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Non-Farm Friday – Is America Working?

Image result for census hiring by month"How "great" are things?

Job growth has been anemic all summer, starting with a depression-level 62,000 in May but June, July and August were all around 170,000 and September was back at the edge of a cliff at 136,000 and we've been told it's "no big deal" every time but it's actually a very big deal because the Government is hiring hundreds of thousands of Census Workers and even August, which clocked in at 168,000 official jobs had just 100,000 jobs if you didn't count the Census Workers and September job growth was near zero without the Census

In fact, the Census is still 500,000 jobs behind in hiring as the Trump Administration doesn't seem very eager to do their Constitutional duty and count the voting public – most likely because the demographics are turning against the GOP and they'd like to maintain the 2010 status quo for another 10 years if they can.  It's also possible Trump has been "saving" the hiring to be closer to the 2020 election – so he can boost his job numbers so he can brag about them next year – before they are all terminated at the end of the count.

In a presentation to the National Advisory Committee in May, the Census Bureau said they needed to begin canvassing in August (two months ago) in order to be done by December of 2020 (as mandated by the US Constitution).  More importantly (to Trump) the Census Bureau warned that any undercounting due to delays would disproportionately undercount Black and Hispanic voters as well as poor voters – who tend to respond less to Internet, Paper and Phone survey requests.  I guess that was all Trump needed to hear…

Image result for trump immigrant meme"Undercounts in the census lead to under-representation in Congress and Trump has already kicked over 300,000 people out of the country, leading to an environment of fear that will cause census responses to go even lower as people are suspicious that it's a trick to get them to reveal relatives who are potentially illegal.  Imagine if you were a Jew in Germany in the 30s and the Nazis sent over a survey asking how many Jews were in your home.  Maybe they just want to make sure you are being fairly represented, right?  

Payrolls have been anemic and that means low demand for the Dollar (/DX), which is languishing at 97 and the Fed certainly isn't helping to give it strength with their loose-money policy and Trump thinks that's not even loose enough.  Another anemic job report (under 160,000) and we could break below 97 for the first time since July, which will actually be a boost for stocks and commodities.  In our Live Trading Webinar on Wednesday, we planned to play Gasoline (/RB) Futures long when they came back over the $1.60 line and we got our wish this morning – a lower Dollar can give us a very nice pop!

8:30 Update:  128,000 jobs were added but expectations were low and the GM Strike, which is over, subtracted 50,000 jobs and prior months were revised up a total of 95,000 jobs so, overall, it's a good report and the Dollar is up at 97.25 but /RB is up anyway as more people will be driving to work.  $1.625 is a $1,000 per contract gain, however and it would be silly not to take that off the table.  Congratulations to all who played our Webinar trade! 

The indexes sure liked the jobs numbers and we popped about half a point on the news and they were already up from yesterday's lows so no danger of losing 3,000 on the S&P into the weekend – unless Trump says something silly…

Have a great weekend, 

- Phil


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  1. Good Morning!

  2. Wow, right on time, some big revisions of the job numbers for the previous months… That brings the average for the year to 176k per month. For the relatively low cost of $1T added to the deficit. Even if taking into account only the cost of the tax cuts ($1T over 10 years or $100B per year), it comes down to  $50k for each job created this year. 

  3. When will NFLX turn profitable:

    Some people are widely optimistic:

    And more popular originals will also allow the company to further boost its subscription price despite cheaper rivals, argues Guggenheim Securities analyst Michael Morris. Netflix "will continue to monetize its user base through creating award-winning content at a justifiable, gradually higher, price over time," he predicts. He projects that Netflix will reduce its cash shortfall to $1.88 billion in 2021 before turning slightly free cash flow positive in 2022 with $300 million before a big free cash flow jump in 2023 to $2.92 billion.

  4. Good morning!

    Very tricky charts – could be a triple top or could be a breakout – only time will tell.   

    176,000/StJ – That's just enough to keep up with population growth (which is also the same 1.7% as GDP growth).  I guess if Trump wants more growth he can start a breeding program…

    NFLX/StJ – I'm not sure they have a path to profits with al this competition.  They have a lot of old contracts for shows that will be much more expensive to renew now that there are more bidders – these models don't account for that or the rising costs of creating new shows (also supply/demand driven).  Half the people I talked to in California are pitching projects to NFLX and fires and power outages can disrupt their schedules and increase costs too.  

    "If you want to make money off Netflix, sell the company a screenplay. Writers and consumers will win biggest in an increasingly competitive streaming market."

    In just the last year alone, Sarandos estimated that it costs 30% more to produce a show. A 30% cost increase per show in one year. They also stated that House of Cards, a show that has been pegged as a $100 million show when it began seven years ago, would be a bargain at $100 million in today's competitive content production market. The show was a hit, according to Netflix, and $100 million today would be just 1% of Netflix's production budget.

    The cost inflation is spilling into movies as well. Netflix's new prestige movie, The Irishman, alone has amassed a budget of more than $140 million. No studio prior to streaming could have justified a budget of that size for something simply designed to groom Oscar voters and win awards. In the old theatrical-only release world for movies, a movie had to double its budget at the box office for the studio to break even because theaters kept approximately half of the take. The prospects of a prestige movie for adults raking in more than $280 million at the box office would have been slim at best.


    Next month, competing products Apple+ and Disney+ will launch. As those two platforms evolve, Netflix will face increased competition for writers of new shows and movies. Netflix will also have to pay to keep any talent that produces hits on its own platform. The disadvantage facing Netflix is its financial situation.

    The company recently issued $2 billion in additional debt, bringing its debt load to more than $14 billion. The company also issued $2 billion in debt in April. Netflix is currently burning cash at torrid rate and may not be cash flow positive until 2023.

    Netflix is trading at a steep premium on a P/E basis to comparable media plays. Domestic subscriber count appears to be saturated. International will continue to grow, but margins are lower for international subs. As buzz picks up around Disney+ and Apple+ next month and into next year, domestic subscriber count could take a hit again. And it remains to be seen how much pricing power Netflix will have with consumers as streaming options continue to expand. It's hard to see a catalyst on the horizon that is going to send shares up in any meaningful way.

    At $126Bn now ($287.50) when are they going to be at $6Bn to grow into that valuation?  

    They only SEEM like a bargain compared to the completely insane levels we shorted them at over the summer and I wish they would go back to $360 so we could short them again but, other than that, it's a "stay away" with a ridiculous valuation but plenty of idiots willing to pay it.

    October 10th, 2019 at 3:22 pm | (Unlocked) | Permalink

    NFLX into earnings:


    We have a big fund bet they stay flat (+/- 10%).  My thinking is that a lot of bad news is already priced in and, since they are subscription-revenues, there won't be any major variation all of a sudden but good news will be tempered with worries about Disney and AAPL services taking share next year.  

    You can: 

    • Sell 5 NFLX Nov $300 calls for $10 ($5,000) 
    • Sell 5 NFLX Nov $250 puts for $7 ($3,500) 

    That's $8,500 in pocket so you have $17 of wriggle room above or below the strikes before you lose any money (or roll, of course).  If we hit the middle, that's $8,500 in 36 days!  Profit range is $233-$317.  

    $300 calls are now $2.50 and the $250 puts are 0.55 so $1,525 to buy it back now and a $6,975 (82%) profit already!  

  5. Wow, this market is simply amazing!  The volume is nothing but up and up we go.

    Date Open High Low Close* Adj Close** Volume
    Nov 01, 2019 304.92 305.89 304.74 305.58 305.58 15,407,697
    Oct 31, 2019 304.13 304.13 301.73 303.33 303.33 69,011,900
    Oct 30, 2019 303.43 304.55 301.99 304.14 304.14 49,585,200
    Oct 29, 2019 303.00 304.23 302.86 303.21 303.21 44,238,000
    Oct 28, 2019 302.94 303.85 302.91 303.30 303.30 42,084,800
    Oct 25, 2019 299.74 302.20 299.68 301.60 301.60 45,153,800
    Oct 24, 2019 300.91 301.07 299.46 300.37 300.37 35,453,100
    Oct 23, 2019 298.73 299.94 298.50 299.88 299.88 34,352,200
    Oct 22, 2019 300.58 300.90 298.91 299.01 299.01 48,594,700
    Oct 21, 2019 299.42 300.21 298.94 299.99 299.99 39,048,600

    Oct 2nd was the last time we broke 100M shares.  The SPY average is now down to 72.6M – was about 125M last year.

    It's a tough time to be a Fundamentalist:

    • Berkshire Hathaway's (BRK.B +0.7%) (BRK.A +0.6%) Q3 earnings, due to be released on Saturday, may give more clues as to how Warren Buffett's behemoth investment vehicle is using its massive $122B pile of cash.
    • Valuations for prospective acquisitions have been "sky high" and the company's repurchase of its own stock hasn't been particularly impressive, so some investors have become impatient that Berkshire's cash holdings haven't been put to work.
    • YTD, Berkshire's B shares rose 4.4% lagging the 21% gain in the S&P 500, its worst annual performance since 2009.
    • Thus, investor David Rolfe's Wedgewood Partners sold its stake in Berkshire; Bill Ackman, though, increased his bet on the company.
    • Rolfe exited, reasoning that "the bullish thesis that this massive amount of cash is going to come to bear incredible fruit — hasn't."
    • Ackman, though, figures that Berkshire's underlying businesses will boost earnings even if its funds aren't deployed.
    • Investors will be looking at a number of things in Berkshire's Q3 results — the amount of stock it buys back, how Kraft Heinz fares, if more aggressive litigation environment affects its insurance operations, and whether trade tensions are hurting its BNSF unit.

    Macros still TERRIBLE:

    /RB kept going up.  

    • Presidential candidate Senator Elizabeth Warren (D-MA) has finally released the projected cost of her plan for universal healthcare, called "Medicare for All," a whopping $20.5T over 10 years.
    • She says funding will come from tax increases on businesses and billionaires, sparing the middle class from any tax hikes. She also wants to cut $800B in military spending.
    • Fellow candidate Bernie Sanders (I-VT) is also endorsing Medicare for All while other Democratic hopefuls are espousing less-ambitious plans based on the continuation of Obamacare.
    • Update: Healthcare stocks are firmly in the green in early trade, signaling that Ms. Warren's plan is a non-starter.

    But we're spending $3.5Tn now!  How do  the Dems let the MSM spin their stuff this way?

    • Fitbit (NYSE:FITwill be acquired by Google (GOOG,GOOGL) in a deal that values FIT at a fully diluted equity value of approximately $2.1B.
    • The transaction is expected to close in 2020, subject to stockholder and regulatory approvals.
    • FIT shares were halted ahead of the announcement.
    • The $7.35 per share price is just shy of a 20% premium to last night's close, and about double the price FIT was trading at prior to the rumors of a buyout.
    • The acquisition lets Google join smartphone competitor Apple (NASDAQ:AAPL) in the wearables space. The Wearables, Home, and Accessories segment accounted for $6.5B of Apple's Q4 revenue, beating consensus estimates.
    • Post updated with more background information.
    • Macau gross gaming revenue fell 3.2% Y/Y in October to 26.4B patacas ($3.27B), according to data from the Gaming Inspection and Coordination Bureau.
    • The GGR tally for the month was better than the -4.0% consensus estimate. VIP traffic was soft during the month once again.
    • October GGR as up 19% from September's level due to the Golden Week holiday period falling in the month.
    • Macau casino stocks: Wynn Macau (OTCPK:WYNMFOTCPK:WYNMY), Wynn Resorts (NASDAQ:WYNN), Sands China (OTCPK:SCHYYOTCPK:SCHYF), Las Vegas Sands (NYSE:LVS), MGM China (OTCPK:MCHVFOTCPK:MCHVY). MGM Resorts (NYSE:MGM), Galaxy Entertainment (OTCPK:GXYEF), SJM Holdings (OTCPK:SJMHFOTCPK:SJMHY), Melco Resorts & Entertainment (NASDAQ:MLCO), Studio City International (NYSE:MSC).
    • Related ETF: BJK.
    • Backing out the GM strike, it appears that the economy would have generated almost 187K jobs last month, in line with three-month average of 176K, writes RSM US Chief Economist Joseph Brusuelas.
    • Of note, jobs added in August were revised up by 51K (to +219K) and those added in September were revised up by 44K (to 180K).
    • "VERY robust job quantity; less so, job quality," comments Jared Bernstein, senior fellow at Center on Budget, pointing to a lack of wage pressure.
    • In October, average hourly earnings for employees on private nonfarm payrolls rose by 6 cents to $28.18, up 3.0% from a year ago.
    • Job growth averaged 167K  per month YTD vs. average monthly gain of 223K in 2018.
    • "Takeaway: jobs growth is slowing but not stalling," observes Patrick Chovanec, managing director and chief strategist at Silvercrest Asset Management.
    • Previously: October jobs growth comes in strong (Nov. 1)
    • Cheniere Energy (NYSEMKT:LNG-1.2% pre-market after swinging to a surprise Q3 loss marked by higher operating expenses, but revenues rose 19% Y/Y to $2.17B.
    • To explain the loss, LNG cites several factors, among them: increased total operating costs and expenses primarily due to additional Trains in operation and certain maintenance and related activities at the SPL Project; net losses from changes in fair value of commodity and forex derivatives; increased interest expense; increased net derivative loss related to interest rate derivatives; increased other expense primarily related to an impairment of our equity method investment in Midship Holdings; and decreased margins per MMBtu of liquefied natural gas recognized in income primarily due to decreased pricing on LNG.
    • But Q3 adjusted EBITDA rose 22% Y/Y to $694M from $596M in the prior-year quarter, primarily due to additional volumes of LNG recognized in income primarily due to additional Trains in operation, partially offset by decreased margin per MMBtu of LNG recognized in income.
    • Cheniere expects FY 2019 adjusted EBITDA of $2.9B-$3.2B and forecasts FY 2020 adjusted EBITDA to rise by ~30% to $3.8B-$4.1B and distributable cash flow to increase by at least 60% to $1B-$1.3B.
    • Bank of Merrill Lynch lowers Booking Holdings (NASDAQ:BKNG) to a Neutral rating from Buy as it points to some risks with the online travel stock, including the Asia business.
    • "We believe Booking has higher Asian exposure in 4Q vs 3Q," warns BAML analyst Justin Post.
    • Post and team have a mixed read on the impact of Airbnb coming to the public market in 2020. "Airbnb’s plan to list on public markets in ’20 may put a spotlight on BKNG’s traction in alternative accommodations. While the potential for a high Airbnb valuation may be a catalyst, we think investors may focus more on competitive dynamics, including Airbnb’s fast growth and efforts to increase its total addressable market (vacation rentals and hotels)," reads the assessment.
    • BAML's price objective of Booking of $2,160 is still about 5.4% above the current share price and higher than the average sell-side PT of $2,103.29.
    • Shares of BKNG are down 1.41% premarket to $2,019.88.
    • Canaccord Genuity lifts IMAX (NYSE:IMAX) to a Buy rating from Hold after taking in the company's Q3 report.
    • The firm's price target of $25 reps 17% upside potential for shares.
    • The average sell-side rating on IMAX is Outperform, while the Quant Rating is Neutral.
    • Shares of IMAX are up 13.50% YTD.

  6. HBI with a big pop back already.  Guess I'm not the only one who thought the sell-off was silly:

    2022 $15 puts are $3.75 now (never got $4.75) so we can sell 7 instead of 5 to collect $2,625 if you missed the higher price.

  7. I have a lunch meeting, back about 1:30.

  8. Let's take stock of what's relaly going on. 

    DIA peak of 1/22/2018 was 265.91. Now it's 272.85 (1.775 years later) or 1.46% APY. The current dividend yield is 2.15% so let's just say it's accurate enough to add them, so 3.61% APY over 18 months.

    BND has gone from 80.80 to 84.12, or 2.29% APY + 2.74% yield or 5.03% APY.

    The long term strategy of selling the Trump rally in early 2018 and walking away is actually, in hindsight, still right, and that's not even considering the fact that a 10+ year bull market and pending trump crash may still occur. 

  9. Warren / Phil – That's the spin, that this will be in addition to what we pay already while in fact, you will either pay premiums to for-profit companies or taxes to subsidize the Medicare for all plan. Not both… So in that regard, Medicare for all would save us $1.5T each year! 

    As Bartlett (not bleeding heart liberal) said today:

  10. Markets / BDC – The broader indices like NYSE and Russell are actually close to 5% lower than their peak in January 2018. In fact, the Russell was over 10% higher back in August 2018. So yes, you could have been short for 18 months and still be OK today.

  11. Well, I see I didn't miss much, still up about 1%.  

    /RB $1.64!

    /NG off to the races and /KC doing well.  

    /DX back to 97, Fed rate cut trumps jobs.

    Good overview BDC but it still feels sucky to miss a rally.  

    Good point by Bartlett, StJ.  They never seem to learn but I guess that's what makes them Democrats and not hypocrites.  

    RUT still way under the highs but how many people have a long-term viewpoint these days?

    And like broker fees – streaming quickly drops to Zero!

    • NBC (CMCSA -0.5%) is mulling the idea of giving away an ad-supported version of its upcoming streaming service Peacock for free to everyone, CNBC reports.
    • That makes Comcast the latest to rethink lower prices as competitive pressures build from streaming rivals. Disney (DIS +1.8%) priced its Disney Plus service at $6.99/month before bulk discounts, and Apple (AAPL +1.6%) priced Apple TV Plus at $4.99/month. After AT&T (T +1.1%) considered pricing its HBO-and-other-stuff Max service above HBO's $14.99/month price, it decided to stick at that level.
    • And all those new prices came against the benchmark of Netflix's most popular plan, its Standard plan priced at $12.99/month. NFLX is down 1.4%, tagging session lows.
    • Bundling and promotion mean the new for-cost streaming services will be effectively free for many users.
    • Comcast, too, had considered making Peacock free only for cable subscribers and Comcast broadband customers. Now it may give away the ad-supported Peacock, while still charging for an ad-free version, CNBC says.
    • Multiple tiers of Peacock could still get pay TV subscribers other benefits, according to the report.

    Still want to own NFLX?

    • U.S. Steel (X +16.6%) surges to its highest level in three months following Q3 results that were not as bad as feared and the company offers a fairly optimistic take in its earnings conference call.
    • Margins remain under significant pressure but "signs of life are emerging," as the GM labor deal removes a gap, lead times have extended, flat-rolled order rates have materially improved and scrap prices are expected to improve – boosting the company's confidence that the market will improve from here.
    • CEO Dave Burritt says U.S. Steel will scale back investments in repairs and upgrades to its existing mills and the construction of a new sheet steel rolling line at its Mon Valley Works to focus on the company's "number one strategic priority" of acquiring the remaining 50.1% stake in Big River Steel in Arkansas.
    • U.S. Steel expects to spend $950M on mill improvements and equipment in 2020, down from $1.5B analysts had forecast.
    • "We're in a difficult market environment," Burritt said. "We will remain flexible to manage the pace of our other strategic investments."
    • Facebook (FB -0.3%) has gone negative for the day, and Google has pared gains (GOOG +0.1%GOOGL +0.2%), after Goldman Sachs downgrades the communications services sector amid boiling regulatory pressures.
    • The group could be set for several months of lackluster performance alongside what looks like both political parties' mutual distrust of big tech, the firm says.
    • And: “Our previous research showed that antitrust lawsuits typically take years to resolve but ultimately result in lower valuation between lawsuit filing and resolution and slower sales growth following resolution,” writes Chief Equity Strategist David Kostin.
    • Antitrust issues will heat up for tech giants in 2020, he says, and the U.S. election presents another wild card amid some calls to break up companies like Facebook, Google and (AMZN +0.7%).
    • The total count of active drilling rigs in the U.S. racks up its ninth decline in 10 weeks, falling by another 8 rigs to 822 in the latest weekly survey from Baker Hughes.
    • Oil rigs fell by 5 to 691 while gas rigs slipped by 3 to 130; 1 rig remains classified as miscellaneous.
    • WTI December crude oil +2% to $55.27/bbl.
    • The White House is talking about a second round of tax cuts "to help middle-income workers and wage earners," White House Economic Adviser Larry Kudlow said on Fox Business Network's Varney & Co.
    • "The president would love to see another round of lower taxes," he said, but added that "there's nothing formal in the process. I don't have any details."
    • Regarding timing, "It will be announced during the campaign," he said.
    • Appearing on Fox Business Network's Varney & Co., White House Economic Adviser Larry Kudlow works out the math to President Trump's tweet that when adjusting for revisions, the GM strike, and 2020 census workers, the October job growth figure comes to 303K.
    • Kudlow start with the reported figure of 128K then adds the 95K added through revisions to the August and September numbers, bringing it to 223K.
    • Add in 60K to adjust for the GM strike and the 20K of census workers, "The total is, in fact, 300,000 — 303,000, to be precise. That is a blowout number," Kudlow said.
    • Not everyone agrees with that calculation. Silvercrest Asset Management's Patrick Chovanec sees the GM number at 42K, rather than 60K, and notes that the 95K of upward revisions for August and September are good news "but belong to prior months."
    • Fitch Ratings changes its ratings outlook on Nordstrom (JWN +2.3%) to Negative from Stable. Key snippets from the report are below.
    • "The company's performance has weakened materially given execution issues on a number of fronts, with total revenue down 4%-5% for the last three quarters starting the fourth quarter of 2018. This has raised concerns about Nordstrom's ability to return to 3%-4% top line growth in the near to medium term, leading to a change in the Rating Outlook."
    • "EBITDA has been on a decline since 2014 due to Nordstrom's investments across its omnichannel platform and the significant top line decline in the company's U.S. full line stores dovetailing secular challenges across mall-based apparel retailers."
    • "To stabilize its ratings, Nordstrom would have to resume 3%+ revenue growth, mid-to-high single digit EBITDA growth, and divert a portion of its FCF towards debt paydown ($500 million of debt maturing in May 2020 and $500 million in October 2021) to return leverage to the mid-2x)."
    • The ratings agency affirms Nordstrom's long-term issuer default rating at BBB+.
    • Australia’s Mineral Resources (OTCPK:MALRF) said that its newly formed MARBL Lithium Joint Venture with Albemarle (ALB +4.5%) had decided to pause operations at the Wodgina Project amid “challenging” lithium market conditions.
    • The two companies in December struck a $1.15B agreement under which Albemarle would acquire a 50% interest in the Wodgina project
    • The closure of the transaction has two stages, firstly a cash payment of $820M from to Mineral Resources ALB  for 60% of the mine and secondly the transfer of a 40% interest in two lithium hydroxide conversion trains to Mineral Resources, resulting in total value of the transaction up to $1.3B
    • Mineral Resources said the decision would not affect its fiscal 2020 mining services core earnings guidance of A$280M – A$300M.
    • The Competition Commission of India wants more information from Amazon (AMZN +0.9%) about its planned stake in Future Retail, according to Reuters sources.
    • Amazon wants to acquire a 49% of Future Group, which would in turn give the tech company a 3.6% stake in Future Retail.
    • The antitrust authority sent a note to Amazon last month saying "in certain overlapping segments and areas of operation of the parties, the combined market share exceeds the threshold specified in the combination regulations."
    • Future Retail operates more than 1,500 stores in the country with 290 budget department and grocery stores.
    • Royal Dutch Shell (RDS.A +1%) is hit with criticism from analysts for warning of possible delays to its $25B share buyback program, as some say the move undermined the credibility of the company's management.
    • CEO Ben van Beurden tried to play down the warning during the company's earnings conference call, saying Shell still intended to complete the buyback on schedule by the end of 2020.
    • The comments "had a predictable and in our view unnecessary impact [and] are likely to exasperate long-suffering investors further," says UBS analyst Jon Rigby, who rates the stock as a Buy.
    • Morgan Stanley's Martijn Rats says he now assumes the buyback program will take a year longer than planned, and Jefferies analyst Jason Gammel says Shell's "management credibility has now been strained," retaining his Buy recommendation on the stock "with somewhat less enthusiasm."
    • Alasdair McKinnon of the Scottish Investment Fund, which holds shares in Shell, said the company was right to flag the warning, adding that the stock was "harshly treated" yesterday.
    • Federal Reserve Vice Chairman Richard Clarida is "very happy" with the central bank's current monetary policy stance, he says in an interview on Bloomberg TV.
    • That appears to reinforce Fed Chair Jerome Powell's statement on Wednesday that current policy is "likely to remain appropriate."
    • Repeats that U.S. economy and monetary policy are in "a good place," one of the Fed's most-used talking points recently.
    • Calls the October employment print "a very solid labor market report."
    • Sees U.S. economy "operating in the range of trend growth" and the Fed expects that to continue, but adds that the economy is "not late cycle."

  12. What QE?  


    Stock Market up BIG! Record highs for S&P 500 and NASDAQ. Enjoy!

    10:08 AM · Nov 1, 2019Twitter for iPhone





    Bush Ethics Lawyer Calls Trump Money Steered To Impeachment Foes 'Felony Bribery' "Any other American who offered cash to the jury before a trial would go to prison for felony bribery," writes attorney Richard Painter.









  13. phil// Any suggestion on a new GOLD trade?  Or it is time to wait it out for the GOLD to come down further?  Thanks

  14. Gold/Rookie – Well, they had a bit of a pullback but not too much.  I'd rather come in at $15 but they are a long-term play so you can scale in now if you feel the need.  

    • Sell 5 GOLD 2022 $15 puts for $2 ($1,000) 
    • Buy 10 GOLD 2022 $15 calls at $4.50 ($4,500)
    • Sell 10 GOLD 2022 $22 calls for $2 ($2,000)

    That's net $1,500 on the $7,000 spread so $5,500 (366%) upside potential at $22 and you can sell 3-5 short calls when they get closer to $20 to pick up income.  In this case, we mostly hope GOLD goes lower so we can roll the $15 calls to the $10 calls (now $7.70) for less than $2.50 and very happy to roll the short puts to the 2023 $13s or the 2024 $10s if it goes lower.  

  15. Streaming / Phil – Maybe because I have more disposable income than the average person, but I would rather pay $15/month than watch 2 hours or more of ads to cover the cost of my streaming plan. I pay for the premium YouTube sub for the family and over the last 3-4 years, it's probably saved us days of having to wait through ads. 

    The biggest problem for these streaming guys will be that most people won't be able to afford all of them (it's now actually getting more expensive than cable TV) and will probably end up switching back and forth between them and watch what they wanted to watch and cancel! Churn is going to rise I am guessing.

  16. Paying/StJ – Yes, we're rich, we value our time more than money but NFLX can't get by just serving the rich.  I agree on churn but the bottom line is that more services is very likely to lead to lower pricing as there's not much incremental cost for a new subscriber – so they'll do whatever they can to get them at some point.

  17. Anybody have the BA trade from the other day? Thanks…

  18. Putting a cherry on top into the close.

    Have a great weekend everyone, 

    - Phil

    BA/Sun – This one?

    Now that the BA testimony is over, possibly Trade of the Year:

    • Buy 10 BA 2022 $330 calls for $69 ($69,000) 
    • Sell 10 BA 2022 $430 calls for $32 ($32,000)
    • Sell 5 BA 2022 $320 puts for $50 ($25,000) 

    That's net $12,000 on the $100,000 spread that's a little in the money to start.  Once BA is up at $400, we could even do some call selling to wash away the $12,000.  

  19. The short 5 are puts – to be clear.  

  20. American Airlines cancels Boeing 737 MAX flights until Jan

    cracks in the wings they were saying on news this morning

    different than the previous issues

  21. Yes that one…Thanks!!

  22. Hong Kong Protests: Tear Gas Fired in Busy Shopping District

  23. Barneys Is Sold for Scrap, Ending an Era

  24. How China built a single-photon detector that works in space

  25. Trump absent, ASEAN charts path for trade bloc led by China

  26. Saudi Aramco I.P.O. Is Announced

  27. How about NYCB now? Buy stock at 11.75, sell 2022 12 puts and calls