generals but of elected leaders—presidents or prime ministers who subvert the very process that brought them to power. Some of these leaders dismantle democracy quickly, as Hitler did in the wake of the 1933 Reichstag fire in Germany. More often, though, democracies erode slowly, in barely visible steps.”

    “This is how elected autocrats subvert democracy—packing and “weaponizing” the courts and other neutral agencies, buying off the media and the private sector (or bullying them into silence), and rewriting the rules of politics to tilt the playing field against opponents. The tragic paradox of the electoral route to authoritarianism is that democracy’s assassins use the very institutions of democracy—gradually, subtly, and even legally—to kill it.”

    “Because there is no single moment—no coup, declaration of martial law, or suspension of the constitution—in which the regime obviously “crosses the line” into dictatorship, nothing may set off society’s alarm bells. Those who denounce government abuse may be dismissed as exaggerating or crying wolf. Democracy’s erosion is, for many, almost imperceptible.”

    “The drift into authoritarianism doesn’t always set off alarm bells. Citizens are often slow to realize that their democracy is being dismantled even as it happens before their eyes.”

    "Now we find ourselves turning to our own country. Over the past two years, we have watched politicians say and do things that are unprecedented in the United States—but that we recognize as having been the precursors of democratic crisis in other places.”

    Steven Levitsky, How Democracies Die: What History Reveals About Our Future

  63. Shelby Co. Democratic Party warning voters of fake sample ballots mailed out weeks before Memphis municipal election

  64. Germany to join alliance to phase out coal

  65. Trudeau’s support holds after apology for wearing brownface

  66. Trump, Biden and a Whistle-Blower Complaint: Here Are the Basics

  67. Future not looking good at the moment!

  68. And now we are up…

  69. Advill/employment survey….Pew Trust is generally okay, but when you see a study that plucks out a couple of specific years, it raises suspicions that they might be playing with the data.

  70. Good morning!

    Dollar flew higher, smacking everything back down.  

  71. European stocks sink after weak business surveys