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Hedging for Disaster – The Corona Crisis Continues

Futures went limit down again.

QE Infinity and $1.2Tn of stimulus wasn't enough, it seems.  Here's the problem – even if you give every man, woman and child in this country $2,000 a month ($600Bn) – where are they going to spend it?  

Even if the US is that generous (we're not), what about the rest of the World?  If every country doesn't do something similar, we're still looking at a global Recession.  Recessions end when people goo back to work and things start getting back to normal.  The problem is, there's no "normal" in sight at the moment. 

As I keep saying – you have to fix the crisis first – NOT the economy!

This is like firemen showing up at a house fire and painting the house while the fire rages on - who cares about that?  

Image result for federal throw money on the fire

As you can see from this 1934 cartoon, this isn't the first Government that's taken a crisis (the dust bowl at the time) and thrown money at it.  Money didn't stop the farms from failing and money didn't solve the bread lines or the cascading unemployment that ended up destroying the economy in the Great Depression.  The Trump Administration has been propping up the markets since 2017 and have already used all the Fed's firepower and put us $3Tn more in debt in 3 years of Trump and now, when we have an actual crisis – even $1.2Tn doesn't seem like enough to "fix" things.

Image result for bloomberg tv homeBloomberg reporters are reporting from their homes – how's that for inspiring confidence!?  As I noted this morning in an Alert to our Members:  

Sadly, we'll have to add more hedges today, in case 2,400 breaks down and we head for 1,800.  Fortunately, that's down 25% so up 50% on SDS, which is already at $34 so $51 would be the target and the SDS May $35 ($7.50)/50 ($4.50) bull call spread is just $3 and pays $15 so 400% upside potential means we can get $100,000 back for each $25,000 and we just sold $81,000 worth of short puts in the LTP which pays for $300,000 worth of protection.

Of course we don't need to take it all at once but 80 of those spreads for $24,000 pays $120,000 back at $50 and we certainly hope we lose the $24,000 but I'd rather have the insurance until things calm down.  If 2,250 fails, we add another layer (maybe June contracts) and another at 2,000 and, by the time you are adding at 2,000, the S&P is down 17% and that's 34% up on SDS to $45.56 and the May $24s ($10 in the money) are $12 so we'd already be able to cash in the original calls for $12 and leverage that to buy more long spreads, etc.  

And, of course we already have over $200,000 worth of FXP (our first virus hedge) SQQQ, and QQQ hedges that will kick in but we need to make sure we have at least $500K in the STP as another 20% down could wipe out the buying power of the $500,000 LTP.  In the very least, we'd have to buy back all our short puts (can't risk assignment) and then wait a very long time hoping our bull call spreads go back in the money.  

Is it survivable?  Of course it is – but that doesn't mean it will be pleasant.  

“I think the Fed is doing the right thing. But people are having margin calls,” said Alex Au, managing director at Alphalex Capital Management, a hedge fund based in Hong Kong. “There might be many forced sellings on the market as people unwind earlier positions.”

Investors who have used borrowed money to make bigger bets can face margin calls when holdings fall in value, forcing them either to stump up more cash or to sell their positions.

This is probably a fantastic opportunity to deploy cash but, as noted above, cash is in short supply and we can't be sure it's the bottom so we need to "waste" (hopefully) money on hedging if we intend to stick with long positions.  

One reason we can't wait is that there's a possibility (30%) they will close the markets – another reason people are cashing out in a panic.

Image result for hedgingSo it will be a busy day, expect to be adding hedges to all our portfolios this morning and we'll have a lot to talk about in today's Live Trading Webinar. 

 Meanwhile, I do expect progress on stimulus today so I still like (again) playing the S&P Futures (/ES) long OVER the 2,400 line – with TIGHT STOPS BELOW. I also like /NG long here ($1.65) also with tight stops and Copper (/HG) at $2.20 is also a good long – but tight stops below.  Better to take small losses and try again at the next support than ride the futures down! 

We are certainly trading below fair value for most stocks but that value assumes some kind of normality where people get up and go to work, school, etc…  As it stands now, people can't leave their homes, Las Vegas is closed, California is closed, New York is closed – probably the whole country next week so we have to rethink what commerce is in a country where no one goes out.

Let's say 80% of the people still get paid.  US payrolls are $6.5Tn or $500Bn a month and Bernie says give us $600Bn a month so – THANKS!  That's why Yang (and me!) is right that $1,000 a months for people over 18 (210M) would be a more realistic $210Bn a month or $2.5Tn a year, which is by no means a crazy number in a $20Tn GDP – a simple 10% VAT would take care of it and resdistribute the wealth from the people who spend to the people who don't have any money.  

In any case, if we do hand out $210Bn/month for the duration (seems to be the current plan in Congress) and 80% of $500Bn a month continues to be paid out – that's $610Bn – more than people are getting paid now! 

So there's no reason for the economy to collapse based on that, though I imagine that each month 10% less people will get regular paychecks as more and more businesses begin to shut down.  This was a trend in progress anyway as McKinsey says 39-73M Americans were going to lose their jobs to automation over the next 10 years anyway.  Think of the incentives companies have now to use robots instead of people!

Image result for universal basic income

Even with a Universal Income supplimenting wages, the real problem becomes SPENDING.  $500Bn a month only becomes a $20Tn GDP (there's other income besides wages, of course) due to the money multiplier effect, which is roughly 3.5x.  In other words, you get paid $5 and you give it to SBUX who pays the barista who goes to the supermarket to buy a whole pound of coffee for $8 (because they are not a sucker like you!) and the Supermarket pays the cashier who combines it with food stamps (because those wages suck) and they get a turkey, etc…  

So money moves through the economy and poor people spend whatever they get so they move money the best but, when you give money to rich people they put it in the bank (0x multiplier) or, even worse, they put it into an instrument that produces NOTHING and demands interest/rent, which sucks even more money out of the economy (-0.1x).  Since the rich have 100x more than the poor – that's a lot of sucking!

Image result for zombie apocalypseStill, unless we are heading into a real Zombie Apocalypse, where humanity is wiped out and replaced by a mindless hoard with no interest in food, fashion or fun – we will survive – even if surviving means locking ourselves in a bubble and shopping via Amazon drones with our Universal Basic Incomes.  

Even THAT would still have our GDP around $12Tn, down 40% from where it was but certainly not $0 – that's why a sell-off past these levels is silly and can't last – and that's the worst possible case – the actual case is probably quite a bit better than that – we just have to get through the next few months.  I made a similar case back in 2010, when stocks were still 50% off their 2008 highs at S&P 900:

The Worst-Case Scenario: Getting Real With Global GDP!

Be careful out there!  

 

 


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  1. Morning, All! 

    Join Phil at 1pm for the LIVE webinar!

    https://attendee.gotowebinar.com/register/7225850085896408589


  2. Phil,

    There is no tittle on today's post, may make it harder for people to get to the comments page.


  3. Lotter – There should be a title now. Try to clear the page cache and reload (on windows ctrl+f5) and let me know if you're still not seeing it. 


  4. Seems unlikely those prices on the new hedges survive the open


  5. Phil – I would assume it makes send to roll my short 2022 TSLA $1200 calls down to $900s? $800s to help offset the short puts


  6. sense


  7. ummm, 1020? Good Morning…..


  8. Tittle,

    Worked, thanks.


  9. Good Morning. 

    Good Morning snow… :)


  10. I really liked Mark Cuban's take on stock buy backs. Never again.

     

    I'd let the airlines sweat.  Their dum CEO's and BOD's deserve nothing and the shareholder's will be crushed, but the practices of these airlines leave an ugly mark on capitalism and don't need any taxpayer assistance. :)


  11. Good morning!  

    After arguing with people over at Seeking Alpha I realize what idiots the general investor population is so thank you all for being here and making this a rational trading community where we can actually have proper discussions and reach rational conclusions – that's why I'm in a good mood now.

    Also, talking to the "average" investors reminds me how irrational the panic is.  While I may talk  about "Zombie Apocalypse" in jest – a scary percentage of these guys actually believe it – and are actively betting on it.

    Yikes though – 20,000 more infections since yesterday.  Deaths (8,243) are now more than 10% of recoveries (82,107).  Italy 31,000 now – WTF Italy?!?

    /ES long kicked in.

    TSLA/Coulter – You sold $1,200 calls?  Good job!   They are still $30, that's ridiculous, I almost want to sell them myself.   If you have, for example, the short $550 puts, now $250, I'd sell the $650 calls for $75 and roll the puts to the $450 puts at $175 so no net cost and you just have to roll the loser on that spread next.  

    Title – I forgot it at first, then fixed it.

    Buybacks/1020 – Any company that bought back their stock in the past year during the bubble deserves to go BK.  In the very least the board should be publicly executed and replaced with actual shareholders (who bought stock, not granted it). 

    That's also a major contributor to the market crash, Buybacks were about 20% of the total inflow volume – now gone.  

    Image result for stock buybacks 2019

    Image result for stock buybacks 2019

    Image result for stock buybacks 2019

    Image result for stock buybacks 2019

    Talk about the writing being on the wall…


  12. Sorry, got busy with some work this morning and didn't post the big chart! Although it's been somewhat meaningless the past 2 weeks and every single rip has been sold the day after. There is simply not enough money that can be printed right now to stem the flow!


  13. Holy cow, even the one person in Greenland got the virus!  Why do they even have testing kits???

    Not enough money/StJ – There's certainly not enough money to fill all the sell orders that keep pouring in and these ETF liquidations are not helping at all.  


  14. Regarding buy-backs, Sen. Murphy posted that yesterday:

    And remember, these guys also got huge tax cuts the past 2 years and have used the money to buy back shares that are going up in smoke now! I am sure they would love to have these $11B now!


  15. Public Execution – Is that before or after being tarred and feathered?  :)


  16. And someone on MSNBC was making the point that all the cruise lines are registered outside the USA – Liberia, Panama and other tax havens! They don't even pay taxes in the US. Should we bail them out? Humanely speaking, we have to help the employees, but when they are talking about drug testing welfare recipients,  that should also apply to corporate welfare recipients. Not drugs of course, but corporate governance.


  17. Airlines – What really sets me off is the 'need' of a 50B bailout and the desire to only pay back half.

     

    I guess it does not hurt to ask….


  18. I'm not sure what part of travel and leisure deserves a bail out and we can't avoid casualties while figuring it out…


  19. Bailout / 1020 – But that's not socialism, right?


  20. NLY close to being down 50% from the highs last month – yikes


  21. Phil, Employees working on Cruise ships are not US citizens, and don't pay taxes in this country! The cruise companies are foreign flagged, so they do not pay US taxes…..why are we bailing out these parasitic patriots!  Just my 2 cents……


  22. NLY 2022 $5 puts fillable at $2.05… ouch! Don't ask me how I know…


  23. This is BS in the STP as we have 100 SQQQ Jan $20/35 bull call spreads and SQQQ is at $27 and the spread is currently being priced at $13.80/13.20 – causing us to show just net $6,500 (a huge loss on our $39,000 position) when we're actually $75,000 in the money.  Be careful of things like that in your portfolio as the broker tends to price the bid for your longs and the ask for your shorts – giving you a worst-case scenario.

    The $20s are actually $11.70/15 and the $35s are $9.50/13.90.  Obviously, if we could actually get them for net 0.60, we should buy 1,000!  

    SDS is at $36 and the May $35s were $8.50 and the May $50s were $5.60, so that worked out as expected, although at higher strikes.  

    Airlines/StJ – F them and their baggage fees!  They should take a vote among passengers and only give bailouts to the airlines that treat us like human beings…  

    Cruise lines/StJ, Jasu – Hey I made that point last week!  Not many US employees either.  

    I too need a $50Bn bailout and I'm even willing to pay 2/3 back – where do I sign?  

    Worse than the disease/Snow – I agree, our cure for the virus is to cause a Recession?  Then the GOP will cut aid programs and SS and Medicare and hundreds of thousands will die from that instead…

    NLY/Ati – Catastrophic action on these REITs.


  24. stjean – I moved to Las Vegas in 1986 when the strip and the rest of the town were owned by locals and a few shady types, then corporate America moved in and wrecked our cool little town.

     

    Back in the day, Socialism would be providing help for those locals and related businesses.

    For corporate America, a bailout is a handout….  :(


  25. Yeah, Steve Wynn (and Donald Trump) needs a bailout but not my local pizza guy?   They're sure not going to forget the pizza guy when the Government has to pay for all this BS.  

    I'm for wage and business interruption pay only.  Whatever you made last March/April last year should be immediately granted this year (less whatever you are making this year, of course) and anything else (that can't be readily proven) would have to be applied for and audited.  

    That would let almost all salaried people and most small businesses operate with minor subsidies that give them peace of mind that things can be normal again in May and businesses would have no reason to lay people off – lessening the amount you have to give to individuals.  

    There, done – next crisis?


  26. Remember, the Trump organization is in the tourism industry, so bailouts are guaranteed there! But not for the guys mowing the lawn, busing the tables and cleaning the rooms. 


  27. BTW, not much noticed here because we have enough to worry about but Switzerland is on the verge of a major breakdown like Italy. 2700 cases for a population of less than 9M people. That's 300 per million. Insane! 


  28. We're going to need an FDR type of response to this.


  29. Speaking of FDR, I am guessing that 50 years from now, people will speak of Trump in the same sentence with Hoover!


  30. China peaked around 2/17 (oddly the same point the markets were hitting ATH's here). Once we peak we can start to pick up the pieces and get the buy list together. I'm starting with SVXY. Note the VIX is lower today and both UVXY and TVIX are way up, so they are becoming disconnected.


  31. Starting to nibble on some DBO/oil.


  32. Phil – It seems to me that no company is really safe right now. What happens to someone like DIS if the parks have to be closed for 3 months. No movie releases either (and theaters are closed anyway). And there is no sport so people will cancel their ESPN subs as well unless they get these $2000 checks to stay home. Can car companies not sell cars for that long? The list is so long now!


  33. Dow 20,000! Get out the caps!


  34. I just hope I can leave the 10k cap in the closet!  :)


  35. 10k cap – I wouldn't


  36. I am noticing not a lot of liquidity in markets. If things get to intrinsic value, then they will trade. I traded a long held  March 40 UBER put today, I know it was greedy bastard to hang on to it, but it is nice to see large returns these days. Looks like market makers don't want to extend cash until it becomes in their favor. 



  37. 10k and I'm headed back to the dispensary…. :)


  38. all hail favipiravir !!!


  39. I hope that this board is more rational than Seeking Alpha ! If they were paying attention, at least they have some hedges. I set up a long and short accounts. Lately the shorts are definitely winning.  If anyone uses Etrade, In the Power E trade platform, there is a Portfolio Analysis tab that allows you to do what if scenarios. I usually do SPX and RUT up and down 15% in 45 days. I sleep better, after seeing those calculations,,. 


  40. circuit breakers getting close


  41. Snow – "democracies" means you vote for for your civilian-elected leaders and who then transfer power peacefully, NOT that those said leaders institute movement restriction and other draconian measures to stop the spread of an epidemic.

    Also, I heard OBX is not allowing non-residents onto the Outer Banks. Law Enforcement check point on the Wright Memorial Bridge. A check point folks!!

    I've never been to an infamous WA dispensary but maybe it's time…. (if they're open….)


  42. I bet we could make a killing selling full body condoms!



  43. BDC – they'll deliver… ;)


  44. BND is starting to settle down. Any MUNI holding heavy in Illinois is toast.


  45. STP Adjustments:  We may as well take advantage of the high VIX:

    • QQQ – Let's roll 10 short April $175 puts at $13.10 ($13,100) to 15 May $150 puts at $8.70 ($13,050) and let's roll 20 (1/2) short Jan $175 puts at $25.50 ($51,000) to 30 of the May $150 puts ($26,100) and let's cash our Jan $190 puts at $30 ($120,000) and buy 80 of the Jan $180 ($25)/160 ($17) bear put spreads for $8 ($64,000).  So we're cashing in $31,050 and we've got the 80 spreads ($160,000) covering 20 short Jan $175s (which we'll roll eventually) and 45 May $150 puts.  
    • SQQQ – Let's trade in 35 (of 100) of the Jan $20 calls at $14.50 ($43,500) for 100 of the June $25 ($10.70)/35 ($9) bull call spreads at $1.70 ($17,000) and let's roll 35 (of 100) of the short Jan $35 calls at $11 ($38,500) to 50 short April $27 calls at $7.20 ($36,000).  Here we're taking $24,000 off the table and we now have 65 Jan $20/35 bull call spreads ($97,500) and 100 June $25/35 bull call spreads ($100,000) covering 50 short April $27 calls and 50 short April $32 calls.  There are no Mays yet but the June $40s are $8, so I'm very confident we can roll the short calls along.  
    • TLT – This is stupid as TLT went the wrong way on us and now is back where we started but the VIX has sent the price of the Jan $155 puts up from $7 (3/5) to $17.  Our spread is only $10 so we have to take the long $155 puts off the table for $17 ($51,000) and we'll roll the 20 short Jan $145 puts at $11 ($22,000) to 20 short April $150 puts at $6.35 ($12,700) as those will burn off much quicker and we'll clean up the mess later with $41,700 in our pockets.  

    Chewbacca baby!  

    • TSLA – I knew I should be worried about the short $550 puts!  Down $80,000 now at $235 ($117,500), we can roll them to 10 short July $350 puts at $80 ($80,000) for net $37,500 and we collected $32,000 selling them so net $5,500 loss if they hold up means not worth selling short calls but we will buy back the 6 short Sept $900 calls for $12.50 ($7,500) and hope for a bounce to sell again.  

  46. TSLA Jun 5p has a bid. Now that's hilarious.


  47. Had my first case of coronavirus rage today – a company in Switzerland (once again, big crisis there) is looking at our product. I called them and the guy who picked up the phone yelled FU A'hole and hung up! I guess a US caller ID didn't make him happy! 


  48. BDC, your yesterday´s question:

     

    Goverment announced a  € 200 B paln equivalent to 20% of PIB, "nobody left behind" is the motto.

    Is a mix o policies depending of the sector, they say that the goal is to preserve jobs but  the proposed is far in some cases of the german approach (share the pain) they claim to follow..

    it includes;

    delay of mortgages in cases of temporal jobloss ( ERTE, is a legal figure)

    Delay of SS payments and no calculaton in the montlhy compute.

    Delay of gas, electricity and water bill meanwhile…not clear for how long

    Stopping all the eviction procedures and review by case.

    No taxes for small businesses…etc.

    Problem is that legal frame, systems, and are not adapted, there is no fresh money on the table, it´s obvious that many different activities will require massive amounts, airlines, hotels, etc.  I´m not optimistic, all the contrary, and people are expecting a 15 days confinement, the Korean model indicates 4-5 weeks in harder conditions that we have.

    In addition to that, you can´t find a mask or gel, or alcohol, people is  near to really buy cheap vodka


  49. BDC – 10 contracts of the F Jan 22 1 Put  have been sold! 


  50. At this point if you're playing OTM naked puts, you're playing for BK


  51. Anything to do with the dividend portfolio?  Divs will be cut to nothing seems likely, but still looking at all those short put even if 674 days out.


  52. How about the employees buy back the airline using an employee owned company backed with cheap loans from the us treasury. :-)


  53. Good question Tangled.  I'm thinking the same.


  54. I like the idea of an airline where you own your seat reservation. That is, you can sell it to others on a "open" market. Airplanes will be cheap soon, maybe we can start one.


  55. Reit´s  are AGNC, NLY are supposed to be a prudent investment what the hell is going on?


  56. Newbee here!
    looking to learn from y'all. trying to digest all the information shared here. with saying that and some moves have been done in the last few days, where can I pick up? Thanks


  57. Phil;

    What´s your idea with BA, will be rescued? will they do something as GM?


  58. StJ – here's me getting mad at the Virus


  59. /YM 19569 breaks its headed for 18568

     


  60. My response is simply come back when you've lost 200 pounds. Maybe 300? Perhaps why I could enver hold down a McD's job.

    https://www.reddit.com/r/PublicFreakout/comments/fkm4uu/woman_yelling_at_fast_food_staff/


  61. FDR/BDC – Can't put people to work if they can't go outside!  I said the other day, they should have factories producing masks and clean suits 24/7 – and ventilators!  Then we should have hundreds of thousands of people going out and helping people and cleaning things.  Make America Shiny Again!  

    DIS/StJ – They delayed Black Widow!  I was looking forward to that… sad  As I said, the government needs to provide gap insurance to all businesses and workers.  Logically, the max cost would be $3Tn but that would be covering the entire GDP and that's not how things work so maybe 1/3 of that would do it per month.  That would avoid disruptions and we could all go right back to work when they sound the all clear and another $2-3Tn in deficits can be swept under the rug with the other $23Tn (still better than Japan!).   Doing that would keep our GDP at $20Tn and next year $20Tn.  Not doing it risks us slipping to $16Tn and maybe it snowballs from there.

    Image result for gdp by year usa

    Not looking so bad now, is it?

    Caps off, 20,000 already failed.  

    What if/Randers – Very useful, you should always be doing those. 

    Condoms/Kustomz – I have a line on some hand sanitizer – lots of interest in that. 

    LOL StJ – Remember when the World used to like us?  

    Dividend Portfolio/Tangled – It is now down 100% due to the short puts (99.2%) and high VIX as we had decided to let them ride out but I think I'll have to break that rule since not making adjustments is silly at this point.   Of course, that would be predicated on being able to put more money in.  Overall, the best strategy with the VIX this high is to wait it out.  In the STP, we can take advantage because we have profits in our hedges but we don't want to spend money in the other portfolios with this much uncertainty.  

    Speaking of portfolios, SQQQ in the Earnings Portfolio has the same adjustments as the STP above!  

    2,400 on /ES again – I'm back in for 2 long.

    Airlines/BDC – Well, I'm not sure if I like that model as it's essentially stub hub and you'll never find a cheap seat again.  

    Speaking of which:

    How crazy is that?  

    REITs/Advill – The problem is all the mortgages they sold are going to be refi'd at super-low rates and their lending in the near future will be at super-low rates so their earnings will plunge.  Still better than owning the properties – how would you like to be a commercial REIT when all your tenants are shut down?  

    Welcome Akrummo!  I'd start by clicking the Phil Tab on top and reading the last couple of weeks of posts and comments so you get an idea of where we are.  Cash is king at the moment but we are nibbling at some trades.  

    Trump time again! 


  62. People with twitter accounts need to start the idea this is God's judgement for electing Trump


  63. My wife is now teaching remotely since schools are closed and I can tell you, Google is going to become very popular! Thankfully they have all these apps and the infrastructure.


  64. BDC – "Snow – "democracies" means you vote for for your civilian-elected leaders and who then transfer power peacefully, NOT that those said leaders institute movement restriction and other draconian measures to stop the spread of an epidemic."

    Umm, yes….your point?


  65. So when you do a new hedge like the SDS one today…   is the idea to let it ride to expiration?   If bottom halfway through that period seem like closing it with the new yet higher vix will not work?


  66. Phil / SLV -

    Thoughts on selling puts on SLV at these levels?

    June /RB is under $0.66 now, wish I could buy a contract & take delivery.  Gas for life at the price my Grandfather talked about "back in my day…" LOL


  67. "Airlines/BDC – Well, I'm not sure if I like that model as it's essentially stub hub and you'll never find a cheap seat again.  "

    Well, that's bullshit. What if you can't fly and want to raise cash? You need to sell.


  68. Look at @ $DXY go!!


  69. Do the companies that store oil get to jack up their prices in a super glut?  Does it matter if they the owners of the oil walk away from it?


  70. snow/point – I thought I had one. not sure now.


  71. Seattle traffic. Never seen this before on a workday. Never.


  72. I'm reaching my limits of what I'm willing to pay for hedges to protect positions. So far I'm still doing OK for the year, but at some point I'd rather just liquidate anything I've got left than to pay up this much for hedges to protect them. Any small move up in equities will just be cancelled out by how much the hedges get destroyed when the VIX drops. Cheaper and easier to liquidate and re-estabish later. Nasty feedback loop.


  73. SDS/Tangled – Not usually.  We usually tear them apart and put them back together like today's STP adjustments.  You have to take advantage of days like today – the premiums are insane so we cash in longs and sell more shorts whenever possible – especially when it can generate CASH!!!  If you don't have the margin for it – you need to consider more conservative strategies but SDS is a basic hedge designed simply not to lose too much as we hopefully have a bottom and, if we don't, then they'll probably stay in the money through May.

    SLV/EMike – Dollar is going crazy – not sure when it will stop so I'd wait.  As far as /RB goes, however, Jan 2022 contracts are 0.89 and contracts pay me $420 per penny to the upside so if I buy one of them, I'm insuring I pay no more than $1 per gallon for gas for 2 years, which would save me about $9,000 on 3 family cars (vs $3 now) but if /RB went back to $1.50, at $420 per penny, I'd make $25,620 so I like the risk/reward – especially as I can roll the contract out and keep getting cheap gas for life.   /RB more likely to go up 0.61 than down, I would think.

    Webinar time!


  74. circuit flipped. oh well, coffee break


  75. are we stopped not limit down?


  76. Limit down time for coffee..decaf


  77. Record VRO/VIX settlement today – $69.76!


  78. Hopefully the webinar works. Conference lines have seemed a little bit overwhelmed this week – choppy signals, full dial-in warnings, busy signals. They're really getting slammed with the surge in teleconferencing. 


  79. Phil//  Recently you had mentioned NLY as a keeper.  Given today's analysis of yours, should we close NLY?   I'd like your thoughts on that.

    Thanks.


  80. Russel tripped the breaker


  81. DOW 18,332.74 was close on 11/8/16, the last close before it was known Trump had won the election, -5.5% to go.


  82. if the Russel goes it's 2/16 low of 943.1 it will be re-tracing to early 2013. We're about to lose a decade of gains in a month.


  83. I finally took a hedge.  Too late to same me, but should help the market stabilize (at least that is my history)


  84. same should have been save   (really need an edit capability)


  85. I hope you're out of VXX STJ.  


  86. can TVIX really go to 1200? oh my…


  87. We may have a 50% retracement… 1700 SPY  15,000 DOW  850 RUT


  88. Depression. DOW 3000.


  89. DWT is the most powerful cash printing machine I have ever owned.


  90. Oil about to go under 20. Wasn't someone looking for justification it might go under 24 just yesterday?


  91. Yeah, there was talk of $24 oil yesterday. I told myself I'd go long when /CL was between 24 & 22, started adding some DBO, small. 

    Still kicking myself for getting out of those CCL $50 puts when CCL was $30-$25. 


  92. VXX / Palotay – Yup, all out now! Painful but less painful than next week I am sure!


  93. With oil at $20, we can all fill up for cheap with nowhere to go! 

    That's going to hurt a lot of people here in the fraking industry (more bailout – although it would be a joke to have to bailout the oil industry) and countries. I am guessing that Russia will have less money to invest in election meddling now.


  94. The ruble has lost 30% since January! It's a freaking currency, not a 3xETF! Or our current markets lol


  95. well if TSLA goes to 200 by Jan 2022 I break even, @ 100 I lose 20K and at 0 I lose 40K (assuming I do nothing)

    if CMG goes to 200 by Jan 2022 I break even, @ 100 I lose 10K and at 0 I lose 20K (assuming I do nothing)

    TSLA maybe BK, but I don't see CMG going belly up


  96. Mortgage repo market froze up last night because goverment imposed a 500 basis point fee on mortgages(FHA<VA)  So the money they need to keep in the bank for loan origination went from 1100 to 6000+ per 100,000 dollars. This affects non banks big time and over 50 % of loans are done through non banks


  97. VXX / Palotay – Looks like they will need to add more strikes!


  98. VIX futures higher than in 2008! I guess another record there:


  99. I think the only badness record not broken is total peak to bottom fall of 60% in 2008.  Still plenty of time though.


  100. Phil[ To hedge against further declines in energy, What about buying DUG and selling calls against the positition.  Premiums are huge


  101. Phil/TLT

    what happened to TLT? big down

    regards


  102. Dollar sky rocketing.


  103. Clear water in Venice canals for first time in 60 years they say.  I wonder how much our carbon footprint has dropped?  Not that it will last, especially with hyper cheap oil.


  104. Order not getting executed. it seems that we are on the losing side. even if I had put mid price it did not go through…maybe no liquidity

    regards


  105. Bill Ackman: We are buying stocks

    Mar. 18, 2020 3:07 PM ET|By: SA Eli Hoffmann, SA News Editor 

    "I am confident the president will do the right thing in temporarily shutting down the country and closing the borders. If that happens, we can win the war against the virus and the markets and the economy will soar," Bill Ackman says in a tweet.

    "That is why we are buying stocks. These are bargains of a lifetime if we manage this crisis correctly."


  106. Enough doom and gloom. Need more from folks like above/Ackman.

    This has gone from panic to hysteria. 


  107. CL just bounced 2.00


  108. REITS – UP huge !


  109. How do I bet that the USD is going to appreciate against the yuan with options?


  110. Off their lows.


  111. NLY was actually halted Albo! Sold a lot of puts in there today, added some stock. Say a prayer for me.


  112. An "exceptional buying opportunity,” famed investor Bill Miller says of stocks

    Mar. 18, 2020 3:29 PM ET|About: Coty Inc. (COTY)|By: Brad Olesen, SA News Editor 

    Bill Miller, of namesake Miller Value Partners, said in an interview Wednesday that there have been only four other "great buying opportunities" in his lifetime, calling the current time period the fifth.

    He acknowledged one shouldn't go all in now, but would be wise to start "layering it in"

    His comments follow those of hedge fund manager Bill Ackman, who also noted that he was buying stocks right now, including those in the hotel sector, though expressed a gloomy view of the economy should the U.S. not take the necessary to steps to stop the virus


  113. More! More! Need to break to cycle.


  114. phil/ES

    a poke into the close  into the ES for a jump tomorrow from oversold levels?


  115. Oops- s/b "the cycle"


  116. "Later today, the Senate will vote" on the House legislation, McConnell said, calling it "a well-intentioned bipartisan product" and said that he will be voting for it. "I will vote to pass their bill," he said.


  117. Holy crap!

    • "We will be invoking the Defense Production Act," to marshal the private sector in response to the coronavirus pandemic, President Trump said at the White House's coronavirus media briefing.
    • He adds that FEMA is activated in every region.
    • The U.S. Navy will be sending two hospital ships, one to New York City and the other to a West Coast location, he said.
    • Announces further steps to expand testing capacity and the government is checking to see if a self-swab test is effective.
    • 1:04 PM: Media briefing ends.
    • 12:50 PM: Trump said he'll probably take measures on the southern border today. Earlier today, the U.S. closed the border with Canada, which won't apply to trade. The Canadian border measure may last for about 30 days.
    • 12:47 PM: China hasn't asked for suspension of tariffs, Trump said, adding, incorrectly that China continues to pay billions of dollars in tariffs to the U.S.
    • 12:45 PM: The curve illustrating the increase in coronavirus cases won't be stable for awhile as the pace of testing ramps up and works through the backlog of testing, Birx said.
    • 12:43 PM: The size of the checks that the government expects to send to Americans to help mitigate the economic crisis from Covid-19 is still to be determined. "We are looking at different numbers," Trump said.
    • 12:40 PM: "There's going to be a comeback very, very quickly, once this is solved," Trump said.
    • 12:37 PM: The U.S. needs millions more masks and needs more ventilators, he said. "We're ordering thousands and thousands of ventilators," Trump said.
    • The U.S. has "in excess of 10,000 ventilators" in stockpiles, Pence said.
    • 12:32 PM ET: Trump said he doesn't agree with Treasury Secretary Steven Mnuchin that the unemployment rate could reach 20%. "That's a worst-case" scenario, Trump said.
    • 12:27 PM ET: Defense Secretary Mark Esper has ordered that field and expeditionary hospitals be prepared to deploy to affected areas.
    • 12:25 PM ET: Dr. Deborah Birx, White House Coronavirus Response Coordinator, said lab companies are focusing on areas that have the most concentrated cases. So people in areas not as affected may still have difficulty in getting tests, she said.
    • 12:18 PM ET: Number of tests performed is being expanded by the thousands every day, Pence said.
    • 12:16 PM ET: Vice President Mike Pence reports confirmed coronavirus cases in all 50 states.
    • Update at 12:15 PM ET: Department of Housing and Development will suspend all foreclosures and evictions through April.
    • The U.S. Senate will vote today on a second bill aimed at responding to the COVID-19 outbreak. This interim package, to be followed by a third package costing ~$1T, covers free testing for the respiratory disease and at least two weeks of paid emergency leave for a wide range of Americans dealing with the contagion.
    • It also give states more money for Medicaid and food stamps and expands unemployment insurance programs.
    • The House passed its version this past Saturday, then approved changes on Monday that scaled back the paid leave program. President Trump is expected to sign it into law.
    • Congress passed an $8.3B aid package a couple of weeks ago.

    And WTF?

    • The Atlanta Fed's GDPNow model estimates Q1 U.S. real GDP growth at 3.1%, up from 2.9% on Mar. 17.
    • Citing this morning's new residential construction report, nowcast of Q1 real gross private domestic investment growth increased to 7.5% from 6.3%.

    LB halted for some reason, hit $8 and then $9.43.

    NLY/Rookie – We were discussing in the Webinar.  Low rates hit them (MREITs) as people refi their loans away and then new loans get made at crappy rates so earnings can be impacted for quite some time.  If it's not impacting your buying power and you want to hold them for a decade, then I have no problem staying with them but you have to pick the ones you want to stick with and improve them if you can – not just sit and pray $10 will come back.

    ROFL Tangled – Thank you for your sacrifice.  

    DWT/MrM – Amazing!  What's the inverse of that?

    Oil/BDC – Makes no sense, they had good inventories today:

    • EIA Petroleum Inventories: Crude +2.0M barrels vs. +3.3M consensus, +7.7M last week.
    • Gasoline -6.2M barrels vs. -2.9M consensus, -5.0M last week.
    • Distillates -2.9M barrels vs. -2.0M consensus, -6.4M last week.
    • Futures (CL1:COM-11.58% to $23.75.

    We added /RB long at 0.65 in the Webinar:

    TSLA heading back to my old $150 target.  Very mad at myself for not sticking to my guns.

    CMG getting interesting but there are safer things to play.

    Repos/Bert – Good to know, thanks.

    VXX/StJ – I'm finally tempted to short.  

    DUG/Albo – I have a hard time betting on sub $20.  Very little US production is sub $20 so, without subsidies, production will dry up fast..

    Everyone is going a little nuts with all this extrapolation.  The pace of the selling has everyone seeing zero but some good news could change things very quickly and there would be an epic short squeeze. 

    • Gilead’s (NASDAQ:GILD) treatment for coronavirus “could be approved for Covid-19 very soon,” a Piper Sandler analyst says.
    • “We now believe the remdesivir clinical trial results are likely to be positive,” analyst Tyler Van Buren says of GILD's experimental medicine.
    • “If successful, it could be approved for broad use in the coming months considering it’s safe, the bar for efficacy in the context of the ongoing global pandemic is low.”
    • GILD +9.4% today.
    • Partnering with the Indiana State Department of Health, Eli Lilly (LLY -3.1%) will use its specialized research laboratories to analyze samples taken in healthcare facilities in the state for the SARS-CoV-2 virus.
    • The company says it will not accept money from government  agencies, hospitals, insurance companies or patients for the work, calling its efforts a "contribution" to the area's efforts to stop the spread of COVID-19.
    • Bill Miller, of namesake Miller Value Partners, said in an interview Wednesday that there have been only four other "great buying opportunities" in his lifetime, calling the current time period the fifth.
    • He acknowledged one shouldn't go all in now, but would be wise to start "layering it in"
    • His comments follow those of hedge fund manager Bill Ackman, who also noted that he was buying stocks right now, including those in the hotel sector, though expressed a gloomy view of the economy should the U.S. not take the necessary to steps to stop the virus
    • "I am confident the president will do the right thing in temporarily shutting down the country and closing the borders. If that happens, we can win the war against the virus and the markets and the economy will soar," Bill Ackman says in a tweet.
    • "That is why we are buying stocks. These are bargains of a lifetime if we manage this crisis correctly."

     

    Speaking of REITs we love:

    • Its stock in complete free-fall (along with the rest of the leveraged rate players), Chimera Investment (NYSE:CIM) says it has repurchased $22M of shares since announcing a $150M buyback plan five days ago.
    • Officers and board members have also been in the market buying, says the company.
    • Chimera notes it has tech in place for all employees to work remotely with little or no change to typical patterns.
    • The company has rolled financing on about $7.3B of collateral since March 1, including $2.1B this week.
    • Press release
    • Shares remain near session lows, down 45.25% to $6.69. They're off about 70% over the past month

    Same management team as NLY.

    • Delta Air Lines (NYSE:DAL) expects Q2 revenue to fall by almost $2B compared to a year ago.
    • "We will continue to make significant capacity reductions with a 70% systemwide pullback planned until demand starts to recover. Our international operation will take the largest reduction, with over 80% of flying reduced over the next two to three months," warns the airline company.
    • Delta says it's deferring all capital spending plans and targeting more expense reductions.
    • Shares of Delta are down 34% and traded as low as $21.07 minutes ago.
    • SEC Form 8-K
    • United Technologies (UTX -22%) is on track for its lowest close in nearly eight years and the biggest one-day selloff since shares fell 28% on Sept. 17, 2001.
    • J.P. Morgan analyst Stephen Tusa cuts his UTX stock price target to $119 from $160 but reiterates his Overweight rating, saying that despite uncertainty surrounding how the coronavirus crisis plays out and a balance sheet that is weaker than many peers, he thinks the stock has "pulled back too much."
    • The stock has lost ~53% from its all-time closing high of $156.83 on Feb. 7, less than six weeks ago.
    • Citing the need for enough time to clean and sanitize stores and restock shelves during the coronavirus outbreak, Walgreens (WBA +4.8%) will reduce in-store operating hours to 9 am – 9 pm during weekdays and over weekends until further notice (weekend pharmacy hours will remain largely unchanged).
    • 24-hour drive-thru service at offering stores will remain open as usual.
    • Related tickers: CVS Health (CVS +0.2%), Rite Aid (RAD +9.8%)
    • Oilfield services and drilling companies working in North America hold ~$32B of debt due to mature in 2020-24, Moody's says in a new report.
    • Speculative grade firms with high near-term refinancing needs include Transocean (RIG -19.8%), with $4.3B in upcoming maturities, along with Valaris (VAL -14.5%) with $1.8B, Nabors Industries (NBR -24%) with $1.4B and Superior Energy Services (SPN -18.3%) with $1.3B, according to the report.
    • The sector faces a further decline in activity and cash flow with weak earnings constraining access to the capital markets and the coronavirus outbreak exacerbating credit stress.
    • Grocery store stocks are surging once again as the general consensus appears to be that social distancing is going to last well past two weeks and keep restaurant chains closed.
    • Kroger (KR +9.3%), Grocery Outlet Holdings (GO +4.9%), Casey's General Stores (CASY +4.6%), Weis Markets (WMK +3.2%) and Ingles Markets (IMKTA) are all higher on the day.
    • Food manufacturers Lancaster Colony (LANC +1.3%), McCormick (MKC +3.7%), Conagra Brands (CAG +2.1%), J&J Snack Foods (JJSF +3.5%) and Sanderson Farms (SAFM +1.9%) gains of varying degrees on a down market day. Hormel (HRL +1.8%) even carved out a new 52-week high earlier in the session.
    • Food wholesalers United Natural Foods (UNFI +23.1%) and Spartan Nash (SPTN +19.3%) are also soaring to new heights.
    • Retail beasts Target (TGT +2.6%), Walmart (WMT +5.2%) and Costco (COST -0.1%) are also big outperformers relative to the broad market averages.
    • The biggest gainer of all today is online meal provider Blue Apron (APRN +129.2%).
    • All those gains come at the expense of the restaurant sector, which is getting crushed once again. Wendy's (WEN -21.9%), Darden Restaurants (DRI -15.7%) and Denny's (DENN -17.8%) are the three of the big losers on the day. McDonald's (MCD -8.4%) is also in a downward spiral.
    • The company yesterday said it figured current book value is down about 5% since the start of the year, meaning a modest negative economic return on book value once the $0.32 quarterly dividend is added back in.
    • Redwood (NYSE:RWT) also took note of its diversified mix of funding sources, and the recent (last two weeks) pricing of about $1B total for two securitizations.
    • There's also $2B in long-term FHLB funding that can be tapped as needed.
    • The above-referenced book value decline means current book value is probably somewhere just above $15 per share. With today's 53% decline, the stock is trading hands at $3.39. Shares were about $17 earlier this month. The yield is 38% (assuming unchanged dividend).
    • Previously: Existential threat for leveraged rate plays (March 18)
    • IMAX is still suffering along with the rest of the movie-theater industry today, while its CEO is taking advantage with a share purchase.
    • Richard Gelfond disclosed that he purchased 25,000 shares yesterday, at an average price of $7.8514.
    • That brings his direct beneficial ownership to 296,992 shares.
    • Chief Legal Officer Robert Lister also bought 5,000 shares yesterday, and President Mark Welton bought 5,000 shares as well.
    • Shares are down another 13% today to $6.23, with most theaters closed for an indefinite period. They've fallen more than 53% in a week.
    • Once again the news isn't great for Six Flags Entertainment (NYSE:SIX).
    • In a fresh note out today, Oppenheimer models Six Flags as if the theme park operator's parks will be closed until the beginning of July, seen as realistic based on projections.
    • The firm sees the extended period of closures leading to 2020 EBITDA of $150M vs. $450M prior estimate.
    • Looking down the road, analyst Ian Zaffino sees it as unlikely that Six Flags gets a federal bailout or loan forgiveness.
    • Six Flags is down 23.55% to $9.82 after trading as high as $59.52 within the last year.

  118. TLT/Pat – Don't you guys listen to the Webinar?  I was saying that adding $3Tn in stimulus to $23.5Tn in debt (+$1Tn deficit for this FY) may be the straw that breaks the camels back and, like Greece, the Fed will no longer have the credibility to set rates and we will  be at the mercy of the free markets (God forbid!).

    Venice/Tangled – No cruise ships is a big help.

    Amen Pstas!

    Yuan/Palotay – CYB is probably the most liquid but already took a hit and China can change it at will so dangerous play.

    Layering in/Pstas – Hey, didn't famed investor Phil Davis say that last week?

    /ES/Maya – If you are brave, it's a good percentage play but I don't think I'd go to sleep with it open.


  119. This looks a bit optimistic as far as a recovery is concerned:

    They are still talking about possible waves of this virus until we get a vaccine! And BTW, will anti-vaxxer not get the shots if we get that vaccine approved! 


  120. Comment content omitted because it is too long.


    • "We feel very, very strongly that the markets need to remain open," NYSE President Stacey Cunningham told Maria Bartiromo of Fox Business Network, in discussing the market volatility that resulted from the coronavirus pandemic and oil price war.
    • She gives two reasons: "Closing the market, one, does not stop market anxiety" and "two, people need to have access to their money."
    • "We will get through this and the markets will recover," Cunningham said.
    • The exchange, owned by Intercontinental Exchange (ICE -7.3%), is taking extra precautions in who it allows onto the trading floor, in cleaning and sanitizing the floor and thinning out the number of people on the trading floor.
    • Anybody entering the building who's exhibiting Covid-19 symptoms gets tested and are asked to remain at home until the test results come back, she said.
    • So far the exchange hasn't been asked to close the trading floor. And "we see very much during this really volatile period how helpful it is to have these people applying human judgment to these moments," Cunningham said.
    • "If it gets to a point where we need to close the floor, we are ready to do that at any moment in time," Cunningham said.
    • Instead, the NYSE would switch to 100% electronic markets. "We know how to run electronic markets. We run several electronic markets today," she said.
    • Crude oil prices are not the only energy commodity that's falling, as U.S. ethanol prices have hit their lowest levels in 17 years, according to S&P Global Platts.
    • Ethanol trading on Chicago's Argo Terminal reportedly closed at $0.99/gallon on Tuesday, the lowest price for the corn-based fuel since 2003 and the first time its assessed value has dropped below $1/gallon.
    • S&P Global's Sophie Byron says the price decline has been driven by coronavirus-related demand fears and falling gasoline prices in the Saudi-Russia oil price war, which has added to downward pressure on an already oversupplied ethanol market.
    • Although some ethanol plants may shift their production to make disinfectants in the short term, Platts says those volumes likely would not make a dent on prices.
    • Boeing suppliers are heading deep into the red after the U.S. planemaker called for a $60B lifeline for the U.S. aerospace industry.
    • Any liquidity provided "will be used for payments to suppliers to maintain the health of the supply chain," according to the company.
    • The big standout is Spirit AeroSystems (SPR -27.2), which builds several important pieces of BA aircraft, including the fuselage of the 737, portions of the 787 fuselage, as well as cockpit sections.
    • Related suppliers: Astronics Luminescent Systems (ATRO -10%), Hexcel Structures (HXL -12.5%), Honeywell Aerospace (HON -11%), Kaman Aerospace (KAMN -9.2%), Heico (HEI -18.1%), TransDigm (TDG -34.8%), 3M Aerospace Sealants (MMM +1.5%), Eaton Aerospace (ETN -14.2%), Collins Aerospace (UTX -19.1%), Curtiss-Wright Flight Systems (CW -9.3%), Ducommun AeroStructures (DCO -14.6%), BAE Systems Platform Solutions (OTCPK:BAESY -4.5%), Donaldson Aerospace & Defense (DCI -11.5%), L3Harris (LHX -5.4%).
    • Based on the price action in mortgage REITs (agency, credit, commercial), and other borrow short/lend long players, there's real question about whether 1) They'll be able to continue to find financing, and/or 2) Whether their borrowers can pay them back.
    • Nearly the entire mortgage REIT sector can be had for less than 50% of book value. Some action today: Annaly (NLY -19.6%), AGNC Investment <<AGNC>, Chimera (CIM -33.3%), Two Harbors (TWO -25.6%), New York Mortgage (NYMT -29%), Invesco (IVR -28.3%), MFA Financial (MFA -34.8%), New Residential (NRZ -36.9%).
    • Highly popular leveraged Pimco CEFs: Pimco Dynamic Income Fund (PDI -8.1%), Pimco High Income Fund (PHK -12.5%), Pimco Dynamic Credit Credit Income Fund (PCI -9.8%).
    • Commercial lenders: Starwood (STWD -23.9%), Blackstone Mortgage (BXMT -33.8%), Ladder Capital (LADR -32.5%), Granite Point Mortgage (GPMT -33.9%), Apollo Commercial (ARI -31.4%).
    • UBS thinks the surge in food and packaged goods demand could just be getting started. What has started as a rush on toilet paper and hand sanitizer is expected to expand.
    • "We anticipate Food trends to accelerate further vs other Staples categories as the impact of restaurant & school closures drives a strong shift in consumer spend to online, grocery shopping and at-home consumption. Since the first meaningful spike in both new U.S. and Italy COVID-19 cases was reported on 2/24, large cap HPC has significantly outperformed Packaged Food, Beverage and Beauty stocks. This dislocation suggests Food stocks still have room to rally near-term as consumer behavior shifts to grocery in coming weeks."
    • The firm's current list of Buy-rated stocks includes Colgate-Palmolive (NYSE:CL), Conagra Brands (NYSE:CAG), Energizer Holdings (NYSE:ENR), Mondelez International (NASDAQ:MDLZ) and Nomad Foods (NYSE:NOMD). Looking ahead further, if the trend of keeping pantries stocked continues even after the pandemic, companies seen benefiting include General Mills (NYSE:GIS), Kellogg (NYSE:K), Kraft Heinz (NASDAQ:KHC), Procter & Gamble (NYSE:PG) and Kimberly-Clark (NYSE:KMB).
    • JPMorgan analyst Doug Anmuth raises his Q1 sales estimate for Amazon (AMZN +0.7%) to $74B, which is $1B higher than the tech giant's guidance range.
    • Anmuth: "E-commerce (AMZN, EBAY, (NYSE:CHWY), etc) will benefit as closings of physical stores & fear of public places should accelerate the secular shift of retail online, which we believe will prove sustainable even after the crisis ends."
    • The analyst thinks Amazon will "gain incremental share of both total retail & online retail in a downturn, as was the case in 2008-2009."
    • Anmuth is also positive on Chewy due to its "high recurring revenue stream, low China supply chain risk, & high exposure to staples-like consumables."
    • The analyst also expects strong Netflix (NFLX +1.7%) demand in H1 due to more workers at home and a lack of sports programming. Anmuth raises his 2020 global net adds estimate from 26.9M to 27.8M.
    • JPMorgan has Overweight ratings on Amazon and Netflix.
    • U.S. consumers spent 21% less on Uber (UBER -10.1%) rides in the week ending on March 16 compared to the prior week, according to new Edison Trends data via the WSJ.
    • Rival Lyft (LYFT -7.2%) declined 19% in the same week.
    • The declines happened before California, the home state of both companies, issued its shelter-in-place order.
    • Shifting to the eight weeks ending on March 2, the week-over-week average spending on rides grew 3% for Uber and 4% for Lyft.
    • Related: Earlier this week, Uber and Lyft announced pausing shared rides to help limit the spread of the coronavirus.
    • Amazon may be the online gorilla, but Walmart's (NYSE:WMT) store network and supplier leverage is unmatched, writes Matthew Boyle at Bloomberg.
    • According to Gordon Haskett, Walmart is far and away the most popular choice among new online grocery shoppers, at 58%. Second is Amazon/Whole Foods (NASDAQ:AMZN) at 14%. Target (NYSE:TGT) is third at 10%, then Kroger (NYSE:KR) at 6%, and Costco (NASDAQ:COST) at 4%.
    • Walmart is "a clear winner," says Morgan Stanley's Simeon Gutman, forecasting a 3% rise in same-store sales this year vs. his previous estimate 0.5%.
    • The stock's up another 4.65% today to $124.81, just pennies shy of a new 52-week high.
    • Shares of Blue Apron (NYSE:APRN) come off a trading halt to continue its dizzying ascent.
    • Blue Apron is now up 73.55% on the day and over 300% higher for the last week.
    • H&R Block (NYSE:HRBsinks 9.3% after the tax preparer withdraws FY2020 guidance after U.S. Treasury Secretary Steven Mnuchin announced that the Treasury would allow a deferral of tax payments to the Internal Revenue Service for up to 90 days after the usual April 15 deadline.
    • Moreover, certain states have also extended or may extend tax filing deadlines, the company said.
    • As recently as March 5, HRB had reiterated its outlook for revenue growth 1.5%-3.5% and EBITDA margin of 24%-26% for its fiscal year ending April 30, 2020.
    • There are some decimating drops in the consumer sector today. Traders think that investors are pricing in the reality that the current social distancing efforts could go on longer than the two to three weeks that companies have built into their immediate plans.
    • Just a few of the names with eye-popping declines are Marriott International (MAR -20.8%), United Airline (UAL -15.9%), Nike (NKE -6.6%), Coca-Cola (KO -8.5%), Home Depot (HD -9%), Lowe's (LOW -8.4%), PepsiCo (PEP -4.8%), Avis Budget (CAR -27.9%), Ross Stores (ROST -10%), TJX Companies (TJX -8.4%), Mondelez International (MDLZ -5.5%) and Anheuser-Busch InBev (BUD -8.8%).

    • Airbus (OTCPK:EADSF -22.5%) shares opened the session losing a fifth of their value after the U.S. raised tariffs on European aircraft, further denting the planemaker already hurt by coronavirus turmoil.
    • European Trade Commissioner Phil Hogan underscored the EU's desire to negotiate a settlement over aircraft subsidies when he spoke with U.S. Trade Representative Robert Lighthizer on Monday.
    • "The EU had made concrete proposals related to existing subsidies and future disciplines in this sector and the commission negotiating team will follow up actively with their U.S. counterparts in the coming days," according to a spokesman.
    • While the Fed has taken a number of steps to inject liquidity into the financial system and prevent credit markets from freezing as economic activity drops off because of the coronavirus, it can do more, write two former Fed chairs in an op-ed in the Financial Times.
    • As Boston Fed President Eric Rosengren has suggested, the central bank could ask Congress for authority to buy limited amounts of investment-grade corporate debt, write Janet Yellen and Ben Bernanke.
    • Most central banks already have that authority; the Bank of England and the European Central Bank use it regularly.
    • "The Fed's intervention could help restart that part of the corporate debt market, which is under significant stress," they said. "Such a program would have to be carefully calibrated to minimize the credit risk taken by the Fed while still providing needed liquidity to an essential market."
    • Among other programs, the Fed, with support of Treasury and the Congress, could restart the Term Asset-Backed Lending facility, which was used during the 2008 crisis in expanding credit to households and businesses.
    • It could also explore a low-cost financing facility for banks to support lending to households and small business adversely affected by the crisis — something similar to the Bank of England's Funding for Lending Scheme, they said.
    • Starbucks (NASDAQ:SBUX) Kevin Johnson says the company has the financial strength and resilience to manage through this extraordinary time as it activates the new "to go" model across the U.S. and Canada.
    • Starbucks says it will offer paid sick leave and catastrophe pay, as well as new mental-health benefits for U.S. partners and their families.
    • On the delivery front, Starbucks indicates that in its program will reach national U.S. availability by the end of April.
    • There is also a little treat for investors with Starbucks announcing a new repurchase authorization for up to 40M shares. The authorization is in addition to the approximately 16M shares that remained available under an existing authorization.
    • Mining stocks are set to suffer today from tumbling metal prices, as stimulus measures fail to improve investor confidence over the rapidly deteriorating global economic outlook.
    • Among broad global miners: RIO -8.5%BHP -8.3%VALE -9.4% pre-market.
    • Copper is the worst performer among the metals, with prices in London slumping below $5K/metric ton for the first time since 2016; FCX -9.7%TECK -4.1%.
    • Among steel producers: X -8.2%NUE -5.6%STLD -6.7%CMC -6.3%MT -10.5% pre-market.
    • Iron ore futures in Singapore rose on signs the coronavirus spread in China is coming under control, but CLF -6.8% pre-market; aluminum miner AA -10%.
    • AMC Entertainment (NYSE:AMC) is setting up for another sharp move down, falling 14.5% premarket amid new downgrades as it responds to the coronavirus crisis with dark theaters.
    • Citigroup cut the stock to Sell, expecting a total shutdown in Q2 to be mitigated only by a "modest" recovery in Q3. Analyst Jason Bazinet has set his price target to a Street-low $1 – 60% downside from its already depressed price.
    • That's based on a 7x multiple of estimated 2021 EBITDA, assuming the company can tap additional liquidity that might not be available due to leverage.
    • B. Riley FBR cut to Neutral from Buy, and set its price target to $3.50 (now implying 41% upside).
    • And Barrington Research cut to Market Perform from Outperform and reduced its price target to $7 (implying a hefty 182% upside).
    • Newish ECB boss Christine Lagarde flubbed her debut meeting a couple of weeks back, and has been curiously quiet since.
    • So far, the reign of Lagarde has been a far cry from previous ECB head Mario Draghi's "whatever it takes" attitude.
    • The result has been a sharp rise in yields across the continent. Maybe this needed to happen – after all Spanish 10-year yields were approaching zero not long ago – but perhaps now's not the best time.
    • Today's action: Spanish 10-year +28.5 basis points to 1.31%, Italian 10-year +30.5 basis points to 2.68%, Germany 10-year +16 basis points to -0.27%.
    • Checking stocks, the Stoxx 600 is down 4.2%. led by a 5.1% decline in France.
    • The two largest decliners in the casino sector during the premarket session are the two big players poised to merge.
    • Caesars Entertainment (NASDAQ:CZR) is down 21.57% and Eldorado Resorts (NASDAQ:ERI) is off 19.62%.
    • The combination of the two casino operators is scheduled to close during the first half of this year, although the huge reset in the industry leaves a lot of questions going into the merger.
    • February Housing Starts-1.5% M/M to 1.599M vs. 1.520M expected, 1.624M prior (revised from 1.567M).
    • Building permits 1.464M vs. 1.500M expected and 1.551M prior (unrevised).
    • Hedge funder Bill Ackman puts forth his own plan for how the U.S. government should attack the spread of coronavirus.
    • "Mr. President, the only answer is to shut down the country for the next 30 days and close the borders. Tell all Americans that you are putting us on an extended Spring Break at home with family. Keep only essential services open. The government pays wages until we reopen," he writes in a tweet.
    • JetBlue (NASDAQ:JBLU) CEO Robin Hayes says demand continues to worsen for the airlines and warns that "the writing is on the wall" that travel will not bounce back quickly.
    • "Even though we entered this from a position of strength with a strong balance sheet and cash in the bank, because of the dramatic fall-off in bookings, we need to reduce our spending immediately so that we can continue to fund JetBlue’s operations," he says.
    • JetBlue has already announced an initial capacity reduction, pay cuts for officers, voluntary time off programs, re-negotiated business partners agreements and other spending reductions.
    • Looking ahead, JetBlue says it's reducing capacity in the coming months, with a reduction of at least 40% in April and May. Substantial cuts are also anticipated for June and July.
    • Some JBLU aircraft are likely to be grounded, per Hayes.
    • The company is also calling on the government for assistance.
    • JBLU -7.56% premarket to $8.80.
    • Source: Press Release
    • If the the five industries most stressed by the coronavirus and oil price slump were to draw as much as 70% from their lines of credit, that could pull a total of ~$700B from the six biggest banks' liquidity pools, or close to 16% of lenders' cash-like holdings at the end of last year, Bloomberg reports.
    • On Tuesday, the Federal Reserve moved to expand support of markets that usually provide faster and cheaper loans to corporations, easing demand on credit lines and relieving the potential strain on the banking industry.
    • During the 2008 financial crisis, corporate customers of U.S. banks drew down about 30% of their available credit, with some sectors drawing much more.
    • Before the Fed announced its program to help companies borrow using commercial paper, dozens of companies hit the worst by the virus and oil price war started drawing billions of dollars from their existing credit lines this month, negotiated new loan commitments or sought new loan packages.
    • The Fed's buying program will ease demand to draw on companies' credit lines, said Keefe, Bruyette & Woods analyst Brian Kleinhanzl.
    • Not all cash pulled from credit lines necessarily leaves the banking system, as loans are sometimes used to repay other loans. But if the funds from credit lines exit the system, the liquidity would decline, a bank executive told  Bloomberg.
    • But there's no reason to expect a 2008-like exodus of cash from the banking system since the fear this time relates to the economy, not bank stability, the executive said.
    • ETFs: XLFFASFAZVFHUYGFNCL
    • Previously: Fed fires another bullet: Establishes commercial paper funding facility (March 17)
    • U.S. crude oil futures (NYSEARCA:USOplunge to their lowest since May 2003 as travel and social lockdowns triggered by the coronavirus pandemic slam demand.
    • April WTI -5.8% at $25.83/bbl, while May Brent -3.5% to $27.73, its lowest since early 2016.
    • The Energy SPDR (NYSEARCA:XLE) is down 5.75% premarket. Exxon (NYSE:XOM-4.5%, Chevron (NYSE:CVX-5%, BP (NYSE:BP-5.2%, ConocoPhillips -5.5%.
    • "The oil demand collapse from the spreading coronavirus looks increasingly sharp," says Goldman Sachs, which also forecasts Brent crude falling to as low as $20/bbl in Q2, a level not seen since early 2002.
    • Goldman also expects a demand contraction of 8M bbl/day by late March and an annual decline this year of 1.1M bbl/day, which it says would be the most on record.
    • Rystad Energy projects a Y/Y decrease of 2.8M bbl/day in global oil demand this year – "To put the number into context, last week we projected a decrease of just 600K barrels."
    • Wedbush cuts its Apple (NASDAQ:AAPL) target from the Street-high $400 to $335, citing "dark days ahead" due to the coronavirus impact.
    • The firm expects that the 5G iPhones won't release this fall due to the "global lockdown-like conditions," the supply chain still working to normalize in Asia, and the lack of a clear timetable "on when normalcy will eventually return."
    • Wedbush maintains an Outperform rating on Apple. The company has a Bullish average Sell Side rating.
    • Apple shares are down 6.2% pre-market to $237.20.
    • MBA Mortgage Applications
    • Composite Index: -8.4% vs. +55.4% (W/W).
    • Purchase Index: -0.9% vs. +12.0%.
    • Refinance Index: -10.4% vs. +79%.
    • 30-year mortgage rate remains at 3.74% vs. 3.47%.
    • Mortgage rate jumps 27 bps to 3.74%, highest since mid-February.
    • The WSJ reports that hospitals across the U.S. are running out of masks, gowns and other protective equipment needed by staff amid COVID-19.
    • Yesterday, the Pentagon stepped up with an offer to supply up to 5M respirator masks. One hospital system is burning through 14K respirators each week, according to a representative of healthcare contract negotiator Premier.
    • Front-line healthcare providers are having to reuse (otherwise) disposable gear in light of shortages. Administrators at Providence health system headquarters in Renton, WA, are in conference rooms assembling makeshift face shields from vinyl, elastic and two-sided tape as supplies dry up.
    • Testing delays are also stoking demand because hospitals have to hold patients until they receive the results.
    • HHS is trying to help by deploying its reserves of protective gear when companies and states cannot meet demand, but has cautioned that its stockpile will be insufficient.
    • ETFs: THWBMEGRXIXJGDNAKMEDXLV, (NYSEMKT:APT) (+4% premarket), (NASDAQ:LAKE) (+4% premarket)
    • The governor of Nevada officially ordered all casinos in the state to shut down for 30 days beginning at noon today.
    • The state's latest coronavirus containment effort will apply to all bars, gyms, malls and restaurants that do not provide takeout and delivery services.
    • Many casino operators are planning around closings that could potentially last even longer, as well as the impact on tourism for the summer and into the fall.
    • Nevada operators: Caesars Entertainment (NASDAQ:CZR-10.00% premarket, MGM Resorts (NYSE:MGM-6.49% premarket, Boyd Gaming (NYSE:BYD), Wynn Resorts (NASDAQ:WYNN-8.99% premarket, Las Vegas Sands (NYSE:LVS-11.40% premarket, Eldorado Resorts (NASDAQ:ERI-2.18% premarket, Full House Resorts (NASDAQ:FLL) and Red Rock Resorts (NASDAQ:RRR).

  121. Oh no, Trump is speaking again! 

    • "The market is in our view currently pricing a deep recession for the entire year, with no anticipation of light at the end of the tunnel. Reconciling consensus expectations from a bottom-up perspective and the recent price action, which has a more top-down perspective, we believe that the wave of downgrades for consensus numbers should keep the S&P 500 under pressure in the near-term, until the end of 2Q20," SocGen analysts write in a note this morning.
    • While they do not exclude the potential for further downside on the S&P 500 in the next few weeks (if COVID-19 cases outside of China continue to increase and policymakers fail to efficiently respond in a coordinated way), their central scenario is that negative GDP growth stretches to Q3, and recovers in Q4.
    • "For 2H20, we believe that the long-term forces will remain in motion for the U.S. equity market – we do not believe there will be an L-shape, but rather a V/U shape recovery." They note that share buybacks remain high, and say the ownership of the U.S. equity market "gives us some clues."
    • For now, they suggest being long staples versus discretionary, and to stay away from the growth components of U.S. equities (U.S. tech).
    • Bottom line: "We believe the S&P 500 could rebound to 3,500 by end-2020."
    • For someone like me who has been worried about the lack of targeted and timely measures by the Fed, yesterday's moves represent a huge leap in the public sector response, Mohamed El-Erian writes for Bloomberg.
    • "The United States made encouraging progress on Tuesday in responding to the coronavirus, led by the public sector and involving supportive changes in private sector behavior.
    • "The efforts won’t prevent the global economy from falling into a sharp recession, but they will help many Americans better navigate this extremely difficult phase of the crisis.
    • "This whole-of-government approach is not limited to the executive branch and its work with the Fed. There were also other signs of better collaboration with Congress, including on a sweeping fiscal package that is said to be benefiting from a level of bipartisan cooperation not seen on Capitol Hill for several years."
    • He's also encouraged by the fact that companies are "demonstrating a stronger spirit of cooperation, especially in the health-care, pharmaceutical, banking and technology sectors," including openness, collaboration, and embracing open-source research.
    • Next, he writes, governments need to figure out how to prioritize "what will be an avalanche of bailout requests, including clarity on the why, how, when, how and exit strategy." Airlines, he says, are not the exception, "but rather a leading indicator of the types of shock coming to the vast majority of sectors."
    • "Equities look uninvestable as long as the pandemic is out of control and there is no circuit breaker to kill extreme volatility," Barclays analysts write in a note this morning. "As fear dominates, we advise investors to stay put, but rationally balance the near-term risks with the medium-term opportunities. Uncertainty is likely near peak levels, technicals are deeply oversold and bear market rallies could be sharp. Rather than making hazardous predictions, we provide our thoughts on how to navigate this unprecedented situation:"
    • Don't catch a falling knife. The plateauing number of new cases in China shows drastic containment measures can work and suggests the situation in Europe and U.S. could improve during the spring. However, as both are at earlier stages, the worst may be yet to happen.
    • Long-only funds and retail have yet to capitulate. Systematic de-risking has largely happened, but equity outflows have been moderate. The second wave of selling driven by fundamental investors likely started this week and could intensify if redemptions increase.
    • Emerging markets are a good place to hide. EM equities have outperformed lately, which we expect to continue. Tech and mining are our key EM plays.
    • Following hours of talks that extended well into the night, GM (NYSE:GM), Ford (NYSE:F), and Fiat Chrysler (NYSE:FCAU) negotiated "extensive plans" with the United Auto Workers union to prevent America's auto industry from coming to a standstill.
    • "They will be working on shift rotation to minimize risk," according to a statement. The 'Big Three' "agreed to review and implement the rotating partial shutdown of facilities, extensive deep cleaning of facility and equipment between shifts, extended periods between shifts, and extensive plans to avoid member contact."
    • Executives from companies such as Marriott (NASDAQ:MAR) and Hilton (NYSE:HLTmet with President Trump on Tuesday to discuss a bailout, consisting of $150B in direct aid for the hotel sector and $100B for related travel companies.
    • They warned that half of the hotels in the country could close this year and the sudden cratering of demand would cause the loss of 4.6M jobs.
    • Chip Rogers, CEO of the American Hotels and Lodging Association, said the economic impact of the pandemic on the hotel industry was already bigger than "September 11th and the 2008 recession combined."

  122. Phil// Since I couldn't attend the webinar, I'd like to the official position on NLY.  Are we sticking with it or closing it since it is not likely to see $10.00 in a very long time.


  123. MTN is a good one.  They are essentially closed from April – November anyway (ski resorts):

    • Vail Resorts (NYSE:MTN) says it's suspending operations at all of its North American mountain resorts and retail stores.
    • The resorts will remain closed through the remainder of the 2019/2020 North American ski season, as well as the lodging properties and transportation business.
    • The company will consider reopening Breckenridge Ski Resort in Colorado, Heavenly Mountain Resort in Lake Tahoe and Whistler Blackcomb in British Columbia in late April/early May, dependent on the situation.
    • CEO update: "Given the closure of our operations as a result of COVID-19, we anticipate that our operating results for March and April will have a negative impact of $180 million to $200 million compared to the Resort Reported EBITDA expectation we had as of March 1, 2020.  If we are able to reopen certain resorts before the end of the season, we believe such a decision will not have a material impact, positive or negative, on our results for Fiscal 2020… we also have significant liquidity through our cash on hand, our $500 million U.S. revolver and our C$300 million Canadian revolver associated with Whistler Blackcomb."
    • Vail Resorts says it will review its previously announced calendar year 2020 capital plans and plans for returning capital to shareholders.
    • Source: Press Release
    • The losses today in the mREIT sector (REM) are shocking, but you should have seen the tape a couple of hours ago.
    • At its low for the session, MFA Financial (NYSE:MFA) was changing hands at $1.50 per share, or an annualized yield greater than 50%. The stock more than doubled to close at $3.67, down 13.5% for the day.
    • Chimera Investment (NYSE:CIM) traded as low at $6.42 before issuing an update saying the company has been buying back stock, executives have been buying stock, and there are no funding issues. It managed to rally to $9.99, still down 18.2% for the day.
    • Just to pick one other, Ellington Financial (NYSE:EFC) touched $3.24 today, and got back to $5.50 at the close, down 24.7%.
    • These three and the rest of the sector continue to trade at highly distressed levels of 50% or discounts to book value (and the securities they hold tend to be pretty liquid, particularly as the Fed is buying MBS).
    • Five Below (NASDAQ:FIVE) reports comparable sales fell 2.2% in Q4 to fall within its guidance range of -2.5% to -2.0%.
    • Gross margin was 42.1% of sales vs. 41.6% of sales consensus and operating margin was 21.0% of sales vs. 20.8% consensus.
    • The retailer says it's not providing guidance for Q1 or FY20 at this time, but says if not for the outbreak it would have expected FY20 to be in line with its goals.
    • FIVE +6.92% premarket to $57.30.
    • Previously: Five Below EPS beats by $0.02, revenue in-line (March 18)
    • General Electric (NYSE:GE) has ample liquidity, Gordon Haskett analyst John Inch writes in a note.
    • Still, with aviation and GE Capital aviation services contributing to 75% of GE’s profit and more than 100% of its free cash flow, “the protracted risks to GE’s fundamentals due to the global impact from coronavirus would screen as substantial,” he says.
    • Inch notes that that during the 2008-2009 recession, GE received billions in government assistance, since GE Capital was seen as critical to the U.S. economy. Today, GE’s importance to the U.S. economy is reduced and arguably just comparable to other large equipment suppliers.
    • GE shares fell as much as 17% today.
    • Credit markets continue to freeze up, David Goldman writes in the Asia Times. "Before the present crisis, the U.S. government was running a deficit of more than $1 trillion, or over 4% of GDP, an extraordinarily high level at a time of full employment. The proposed stimulus measure will more than double the deficit, not including the nearly trillion dollars that the Federal Reserve is committed to spend to support the Treasury market, the interbank lending market, and – possibly – municipal and other bond markets."
    • The market has set a limit as to how much money governments can spend to indemnify the world economy against a global freeze-up, he says. The U.S.'s proposed trillion-dollar stimulus program announced yesterday afternoon did not impress markets. "Investors think that governments are chasing after a market that has already started to roll downhill… For the first time since the U.S. Civil War, the credit of the United States is in play."


  124.  

    Senate Passes Bill to Combat Pandemic as Administration Proposes Direct Payments to Americans

    The Senate passed a relief bill to combat the coronavirus pandemic as congressional negotiators deepened their conversations about a new package that could total about $1 trillion, including a proposed $500 billion in direct payments to American households.

    The measure that passed, and now goes to President Trump for his expected signature, will provide free testing for the Covid-19 disease caused by the virus and require smaller employers to provide at least two weeks of paid sick leave to many of those affected by the crisis.


  125. NLY/Rookie – I actually like CIM better down here, NLY is my 2nd favorite.  I suppose you mean in the Dividend Portfolio which is:

    NLY Annaly Capital Management Inc. 2000 10/29/2019 141 $17,840 $8.92 $-3.39 $8.30     $5.53 $-1.13 $-6,780 -38.0% $11,060
    NLY Short Call 2022 21-JAN 7.00 CALL [NLY @ $5.53 $-1.13] -20 10/29/2019 (674) $-3,960 $1.98 $-0.61     $1.37 $0.27 $1,220 30.8% $-2,740
    NLY Short Put 2022 21-JAN 10.00 PUT [NLY @ $5.53 $-1.13] -10 10/30/2019 (674) $-2,500 $2.50 $3.83     $6.33 $1.38 $-3,825 -153.0% $-6,325

    So we spent net $11,380 for the first 2,000 shares ($5.69) and now the stock is $5.53.  We risk being assigned another 1,000 shares for $10 ($10,000) which makes the total investment $21,380 for 3,000 shares ($7.13) if we do nothing.   If we are assigned and NLY is called away at $7 between now and 2022, then we are in for net $7.39 on 1,000 shares.  

    I just don't consider it a bad enough outcome to worry about.  They are paying out 0.25 on the 30th – if they skip that I'd be concerned but too late I think.  I'd love you to walk me through on why you want to get rid of a $5 stock that pays a $1 dividend.  So what if you paid net $7.39 for it, it still pays a $1 dividend – and that's without selling options!


  126. Phil// My worry is that they would cut the dividend.  So they may not pay the $1.00 dividend you mentioned.  In that case, what are our options?  That is what I am trying to figure out.

    Thanks


  127. Markets seem weirdly calm at the moment (by recent standards).  Just fatigue?  Calm before the storm?  Bottom really has been hit?


  128. Hey Phil, what about a lotto on MRRL for when Reits snap back?  Do they do really well or are they about to actually kill the ETF because of their leverage?


  129. NYSE closed the floor – electronic trading only. 

    NLY/Rookie – If they don't pay it, you have 3,000 shares at $7.13 and it probably drops to $3 so you can buy 3,000 more for $3 and average in at $5.07, where it is now so, if you don't REALLY want to own 6,000 shares for $30,420 – then you should put stops on it but that's also something you should have decided a long time ago because that's always been the next level to buy at.  

    Mar 30, 2010 0.65 Dividend
    Dec 24, 2009 0.75 Dividend
    Sep 29, 2009 0.69 Dividend
    Jun 25, 2009 0.6 Dividend
    Mar 26, 2009 0.5 Dividend
    Dec 26, 2008 0.5 Dividend
    Sep 16, 2008 0.55 Dividend
    Jun 25, 2008 0.55 Dividend
    Mar 26, 2008 0.48 Dividend
    Dec 27, 2007 0.34 Dividend
    Sep 27, 2007 0.26 Dividend
    Jun 28, 2007 0.24 Dividend
    Mar 29, 2007 0.2 Dividend

    That's their payouts in the last crisis.  I don't know what else to tell you, their balance sheet LOOKS OK and they don't seem to be near default and they seem to be able to cover the dividend for now and they have no history of skipping but can they?  Sure they can!  They could go BK suddenly.  An asteroid could hit them and wipe them out tomorrow too.  

    SKT is equally baffling (20%) and CIM (13.3%) and AGNC (16.26%).  Might they make less money buying and selling MBS and CLO instruments?  Of course – and then they will pay less out because the dividends are profit distributions and maybe it will be a year or two before they pick up again but I don't mind because I can sell NLY 2022 $5 calls for $1.60 while I wait – even if I don't want to sell the $5 puts for $3 (today's last) it still drops my net from $7.39 to $5.79 and, as long as they don't go BK – my basis will eventually be zero and I'll still be able to sell calls and maybe they start paying dividends again.

    Since I'm not as gloomy as you, I would certainly sell 20 2022 $5 puts for $3 ($6,000) as that drops my net to $5,380 on 2,000 shares ($2.69) with the potential to be assigned 2,000 more at $5 ($10,000) and 1,000 more at $10 ($10,000), which would be $25,380 for 6,000 shares ($4.23) so even if they pay no dividend at all, I can sell 60 $5 calls for $1 and that's 23.6% right there.  

    I'm trying but I just can't get to your level of negativity on this one.

    Bottom/Tangled – I find it hard to believe that $3Tn can't boost the markets.  It's 60 days of our entire GDP and our GDP isn't at $0.  AMZN alone is boosting it.

    MRRL/Tangled – I have no clue on them.  Looks sketchy.   They don't own the REITs, they just track them with derivatives so, if they deplete their assets going down, I'm not sure how well the come back going the other way. 

    On the other hand they pay a monthly dividend (0.056 on 3/11) so fun to own at 0.67 if they don't go BK.  I guess it's a fun use of $6,700 as it could pay you $560 in April so a free plane ride or hotel room every month for life if it goes well..  Actually, last year they paid 0.50 in some months!

    That would be fun, 10,000 shares for $6,700 and you get a monthly $5,000 check!  Still, more likely they die.


  130. No trials.  As if the court system was not already backed up enough.


  131. Those casino stocks – holy moly. ERI from $70 to $7 in two months! What's your favorite casino stock for a long play, Phil? 


  132. Whoops, MRRL being closed.


  133. REML appears to still be alive. Whether they'll last the week, who knows, but now sporting something like a 73% yield.


  134. Back over 2,400 baby!  

    I hope Maya took that /ES gamble…

    I'm back in /ES at 2,400 – hopefully a brighter day tomorrow.  

    .RB good for a quick $700 per contract already.  

    Casino/Ati – I would not want to guess.  Any of them can fail if closed for a whole quarter.  

    All about 75% off so far.  ERI off 90%

    At least with CZR you can sell the 2022 $5 puts for $2.50 and only risk $2.50 and you can do that and sell the $5 calls for $1.50 so now you are net $1 if assigned and what you could do is set a conditional buy if they go over $5 so you'd have the stock at $5 less the $4 you sold is net $1 with a call away at $5.  As long as the move above $5 isn't a head-fake, it's a nice return. 


  135. I take full credit for the market jump.  Took out that hedge and limited my gains on oil rebound.


  136. In with the democrat proposals:   #26 of the bazooka? Temporary Ban on Stock Buybacks and Dividends. This provision would impose a temporary ban on corporate stock repurchase activities and paying dividends until the impacts of the coronavirus on the American financial system have ended to ensure that companies are using their excess cash to pay workers, shore up their bottom lines, and invest in their communities.    While I am ok with the idea, I have a feeling somehow this will benefit execs more than workers and communities.


  137. MMT- here we go.


  138. Phil – Where do you see the dollar going? Isn't supposed to go down at some point with all that free money?


  139. And down we go. I guess the market doesn't like the Paid-Leave Bill



  140. Well, it was fun while it lasted.  That's what I mean by you can't go to sleep with open Futures.  All stopped out now.

    At least Tangled's hedges will be worth something.

    Dollar/Akrum – Right now it's a panic to the Dollar from around the World.  Also, our Government is borrowing $3Tn – that creates a demand for Dollars that dwarfs the Fed's QE (so far).

    Rush for Cash Rattles Markets, Driving Stocks Lower

    Dow sinks 1,338 points as investors sell everything from Treasurys to gold

    Companies and investors hunkered down for a prolonged economic stall, taking the recent market turmoil into a new, more troubling liquidation phase.566

    Senators turned their full attention to the Trump administration’s proposal for $1 trillion in spending to combat the coronavirus pandemic, including aid for airlines and direct payments to American households, after passing a paid-leave bill

    The Mexican president said he wouldn’t close airports, shut down businesses or take other steps that might damage the economy

    Paid leave/Dave – I think the market doesn't like that nothing of substance has been passed yet.