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Tariffic Tuesday – Trump Adds $7.2Bn to his Slush Fund

Image result for trump tariff use of funds"Follow the money!"

That was the advice given to Watergate reporters Woodward and Bernstein by their source "Deep Throat" (don't Google that!) suggesting that political corruption can be brought to light by examining money transfers between parties.  The Trump Administration took in $7.2Bn in tariffs in the form of taxes paid by American Consumers and Companies in October alone.  That number will increase to over $10Bn/month if Trump goes through with his threat to add more Tariffs at the Sunday night deadline.

According to an analysis of data from the President’s own Department of Commerce, American businesses, farmers and consumers – and not China – have paid $42 billion in additional taxes because of these tariffs,” stated Americans for Free Trade spokesperson Jonathan Gold. “Yet even when faced with this staggering number, it’s still unclear whether the president will follow through with his threat to raise taxes yet again on December 15th with another rounds of tariffs, this time on primarily consumer-facing products like toys and consumer electronics.

China’s government and companies in China do not pay tariffs directly. Tariffs are a tax on imports. They are paid by U.S.-registered firms to U.S. customs for the goods they import into the United States.  Importers often pass the costs of tariffs on to customers – manufacturers and consumers in the United States – by raising their prices.

Trump's tariffs are a new tax on Americans, trump tax law tariffs, what tariffs did Trump impose?The trade war has hit swing states particularly hard. In seven of the top swing states (Florida, Iowa, Michigan, Minnesota, Ohio, Pennsylvania and Wisconsin), Americans have paid a combined additional $7.66 billion in taxes because of these tariffs. In Michigan alone, businesses, farmers and consumers have paid an additional $1.8 billion in taxes. For the month of October, people in these seven states have paid an extra $687 million, including almost $138 million in Ohio alone. 

As these states face higher and higher tariffs, their economies begin to suffer. Unemployment is rising in key swing states like Michigan and Wisconsin, with Moody’s Analytics estimating the trade war has reduced U.S. employment by 300,000. Farm bankruptcies have risen 24 percent since September of last year, and some of the hardest hit areas are in must-win swing states. And the manufacturing industry, which plays a pivotal role in many swing states, contracted for a fourth month in a row in November, with ISM Chairman Timothy Fiore saying, “Global trade remains the most significant cross-industry issue.” 

Trump then turns around and uses this money to buy votes, handing out over $28Bn in bailouts to farmers in swing state – yet another quid pro quo for his big campaign contributors, as small farmers (under $10M) got less than 15% of the bailouts with factory farms (big Trump donors) getting the lion's share of his gifts.  

A slush fund is defined as "A reserve of money used for illicit purposes, especially political bribery."  

Image result for trump farm bailoutLegal experts and members of Trump's own administration have serious questions about the Department of Agriculture (USDA) doling out $30 billion to farmers harmed by Trump's ongoing trade war with China, according to the Washington Post (I know – FAKE NEWS!).  Two USDA officials told the Post that they worried the massive bailout program, administered through the Commodity Credit Corporation, goes far beyond the legal limits intended by the New Deal law.  "It was obvious they were stretching their legal authority," one USDA official told the Post. A former USDA official who worked there during the Trump administration added that, "They're doing it really fast and shorthanded."

"They're essentially using it as a political slush fund to backfill for the cost they're imposing on agriculture through the trade war," Neil Hamilton, former director of the Drake Agricultural Law Center, told the Post. "Congress never said, 'Go spend $28 billion trying to make people whole because of this trade war you created.' That's just something they have cooked up."  The nearly $30 billion price tag also has many experts questioning the program. During President Obama's tenure, the largest bailout for farmers was a 2018 program to help cotton farmers, which cost $216 million. Trump's taxpayer-funded farmer bailout program costs more than 100 times that amount.

Image result for trump farm bailoutThe bailout funds, which overwhelmingly go to White Farmers (99.5%), are often not enough to make up for the losses from Trump's trade war.  "The MFP has almost exclusively benefitted white men and their families, who appear to be disproportionately upper middle-class or wealthy," New Food Economy reported. "These payments further entrench already drastic inequalities in agriculture, along racial, ethnic, gender, and class lines."

Even in states with a relatively high number of black farmers, the money still mostly went to white-owned farms.  "In Mississippi, for example, where 38 percent of the population is black and 14 percent of farms have a black principal operator, according to the 2017 Census of Agriculture, only 1.4 percent of the $200 million distributed to farmers through the MFP went to black operators," New Food Economy noted.

Of course, giving money to rich farmers while forcing their neighbors into bankruptcy is the ultimate real estate grab – perhaps Trump isn't as dumb as he seems…

To add insult to injury, Agriculture Secretary Sonny Perdue was caught recently mocking farmers who were struggling as a result of the tariffs.  "What do you call two farmers in a basement?" Perdue joked with a group of Minnesota farmers in mid-August. "A whine cellar," Perdue said, generating boos from the crowd. 

While Trump's Big Farm buddies are being bailed out, American households will still be hurt from the higher costs foisted upon them by Trump's trade war. Experts estimate the average family will be forced to pay $1,000 more next year because of the trade war, a higher amount than most Americans will receive as a result of the 2017 GOP tax law, which promised tax relief for the middle class.

9 am Update:  After I published this PSW Report, the Administration has indicated they are considering NOT increasing tariffs on Dec 15th and will continue to negotiate with China.  I don't know if it was because of me but I'm always happy to help!  8) 


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  1. Good Morning!

  2. We are going to get so much whining, we'll be tired of whining!

  3. Were things so bad for the top 1% and CEO in 1975 that they had to increase their take?

  4. This market rally is so narrow:

    In a recent research note, Andrew Lapthorne, head of quantitative research at Société Générale, pointed out that within the nearly 1700 constituents of the MSCI World Index, “the megacap group [with market capitalizations above $100 billion] is powering ahead, whilst those in the sub- $5 billion market cap range are still struggling to make back last year’s loss.”

    “The more remarkable numbers are this 100bn portfolio represents just 77 companies but 27% of the global market cap,” he added, while there are more than 11,000 companies with market values of less than $1 billion, and the median company in that group has shed nearly 10% of its value so far this year.

  5. Good morning!

    Ah, Trump delayed the tariffs because he knew the House was going to announce official impeachment this morning.  On TV right now.  2 Articles:

    • Abuse of Power (Ukraine/Biden) 
    • Obstruction of Congress:

    Contempt of Congress is the act of obstructing the work of the United States Congress or one of its committees. Historically, the bribery of a U.S. Senator or U.S. Representative was considered contempt of Congress. In modern times, contempt of Congress has generally applied to the refusal to comply with a subpoena issued by a Congressional committee or subcommittee—usually seeking to compel either testimony or the production of requested documents.


    In the late 1790s, declaring contempt of Congress was considered an "implied power" of the legislature, in the same way that the British Parliament could make findings of contempt of Parliament—early Congresses issued contempt citations against numerous individuals for a variety of actions. Some instances of contempt of Congress included citations against:

    In Anderson v. Dunn (1821),[1] the Supreme Court of the United States held that Congress' power to hold someone in contempt was essential to ensure that Congress was "… not exposed to every indignity and interruption that rudeness, caprice, or even conspiracy, may mediate against it."[1] The historical interpretation that bribery of a senator or representative was considered contempt of Congress has long since been abandoned in favor of criminal statutes. In 1857, Congress enacted a law that made "contempt of Congress" a criminal offense against the United States.[2]


    Concerned with the time-consuming nature of a contempt proceeding and the inability to extend punishment further than the session of the Congress concerned (under Supreme Court rulings), Congress created a statutory process in 1857. While Congress retains its "inherent contempt" authority and may exercise it at any time, this inherent contempt process was last used by the Senate in 1934, in a Senate investigation of airlines and the U.S. Postmaster. After a one-week trial on the Senate floor (presided over by Vice President John Nance Garner, in his capacity as Senate President), William P. MacCracken, Jr., a lawyer and former Assistant Secretary of Commerce for Aeronautics who was charged with allowing clients to remove or rip up subpoenaed documents, was found guilty and sentenced to 10 days imprisonment.[11]

    MacCracken filed a petition of habeas corpus in federal courts to overturn his arrest, but after litigation, the U.S. Supreme Court ruled that Congress had acted constitutionally, and denied the petition in the case Jurney v. MacCracken.[12][13]


    Following a contempt citation, the presiding officer of the chamber is instructed to refer the matter to the U.S. Attorney for the District of Columbia;[14] according to the law it is the duty of the U.S. Attorney to refer the matter to a grand jury for action. However, while the law places the duty on the U.S. Attorney to impanel a grand jury for action, proponents of the unitary executive theory argue that the Congress cannot properly compel the U.S. Attorney to take this action against the Executive Branch, asserting that the U.S. Attorney is a member of the Executive Branch who ultimately reports only to the President and that compelling the U.S. Attorney amounts to compelling the President[citation needed]. According to this theory, to allow Congress to force the President to take action against a subordinate following his directives would be a violation of the separation of powers and infringe on the power of the Executive branch. The legal basis for this position can be found in Federalist 49, in which James Madison wrote “The several departments being perfectly co-ordinate by the terms of their common commission, none of them, it is evident, can pretend to an exclusive or superior right of settling the boundaries between their respective powers; and how are the encroachments of the stronger to be prevented, or the wrongs of the weaker to be redressed, without an appeal to the people themselves, who, as the grantors of the commissions, can alone declare its true meaning, and enforce its observance?”[15] This approach to government is commonly known as "departmentalism” or “coordinate construction”.[citation needed]

    Others[who?] argue that Article II of the Constitution requires the President to execute the law, and that the Executive Branch cannot define what the law is or interpret the law, as those powers are reserved for the legislative and judicial branches respectively.[citation needed] They[who?] argue that any attempt by the Executive to define or interpret the law would be a violation of the separation of powers; the Executive may only—and is obligated to—execute the law consistent with its definition and interpretation; and if the law specifies a duty on one of the President's subordinates, then the President must "take care" to see that the duty specified in the law is executed. To avoid or neglect the performance of this duty would not be faithful execution of the law, and would thus be a violation of the separation of powers, which the Congress and the Courts have several options to remedy.[citation needed]

    The criminal offense of "contempt of Congress" sets the penalty at not less than one month nor more than twelve months in jail and a fine of not more than $100,000 or less than $100.[4]

  6. SMLP – Sold 1/3 up 20%.

  7. OOPs !  10%.

  8. stjean/UVXY  thought you might be interested.  I saw this last night from

    I’m estimating that ProShares will reverse split UVXY 5:1 for the tenth time around May 11th, 2020.  I’m basing this forecast on UVXY’s recent decay rate of around 11% per month and the price trigger point that spurs ProShares to take action of $8 per share.  Sometimes ProShares will do a 4:1 split because of issues with adjusted options, but this time 5:1 works fine and that seems to be ProShares’ preferred choice.

    Because of the dramatic volatility swing on February 5th, 2018 Proshares decided to reduce the leverage on UVXY from 2X to 1.5X.  This will reduce UVXY’s performance during volatility spikes but it will also reduce its decay rate when volatility is subdued.   My simulations indicate that UVXY’s average annual decay rate will drop from around -82% a year to -68% a year.   This doesn’t seem like a lot but in practice, it will be significantly stretch out the time between reverse splits.  If my estimate is correct UVXY will have gone 20 months since it last reverse split in September, 2018 compared to 17 months for its 2X competitor TVIX (and TVIX typically does 10:1 reverse splits not 5:1).

    Proshares’ 1.5X leveraged short-term volatility ETP, UVXY, must frequently reverse split to keep their prices in a reasonable trading range—otherwise, its share price would rapidly approach zero.  For example, an original share of UVXY purchased for $40 at the fund inception in 2011 would now be worth less than 0.0001 cents.

    For a discussion of what causes this ruinous price erosion see “How Does UVXY Work?”  Lacking bear markets these funds are ravaged by contango at rates that vary between 50% and 75% per year.  Monthly decay rates run in the 7% to 18% range.  See this post for a chart showing how those decay rates have changed over time.

    From my simulations, 1.5X leveraged volatility funds will reverse split about every 8 to 22 months.

  9. UVXY / Stockbern – Thanks for the information. In fact, I used to sell UVXY calls but it turns out that VXX is more margin efficient in the long run. On top of that, these leveraged VIX instruments found themselves in a big mess in January 2018 when the VIX spiked overnight. In fact, these leveraged VIX ETF made matter worse because they had to cover their shorts and drove the VIX much higher AH than it was at the end of trading. The lower leverage ratio should help but until I see more data, I'll stick with VXX. But good information!

  10. albo/AIMT    looks like a 52 week high today 

  11. new experience for me yesterday.  I took an uber to the DIA airport and was picked up in a Tesla model 3, upgraded version with 2 motors. The driver used self driving mode for about half the trip. I got a 40 minute demo about the car and frankly was quite impressed.  There are all kinds of features you never associate with a car, such as a "dog" setting where you can lock your dog in a car and the climate is controlled and you can use the internal camera to check on him.  Also, you can sync your calendar and the car will be ready to go to an appointment and actually drive you to it.   

  12. Did an engagement trade on CPRI ($38.46) – sold a Jan 17, $37.50 straddle for $4.60 credit and added downside protection in this whipsawy market by buying the Jan 17 $35 put for $0.90. So no risk to the downside and happy to roll forward as needed.

    I like selling straddles when I can pick up >10% of the stock price in premium.

  13. Getting some crazy up and down action this morning:

    77 Companies/StJ – The same Top 0.01% that is consolidating general wealth is also consolidating us down to just a few mega-corps.  This is what Marx warned us would happen 100 years ago but we're not even allowed to talk about him anymore – or people might realize what's going on…

    The need of a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere. (Section 1.19)

    In competition with other capitalists, each capitalist must always provide a new product to tantalize the consumer with, in order to make more profit and stay in business. This pushes the bourgeoisie to expand across the planet to find or create more customers and to acquire more labor and raw materials. But what is the shiny new thing you want, and where is it made? What are the conditions there like? See child mining in Africa, for example."

    “The ideas of the ruling class are in every epoch the ruling ideas, i.e. the class which is the ruling material force of society, is at the same time its ruling intellectual force. The class which has the means of material production at its disposal, has control at the same time over the means of mental production, so that thereby, generally speaking, the ideas of those who lack the means of mental production are subject to it. The ruling ideas are nothing more than the ideal expression of the dominant material relationships, the dominant material relationships grasped as ideas.”

    “The bourgeoisie cannot exist without constantly revolutionizing the instruments of production, and thereby the relations of production, and with them the whole relations of society." 

    “The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilization. The cheap prices of its commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians' intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilization into their midst, i.e., to become bourgeois themselves. In one word, it creates a world after its own image.”

    “You are horrified at our intending to do away with private property. But in your existing society private property is already done away with for nine-tenths of the population; its existence for the few is solely due to its non-existence in the hands of those nine-tenths."

    “Communism deprives no man of the power to appropriate the products of society: all that it does is to deprive him of the power to subjugate the labor of others by means of such appropriation.  

    It has been objected, that upon the abolition of private property all work will cease, and universal laziness will overtake us.  According to this, bourgeois society ought long ago to have gone to the dogs through sheer idleness; for those of its members who work, acquire nothing, and those who acquire anything, do not work.”

    “Capitalism: Teach a man to fish, but the fish he catches aren't his. They belong to the person paying him to fish, and if he's lucky, he might get paid enough to buy a few fish for himself.”

    “The modern bourgeois society that has sprouted from the ruins of feudal society has not done away with class antagonisms. It has but established new classes, new conditions of oppression, new forms of struggle in place of the old ones.”

  14. 77 / Phil – I imagine that 50 years from now our kids will be talking about one company only. Maybe Google or FB will change their name to Skynet!

  15. If I were in charge of Intel, that's what I would call the first production AI Chip set.  devil

  16. JO – Coffee is crazy higher! I'm now shorting it.  Too extreme in my opinion. 

  17. Stockbern / UVXY – thanks for sharing, a learning opportunity.

    But I have a trading journal note – anything that gets a hit on a ticker search string of '*VXY' returns the error message "are you f%%%ing out of your mind!!!!!!??????"

  18. TSLA/Stock – They are great cars, it's just that the company isn't set up to be profitable making them.   Musk has raised over $20Bn and has generated $10Bn in negative cash-flow with $14Bn in debt and, the last 4 Qs were -$702M, -$408M, +$143M & -$827M so net -$1.8Bn in the last 4Qs on $24Bn in sales while Ferrari (RACE), for example, also makes a cool car with just $3.4Bn in sales last year but $800M in profits.

    I wouldn't buy RACE either for $165 (37x earnings) but at least they make money!  When we're down to just one company in the World – I don't think it will be TSLA.

    JO/Tshroy – Be very careful shorting coffee – The crops were far short of forecast:

    Coffee Market Report

    10 Dec 2019

    The latest Commitment of Traders report from the New York arabica coffee market has seen the shorter term in nature Managed Money fund sector of this market increase their net long position within the market by 319.55% over the week of trade leading up to Tuesday 3rd December; to register a new net long position of 13,908 Lots. Meanwhile the longer term in nature Index Fund sector of this market increased their net long position within the market by 8.82%, to register a net long position of 62,291 Lots on the day.

    Over the same week, the Non-Commercial Speculative sector of this market decreased their net short sold position within this market by 87.41%; to register a new net short sold position of 956 Lots. This net short-sold position which is the equivalent of 271,022 bags has most likely been further decreased, following the period of mixed but overall firmer trade that has since followed and likewise, that of the Managed Money Fund sector of the market.

    The March Arabica coffee KCc2 settled up 2.9% at 128.40 Usc/Lb, its highest level since October last year. ICE-certified stocks have fallen from 2.5 million bags in March to around 2.1 million bags in December boosting coffee prices. The international Coffee Organisation (ICO) forecast a deficit of 502,000 bags, while not large considering last seasons 3.7 million bag surplus, has likely also been a driving factor in the recent price rally.

    That was our whole long premise – that they were too optimistic.  A lot of people had to unwind – not sure if they are done.  

  19. JO / Phil – What is the impact of these 30% increase on coffee prices for companies like SBUX and DNKN. It can't be just minimal – this is a big move.

  20. Just one more poor man's trade fro you  today MMM buy the Jan 22 140 call for 35.30 and sell the Jan 20 172.5/160 strangle for 5.25. The Dec 19 13  140 call has a sales value of 28.55, so just two sales of strangles and you could be out of the woods. Just take it allways in small numbers!!! Just to get your feet wet.

  21. Actually, SBUX uses 10 grams (0.35 oz) of coffee per 6 oz of water. so let's call it an ounce per cup and they aren't paying $8/pound – more like $4 or less so 0.25 per cup goes up to 0.325 is not going to do much to the overall business model for SBUX but DNKN works on thinner margins with bigger cups so maybe for them a little ding.  Plus I imagine they have hedges.  If I were SBUX, I would have hedged out 5 years at the summer prices!  

    MMM/Yodi – Yeah, they got whacked in May and never recovered.  $170 is $97Bn and they are solidly dropping $5Bn to the bottom line but no growth in sight so this is a fair price but could go lower if they have any trouble. 

    Year End 31st Dec 2013 2014 2015 2016 2017 2018 TTM 2019E 2020E CAGR / Avg
    Revenue $m 30,871 31,821 30,274 30,109 31,657 32,765 31,970 32,137 33,820 +1.2%
    Operating Profit $m 6,666 7,135 6,946 7,027 7,788 7,207 6,596     +1.6%
    Net Profit $m 4,659 4,956 4,833 5,050 4,858 5,349 4,948 5,258 5,638 +2.8%
    EPS Reported $ 6.72 7.49 7.58 8.16 9.17 9.18 8.36     +6.4%
    EPS Normalised $ 6.72 7.49 7.71 8.03 8.34 8.46 8.99 9.05 9.69 +4.7%
    EPS Growth % +6.3 +11.5 +3.0 +4.2 +3.8 +1.4 +10.4 +7.00 +7.10  
    PE Ratio x           20.1 18.9 18.8 17.5  
    PEG x           2.87 2.70 2.64 2.72

    This is a company that needs to do an acquisition!  

  22. Phil I always say use small numbers. If you have 20 horses in the stable and one drops dead you still got 19. But if you only have invested in two horses and you lose one you down 50%!

  23. Stockbern – AIMT is at a new yearly high.  FDA approval is expected next month for their peanut allergy therapy.

  24. MLPs  are strong for the second day in a row.

  25. Hello Yodi, I read all your posts, thanks. I would make one suggestion, could you please put the current price of the stock after you give the symbol? For me that would help put make everything a bit easier to appreciate, thanks.

  26. So, does Donald Trump think his FBI director is in the ‘deep state’ now too?

  27. Motox Any suggestion is always welcome, and if you do not ask you will not get any answers.
    I am not sure which platform you using for your trading but most members here I think use TOS.
    Now when you want to check any of my suggestions, the first thing you should do is check out on your platform the trading symbol. As soon as you put in the symbol you will see the name and the stock price. From there on you can enter your puts and calls to see, what I am talking about.
    After that you need to do your own research before you even put a penny in to a trade.
    Never and I repeat never take some one else’s word blindly. But I will enter the price of the stock as I enter the symbol. But remember prices change constantly. So you always have to make your own assessment.
    Good for asking. As I said before especially new members do not hesitate to ask.

  28. 10%/Winston – Those kinds of trades are bread and butter in a normal market.  


    Palladium roars to record $1,900/oz. on South Africa power cuts

    • Palladium spot prices (NYSEARCA:PPLTpush past $1,900/oz. for the first time ever as South Africa's power crisis halts mining production in the country, exacerbating supply concerns and extending the metal's record run.
    • Spot palladium recently was +1% at $1,901.27/oz., after hitting an all-time high $1,903/oz.
    • "South Africa produces 40% of world's palladium and the ESKOM outages are hitting some mines, giving palladium just that extra nudge above $1,900," says Tai Wong, head of base and precious metals derivatives trading at BMO, but after 13 straight positive sessions, "it wouldn't be surprising to see some consolidation, though the overall trend continues to look positive."
    • Scarcity concerns over palladium already have helped lift the metal by ~50% in 2019, due to its large demand in the auto sector.
    • Other metals also gained on the South African outages, with platinum +3.1% at $922.40/oz., the highest since Nov. 21, and silver +0.4% to $16.66/oz.; spot gold only +0.1% at $1,463.66/oz.

    Can't make cars without it so a disruption in supply like this gets it going crazy.  

    Stocks turn mixed amid conflicting trade headlines

    • In a familiar scenario, the three major U.S. stock averages are mixed in midday trading as trade headlines push indexes one way or another.
    • The S&P 500 is flat, while the Nasdaq holds onto a 0.1% increase; the Dow edges down 0.1%.
    • Before the open, futures for all three U.S. stock averages rose into positive territory following reports that U.S. and Chinese trade negotiators were planning on a delay of new round of tariffs on Chinese goods that were set for Dec. 15.
    • Since then, White House economic adviser Larry Kudlow said the Dec. 15 tariffs are "still on the table."
    • "The president has indicated if the short strokes remaining in negotiations do not pan out to his liking that those tariffs could go back into place,” said Kudlow at a Wall Street Journal conference today.
    • By S&P 500 industry sector, information technology (+0.3%) and utilities (+0.1%) outperform the broader market, while real estate (-0.7%) and materials (-0.5%) lag the most.
    • The 10-year Treasury falls, pushing yield up almost 3 basis points to 1.847%.
    • Crude oil rises 0.3% to $59.19 per barrel; gold increases 0.3% to $1,468.60 per ounce.
    • Across the Atlantic, the Stoxx Europe 600, Germany's DAX, and the FTSE 100 each closed down 0.3%; France's CAC 40 ended the session up 0.2%.
    • The U.S. Dollar Index falls 0.2% to 97.50.

    Sky-high projection on McDonald's P.L.T sales

    • UBS extrapolates some data out of the test by McDonald's (MCD +0.2%) test of Beyond Meat (BYND +0.4%) burgers at select locations in Ontario. The firm forecasts the fast-food chain could sell as many as 250M P.L.T (plant, lettuce. tomato) burgers a year in the U.S. if the alternative protein sandwich was rolled out nationally.
    • "We believe Beyond Meat has a first-mover advantage – for now – but it appears a door remains open for McDonald’s to refine its P.L.T. offering before introducing a plant based patty in the United States," observes UBS analyst Steven Strycula.
    • McDonald's describes the P.L.T. as being made with a juicy, plant-based Beyond Meat patty and served on a sesame seed bun with tomato, lettuce, pickles, onions, mayo-style sauce, ketchup, mustard, and a slice of processed cheddar cheese. Importantly, the patties are cooked on the same grill as other burgers, meat-based products and eggs. The P.L.T has 460 calories, 42 grams of carbohydrates and 25 grams of saturated fat. The level of sodium is 38% of the daily recommended value, while the burger also contains iron (20% DV), calcium (15% DV), vitamin A (15% DV) and vitamin C (20% DV).

    Boeing reports 30 orders of 737 MAX in November

    • Boeing (BA -0.6%) says orders for its troubled 737 MAX rose incrementally last month, with two firm orders for 30 jets.
    • But YTD, the company has lost a net 84 orders for commercial planes, amid the MAX grounding and moves by some customers to cancel MAX orders or convert them to other Boeing models.
    • Boeing reports a net increase with 11 commercial airplane orders in November, well behind rival Airbus (OTCPK:EADSY), which recorded orders for 219 commercial airplanes during the month.
    • Airbus YTD has logged orders for 940 planes and is on pace to easily win the annual order race with Boeing.
    • The European planemaker also will win the annual aircraft delivery battle with 77 planes in November vs. 24 for Boeing; for the year, Airbus has delivered 725 planes vs. 345 for Boeing, on pace for the U.S. company's lowest full-year deliveries since 2008.

    Freeport LNG launches commercial operations

    • The Freeport liquefied natural gas project in Texas has started commercial operations at its first liquefaction train, project partners Osaka Gas and JERA announce.
    • The two partners have each contracted for half of Train 1’s total offtake capacity of 4.64M mt/year under 20-year liquefaction tolling agreements.
    • The new supply is expected to further weigh on spot prices, which already are at their lowest ever for this time of the year.
    • Freeport LNG has three trains, each with a liquefaction capacity of 5M mt/year.

    Virgin Galactic takes off again; +11%

    • Virgin Galactic (NYSE:SPCE) is up another 11% to $9.35/share this morning after climbing 12% on Monday.
    • While a near-term price target of $22 was set at Morgan Stanley, the firm predicts shares could rise as high as $60 over the coming years if the company successfully executes its goals of hypersonic point-to-point air travel and space tourism.

    Apple's iPhone 11 seeing strong holiday demand

    • KeyBanc says Apple's (AAPL +1%) iPhone is seeing strong holiday demand, citing checks of carriers in North America and Western Europe.
    • Analyst John Vinh: "Holiday iPhone sell-through was consistent with historical levels even without generous promotions."
    • The low-cost iPhone 11 remains the most popular model, beating out the iPhone 11 Pro and 11 Max.

    Apple offers iPhone subscription for Card holders

    • Apple (NASDAQ:AAPL) Card holders can purchase an iPhone in 24 monthly payments with no interest.
    • The payments will be bundled in with the minimum Card payment in the Wallet app.
    • Apple is also offering a 6% discount at its retail stores for purchases using a Card through this month, which is twice the normal discount.

    China auto stays in prolonged slump

    • Automobile sales in China fell for a 17th straight month, according to data from the China Association of Automobile Manufacturers.
    • Auto sales were down 3.6% Y/Y to 2.46M vehicles, with sales of new-energy vehicles down 44% during the month to 95K following the expiration of a subsidy program last summer.
    • "The China 5-6 emission standard change is the biggest reason for this year’s sales plunge," says CAAM Deputy Secretary General Chen Sihua. Others might say macroeconomic issues are a huge factor in the prolonged slump.
    • For the year, U.S. automakers have seen their market share fall by 1.5 percentage points and Chinese automakers have seen three full percentage points peeled off, while German and Japanese automakers have improved their market share.
    • Looking ahead, manufacturing quotas from Beijing on new energy vehicles are expected to boost EV and hybrid sales. The government aims for 25% of all auto sales to be in the new-energy category by 2025.

    Toll Brothers -3.7% as Q1 outlook disappoints

    • Toll Brothers (NYSE:TOLslides 3.7% after analysts flag lower-than-expected Q1 2020 guidance from the homebuilder.
    • Raymond James analyst Buck Horne writes, "The most pressing issue appears to be Toll's adjusted gross margin guidance of ~21.3%" – an almost 300 bps Y/Y decline and "well below our published 23.5% estimate."
    • JPMorgan's Michael Rehaut notes that Q4 order growth "was below our estimate and we believe investor expectations.
    • He also points out that Q1 gross margin guidance of 21.25% slips from Q4's 21.9%; by comparison, other builders' calendar Q4 gross margins are expected to be flat to up slightly.
    • KBW's Jade Rahmani writes that while Q1 guidance is below KBW's estimate and the consensus forecast, strengthening demand in the first six weeks of fiscal Q1 "should benefit margins going forward."
    • Quant rating Neutral; Sell-Side average rating Neutral (1 Very Bullish, 1 Bullish, 16 Neutral, 2 Bearish).
    • Toll Brothers conference call at 11:00 AM ET.
    • Previously: Toll Brothers Q4 EPS beats; sees stronger demand in Q1 (Dec. 9)

    Walmart tests autonomous grocery deliveries

    • Walmart (NYSE:WMT) and Nuro are up and running with their autonomous vehicle grocery delivery program to select customers in Houston.
    • The companies says the pilot program will offer a new, affordable and accessible delivery option to select Walmart customers in the region.
    • The service will use Nuro's custom-built delivery vehicle that carries only products with no onboard driver or passengers. Nuro uses autonomous Toyota Priuses that are powered by the firm's proprietary self-driving software and hardware.
    • The service plans to expand to the general public around Houston later in 2020.
    • Source: Press Release

    Productivity and Costs

    • Q3 Productivity and Costs-0.2% vs. -0.1% expected, prior -0.3% estimate (unrevised).
    • Unit labor costs: +2.5% vs. +3.4% expected, prior +3.6% estimate (unrevised).

    I'm thinking we should put together a portfolio of "Future is Now" stocks like SPCE – Something that represents the leader in each Future Field like CRSP, ISRG, etc…

    Good topic for tomorrow's Webinar.

    Today I'm off to do the radio show at 2:30 @

  29. Yodi:

    DK is up 2%, I think there is more people that you think following you!.

    Where are you now, by the way.

  30. Phil / TSLA – im looking at shorting this w/ Jan '20 365 calls. – thoughts?

  31. Phil TSLA /   Than Jan $365 Calls at at about $12  

  32. Advill,

    Hi as long we do not have a crash and things run normal should be OK just hope every one makes his own decission.

    Are in Miramar!!!!!

  33. Phil / SKT -  I see your reasoning for holding SKT in the Dividend portfolio with the 2022 options….the consistent >95% occupancy chart since 2000 (in their IR report, which you showed in the webinar) resonated with me. 

    In the very near term, wouldn't it be fair to assume investors would also expect and/or want to see good numbers from the occupants as well?  The Dec 15 tariffs(yes/no/maybe?) and the Retail Sales numbers coming out this Friday, will that affect SKT?

    The Jan $15 short put was in your "5 Trades for Christmas".  I have the Jan $16 short put.  I think you had Jan $17.50 short puts in the LTP before that was cashed out in Sept.

    The $16 put is $0.725 now, I entered on Sep 1 for $1.94 .  Would I buy it back now to be safe, or wait until expiration on Jan 20?  SKT at $15.84 now.

  34. Jeffrey Gundlach Webcast infos –  very good info this is the live webcast:

  35. Thanks Batman! 

  36. Saguaro --  are you here?  Curious if you are playing along CBS and TAP?

  37. Thanks Yodi, I use Interactive Brokers so I have access to everything it's just that I often read the chat during the day when I am a bit rushed for time, thanks.

  38. Vidt -

    Yes, I sold the CBS 2022 $40 puts, but I never did anything with TAP. The next time Phil makes the case for TAP, I'll think about it again, and maybe do some more research. Maybe then I'll buy it.

    I also bought and sold the UNG deal Phil suggested, Jan 2020 $15/$19 bull call spread with short Jan 2020 $19 puts. On that I waited too long and ended up breaking even.

    I also bought, and recently sold, the JO March 2020 $30/32 bull call spread and March 2020 $30 short puts. On those I actually made money :-)

    Those two make me want to know more about how to assess commodities :-)

  39. TSLA/Batman – You know it's dangerous, right?  I agree with the premise but be very aware TSLA could pop 20% in a month very easily (or drop 20% too) and that would be $425 so make sure it's nothing you won't be comfortable doing a 2x roll on and spending a year working out.  Also, as silly as it may seem – TM is a $201Bn company with about $300Bn in sales and $19Bn in profits and TSLA has $24Bn in sales and no profit but what if someone at TM decides they could squeeze 10% out of TSLA?  And don't forget, TSLA is not just a car company – they have the battery company and the solar company so maybe TM buys the cars for $15Bn and GE buys the batteries and solar for $15Bn and TSLA gets bought out at $420 (Musk's prediction) – then you are F'd.  Not at all likely but not impossible.  

    It's the kind of play that's OK to make if losing $20,000 would only annoy you…

    SKT/Vidt – Also almost my Trade of the Year.  I don't think the month to month occupancy is an issue – the point is SKT rode out the 2008/9 crisis and kept their numbers out and they have ridden out the "Retail Apocalypse" and kept their numbers up and THAT is why they make a good investment for the long term.  

    As to our 5 Trade Idea, the stock is at $15.95 and they paid a dividend 10/30 so no new ones until 1/30 and earnings are 2/15ish so no major shocks are likely unless Retail Sales are a disaster and spook investors off REITs as well.  Still, the Jan $16 puts are 0.65 so all you can make in 38 days is 0.65 but SKT has been to $14 recently so you could owe $2 – though that's really only even – worst case.  

    The question is, what's your long-term intent?  The 2021 $13 puts are $1.20 so figure you could roll to that if it turned on you and, if you have no problem with that long-term play – then way pay 0.65 just to avoid a not-so-bad worst case?  Of course, if you'd rather buy back the short $15 puts that pay 0.02 per day to sell the June $16 puts for $1.95 (0.01/day), then I can see wanting more cushion but, otherwise, why do you want to give a guy 0.65 of premium just because you lack conviction?  

    TAP/Sag,Vidt – Not so much bullish on TAP as bottomish.  Down so far though but another year to go.  

    From the Hemp Boca Portfolio:

    TAP Short Put 2022 21-JAN 50.00 PUT [TAP @ $51.21 $-0.32] -5 11/19/2019 (773) $-3,800 $7.60 $-0.10 $-7.60     $7.50 $-0.50 $50 1.3% $-3,750
    1 Bull Call Debit Spread
    TAP Long Call 2021 15-JAN 50.00 CALL [TAP @ $51.21 $-0.32] 20 6/18/2019 (402) $17,000 $8.50 $-2.85 $8.13     $5.65 $-0.15 $-5,700 -33.5% $11,300
    TAP Short Call 2021 15-JAN 60.00 CALL [TAP @ $51.21 $-0.32] -20 6/18/2019 (402) $-8,000 $4.00 $-2.05     $1.95 $-0.05 $4,100 51.3% $-3,900

  40. Phil  good idea


    I'm thinking we should put together a portfolio of "Future is Now" stocks like SPCE – Something that represents the leader in each Future Field like CRSP, ISRG, etc…

  41. The Yodi effect"… like a Jedi  force!  lol

  42. Phil;

    Somebody else shares your opinion on WBA. Problem is to determine how long is the "long march" fr them, 1 year? 2?