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Federally Funded Thursday: “We are Not Going to Run Out of Ammunition” – Powell

Fed's balance sheet rockets above previous high in one week$4.5 TRILLION! 

That's how much more lending power the Fed just opened up.  That's on top of the $4.66Tn they arlready doled out – $1Tn of it in the past month alone…  The Fed spent $4Tn buying the first recovery so what's another $4.5Tn to buy the next one?  That was a trick question as the answer is "A good start! 

Pat Toomey (R) of Pennsylvania told Bloomberg yesterday that ANOTHER $4.5Tn is waiting in the wings.  Who knew we had this much money sitting around?  Certainly not the 700,000 Americans Trump pulled off Food Stamps because he said we couldn't afford $4.2Bn to feed starving children.  Yet if one Octogenarian in the Senate gets a virus – suddenly $4,500Bn is available to ease the pain.

"Burn in Hell" is not something you usually hear in a Financial Newsletter but sometimes it's hard to find nicer ways to express yourself….

We still need the House to confirm the bill but let's keep in mind this is only our FIRST bailout package.  If things drag on, there will cerainly be others and the way our Government is responding, things are certainly going to drag on.  If you wonder what FEMA is doing during this emergency, New York, Hawaii and North Carolina  have issued an urgent request to FEMA for emergency mortuary assistance as deaths mount across the states.

New York City has 17,856 cases of the virus (worst city on Earth) and over 200 people have died in the past week, which has overwhelmed the city's morges and they are currently keeping the dead outside in makeshift tents.  As usual, states turn to FEMA to clean up the mess and soon we'll be hearing all the stories of families screaming about misplaced bodies, etc.  This is, of course, not uprecedented:

What, too soon?

CBS (VIAC) will be putting Stephen Colbert back on the air on Monday, apparently from his house but they plan on doing a full show with interviews (from their homes) and even the production team is working remotely (though someone had to come over and set up the cameras, I imagine).   Jimmy Fallon already started doing his show (sort of) and Jimmy Kimmel and Seth Meyers have been podcasting.  The Daily Show, Full Frontal, Conan, John Oliver and Bill Maher are also going to start doing home shows.  

As I said to our Members, after a few weeks, people get bored with any crisis and start going back to "normal" as much as possible.  That's why we don't buy into these end-of the-World GDP forecasts.  In fact, Singapore's GDP was down 10.6% in Q1 – about the same as China's and both countries are looking at 2-4% contractions for the year.  This is not a good reason for stocks to be off 40%, is it?  

Will the virus be worse in the US?  Well, Donald Trump is the President – so draw your own party-line conclusions as to how well he will handle the virust compared to other World Leaders – many of whome didn't have 3 months' notice to prepare when the breakout started in Asia in December.   

This is why, in our Webinar yesterday, we stressed taking up positions in BLUE CHIP STOCKS that are on sale – we gave you 20 of them in the past two weeks and our Member Portfolios have been adjusted to take full advantage of the next market correction – the one that corrects for the irrational panic that is driving it now.  

Wednesday March 11th:  Money Talk Portfolio Update (7 trade ideas)

Thursday March 12th:  Thursday Failure – Trump Shuts Travel, Provides No Solutions, No Stimulus – Market Tanks (again) (10 trade ideas)

Tuesday March 17th:  2,400 Tuesday – S&P Tests the Bottom of our Target Range (10 trade ideas) 

PhilStockWorld March Portfolio Review (100 trade ideas)

There's over 100 trade ideas in those 4 posts and we are still looking to sell puts that are 20-40% below the current price and/or use bull call spreads that are 30-50% in the money and pay at least 100% at levels that are less than halfway back to the highs.  In other words:

If you missed the bottom on BA, you have to take advantage of what you've got so we have a big pop yesterday that inflated the options premiums, raising the internal volatility of the BA contracts and we take advantage of that by selling as much premium as possible:

  • Sell 10 BA June 2022 $175 calls for $55 ($55,000)
  • Buy 10 BA June 2022 $110 calls for $85 ($85,000) 
  • Sell 5 BA June 2022 $85 puts for $20 ($10,000) 

Here we're paying net $25,000 for a $65,000 spread that's $50,000 in the money so it's not a very ambitious target and we're promising to buy 500 shares of BA for $85 – about 1/2 the current price.  Like the virus, BA's troubles are now more irrational panic than a realistic assessment of the long-term damage done to the company and what do you think the airlines are going to do with $50Bn in bailout money?   Airlines have 3 major expenses, fuels, staff and new planes.  They aren't flying and they laid off their staff – what's left to do?

I'd like to say this is the opportunitiy of a lifetime but it's really the opportunity of the decade – as this sort of thing happens all too often, unfortunately.  

Still – don't miss out!


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  1. Good Morning.

  2. Too soon?  Not for my twins. 'Bring out your dead' is their favorite gallows humor around the house. ;)

    I choose to look at the bright side…

  3. Someone will need to take responsibility for this disaster and we know who won't. I guess everybody else will be blamed but Trump!

  4. I spend far too much time traveling and in meetings for work.  Even getting around NYC for meeting takes far too much time given the congestion and crumbling infrastructure.  With pandemics likely to increase in frequency, advent of 5G and the attitudes of the younger generation, I wonder if videoconferencing and broadcasts from home are a new way of life.  Not too mention reducing the carbon footprint and the poor treatment you get from airlines now.  This will drive some serious changes to the world from revealing dead wood in various organizations to wholesale changes in various businesses.  

  5. seer – kids are hooked into their video games with their friends – so you are correct.  Mine talk with their buddies in CA, and we are in MA.  Heck, when we lived in CA, my kids talked with their friends over the wires.  They don't go out anymore to play stick ball!  

  6. 3.3 Million weekly initial jobless claims! Highest ever, smashing the all time record of 695K:

  7. Good morning, All!

    The webinar replays are now available!



  8. Good morning! 

    Love that 1020.

    Big Chart – Let's hope for a Big Bounce! 

    Ch-ch-ch-changes/Seer – One would hope but the above clip is from the mid 1300s and we haven't learned crap in 700 years so I somehow doubt 2020 will be the turnaround.  

    Told you so:

    • Q4 GDP+2.1% vs. +2.1% consensus and +2.1% prior estimate.
    • PCE price index +1.4% vs. prior estimate of +1.3%.
    • PCE price index, excluding food and energy, +1.3 vs. prior estimate of +1.2%.
    • The deceleration in real GDP in 2019, compared to 2018, primarily reflected decelerations in nonresidential fixed investment, exports, and PCE which were partly offset by accelerations in both state and local and federal government spending. Imports increased less in 2019 than in 2018.
    • Feb international trade in goods-9.1% to -$59.9B vs. -$63.8B consensus and -$65.9B prior (revised).
    • Exports: +$0.7B M/M to $136.5B.
    • Imports: -$5.3B M/M to $196.4B.
    • Initial Jobless Claims+3M to 3.28M vs. +1M consensus, 282K prior.
    • Continuous Claims: +101K to 1.803M vs. +1.702M prior (revised).
    • Marks the highest level of seasonally adjusted initial claims in the history of the series. The previous high was 695K in October 1982.
    • RSM US Chief Economist says the report implies the April unemployment report will rise to ~5.75% from 3.5%.
    • "Because of problems processing claims policymakers and investors should anticipate similar increases in coming weeks," Bruesuelas said.

    3M Unemployed was certainly expected.  167M working so that's 2% lost jobs in first week of shutdown, we're on the way to 15M-30M after a month so nothing surprising about this number.  

  9. I think that some things will change – my company and others are already organizing online conferences using YouTube and other channels. Once people realize how much money can be saved that way and how much more productive that can be, this will have an impact. That doesn't mean that live conferences will disappear, but it will have an impact for sure.

  10. Phil/hedge

    good morning!

    Your  SQQQ hedge from 3/25: June $28/36- where does the SQQQ go with a 20% drop in the NASDAQ by June? How many contracts do I need to protect a $500k portfolio from a 20% drop from here? How many contracts would I need?

    Or, what about the June SPY 2300/2000 bear put spread for $7? so, $7 pays $30 if SPY drops to 2000 by June?And sell the June 2800 calls for $7, maybe?  A $300 spread for net $0. Only problem is is I wouldn't know how to manage it if it got above 2800. And 40 contracts should net me $94K if SPY is at 2000 by June.

    please advise!

  11. Stjean, agree.  It happened after 9-11.

  12. Conferences/StJ – I know I hardly go anymore.  Such a waste of time!  I used to love going to Comdex but now (E3), it makes more sense to just log onto the site and brows around and see what there is without the hassle.  I can go to Vegas when it's less crowded (like now!).

    SQQQ/Maya – That's the tricks, right.  If the Nasdaq drops 20% (and stays down) then SQQQ goes up 60% – that's the premise for that trade.  Also, it requires only a fixed amount of cash and no margin – another big plus so your SPY hedge sucks by comparison (that's the technical term).  At the moment, the $28s are $4.60 and the $36s are $3.70 so still 0.90 to get $8 back and SQQQ is at $22 and 1.6 x $22 is 35.2.  Of course, now you can pick up the $22 ($6)/29 ($5) bull call spread for $1 which only pays $7 but is at the money – so a good trade off.  

    So, with a $500,000 portfolio, assuming you are well-correlated to the Nasdaq, you'll drop $100,000 though our LTP, with leverage, would drop more like $250,000.  Either way, you want to hedge about 1/2 the loss so, if you want to protect against a $100,000 loss, you should have a $50,000 hedge so maybe 100 of the $22/29 spreads for $10,000 that will pay $70,000 and you can hedge the hedge by simply picking a stock you'd REALLY like to own if it gets cheap, like TOL at $10 and sell 40 of those for $2.25 ($9,000) and that pays for the hedge (less $1,000) and worst case is you own 4,000 shares of TOL at $10 ($40,000) which should be about 4% of your buying power.  

    Remember, you WANT TO LOSE on the hedge so you never want to make it too big.  If the market drops and SQQQ hits $25, you simply add another and another at $30 and, by the time you add the $30/40 hedge at $30, you are ready to take the $22/29 hedge off the table and that pays for the next 3 hedges and then some!  

  13. Will this be the catalyst of an actual cashless society?


  14. Phil/BCS

    What is the idea behind going in the money on the Leap BCS? I was reading your money portfolio ideas

    e.g. SPWR 2020 BCS 5/10 for 1.80 when SPWR is at 6.67. We could have gone for a little OTM BCS and save some initial cost as we know that SPWR would do great and we have enough time to get it right. I have seen that these BCS really go to their maybe 80% value (so that means >100 % on the trade..which is really good) quickly as the stock goes up but are then at the same level till they are really deep in the money. So is it good to just get off the BCS and invest money elsewhere once they are close to their full value?

    I understand that OTM spreads have risk as we are maybe paying more premiums also maybe there are difficult to adjust if the trade goes the other way. am I getting this correct?

    thanks as always


  15. Hedge/Phil

    Thanks for explaining the math.. I have never done a hedge like that. 
    won't do the 'sucky'  SPY hedge, (as you say in technical terms) (smiley here)!

  16. STJ/paying for it

    yup, you are right! Who will they hold responsible?

    The world's largest economy, brought down to its knees and worse.

    All for want of a few hundred thousand swab tests, and a few million masks?

    I wonder who the CDC were protecting when they said we don't need mass testing…(they still have not come out and said that we do, although others have). The same agency that said masks don't help if you have no symptoms? (How about the 1.2B people in China wearing masks? The same people who managed to contain (hopefully) the spread and limit it to one province?) 

    the same CDC has also been saying grocery checkout cashiers don't need masks! What? 
    Why anyone would quote the CDC as any kind of authority on anything is beyond me….

    HHS, Medicare- same boat… They were all in some kind of drug induced coma for 8 weeks, I think.

  17. US jobless claims hit 3.3 million, quadruple previous record

  18. of course we didn't have the money to prepare for something like this but now we have trillions to throw at it to save the markets

  19. Coulter/money

    I think $500M would have bought us 2M tests at $100 each (including the kit, and the test, and prob half that price) as well as 300M masks…Total cost: Half billion dollars!!!

    and we are now up to….? (Pick your trillion number here)

  20. SQQQ/Phil

    Fidelity shows mid point of bid/ask of $1.3 and not $1… quite a bit more of a cost.. what now?

  21. Maya – But as you already see, Trump and others will blame the Dems for the crisis. No one could have expected it, the previous administration left us in bad shape, we had no warnings, governors didn't spend the money, the Dems blocked bills, and so on! The buck never stops on his desk! Spin it 24/7 on Fox and by November Trump will be proclaimed as the savior while 10M lost their jobs and who knows how many are dead!

  22. CIM is on fire. Established 1/2 a stock position at $8 and sold calls against it here at $13. 

  23. And STWD – up close to 40% today. Nothing like free money to help! Sold more puts there hoping to get cheap shares, but might not happen lol

  24. STJ- totally agree! Weirdest 4 years of any President/presidency since I have been in this country…and scary!

  25. Pelosi says she WILL pass $2 trillion bill Friday and send it to Trump

  26. 15 yr FRM higher than 30 yr. now that's weird. I feel like there's some arbitrage here somehow but maybe someone smart can figure it out.

  27. Cash/Life – That's always been true.  The bitcoin people are spreading that narrative now.  

    Bull call spreads/Pat – The idea is that we want to pay less premium than the calls we're selling (being the house), and generally going in the money fixes that and usually I want to be deeper in the money but stocks are so crazy low at the moment that we can go for better spreads than our usual 2:1 payouts.  

    You're welcome Maya.  CDC answers to DHHS, which is headed by Alex Azar:

    Alex Michael Azar II (/??z??r/; born June 17, 1967) is an American attorney, public servant, former lobbyist and executive who serves as the United States Secretary of Health and Human Services. Azar was nominated to his post by President Donald Trump on November 13, 2017, and confirmed by the United States Senate on January 24, 2018.

    From 2012 to 2017, Azar was President of the U.S. division of Eli Lilly and Company, a major drug company, and a member of the board of directors of the Biotechnology Innovation Organization, a large pharmaceutical lobby.

    Azar is a Republican and has contributed to the campaigns of Mike PenceMitch McConnellOrrin HatchLamar AlexanderJeb Bush, and Donald Trump according to the Center for Responsive Politics.[6]

    "Only the finest people"….

    Effective January 1, 2012, Azar became President of Lilly USA, LLC, the largest division of Eli Lilly and Company, and was responsible for the company's entire operations in the United States.[20] Prices for drugs rose substantially under Azar's leadership, including the tripling of the cost of the company's top-selling insulin drug. Also under Azar's watch, Eli Lilly was one of three companies accused in a class-action lawsuit of exploiting the drug pricing system to increase profits for insulin. Eli Lilly was also fined in Mexico for colluding on the price of insulin.[21][22]

    In January 2017, Azar resigned from Eli Lilly "to pursue other career opportunities" as a result of a company reorganization.[24] He also resigned from the board of directors of the Biotechnology Innovation Organization. In his last year at the corporation he earned $2 million.[25]


    On November 13, 2017, President Trump announced via Twitter that he would nominate Azar to be the next Secretary of Health and Human Services.[23][26]

    Many health care advocates raised concerns about the nomination, citing Azar's track record of raising drug prices and his opposition to Obamacare; his preferences, that is, for a "free market" to meet all Americans' health care needs.[27] Critics noted that Azar approved a tripling of the price of insulin while CEO of Eli Lilly.[28][29] Speaking in favor of his nomination were two former U.S. Senate Majority Leaders, Democrat Tom Daschle and Republican Bill Frist. Both those endorsers were affiliated with the Bipartisan Policy Center, a Washington D.C. think-tank which receives support from Eli Lilly.[30]

    In spite of objections, his nomination was relatively smooth. Azar was confirmed on January 24, 2018, with a vote of 55–43,[31] with most Democrats opposed.

     Senator Bernie Sanders said in a press release, "The nomination of Alex Azar, the former head of Eli Lilly's U.S. operations, shows that Trump was never serious about his promise to stop the pharmaceutical industry from 'getting away with murder'." "The last thing we need is to put a pharmaceutical executive in charge of the Department of Health and Human Services." During that tenure, Eli was fined for colluding to maintain high drug costs in Mexico.[28]

    On January 28, 2020, Azar stated that the Trump administration had no plan to declare a public health emergency as the COVID-19 virus spread in China. He asserted that the risk to Americans was minimal

    On February 25, 2020, Azar appeared before the Senate Appropriations Committee to testify on the danger of and responses to the 2019–20 coronavirus outbreak. Louisiana Republican Senator John Kennedy asked both Azar and Chad Wolf about the fatality rate in victims. Azar said that the fatality rate of seasonal influenza was about 0.1%, and that the fatality rate of COVID-19 was estimated at between 1% and 2%; however, Azar added that the latter figure was uncertain because there might be many mild coronavirus cases yet unreported.[41] Chad Wolf said that the fatality rate for COVID-19 was between 1.5% and 2%, and that the fatality rate for influenza over the last 10 years in America was similar (about 2%).[42][43] Kennedy was unhappy with the briefing, saying afterwards, "I thought a lot of the briefing was bullshit… They would answer the question but dodge, bob and weave. I understand there’s a lot they don’t know. I get that. But they need to answer the questions straight up. They all talk about a task force, a committee — a committee's not going to solve this problem".[44]

    Trump's officials tried to allay concerns that their request for $2.5 billion was insufficient to address the epidemic. Some Republicans joined Democrats in criticizing the funds requested and found transparency lacking with regard to a coherent strategy to contain the virus. Another Republican, Senate Appropriations Committee Chairman Richard Shelby of Alabama, told Azar: "If you lowball something like this, you'll pay for it later."[45][46][47] Pennsylvania Democratic Congressman Brendan Boyle asked Azar how he could defend "draconian cuts" in the CDC budget “at the same time we are facing a unique worldwide health crisis".[47] 

    On February 27, U.S. Representative Jimmy Gomez of California revealed that he had been contacted by a whistleblower from the Department of Health and Human Services (HHS) who had been dispatched to deal with the arrivals of travelers exposed to the coronavirus. There were allegations made that those sent from the HHS to California quarantine sites lacked both sufficient protective clothing and the training necessary to prepare them to deal with the contagion

    On February 28, 2020, United States Senate Finance Committee ranking member Ron Wyden wrote Azar to ask why HHS Administration for Children and Families employees were involuntarily dispatched to California to meet with quarantined travelers despite lacking expertise in the field and lacking proper information, equipment and training. Wyden also asked why said employees were not cleared to ensure that they had not become carriers of the disease before they were returned to their home stations.[39]

    The coronavirus outbreak began in December 2019, with the U.S. government having two months of lead time before the virus reached the continental United States.[49] America's ability to test for the virus was hampered by both contamination and delays. On March 2, 2020, Azar was criticized for unpreparedness that may have accelerated the spread of the virus. Some critics focused on the lack of definitive testing of those who might be spreading the virus. China had tested over 1,000,000 people, while the CDC had tested less than 500 and its results had been undermined by problems with accuracy and potential contamination. There was substantial internal feuding with regard to formulation of policy at HHS and the CDC.[50]

    I just hope people keep this stuff in mind next time they go to vote for some incompetent idiot as if elections don't matter and political decisions don't matter….

    $1.30/Maya – Is that going to break the bank?  You should never buy a spread like that anyway, you get much better pricing bidding for each leg on your own but really, 0.30 out of $7?  So you'll make $5.70 instead of $6 or lose $1.30 instead of $1.  You could always sell 30% more puts to cover it….  

    CIM/Ati – LOL.  There is NO substitute for understanding the VALUE of stocks.  People stare at these charts like they mean something but all  they do is show you how stupid people were.  If you want to be a real investor – YOU have to KNOW where the value line is.

    STWD/StJ – I thought they were being taken over by MAR?  Did this spin out?

    • Two Tesla (TSLA -0.11%) employees have tested positive for COVID-19, according to an e-mail sent to employees.
    • The employees have been working from home for almost two weeks and did not show symptoms the last time they were in the office.
    • The report didn't indicate at which Tesla site the employees worked.
    • Washington, Oregon, California, Colorado, Illinois, Michigan, New York, New Jersey, Ontario, and Quebec are among the jurisdictions where pot stores have been allowed to remain open during stay-at-home orders.
    • According to MKM Partners, cannabis sales remain resilient despite the pandemic panic.
    • Tilray (TLRY +41.865%), Canopy Growth (CGC +9.943%), Cronos Group (CRON +9.947%), Curaleaf (OTCPK:CURLF +13.081%), Aphria (APHA +13.993%).
    • U.S. crude oil drops <<CL1: COM>> following three days of gains, with worries over rapidly dwindling demand due to coronavirus travel bans and lockdowns outweighing effects of the $2T U.S. emergency stimulus package; April WTI -2.8% to $23.81/bbl, but May Brent +0.2% at $27.46/bbl.
    • "A demand shock of this magnitude will overwhelm any supply response," Goldman Sachs analysts said in forecasting a 14M bbl/day surplus in Q2.
    • Brent crude will remain near $20/bbl during Q2 while WTI likely will fall well below that level as storage swells.
    • WSJ reports the Trump administration will press Saudi Arabia to restrain its scheduled oil production boost.
    • Separately, the U.S. Department of Energy has withdrawn an offer to buy oil for the Strategic Petroleum Reserve due to uncertainty over funding from Congress.
    • Nevertheless, some of the major oil names sport strong gains: OXY +13%MRO +9%,  XOM +2.4%CVX +4.2%.
    • Refiners are up big: MPC +11.6%VLO +7.8%PSX +7.2%HFC +12.4%.

    • The SEC has suspended trading in the largely defunct Zoom Technologies (OTC:ZOOM), after widespread confusion with popular videoconferencing company Zoom Video Communications (ZM +4%), which has seen a sharp rise in usage and stock price amid the COVID-19 pandemic.
    • That suspension in ZOOM trading lasts until the end of the day on April 8 - hopefully giving everyone enough time to learn who's who.
    • The SEC acted "because of concerns about the adequacy and accuracy of publicly available information concerning ZOOM, including its financial condition and its operations, if any."
    • Zoom Technologies – once a distributor of wireless products in the U.S., and a once-recognized name in modems – hasn't offered any public disclosure since 2015.
    • Over the past three months, Zoom Video Communications (NASDAQ:ZM) has risen 109%. Over that period, Zoom Technologies (OTC:ZOOM) went from $1.26 to an intraday high of $60 last Friday.
    • The company expects an "adverse impact" on medical memberships and on the timing and collectability of payments from customers.
    • In addition, says CVS WFH is raising costs and hurting efficiency, and the turndown in rates and stocks is having a big negative impact on net investment income and the value of the company's investment portfolio.
    • Shares are down 0.4% today, continuing to miss out on the major bounce of the past three days.
    • Walmart (WMT -0.745%) is taking on a large number of new workers to help it meet a surge in demand amid the pandemic.
    • The retail giant has added 25K employees and says applications are still spiking. Walmart has removed a lot of the red tape in the hiring process to cut it down to as little as three hours.
    • Walmart is the only Dow 30 stock in negative territory today.
    • After last week's mini-spike, mortgage rates settle after the Fed takes action to stabilize the market.
    • 30-year fixed-rate mortgage averages 3.50% for the week ending March 26, vs. 3.65% a week earlier and 4.06% at this time a year ago, according to the Freddie Mac Primary Mortgage Market Survey.
    • “Similar to other segments of the economy, real estate demand is softening. However, the combination of the Fed’s actions and pending economic stimulus will provide substantial support to the mortgage markets,” said Freddie Mac Chief Economist Sam Khater.
    • 15-year FRM averages 2.92% vs. 3.06% in the previous week and 3.57% a year ago.
    • 5-year Treasury-indexed hybrid adjustable-rate mortgage averages 3.34% vs. 3.11% in the prior week and 3.75% a year ago.
    • iShares Mortgage Real Estate Capped ETF (BATS:REMsurges 20%, but it's still down 4.5% in the past week and 59% in the past month amid market turmoil driven by the Covid-19 pandemic's economic fallout.
    • Homebuilders are on the upswing today, with the iShares U.S. Home Construction ETF (BATS:ITB) up 2.0%; in the past week it's gained 26%, however in the past month it has declined 35%.
    • Piper Sandler (Neutral) lowers its Micron (NASDAQ:MU) target from $56 to $48 after yesterday's earnings report, overall positive but remaining on the sidelines due to the coronavirus crisis.
    • The firm praises Micron's strength in the data center and server markets but notes that auto, mobile, and customer will likely show slight weakness for the foreseeable future.
    • Piper is also positive on DRAM ASPs, which were flat Q/Q.
    • More action: KeyBanc (Overweight, $48 target) notes that Micron pulled its FY demand outlook as medium-term uncertainties grow.
    • Analyst Weston Twigg still expects softer demand in H2 CY20
    • Micron shares are up 3% to $43.78. The company has a Bullish average Sell Side rating.

  28. So in 100 years if there are any historians left, will the downfall of civilization be attributed to Rupert Murdoch?   Just musing.

  29. South Korea cases peaked on 3/14. They have 7504 as of now (48.1k adjusted for US population size). They also have 126 deaths (807 adj.), though half of those came after the peak. China probably has "fake data" but SK does not. This is what our country could be doing if we had been serious. Politics will always be politics but now real people are really dying whose lives could've been saved.

    And it's going to get much worse. If you're making money on this Fake stock market "rally" good for you. Donate some and help out:

    • U.S. officials adequately studied the potential impacts of Energy Transfer's (ET +0.305%) Bayou Bridge pipeline in Louisiana, says a ruling by the U.S. District Court for the Middle District of Louisiana.
    • The court rejected a challenge from environmental groups who accused the Army Corps of Engineers of violating various federal laws by not adequately studying how pipeline construction and potential oil spills would affect sensitive wetlands in the region.
    • Bayou Bridge is a 162-mile crude oil pipeline that connects Louisiana ports in St. James and Lake Charles to a broader network of pipelines.

    • Bernstein has set new Street lows for several media stocks, throwing in the towel on the sector amid coronavirus carnage.
    • There's "not much left for equity holders" amid the fallout, analyst Todd Juenger writes, suggesting media investors can find "much more upside" elsewhere even in case of a quick recovery.
    • But without a quick rebound, there's heavier downside to earnings alongside a long decrease in TV ad demand and what would be a "significant" increase in cord-cutting.
    • He's cut his price target on ViacomCBS (VIAC -5.2%VIACA -1.1%) to $10 from $24, implying another 28% downside from here; reduced targets for AMC Networks (AMCX +2.4%) to $21 from $39 (17% downside); and cut target for Discovery (DISCA +1.1%) to $15 from $26 (30% downside).
    • The back and forth goes on about how airlines will be treated in the stimulus package.
    • The latest reporting indicates that Treasury Secretary Steven Mnuchin has said the government would take stakes in airline carriers in exchange for billions in direct grants to the companies.
    • The Senate bill that passed is providing $25B to airlines in loans and $25B in direct grants.
    • In the end, it looks like the package is close to what was predicted last week.
    • Early action: American Airlines Group (NASDAQ:AAL+4.29%, Delta Air Lines (NYSE:DAL+3.79%, Southwest Airlines (NYSE:LUV+3.65%, United Airlines (NASDAQ:UAL+1.44%, JetBlue (NASDAQ:JBLU+2.66%.
    • BofA cuts its Apple (NASDAQ:AAPL) target by $20 to $300 due to the risk of lower iPhone demand as a result of the coronavirus pandemic.
    • Analyst Wamsi Mohan lowers his 2020 iPhone unit sales estimate from 207M to 175M.
    • Mohan: "In a bear case scenario, we see 13% lower iPhone units due to lockdowns, vs. 6% lower in our base case."
    • The analyst calls the retail store closures a near-term headwind, which should be temporary.
    • BofA maintains a Buy rating due to Apple's cash balance and the upcoming 5G tailwind.
    • Apple shares are up 1.6% to $249.32.
    • Previously: 5G iPhone launch likely delayed – Wedbush (Mar. 26 2020)
    • Yum China (NYSE:YUMC) has 95% of its restaurants back open in China following the peak of the coronavirus outbreak, but the pace of traffic recovery is somewhat slow as might be expected.
    • Oppenheimer says Yum China is trending at same-store sales down 20% from a year ago.
    • "China appears to be the first large economy on the other side of the virus disaster. But the consumer continues to be cautious, partially because the news flow from other countries continues to drive fear," notes analyst Brian Bittner.
    • There is also the question of when an "all-clear" can be sounded to go back out to restaurants. On that note, Starbucks opened locations in Wuhan recently to what was reported to be light traffic.
    • The experience of Yum China is of interest to large global chains like Yum Brands (NYSE:YUM), McDonald's (NYSE:MCD) and Starbucks (NASDAQ:SBUX) that aren't quite sure what to expect on the other side of the pandemic.
    • Twist Bioscience (NASDAQ:TWST) will collaborate with Vanderbilt University Medical Center to supply gene and antibodies for the development of COVID-19 treatments. Also, unit Twist Biopharma will provide custom antibody drug discovery libraries and screen the libraries for potential antibody candidates. Shares up 1% premarket.
    • Henry Schein (NASDAQ:HSICannounces the availability of Standard Q COVID-19 IgM/IgG Rapid Test, an assay performed on a finger-stick sample that can generate results in 15 minutes. Several hundred thousand tests should be available by month-end with "significantly increased availability" thereafter. Shares up 4% premarket.
    • Amyris (NASDAQ:AMRS) has launched a hand sanitizer and has completed initial testing of a vaccine adjuvant. Shares up 7% premarket.
    • MyoKardia (NASDAQ:MYOK): key clinical and regulatory milestones related to mavacamtem for obstructive hypertrophic cardiomyopathy remain unchanged. Enrollment suspended in certain studies and the start of new trials postponed. Rollover of patients in the EXPLORER study to the long-term extension, MAVA-LTE, temporarily suspended.
    • Align Technology (NASDAQ:ALGN) has pledged to donate $1M to support global relief efforts. It will also donate personal protective equipment such as N95 masks.
    • "Caterpillar is continuing to run the majority of its U.S. domestic operations and plans to continue operations in other parts of the world, as permitted by local authorities," the company writes in a press release.
    • "However, due to uncertain economic conditions resulting in weaker demand, potential supply constraints and the spread of the COVID-19 pandemic and related government actions, Caterpillar is temporarily suspending operations at certain facilities. The company will continue to monitor the situation and may suspend operations at additional facilities as the situation warrants."
    • "Caterpillar's financial position remains strong. On a consolidated basis, Caterpillar ended 2019 with $8.3B of cash and available global credit facilities of $10.5B."
    • CAT -2.9% premarket
    • Abercrombie & Fitch (NYSE:ANF) says it will continue to keep stores outside of the APAC region temporarily closed until further notice.
    • "We entered this period of unprecedented uncertainty with a healthy liquidity position and are taking immediate, aggressive and prudent actions, including reevaluating all expenditures to enhance our ability to meet the business’ short-term liquidity needs," says A&F CEO Fran Horowitz.
    • The retailer says it's partnering with vendors, landlords, and lenders to preserve liquidity and mitigate risk during the COVID-19 outbreak.
    • Abercrombie & Fitch says it initiated the process to borrow $210M under its senior secured asset-based revolving credit facility to improve its cash position. A&F is also skipping share buybacks for the foreseeable future.
    • Source: Press Release
    • Goldman Sachs drops Beyond Meat (NASDAQ:BYND) to a Sell rating from Neutral on its view investors aren't going to be willing to pay premium valuations for story stocks.
    • Traffic declines are called a substantial near-term sales headwind for Beyond Meat and meaningful risk is seen with foodservice distribution where BYND captures over half of its sales.
    • GS lowers its price target all the way to $39 from $129. The post-IPO low for Beyond Meat is $45.00.
    • Shares of Beyond Meat are down 9.25% premarket to $66.10.

  30. MUB now a full V-shaped recovery. I guess the market is predicting he Feds don't let State's go bankrupt. It might be worth another play down however, as this could lose steam, perhaps 105 puts dated out to Sept or January, predicting for a Long Emergency to evolve out of this CV situation.

    • Goldman Sachs leaves its Sell position and moves to the Akamai (NASDAQ:AKAM) sidelines, citing the coronavirus-related tailwind of higher internet traffic.
    • Analyst Heather Bellini expects AKAM to take less of a blow from the virus and recover faster than its peers.
    • The analyst thinks Akamai's cloud-security products could see increased demand from businesses shifting from physical to online storefronts.
    • Goldman trims its AKAM target by a dollar to $89.
    • Akamai shares are down 0.4% pre-market to $89. The company has a Bullish average Sell Side rating.
    • Morgan Stanley digs through the text of the $2T stimulus package passed by the Senate without finding a specific mention of the cruise line industry.
    • There is also another obstacle being talked about on the Street. The bailout terms require companies to be created in the U.S. and have a majority of employees based in the U.S. to be eligible for funds. It's unclear if all the cruise line companies could make that claim.
    • In premarket action, Carnival (NYSE:CCL) is down 5.79% and Royal Caribbean (NYSE:RCL) is off 5.68%, while Norwegian Cruise Line Holdings (NYSE:NCLH) is 5.78% lower.
    • JPMorgan reels in its price target on Overweight-rated Target (NYSE:TGT) to $113 from $137 after factoring in the retailer's business update that covered its COVID-19 response.
    • The firm says Target is gaining market share off strong comparable sales growth, but warns on apparel sales and a decline in gross margin due to a negative mix shift.
    • The post-pandemic view is still very bullish. "TGT is a core long-term holding given its ability to compete in the new world of omni-channel retailing and its opportunity to gain share over time and deliver relatively consistent financial results in line with its +LSD comp, +MSD operating income, and +HSD EPS framework," advises analyst Christopher Horvers.
    • Shares of Target are down 0.26% premarket to $90.80.
    • Royal Bank of Canada (NYSE:RY) appears to be among the more aggressive of the banks in making margin calls and re-claiming collateral from mortgage funds. Many other lenders are apparently trying to work with the funds to avoid fire-sale liquidations.
    • AG Mortgage (NYSE:MITT) yesterday evening sued, asking a court to block the sale. The marks RBC used, says MITT, were subjective, and don't reflect the true value of the securities.
    • The news is important for any fund/company holding CMBS (or any other MBS, for that matter). If RBC wins and sells the paper at what very well may be cheap prices, one would assume paper everywhere would then be priced at those marks.
    • No lawyer here, but one imagines these repo contracts are pretty iron-clad in allowing banks to value the collateral. We'll see what the judge says. Best of luck to AG Mortgage and its investors.
    • MITT +24.6% premarket
    • Canadian Solar (NASDAQ:CSIQreports Non-Gaap EPS estimates of $1.06 beats by $0.61. Revenue of $919.7M tops the company's guidance of $850M-$880M.
    • Total module shipments were 2.5 GW against the company's prior guidance of 2.3 GW to 2.4 GW in 4Q19.
    • Sees Q1 total module shipments in the range of 2.15 GW to 2.25 GW, including ~250 MW of module shipments to the company's own projects that may not immediately be recognized as revenue. Revenue in the range of $780M-$810M, GM between 26% and 28%.
    • Expects FY20 total module shipments to be in the range of ~10 GW-12 GW, revenue in the range of $3.4B-$3.9B.
    • Board authorized $150M share repurchase program for a six-month period beginning December 9, 2019.
    • Shares +8.5%
    • Press Release

    • After surging 24% on Wednesday, Boeing (NYSE:BA) shares are up another 2.7% premarket to the $160-level following the passing of a $2T Senate relief bill.
    • "We thank the Administration, especially the President and Secretary Mnuchin, as well as the Senate for working together to take swift bipartisan action to support the American economy, including the 2.5 million jobs and 17,000 suppliers that Boeing, the aerospace industry and the U.S. rely on to maintain our world leadership in commercial, defense and services," the planemaker said in a statement. "The bill's access to public and private liquidity, including loans and loan guarantees, is critical for airlines, airports, suppliers, and manufacturers to bridge to recovery. Boeing's top priority is to protect our workforce and support our extensive supply chain, and the CARES Act will help provide adequate measures to help address the pandemic."
    • The bill will allow, but not require, the government to take equity stakes in any firm that seeks cash from the CARES fund, a condition Boeing CEO David Calhoun has resisted earlier this week.

    • Ford (NYSE:F) says it aims to restart production at select plants in North America as early as April 6, bringing key plants back on-line while the company introduces additional safety measures to protect returning workers.
    • The Hermosillo Assembly Plant in Mexico has a tentative restart date on April 6, while certain plants in Michigan, Missouri and Kentucky could restart on April 14.
    • Shares of Ford are down 5.01% premarket to $5.12.
    • Wendy's (NASDAQ:WEN) reports global same-restaurant sales for the quarter-to-date through March 22 were up 2.8%. The restaurant chain notes same-restaurant sales were on plan for the quarter before COVID-19 started to impact restaurant performance, including a strong week following the breakfast launch (15% comp).
    • Wendy's says it has not experienced any significant supply chain issues to date across the globe and added Postmates to its group of delivery partners.
    • On the financial front, Wendy's increased its cash position by drawing down $120M under its revolving financing facility to take its cash position to over $340M.
    • The company has also suspended all share repurchase activity as well as pulled its 2020 guidance and long-term outlook
    • Source: Press Release

    • Signet (NYSE:SIG) reports comparable sales rose 2.3% in Q4 to top the consensus mark of +1.1%. Zales was a top-performing chain with a 5.9% comp the quarter, while Piercing Pagoda delivered a 7.7% comp.
    • North America comparables sales were up 2.9%, offset in part by a 3.1% drop for the international business. E-commerce sales increased 15.1% during the quarter.
    • Gross margin came in at 41.9% of sales vs. 40.7% consensus and 40.7% a year ago.
    • COVID-19 response: The company says it's aggressively reducing overall capital expenditures, prioritizing digital investments to enhance its e-commerce platform and provide a frictionless shopping experience for customers. After taking a drawdown, Signet has more than $1.2B in cash and an additional $292B available on an asset-based revolving credit facility.
    • Shares of Signet are up 15.28% premarket to $8.45.
    • Previously: Signet EPS beats by $0.18, beats on revenue (March 26)

    SIG – Damn, they were doing so well too!  Fortunately, we came in at $16.95, not $30 but now $8.20 it would be a shame not to DD so here we will buy 1,000 more shares at $8.20 ($8,200) and we will buy back the short 2022 $13 calls for $2.40 ($2,400) and I'm not worried about the $13 puts nor do I want to sell $10 calls so let's leave it as that for now.  So we're spending $10,600 and we netted in 1,000 for $5.65 ($5,650) so now $16,250/2,000 is $8.125 – that's because we're not selling more puts and we aren't re-covering yet but that's also the current price and being assigned 1,000 more at $10 won't change that much but it does double our $370 quarterly dividend to $740 x 7 is $5,180 if all goes well – 1/3 of what we laid out for 2,000 shares in our first 2 years – right on track!  (and we will still collect at least $4,000 more when we decide to sell calls!) 

    If you know what your stock is WORTH then the current PRICE won't cause you to panic.

  31. Phil I am holding ET covered calls at $5 with 8 days to go and now way red (but at least covered).  I can move those to May $6 for break even.  Is that a good way to play?

  32. CIM should have mortgaged my home—

  33. This is well reasoned post comparing 2020 to 2008. 

    The Long Emergency means we are at least 6-9 months out from our "March 9th 2009" equivalent date.

    • Following up on a recent study that showed comparable results between coronavirus tests from self-administered swabs and those collected by healthcare workers, UnitedHealth Group (NYSE:UNH) has launched the new method in the Seattle area where people can apply a swab to the front of the nose, drop it into a test tube and hand it back to a healthcare professional, reducing the chance of exposure and greatly increasing the number of people who can be tested.
    • UNH CSO Ken Ehlert says the new protocol will be rolled out as quickly as possible throughout the company's OptumCare network of more than 48K doctors.
    Image result for sub zero running man
    • Yields on both the 1-month and 3-month Treasury bills fell below zero yesterday, marking the first time that happened since 2015, when both bills briefly flashed red and yields fell to minus 0.002%.
    • However, the readings on Wednesday were well below those, with the one-month traded at minus 0.053% and the three-month at minus 0.033%.
    • Japan and large swaths of Europe have had negative-yielding debt for some time now (in Germany all government fixed-income instruments except the 30-year bond carry rates below zero).
    • Spain overtook China's coronavirus death toll yesterday with 3,434 fatalities (second only to Italy), highlighting a grim picture as older patients miss out on treatment to younger people with a better chance of surviving.
    • Similar wrenching decisions are taking place in the U.S., with Northwestern Memorial Hospital in Chicago and George Washington University Hospital in Washington exploring a universal do-not-resuscitate policy for infected patients.
    • Atrium Health in the Carolinas, Geisinger in Pennsylvania and regional Kaiser Permanente networks are also looking at guidelines that would permit overriding the wishes of a COVID-19 patient on a case-by-case basis (such as risk to doctors and nurses, or a shortage of protective equipment) but would stop short of imposing DNR orders.
    • Related: HCA Healthcare (NYSE:HCA), Tenet Healthcare (NYSE:THC) and Universal Health Services (NYSE:UHS).
    • Despite a U.S. Senate bill that gives $58B to the industry, including payroll support, carriers including Delta (NYSE:DAL) and Hawaiian (NASDAQ:HA) are offering cargo charter services on passenger planes to boost revenue.
    • "Travel restrictions and evaporating demand mean that, aside from cargo, there is almost no passenger business," IATA Director General Alexandre de Juniac said in a statement. "For airlines, it's apocalypse now."
    • More on the Senate bill: Companies receiving funds cannot lay off employees before Sept. 30 or change collective bargaining agreements, while restrictions are in place for stock buybacks, dividends and executive pay. It also allows the government to take equity, warrants or other compensation.
    • The G20 is usually a once-a-year event, but as the world confronts the coronavirus pandemic, 2020 host Saudi Arabia is chairing an emergency virtual summit.
    • Two meetings were additionally held in 2009 and 2010, at the height of the global financial crisis, and many are expecting similar coordinated fiscal measures.
    • Also on watch is the U.S.-China relationship. Fears are running high that the coronavirus could undo the goodwill demonstrated between President Trump and Xi Jinping in January when the "Phase One" trade deal concluded.
    • Major retailers are looking to ease the impact of the coronavirus pandemic, offering help and easing financing to their small business partners.
    • Walmart (NYSE:WMT) is waiving April rent fees for its more than 10,000 businesses that operate within Walmart Supercenters and Sam's Clubs, including hair and nail salons, optometrists, restaurant franchises, veterinary clinics and banks.
    • Amazon is meanwhile pausing loan repayments until April 30 for sellers enrolled in its Amazon Lending program, while interest will not accrue during that time.
    • HanesBrands (NYSE:HBI) draws $630M from its revolving credit facility to boost its cash position to $1B
    • Additional liquidity will increase balance sheet flexibility during the COVID-19 global pandemic.
    • Withdraws 1Q20 and FY2 outlook as it excluded any impact from the spread of COVID-19.
    • Source: Press Release

    • Tesla (NASDAQ:TSLA) is reopening its solar panel factory in Buffalo, New York "as soon as humanly possible" to produce ventilators that are in short supply due to the coronavirus pandemic.
    • Medtronic (NYSE:MDT) is partnering with the EV maker on the project, adding that "open sourcing" one of its lower end ventilators can be an intermediary step in critical care.
    • According to the NYT, there are about 160,000 ventilators in the U.S. and another 12,700 in the National Strategic Supply.
    • Direct payments to individuals: $1,200 per taxpayer with income up to $75,000, at which point it's phased out up to $99,000. Families also get $500/child.
    • An extension of unemployment benefits: Jobless claims will be available longer, and benefits will be improved for four months. Furloughed workers and freelancers are also eligible.
    • $150B for state and local governments.
    • $500B in general corporate aid. $425B of that will be allocated by the Fed through loans to distressed companies. The other $75B is earmarked for hard-hit industries like travel and leisure.
    • $367B in small-business loans that will be facilitated by community banks. Any portion used to keep staffers or pay critical costs will be forgiven.
    • $100B for the healthcare system.

  34. These bitcoin conversations are so tiring. I'm saying the same thing now I said in 2012. Bitcoin is NOT A REPLACEMENT FOR A CASHLESS SOCIETY. Current fiat currency systems DO NOT REQUIRE PHYSICAL CASH. Physical cash happens to exist simply due to legacy. Most trasnactions are already cashless. Bitcoin is NOT a replacement for electronic transactions. Bitcoin is a SYSTEM OF TRUST that removes the need for a third party (e.g., a federal government) to provide for the system of trust. 

    For exmaple, in the 1930's the government looked at the gold based currency system and asked  "what if we remove the gold?" and the answer was nothing. It was not a requirement in a fiat currency system of trust to build it on a metal based system. The "bitcoiners" ask, (or at least, people who discuss bitcoin(? isn't this racist to label "people"?), and by that further I surmise the definition is "people that can be bothered to understand simple concepts," ask the simple question "what if you take away the government?"

    And the unsurprising answer is nothing. They are not needed to create a transactional a system of trust. Visa et. al. can build an electronic transaction system that settles in bitcoin all the same as any fiat currency system. THEY ARE NOT RELATED IN ANY WAY. This is a very very simple concept.

  35. Stimulus – This country is doubling down (10X-ing down really, if there is such a word) on financial engineering. The US economy has long ago abdicated anything remotely resembling a manufacturing based economy. In other words, we don't make anything anymore. Instead of spending a trillion on fighting a real war, i.e., one against the virus (pulling out the DPA and making masks, PPE, throwing $100B straight up at a cure/vaccine, etc), we're instead trying to save financial engineering outfits like leveraged junk bond creators and financial engineering firms like CIM (up 40%, good job!). 

    This is equivalent to the US responding to the war in Europe in 1942 with domestic stimulus. Sometimes you need to Make Stuff and go fight a real war.

  36. time for some that will make you smile

  37. Here's your rally:

    Bitcoin/BDC – I agree with the logic but then why Bitcoin?  It could be any coin or no coin – and I certainly hope it WILL NOT be an instrument like BitCoin where 2% of the addresses hold 80% of the coins.  The well on that currency has been poisoned by the greed of the founders, so it's never going to be real money.  As a concept, cypto is fine but the monetary system we have now which uses BitDollars, which also have no real value and are unique with controlled mining operations (called Central Banks) are already widely distributed with established values in well-protected systems that even has insurance for the users to make sure they are not ripped off in cyber space.  THAT is why BitCoins are worthless – they are not as good as the entrenched competition.  It has nothing to do with the merit of the concept of a virtual currency.

    Making stuff and fighting the real war is a good idea but you do need an economy to come home to when the fighting is done.  

    Dividends/Tangled – Good point.   I wonder what will happen?

  38. Phil I am holding ET covered calls at $5 with 8 days to go and now way red (but at least covered).  I can move those to May $6 for break even.  Is that a good way to play?

    Or out to July $7 calls?

    • Gainers: Granite Point Mortgage Trust GPMT +254%.
    • Ladder Capital (NYSE:LADR+155%.
    • AG Mortgage Investment Trust MITT +127%.
    • MFA Financial MFA +121%.
    • Redwood Trust (NYSE:RWT+100%.
    • TPG RE Finance Trust (NYSE:TRTX+76%.
    • Exantas Capital (NYSE:XAN+75%.
    • New York Mortgage Trust NYMT +69%.
    • Ready Capital (NYSE:RC+66%.
    • Tilray TLRY +66%
    • PetroChina (PTR +0.06%) says the coronavirus and weak crude oil prices may weigh heavily on 2020 financial results, after last year's profits dropped 14% Y/Y, largely due to weakness in its refinery and chemicals segment.
    • PetroChina reported full-year 2019 net profit of 45.68B yuan ($6.42B) on a 6% rise in revenues to 2.52T yuan; refining and chemicals segment operating profit plunged 69% due to excessive domestic refining capacity and narrowing margins.
    • During today's earnings conference call, VP Ling Xiao said the company would discuss price re-negotiations with its overseas natural gas suppliers in an effort to control costs and reduce losses in its gas import business.

    • Stifel says chipmakers are facing coronavirus-related "chaos" in the supply chain, which could create demand issues next year.
    • Analyst Patrick Ho notes that several regional shutdowns have impacted the ability to procure, ship, and receive parts and tools, which poses "a significant challenge for all equipment and component companies."
    • Ho sees near-term demand as healthy and robust, but there's no visibility into H2 2020 at this point.
    • The analyst says that valuations are tricky to judge right now, but lists a few potential defensive names: Applied Materials (AMAT +7.624%), kLA (KLAC +5.583%), and Lam Research (LRCX +9.91%).
    • Ho would also steer investors towards market leaders Entegris (ENTG +5.79%) and MKS Instruments (MKSI +4.926%).
    • The Philadelphia Semiconductor Index is up 5.2% today.
    • Per Johns Hopkins Case Tracker, worldwide COVID-19 cases are 492,603, up 24% from two days ago. Leaders (all increases compared to March 24:
    • China: 81,782 cases (+191)/3,291 deaths (+10).
    • Italy: 74,386 (+10,459)/7,503 (+1,426).
    • U.S.: 69,246 (+22,441)/1,046 (+453).
    • Spain: 56,188 (+16,512)/4,089 (+1,393).
    • Germany: 40,585 (+9,215)/229 +96).
    • According to investigators at Johns Hopkins University and collaborators, their model of the pandemic estimates 58K cumulative cases in mainland China since January 31, about 46K more than local authorities have reported. They also back a ratio of one reported case for every 10 estimated cases.
    • Toyota (TM +2.927%) says it will extend a shutdown of all North American plants for another two weeks due to the ongoing  pandemic and resulting sharp drop in demand for cars.
    • The Japanese automaker says it will now keep all plants in the U.S., Canada and Mexico closed through April 17.
    • Glencore (OTCPK:GLNCY +3.6%) says it has halted operations at several smaller mines due to government restrictions to curb the coronavirus spread but its larger operations are not materially affected.
    • The company says it is shuttering oil operations in Chad, some coal and ferroalloys operations in South Africa and Colombia, as well as nickel and zinc mines in Canada which will be on care and maintenance for the next three weeks.
    • "To date, our larger operations have not been materially impacted, however a number of our smaller assets have had to restrict or stop operations," the company says.

    Peloton gains on report of download spike

    • Peloton Interactive (NASDAQ:PTON) is up 3.33% after some hard data comes in that the company is benefiting from the stay-at-home orders across much of the U.S.
    • Evercore ISI reports that app downloads for Peloton are up 5X normal activity.
    • Peloton has been a favorite pick of analysts looking for companies poised to add business with much of retail (including gyms) shut down.
    • Broadcom (NASDAQ:AVGO) is up 10%, marking its sixth straight day of gains and its second double-digit gain during that run.
    • That streak has come alongside recent positivity from analysts, with Jefferies including Broadcom in a list of chipmakers seeing strength from data-center exposure; Piper Sandler highlighting its ability to maintain a dividend and pay down debt even in a downturn; and Morgan Stanley praising the balance sheet as well.
    • And today's move follows on Micron's beat, which saw analyst highlights of the company's strength in data-center/server markets.
    • Broadcom is now up 29.6% over the past week – a bit of salve for a stock that's 23% lower than it was a month ago.

    AVGO - Let's roll the 5 short 2022 $250 puts at $95 to 10 short 2022 $180 puts at $50 and let's roll our 10 long 2022 $280 calls at $13.10 ($13,100) to 10 long 2022 $200 calls at $35 ($35,000) and I'm fine with the short call target – this is just a bump in the road!   We bought the bull spread for $14,250 and we're salvaging $13,100 from the long puts – not much of a loss, is it? 

    • The mREITs (REM +27.449%) are sporting some gaudy gains again today, but the moves are not a whole lot more than sizable blips on the charts after the big declines of the past few weeks.
    • In any case, the sector appears for now to have broken out a reflexive cycle in which declines in asset values were forcing margin calls/distressed sales, which were forcing declines in asset values which were forcing margin calls/distressed sales, and so on.
    • Stalwarts: Annaly Capital (NLY +11.849%) and AGNC Investment (AGNC +10.96%)
    • Among the more distressed names: New York Mortgage (NYMT +73.361%), MFA Financial (MFA +107.018%), Ellington Financial (EFC +13.139%), Invesco (IVR +59.831%), PennyMac (PMT +40.852%), Anworth (ANH +59.856%), New Residential (NRZ +43.931%), AG Mortgage (MITT +126.172%), Two Harbors (TWO +11.111%)

    NLY/Rookie – Low rates are not good for Mortgage REITs as people refi and bust their margins.  Generally it stabilizes over time (lowers their borrowing cost) but it can cause a lot of short-term damage.  

    Submitted on 2020/03/18 at 3:52 pm

    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.

    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.

    Submitted on 2020/03/24 at 4:05 pm

    REITs/Palotay – That's what bailouts are for.  Banks don't want them to go under so they will amend their loans and gap 3 months on them – end of story.  People are trying to make something out of all these things but any two rational people can fix them with minimal discomfort.  As long as we get a handle on things within 3 months – it's really not that big a deal if people cooperate. 

    Katrina caused $250Bn in total damage, a good portion of that directly impacted just New Orleans and it lasted for a year.  2,000 people died, 300,000 homes were destroyed, shelters and hospitals were overwhelmed – yet the city survived and people went back to work – despite all sorts of dire predictions.  This disaster may be 10x worse, 20x worse ($5Tn in damage, 40,000 dead?) but it's spread over the whole country and, unlike Katrina, the Government IS doing something about it. 

    It's not so much that I'm smart as I've just seen it all 100 times so I tend to have a big-picture perspective on things.  

  39. "TD – Same thing with short puts but you can't double your exposure like that.  So you have 15 of each at $18ish and the $40 puts are $8.  ToS says $6,000 margin for 10 short $52.50 puts and $6,691 margin for 20 short $40 puts – that's why I like those rolls but it doesn't save margin, just costs not too much.  The problem with TD is you don't have a lot of time to turn around and you may be throwing good money after bad so maybe you are better off with more IBM at a much more realistic target to double your money on the spread.  "

    Understand about the TD timelines and the double exposure Phil. Still like TD longterm. Bought back the $55puts. What about a roll from 15 $52.5 Jul puts to 20 Oct 40p?   .. or do you still suggest cancel out everything?

    15 Jul $50c ($5.7) 

    -15 Jul $55c ($2.68)

    -15 Jul 52.5p  ($5.58)

    20 Oct $45c. ($5.3)


  40. So where does this bounce run into trouble? 2700 on the S&P?

  41. sharing because I found this informative.

  42. bitcoin was created and was totally worthless and the founder is considered greedy? Why do I even bother with these conversations.

  43. 2 month ago M95 mask were 10.00 for a dozen and were regularly on sale for 4.95 this was at home depot, lowes  ect ect. they are now 100.00 for 10 masks no price gouging here. My wife the nurse took all my mask and has to use them for surgery because they dont have any

  44. ET/Tangled – Well short-term plays like that are always ticking bombs.   No, it is not good to simply make another ill-advised short-term play.  ET is at $5.50 and the May $6s are 100% premium at 0.75 so the one thing we know for sure is we can steal your 0.75 because that premium WILL expire worthless on May 15th, no matter what the price of ET is.  So you are paying 15% of the price of the stock just to make your bets which means if you don't double up every 6 bets – you will lose money playing.  

    This is exactly what I spend all of my time teaching people NOT to do – how is it possible you've been here this long and are making these kinds of plays?  angry

    TD/Wing – I'm saying TD is at $44 and you have Oct $45 calls for net $10,600 that are back to $10,000 and July $50 calls at $8,000 that are down to $1,700 less the short $55s ($4,000) and hopefully less the short $52.50 puts but down $7,500 at the moment.

    So, currently you are down about $10,000 and most of that would be made up by working the puts 

    I believe you said margin was an issue and TD doesn't have long-term options so I didn't like the adjustments – it's simply not an appropriate position if you are tight on margin.  The World is at 500,000 cases and both the US and Italy are going to pass China in number of cases next week so we could easily drop another 20% so you should be THRILLED for a chance to take risk off the table and leave yourself a little flexible rather than pressing positions you couldn't reposition the last time it was $10 cheaper than it is now and was a great time to do it.

    2,700/Sun – That's the strong bounce line so, from 2,200, we then look for a 100-point (weak) rejection back to 2,600 and 2,500 is a strong retracement that has to hold for us to stay bullish and hopefully we consolidate above there for a move over 2,700.

  45. Thanks…

  46. I hop I was not clear on ET.   I have some ET bought below $5 and short calls at $5 on which most premium is gone already.  So looking to close those calls and sell some more at a higher strike a little further out which reduces my basis a little more and gets me some more of the gain if it goes up.  If that is bad then yup I really do not get it.

  47. Light volume here

  48. ET/Tangled – Well that's very different then!  Still, you can see why I don't sell short-term calls  but I don't know when you sold them, maybe long ago but I doubt it based on the motion.  ET right at $5 and I guess you sold the weekly? $5s, now 0.45, you can mess around with rolls but why not just sell the 2022 $5s for $2.20 and get it over with?  Then you can move on with your life at net $3is and just wait patiently to see if you make 66% called away at $5.

    As a new play, you can buy ET for $5 and sell the 2022 $5 calls for $2.20 and the $3 puts for $1.35 and that's net $1.45 and called away at $5 for a $3.55 (244%) profits at $5+.  If you get assigned more at $3, your average is $2.23 – still not terrible.  

    Volume/Coulter – Relatively but first time in a long time:

    Date Open High Low Close* Adj Close** Volume
    Mar 26, 2020 249.52 259.36 249.05 258.41 258.41 167,786,786
    Mar 25, 2020 244.87 256.35 239.75 246.79 246.79 298,352,300
    Mar 24, 2020 234.42 244.10 233.80 243.15 243.15 235,494,500
    Mar 23, 2020 228.19 229.68 218.26 222.95 222.95 326,025,200
    Mar 20, 2020 242.53 244.47 228.50 228.80 228.80 347,158,800
    Mar 20, 2020 1.406 Dividend
    Mar 19, 2020 239.25 247.38 232.22 240.51 239.10 289,322,000
    Mar 18, 2020 236.25 248.37 228.02 240.00 238.60 327,597,100
    Mar 17, 2020 245.04 256.17 237.07 252.80 251.32 262,070,500
    Mar 16, 2020 241.18 256.90 237.36 239.85 238.45 297,240,000
    Mar 13, 2020 263.09 271.48 248.52 269.32 267.75 329,566,100
    Mar 12, 2020 256.00 266.66 247.68 248.11 246.66 392,220,700
    Mar 11, 2020 280.70 281.94 270.88 274.36 272.76 255,316,300
    Mar 10, 2020 284.64 288.52 273.50 288.42 286.73 276,444,100
    Mar 09, 2020 275.30 284.19 273.45 274.23 272.63 309,417,300
    Mar 06, 2020 293.15 298.78 290.23 297.46 295.72 228,667,200
    Mar 05, 2020 304.98 308.47 300.01 302.46 300.69 186,366,800
    Mar 04, 2020 306.12 313.10 303.33 312.86 311.03 176,613,400
    Mar 03, 2020 309.50 313.84 297.57 300.24 298.48 300,139,100
    Mar 02, 2020 298.21 309.16 294.46 309.09 307.28 238,703,600
    Feb 28, 2020 288.70 297.89 285.54 296.26 294.53 385,764,000
    Feb 27, 2020 305.46 311.56 297.51 297.51 295.77 284,353,500
    Feb 26, 2020 314.18 318.11 310.70 311.50 309.68 194,773,800
    Feb 25, 2020 323.94 324.61 311.69 312.65 310.82 218,913,200
    Feb 24, 2020 323.14 333.56 321.24 322.42 320.54 161,088,400
    Feb 21, 2020 335.47 335.81 332.58 333.48 331.53 113,788,200
    Feb 20, 2020 337.74 338.64 333.68 336.95 334.98 74,163,400
    Feb 19, 2020 337.79 339.08 337.48 338.34 336.36 48,814,700

  49. ET -  If I had 12,000 shares of ET that I got for $5 (and I do) I am not going to agree to sell them in Jan 2022 for $5 in exchange for $2.20 in premium. If I wanted to reduce my cost basis, and didn't mind carrying the margin, I'd rather sell the $5 puts for $2.60 or even the $8 for $4.50.

  50. What a nice, calm day – only up 4% on lower volume…

    Notice above my first set of short puts was the 12th and the 2nd set was the 17th and we did all our big rolls that week too and the 23rd (Mon) as well - you have to take advantage of the VIX when it's like that – there's no better time to sell options! 

    STP holding pretty steady at $495,821 so I guess we're kind of neutral here, which is good.  LTP is still down 10% but that's $449,788 so the combined portfolios are advancing nicely.  

    Butterfly up 80% now as AAPL, AMZN, DIS all recover for us.  WHR and X still super-low but much smaller positions.  

    AMZN also a massive position in our Hedge Fund – $2,050 target for 2022 – I think we'll make it!  

  51. Pharmboy-Biden ad is the best!  Not fake either!

    • The oversupplied market may drive as much as 100M barrels of oil into floating storage "and probably more," International Seaways (INSW +6.3%) CEO Lois Zabrocky tells Bloomberg.
    • "This is a once-in-a-generation type of event," Zabrocky says, noting charterers are starting to book vessels with storage options for periods of more than a year.
    • The company has received inquiries about floating storage for both crude and oil products, covering many types of vessels, from VLCCs to Suezmaxes and smaller ships too, the CEO says.
    • IHS Markit says the world could run out of places to store oil in as few as three months, as supply may exceed demand by 12.4M bbl/day in Q2.
    • Current rates of supply and demand mean inventories will rise by 1.8B barrels during H1, IHS Markit says; with only 1.6B barrels of storage capacity still available, producers would be forced to cut production further because by June there would be no place left to store the unwanted crude.
    • Ross Stores (ROST +4.1%) tells vendors that it's canceling merchandise purchase orders through June 18 due to the impact of the pandemic on its business.
    • "This is the first time in our history that we are unable to deliver exceptional merchandise to our customers," states a memo seen by Reuters.
    • The discount store operator said it would also extend payment terms on all existing merchandise payables by 90 days.
    • Adidas (OTCQX:ADDYY), Skechers (NYSE:SKX) and Ralph Lauren (NYSE:RL) are just a few of the brands with items sold at Ross stores.

    Gee, it's nice to just be able to decide to do that to your vendors!  That's why we're not jumping into many retailers – more dominoes to fall…

    There's always time to be petty:

    • Trump administration officials have agreed on new measures to restrict chip supplies to Huawei, according to Reuters sources.
    • The action by senior cabinet officials comes as U.S.-China tensions reignite over the spread of the coronavirus.
    • The change would require foreign companies using U.S. chipmaking equipment to obtain a U.S. license before sending certain chips to Huawei.
    • The rule is likely referring to newer, sophisticated chips rather than the more common, older models.
    • Global chip manufacturers rely on equipment from the likes of U.S.-based KLA (NASDAQ:KLAC), Lam Research (NASDAQ:LRCX), and Applied Materials (NASDAQ:AMAT).
    • The decision still needs to be approved by President Trump.
    • In its latest pandemic reaction, AT&T (T +6.2%) says it's paying a 20% bonus above its usual hourly base rate to front-line union employees, and is extending paid leave (up to 160 hours) for employees who fit conditions (positive COVID-19 test, or primary caregiver for someone who has, as well as parents/guardians and higher-risk employees).
    • It's adding a fleet of 76 deployable cell sites for FirstNet agencies, and waived fees for some Navy ship-stationed personnel to call home.
    • For consumers, it's offering unlimited data to home Internet wireless/fixed wireless customers, waiving fees for those with hardships, and adding free previews of some premium TV channels, including Showtime, Starz, Epix, HBO and Cinemax.
    • And it's offering World Connect Advantage business customers 50% off the current rate as well as committing $10M to support distance learning.
    • Barrick Gold (GOLD +2.4%) unveils a 10-year production plan aimed at becoming the world's "most valued" gold producer, capable of sustainably producing 5M oz./year of gold nd delivering significant free cash flow.
    • President and CEO Mark Bristow says Nevada Gold Mines – Barrick's recent joint venture with Newmont – will be the "value foundation" of the company's business moving forward, with "enormous potential for growth."
    • Bristow says Barrick's wide-ranging definition of value, includes factors such as economic benefits; the care with which it treats its people, communities and environments; its strategic focus on long-term sustainability; and returns for investors.
    • Separately, Barrick is a named new Catalyst Call Buy at Deutsche Bank with a $25 price target, citing its favorable positioning as one of the largest global gold companies amid a rising gold price backdrop.

    My bad, we only have them in our Money Talk Portfolio – that's silly!

    GOLD – Still mostly in the money – I'm very confident since they are flooding the world with money.   Of course, at this stage, no one is buying gold with it but give them time…

    Image result for zombie food delivery
    • Waitr Holdings (WTRH +17.1%), GrubHub (GRUB +6.1%) and Blue Apron (APRN +8.1%) are making big gains again with more big city mayors talking about an extended period of social distancing.
    • What's different about today's moves are that they are coinciding with a broad rally in the restaurant sector on stimulus relief.
    • Notable gainers include Dine Brands Global (DIN +24.5%), Carrols Restaurant Group (TAST +21.5%), BJ's Restaurants (NASDAQ:BJRI), Del Taco (TACO +11.5%), Dunkin' Brands (DNKN +4.%), Denny's (DENN +3.0%), Arcos Dorados (ARCO +7.0%), Noodles (NDLS +2.4%) and Ruth's Hospitality Group (RUTH +12.5%).
    • Don't think that packaged food stocks are cooling off either.  Flower Foods (FLO +9.4%), General Mills (GIS +5.3%), Hostess Brands (TWNK +7.5%) and Kellogg (K +4.4%) are cooking along rather nicely.
    • McDonald's (MCD +2.626%) discloses that it borrowed $1B from a new 364-day credit agreement with banks.
    • The company says it withdraw the full amount from the credit facility as a precautionary measure to reinforce its cash position and to provide financial flexibility in light of current uncertainty resulting from the pandemic.
    ORIGINAL STAPLES ~ EASY BUTTON ~ Says "THAT WAS EASY" when pressed ~ w/Batteries
    • Boeing (BA +14.4%) soars to the top of the Dow leaderboard for the third straight session, sparked by boost from the $2T stimulus bill that includes $17B in loans for companies deemed critical for national securitycrafted largely with Boeing in mind.
    • The aerospace industry, including Boeing, also would still be eligible to tap a slice of the $500B earmarked for companies generally.
    • Boeing will focus on the investment-grade debt market once federal aid terms are clear and its financial strategy is squared away, Bloomberg reports, adding that the company believes it likely would be able to extract more favorable terms from debt investors than from equity investors.
    • Boeing's price target is raised to $202 from $173 by Bernstein analyst Douglas Harned, who thinks the stock can rise if near-term liquidity threats can be eliminated.
    • The company does not appear to be at great risk "unless airlines have fleets largely grounded for most of 2020."
    • J.P. Morgan's Seth Seifman sees a low valuation multiple for the stock: Assuming Boeing will generate cash flow in the "low double digit billion range" in the future, the company's free cash flow yield would amount to ~13% of the market cap, Seifman says, noting the free cash flow yields of other industrial stocks are substantially lower.
    • Wedbush Securities throws a spotlight on why the $2T stimulus bill might not be a lifesaver for the cruise line industry.
    • Analyst James Hardiman says that Norwegian Cruise Line Holdings (NCLH +2.535%) itself does not believe that it would qualify for the Treasury loans based on the language that says recipients must have been created or organized in the U.S. and have significant operations in and a majority of its employees based in the U.S.
    • "We have reached out to the other two cruise lines for comment, but if NCLH doesn't qualify, we would think that RCL and CCL do not either," writes Hardiman.
    • Investors are taking a more positive view of the developments. Carnival (CCL +15.016%), Royal Caribbean (RCL +2.653%) and Norwegian Cruise Line Holdings (NCLH +2.535%) are all higher on the day.
    • Nomura's notes from a call with Baidu (BIDU +4.2%) management highlight some cautious optimism, with Baidu leadership expecting its ad business would recover from late in Q2.
    • Baidu saw a strong Q4 but forecast declines for Q1 amid "limited" business visibility amid the coronavirus situation in China.
    • But virus control has made progress in China since the report, and Baidu says it's seen some sequential improvement in business (though it's not changing late-February guidance for revenue declines).
    • WeedMD (OTCPK:WDDMF +26.6%announces the appointment of Lincoln Greenidge as Chief Financial Officer.
    • Mr. Greenidge will succeed Nichola Thompson, who will be resigning from her role as CFO, effective April 30, 2020.
    • Most recently, Mr. Greenidge served as the CFO for LSC Lithium Corporation (LSSCF), prior to that he served as the CFO of LeadFX and was the corporate controller of HudBay Minerals Inc.
    Image result for wimpy hamburger today
    • Five federal financial regulators urge banks, savings associations, and credit unions to offer responsible small-dollar loans to consumers and small businesses in response to Covid-19.
    • The Federal Reserve, Consumer Financial Protection Bureau, Federal Deposit Insurance Corporation, National Credit Union Administration, and Office of the Comptroller of the Currency issued a joint statement on the matter.
    • "Responsible small-dollar loans can play an important role in meeting customers’ credit needs because of temporary cash-flow imbalances, unexpected expenses, or income disruptions during periods of economic stress or disaster recoveries," according to the statement.
    • For borrowers who experience unexpected circumstances and cannot repay a loan as structured, lenders are encouraged to consider workout strategies designed to help borrowers to repay the principal of the loan while mitigating the need to re-borrow, they said.
    • The agencies are working on future guidance and lending principles for responsible small-dollar loans to help financial institutions meet credit needs of their customers, members, and communities.

  52. If this is true – what is all the fuss about?

    • Moody's Investors Services now sees G-20 real GDP contracting by 0.5% in 2020 vs. its November forecast for 2.6% growth, due to the "unprecedented shock"of the coronavirus in H1.
    • "The severe compression in demand over the next two to four months will likely be unprecedented, as China's data for the months of January and February reveal," write a team led by Madhavi Bokil, vice president/senior credit officer, CSR, at Moody's.
    • Expects G-20 growth to revive to 3.2%% in 2021.
    • Sees the U.S. economy contracting 4.3% in over combined second and third quarters of this year.
    • Germany's (-5.4%) and Italy's (-4.5%) economies are expected to shrink even more than the U.S.'s during Q2 and Q3.
    • Sees China real GDP growth of 3.3% in 2020 followed by 6.0% in 2021.
    • Moody's expects recoveries in emerging markets to be more muted than in advanced ones. "Although economic activity in China has resumed, the recovery is tepid and is expected to remain so," Moody's says.

  53. Wow, I slept through $22.50 on /CL again but I'll take a couple of longs at $22.90!

  54. WHO warning "Millions can die" without firmer action.  This is all playing out just like a zombie apocalypse movie – despite the evidence all around us, US still acts like this isn't that big a deal and will continue to do so until we are completely overrun with victims – by which time it will be far too late.

    Image result for zombie animated gif

  55. The Bug/Phil – yeah, not surprised. Remember my prediction a few days back when you were shocked that I changed my tune? It's because The Bug hit the US that I changed.

    • Liquidity for the shale sector "may bend but won't break" during the upcoming borrowing base re-determination season in April-May, says Wells Fargo analyst Nitin Kumar.
    • E&Ps including Antero Resources (AR -7.3%), Centennial Resource Development (CDEV +3.3%), Extraction Oil & Gas (XOG), Matador Resources (MTDR -1.4%), Oasis Petroleum (OAS -10.3%) and Whiting Petroleum (WLL -18.7%) could be more than 80% drawn on redetermined bank lines after the spring season, Kumar says.
    • The Wells team estimates private shale operators have drawn ~70% of their bank lines and represent ~83% of current borrowing by U.S. shale, and sees these lines facing scrutiny from banks in the spring.
    • Even before Saudi Arabia decided to flood the market with oil, more than a third of outstanding high-yield energy bonds were trading at distressed prices, Bloomberg notes.

  56. Bug/Snow – Well I never had any doubt it would hit the US.  We were doomed the minute Chinese New Year started without travel restrictions.  That was my point way back when but, for some reason, Trump didn't put me in charge of HHS – even though I'm just as qualified as the guy he did pick because I too have a Dr in the family!  crying


    • Fed Chair Jerome Powell says the central bank is working on a Main Street Lending Facility to help smaller businesses, Bloomberg reports.
    • It will be after Congress passes the current legislation awaiting the vote.
    • Powell speaks during a public portion of a meeting of the Financial Stability Oversight Council in Washington.

    We all need to take out loans and put money in the hedge fund (or do it yourself) as we can leverage the Hell out of this market at the moment! 

  58. MUB – right now the Aug 90 puts are trading for what we originally paid for the 110s! I believe MUB is actually higher right now than it was when we first grabbed those puts. 

  59. Do you mean something different from your usual trades on that leveraging?

  60. The Bug/Phil – yeah, I have an actual copy of the gov's pandemic playbook. It's pretty good, but they're not following it very well……

  61. Yeah Phil, and that leverage is all backstopped by the Fed because the primary dealers can lend to main street.  It is a big circle j…um…never mind.

  62. Wow, anyone remember the good old days of the pre-close "stick"? It's back…

  63. Hi Pharm!

  64. Where ever JRW is…I bet he made a killing today.

  65. MUB/Ati – What a crazy turn on those – so glad we cashed out.  I would not play it again with all this bailout money flying around.  

    Different/Tangled – No but this is a once-in-a-decade chance to buy blue chip spreads that will gain well over 100% on the recovery.  In the HF, we're a bit more hands on, selling short-term puts or calls along the way but it's also tough for most people to do the put selling and short call selling without plenty of margin – along with the hedges you need when we re-dip.  

    DIS is still $103, for example, which is where we took them in the previous set of portfolios and $135 was our target.  You can still sell 10 June 2022 $70 puts for $9 ($9,000) and buy 30 June 2022 $90 ($30)/$120 ($17) bull call spreads for $13 ($39,000) and that puts you in the $90,000 spread for $30,000 and, not yet, of course, but we can sell 10 June $120 calls for $5 ($5,000) using 85 out of 813 days so about 10%.  We would wait for a bit more height but if we can sell $5,000 worth of premium 10 times that's $50,000 and we'd be in for a net $20,000 credit with negligible margin and if DIS is over $120 we make another $90,000 profit for a $110,000 (366%) profit in 2 years.  

    Being able to make 20 or 30 plays like that we can make many millions of Dollars – probably go up to 10x on each one easily as there are 1,000+ open contracts at the Jan 2022 strikes (we don't want to be the dominant holders) so maybe $20M could be deployed to make $60M without much stress.  It's a worthwhile pursuit.  

    Yeah, nice stick at the close!

    Image result for mister stick

    JRW/Willsons – I heard he put too much gold in his boat and sank in the Bermuda Triangle.

  66. -$13k and bleeding.

    I'm totally wrong about the current virus, which must be, in actuality, a total hoax.

  67. Speaking of which, if there's an interest, Doug and I were talking about setting up a quarterly dividend fund using the same principle as the DIS play above but paying out the quarterly revenues.  

    In other words, since it's hard to get income now due to the low rates, that same concept, using $60,000 (conservatively $30,000 + $30,000 in margin) would still buy the $90,000 Disney spread but that's 2-year money.  Along the way we'd sell those $5,000 quarterly short calls and pay them out as distributions so there'd be a short-term return in addition to the long-term positions.  

    If people are interested (must be high net-worth, unfortunately) contact Greg at philstockworld dot com and let him know and, if we get enough interest ($5M), we'll set up a meeting as I think it's the perfect instrument for these times.  

    Virus/BDC – As I said, $6Tn is a LOT of money.  You could be decapitated and there would still be a way to have you win the Boston Marathon with that kind of money!

  68. Bug / Phil – This is what people like Trump don't understand. The death rate is not that great but 20% need hospitalization. I wonder what the death rate would be if hospitals can't care for the 20%. If 100M get the virus here and we need 20M bed that means that 18M who need hospitalization won't get it. How many will die! Maybe Snow can tell us. But it won't be a typical flu season…

  69. That 20% might be lower because the actual number of people infected is not known exactly because people have no or little symptoms. But even if it's 10% or 5%. You are still talking about millions possibly dying.

  70. Death rate/StJ – That's easy, look at Italy, who are now tied with China at 80,589 cases and 8,215 deaths (double China) and only 10,361 recovered.  

    And happy 500,000 to us all!

    I think today is the biggest gain yet in victims – about 50,000 new cases since yesterday!

    US sneaking up on Italy, we're neck and neck but US coming strong around the home stretch has the momentum to pass Italy and China over the weekend – MAGA!!!

    Image result for maga virus

  71. The company does not appear to be at great risk "unless airlines have fleets largely grounded for most of 2020."

    We may not be back to "regular" flying until 2022. The rest of 2020 will look much like it does now. 2021 will begin to see some recovery here and there and then end with a weak "total" recovery that will still be 30% than the flying numbers and revenue pre-CV. People are overplaying the stimulus pump for airlines and Boeing. I know Boeing fell very hard from 340 to 100, but this snap back to 180 is way too far. Boeing had major problems prior to CV; they had management rot that precipitated a culture of arrogance and incompetence that finally reared its ugly head with the two 737 MAX crashes. The Seattle Times has been all over it and I read about it extensively.  They were worth a 50% price haircut based on that alone, and the systemic problems management infected the company with, problems with labor, contractors and sacrificing project performance (and safety which = lost lives!) to save "costs." Now enter the novel CV problem and tell me where this turd goes.

    Their current manufacturing lines are all closed by the way.

  72. I remember when Europe was the epicenter of the pandemics! But we don't like other people having all the glory. USA #1 baby!

  73. BA/BDC – Yes, you'll notice I'm playing them for $175, not $300.  Same things were said after 9/11 – people would never fly again… 

  74. US has 5X the population of Italy, and given the incomprehensibly stupid response and lack of preparation and the current mentality that is nothing short of "F*** it! Just let this thing wash through us," I'd say being 10-20X Italy's peak numbers would be forecasting lightly.

  75. The Italy death rate might be an abberation for now simply because the system got overwhelmed and they had to make life and death decisions so people simply didn't get the care they needed to survive (well documented now). But then that 10% could be the baseline for other countries where the system get overwhelmed. So if Trump and Kudlow get their ways and we get 30M cases, we might end up with 3M dead people. 

  76. Of course people will fly. This kind of binary yes/no, true/false, it IS or it ISN't is not helpful.

    HOW MANY PEOPLE WILL FLY. What's the seat-mile stat? What's the revenue? How is it comparable to previous statistics and at what recovery rate? 

    I predict we will not see total seat-miles over the previous high until 2025.

  77. 4000 US dead by end of day next Friday, 10,000 the following Friday. Another one of my low-information doomsday predictions, like when I said we'd have 1000 by this Friday.

  78. Did people fly back in the middle of 2016? Boeing was 131.

    Boeing went from 59 to 33 in 2001. When did it hit it's low? 2/5/2003 (25.84).

  79. FLights returned to normal once the no-fly ban from 9/11 was lifted. It's not like everyone was sick or something (that feels important to point out now). The difference from 2001, and to a large extent 2008, and now is stimulus NOT "VALUE."

  80. The USA is now #1 in COVID-19 cases according to Wikipedia:

  81. Drudge reporting "shock" claim of 80,000 potential US deaths.

    This is only shocking in how low and short sighted it is. I'm calculating 3M cases as an absolute minimum and CFR's range 5-10%. The lower end means we have every sick patient covered so expect the higher end as hospitals triage older patients (a.k.a. "play God"). 10% x 3M = 300k deaths. This is a minimum figure, IMO.
















  82. ?US is officially the CV case count leader.

    More winning!

  83. Local hospital update (NNJ); 18 on ventilators, 15 of those between 20-40.  Another one died today age 30 and had no comorbidities.  

  84. That's up from eight yesterday and two deaths.  The lack of PPE is criminal and anything similar in manufacturing would be an OSHA violation that would close the plant down.   

  85. Bad news. Tokyo moving toward a lockdown after a flareup in Coronavirus cases.  There was a 3 day weekend last week and it was unusually warm and sunny so EVERYONE was out and about. It also happens to be Sakura blossom season so — you do the math.  

    40 cases 2 days ago, 47 cases yesterday.

    Funny how they suddenly start reporting cases AFTER the Olympics gets postponed. Hmmm… 

    Anyways, we are not over this by a longshot.

  86. Asshole trying to talk-up the stock market and blame the previous administration for the lack of PPE while doing nothing to get PPE for healthcare workers.  Disgusting and criminal.  

  87. Trump must be an alien or android to be able to stand in front of the world and say over and over what great things are happening when people are terrified and suffering. 

    Hes gonna look pretty stupid if he cant find a way to hide the truth for the next two months.

  88. I say he is a sociopath but then people here will object to the language :-)

  89. I wonder if this is significant:

    Nembro, in the province of Bergamo, is the town most hard hit in per capita terms by COVID-19. Currently the town has 31 deaths attributed to COVID-19. But when the two authors looked at the total number of deaths registered in the town in January, February and March and compared it to the average for that period in previous years they found the number was dramatically larger. 158 deaths have been registered in the town during that period this year compared to an average of 35 in previous years.

    The math is simple: the average of 35 plus the 31 COVID-19 deaths gets you to 66. But the town has recorded almost 100 more deaths on top of that. As the authors say, “The difference is enormous and cannot be a simple statistical deviation.”

  90. BDC: I think we can now officially call the US COVID-19 response a Trumpian buttfumble.

    The reason that I'm not calling the virus spread as high as you are is that we did, finally, start doing something about it on March 20. The number of cases was on about a 3-day double, and I estimate the cases 20 days ago as having been (actual) between 35,000 and 75,000. Big spread but it depends on the actual morbidity rate. In any case we probably had about 25 times as many cases on the 20th when we started shutting things down. So somewhere between 875,000 and 1,875,000. Now where the voodoo comes in is guessing what the doubling period will be with shutdowns in place. We haven't done enough testing to have any idea, so it's all guesswork. But most parts of the country, the shutdown is partial at best. I think we can get some idea from looking at Italy. They started restrictions on March 8, but then they went full lockdown on March 11, something we have yet to do. However, we can get some idea from looking at new cases starting on March 16 through now. If we do that, then we find that their growth rate has become 11.44% per day. So if we apply that growth rate to our numbers for the 20th, we get 1.915 x so guessing we have between 1.7M and 3.6M cases today. So either the death rate is higher and the low end of total cases is right, or it's lower and the higher cases is right, but either way we end up with about 58,000 dead by April 15th. What we do between now and then will determine what happens after that. I would like to see a total shutdown nationwide for two weeks. If we do that, it should flush out most symptomatic cases. Alternatively, we could say fuck it, let everyone get it, at some point most people will have had it and gotten over it, probably by July. Instead of $6T in stimulus, they could just buy one million funerals for $5 billion, and call it good. The downside to that is the 20 million people that will be in the hospital. But hell, if we let them die too then that's still just another $100 billion, still a hell of a lot less than $6 trillion, and it would likely put social security back in the black for another couple generations.

    Tommy – Trump already looks really stupid. In November, a political ad of Trump's coronavirus press conference utterings will be a priceless asset for Joe Biden.

  91. If you think about it, CovID-19 is playing out a lot like the climate change issue except at 1000 times the speed.  Coastal cities getting affected first. Even the goalpost shifting is similar.  We've moved from outright denial, claims of it being a Chinese hoax, just the "flu",etc.. to "OK its happening and its bad, but is it really worth sacrificing our economy to deal with it?" phase in a matter of days.  its a good preview of how climate change will eventually play out.

  92. The New Travel Document: Photograph of an Empty Plane

  93. On Coronavirus, We’re #1

  94. Oh no! The famous "Stock trader guy" comes down with coronavirus.  If thats not symbolic for he markets, I don't know what is:

    "Most photographed" Wall Street trader tests positive for coronavirus

  95. dawgdaddy I hope you're right though I fear for the worst. I'll run your assumptions through my numbers too (I love to play with statistics anyhow). I'll report back on the theory. As you point out the unknowns unknowns are the complicating factor where there's nothing to do but guess. Personally I favor the "chicken pox party" over incompetently trying to over up the fact this is essentially what we are doing anyways.

    Here's some levity on it all. "Recessions cancelled, huh?" …. "So canceled"….. hilarious!!

  96. I say he is a sociopath but then people here will object to the language…


    I know we try to avoid political discourse in this chat… but that is something that has been clear (based on his various public comments and interviews) since the 90's? Many CEO's are borderline psychopaths but it probably is not the best personality trait for a President.


  97. Phil / AVGO – I have a 1/3 position on this ( maybe a bit more) looking at the following to add to this.  

    20X Jan '22 $230 ( 55) / 320 ( 22) with a $200 putter at $40 Any feedback on this?  Thanks

  98. Here's tonights update:

    As a result of the ban on elective surgery, and hospitals limiting traffic, doctors are literally going out of business. Closing shop since they can't cover overhead, laying off staff. Tonight I'm hearing about docs that are employed by hospitals being told they will have to take a 50% pay cut and continue to work through this outbreak. What kind of bullshit system is this??  I realize the economic impact isn't selective, and someone has to take a haircut here, but how and in what world does this get better if we let loose the doctors, then nurses, and the people they support??  There won't be bailouts for them, they have student loans, homes, families, and most of them are willing to contribute despite the risk. They are going to work with inadequate protection for themselves and now being asked to sacrifice income that many cannot afford to lose.  Where is the line??  Apparently there isn't one. 

    I would not be surprised if people start to avoid healthcare careers after this. Who in their right mind would want to be around for this the next time it happens??  As it is everyone thinks doctors are a bunch of overpaid idiots that don't know more than Susan on Facebook with her elderberry and essential oils. That is until you are on a ventilator and your options become Susan taking care of you or that guy/gal with the expensive degree that meant nothing to you last week. 

    Oh, and many of my colleagues are working on their wills and getting affairs in order…just in case the lack of protection at work results in their demise. These people are in their 30's and 40's for the most part. Can't isolate because they are now "essential" while everyone else is going about life like not much is going on. F this.


    Rant over.

  99. Dawgy – First if we end up with 20M people in need of hospitals, it won't just be old people who die! It has been the case in Italy because they decided early to triage cases. But in many places, the percentage of young people needing ICU is high. Maybe they have a higher survival rate in ICU, but if there is no ICU, they die too. So it might actually make social security worse because maybe 10M people are taking off the workforce and then we would have to get more immigrants to fill in these jobs! The GOP worst nightmare – fewer old people and immigrants to replace the younger people. Hopefully we don't get there or Trump would end up in a page of history with some very bad names!

  100. Jeffdoc – I think that clearly our healthcare system (the best in the world?) will need some serious evaluation. Might be time to think about the high cost of medical education as compared to the needs of the system. And then some structural changes to the system to improve coverage, prepare for the next crisis and what role the government should have in managing care. I am worried about these rural zone where private hospitals close doors because they are not profitable for example. These decisions can't be made solely around money! Is healthcare a necessity or a privilege?

    In the meantime, I know the thoughts of many here are with the nurses and doctors in the frontline of these pandemics! And for now, the best we can do for all of them is to stay home and/or follow safe social distancing.

  101. jeffdoc – Thanks for what you do. Godspeed to you and your colleagues.

  102. I think I need to start putting <sarcasm> notes on my posts so you guys know when I flaming what seems to be the mentality of the current Administration to prioritize economic activity and a rush to get back to business ahead of undertaking an appropriate response to a really very serious health emergency. Frankly I do not think the Federal government and most state governments really understand the nature of the threat, and what can happen if they let things get even more out of hand than they already are. 

  103. Morning (not looking so good).

    85,000 US cases and still no testing – we blew past Italy and Jeff is, of course, right – How does a financialpackage not address medical professionals to make sure they don’t have financial issues on top of everything they are risking in order to keep society together?

    That’s appalling!

  104. As an example, Gov Doucey in AZ finally issued guidance about shutting down non-essential activities. But when you read through what the state of Arizona includes as "essential" it includes "golf courses", "construction" and "business operations". So what isn't essential? Dine in restaurants, bars, events. This kind of thinking isn't going to get it done. 

  105. Migrant Farmworkers Whose Harvests Feed Europe Are Blocked at Borders

  106. Citing virus, EPA has stopped enforcing environmental laws

  107. Cannabis finds its moment amid coronavirus outbreak


    Ignore this user

    Phil / AVGO – I have a 1/3 position on this ( maybe a bit more) looking at the following to add to this.  

    20X Jan '22 $230 ( 55) / 320 ( 22) with a $200 putter at $40 Any feedback on this?  Thanks

    Phil / Reposting you may have missed this earlier 

  109. Well now we know why the U.K. started to take the virus seriously: Boris Johnson is self-isolating after testing positive for the coronavirus