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Wednesday Weakcovery – Does $500Bn Even Help Anymore?

dc gifs Page 2 | WiffleGifAnother $500Bn is being thrown on the fire.

Not that we don't need it, our economy is on fire and our people are in peril but here we are, after being locked into our homes and out of our jobs for over a month and WHERE are the stimulus checks?  Very few people have gotten their promised $1,200 so far and almost no small businesses have gotten their Paycheck loans, which were meant to allow them to pay their employees -that's what Congress is supposed to be doubling down on this morning but what is preventing 75%-80% of this money from being misdirected to big businesses as well?

PPP vs SBARepublicans had initially wanted only to replenish the small-business fund (which they looted), while Democrats wanted to also boost money for hospitals, testing, food stamps and state and local governments. Although under pressure last week from some centrist Democrats uncomfortable with delaying the small-business aid, Democratic leaders saw several of their requests met in the emerging deal.

It took two weeks for the money allocated in March to reach the banks and then it took only 3 days before the banks ran out of money and the Republicans act like that's shocking but the money is supposed to cover 2 months of salaries and rents and utilities and small businesses employ 50% of the people in this country and those people earn $6Tn a year so $500Bn a month so salaries alone for 2 months are $1,000Bn so STOP BEING SHOCKED THAT $350Bn WASN'T ENOUGH MONEY!

F'ing MATH people – look into it….

Meanwhile a lot of businesses, in good faith, hung onto their staff and kept paying their bills because the President assured them those bills would be covered and then the first round of loans was completely inadequate and now the 2nd round of loans is still inadequate and I doubt many small businesses can afford to keep paying their staff for 2 months based on empty promises – so look for lots more layoffs.

“People are feeling like they’ve lost everything,” CNBC quotes Allie Fleder, chief operating officer at SimplyWise, as saying. About 30% of those who thought the money would not be enough said they planned to look for part-time work. Another 16% said they would borrow from family or friends, 15% would sell assets, 15% would apply for unemployment insurance, 14% would withdraw money from their retirement accounts, and 10% would seek a bank loan.

2018 Small Business Trends | Guidant FinancialThe problem with the loan program, in the main, is that it favors big businesses, who have big relationships with banks and got to the front of the line for their loans of up to $10M for up to 100 employees so let's say those employees made an average of $40,000 x 2.5 months is $100,000 per employee is $10M for any company over 100 people and $300Bn is enough to cover 30,000 businesses in the US who have over 100 employees.  

Unfortuntately, there are 30 MILLION small businesses in the US so there was never a chance that this program was going to actually help people.  We already know Trump doesn't really care about the little guy and, as Stomy Daniels warned us – it's no surprise that Trump is inadequate here as well.  

As usual, Trump's attention goes to the Top 1% and it didn't have to be that way.  80% of the employees in the US are paid through ADP, Paychex or one of the other payroll services and all the Government had to do was pick up the tab on those employees for 2 months and then set up an application process for anyone they missed and the whole thing would have been taken care of and EVERYBODY would have gotten their paychecks.    THAT is what you do when you actually want to help people.  

A Visualization of the CARES Act | Committee for a Responsible ...

Unfortunately, the Trump Does Not CARES Act only set aside $290Bn for direct payments to workers who would be missing $500Bn in salaries each month and the rest of the money aimed at individuals was set aside for Unemployment – which the Government is obligated to pay for anyway as it's an INSURANCE PROGRAM that you paid for with money that was taken from your paycheck – that's not a "gift" from the President!  

Notice that the $600Bn for Small Businesses, which includes what a normal Small Business owner would call a Big Business, with more than 100 employees, include $170Bn (28%) that is really for "large companies".  Airlines are large companies too so that's really $770Bn for large to BIG businesses and $430Bn for small business but, as noted above, 30,000 of those businesses (the Top 0.1%) require ALL of that money and they are the ones that have bookkeepers and CFOs and the relationships with the banks to make sure they get that money before your banker even has a chance to look at your application.

That's why the money is already gone and this next round will be gone too.  Good luck at your bank!

Right now, Larry Kudlow is on CNBC saying that the Payroll Protection Program was "such a success" that they ran out of money.  How ridiculous is that?  A success would have been having the right amount of money allocated in the first place to actually do what the President promised he would do.  Like everything Trump does – this program benefits the Top 0.1%.

Take Airlines, for example, Airlines are getting $75Bn, which is 3.3% of the aid yet Airlines only employ 750,000 people (including freight) out of 165M or 0.0045% so they are getting almost 1,000 (ONE THOUSAND) times more aid per employee than the rest of America.  

And it's the rest of America that is paying for all these bailouts.  The Federal Government, last year, collected $2.9Tn from Individuals, which was 83% of the $3.5Tn the Government collected.  They collected just $230Bn (6.5%) from Corporations much of which was from small coprorations (small businesses that are incorporated) as well.  

So, to summarize the situation very simply, over 2/3 (66%) of the money the Administration is borrowing is going to the Big Businesses that pay just 6.5% of the taxes along with, somehow, $300Bn in additional tax breaks, which will put their forward contributions below ZERO.  Of the 1/3 going to "small business" 90% of that money is being sucked up by the 30,000 (0.1%) businesses that have over 100 employees while 29,970,000 smaller businesses are as likely to get a loan as win the lottery.  

I don’t have to tell you things are bad. Everybody knows things are bad. It’s a depression. Everybody’s out of work or scared of losing their job. The dollar buys a nickel’s worth. Banks are going bust. Shopkeepers keep a gun under the counter. Punks are running wild in the street and there’s nobody anywhere who seems to know what to do, and there’s no end to it. We know the air is unfit to breathe and our food is unfit to eat, and we sit watching our TVs while some local newscaster tells us that today we had fifteen homicides and sixty-three violent crimes, as if that’s the way it’s supposed to be.

We know things are bad – worse than bad. They’re crazy. It’s like everything everywhere is going crazy, so we don’t go out anymore. We sit in the house, and slowly the world we are living in is getting smaller, and all we say is: ‘Please, at least leave us alone in our living rooms. Let me have my toaster and my TV and my steel-belted radials and I won’t say anything. Just leave us alone.’

Well, I’m not gonna leave you alone. I want you to get MAD! I don’t want you to protest. I don’t want you to riot – I don’t want you to write to your congressman, because I wouldn’t know what to tell you to write. I don’t know what to do about the depression and the inflation and the Russians and the crime in the street. All I know is that first you’ve got to get mad. (shouting) You’ve got to say: I’m a human being, god-dammit! My life has value!’

So, I want you to get up now. I want all of you to get up out of your chairs. I want you to get up right now and go to the window. Open it, and stick your head out, and yell: ‘I’m as mad as hell, and I’m not gonna take this anymore!’

I want you to get up right now. Sit up. Go to your windows. Open them and stick your head out and yell – ‘I’m as mad as hell and I’m not gonna take this anymore!’ Things have got to change. But first, you’ve gotta get mad!…You’ve got to say, ‘I’m as mad as hell, and I’m not gonna take this anymore!’ Then we’ll figure out what to do about the depression and the inflation and the oil crisis. But first, get up out of your chairs, open the window, stick your head out, and yell, and say it:

‘I’m as mad as hell, and I’m not gonna take this anymore!’

Yell it out the window tonight and every night at 6pm that you don't get your stimulus check and you don't get a virus test and you aren't able to go out of your home or see your children.  Yell it until the media notices and then, MAYBE then, they will finally ask the average Americans (not the idiots at the pro-Trump rallies), what we are so mad about….


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  1. Good morning All!

    It's bound to be an interesting webinar today! Join Phil at 1pm here:

  2. Good Morning.

  3. Good Morning

  4. Good morning! 

    825,000 virus cases in the US with 4M tested and 45,356 dead increasing now at a rate of 2,500 per day so well over 100,000 by the end of May and will they still be saying it's no worse than the flu?  It's worse than Vietnam – that's a better comparison!  Sadly, it's mostly killing the very same people who lived through Vietnam…

    Other than that, we have a nice rally off the anticipation of another $500Bn – since the first $500Bn didn't find it's way to the people, maybe giving another $500Bn to big businesses will help?  If not, the next $500Bn will certainly do the trick, right?  

    Mount And Blade: Rocky Horror Picture Show Anticipation Gif

    Meanwhile, today is all a matter of perspective:

    Valuing the S&P 500 one more time

     As a base case I assumed a 40% drop in first year earnings, comparable to the financial crisis, and an 80% recovery to pre-virus forecast earnings in 2024.  This combination produces an estimated intrinsic value for the index of 2,492.

    Valuing the S&P 500

    I'm more in the 2,850 camp because of the stimulus (F small business, we play the market!) but he's at the bottom of our expected range so I certainly don't disagree.  

  5. /RB just hit 0.70 from 0.55 yesterday!  

    That's the old contract.

  6. Phil / Hedges 

    i'm having some issues with my SDS hedge spread. 

    I have a mix of Jan '21. $20/$30.  and Sep '20 $15/$25.

    As the S&P swings lower, my short calls lose money faster than my longs can make it up.  Then as we bounce higher, the inverse is true, with my short calls taking longer to recover than my longs.  Is this just the nature of the beast on the short term?  i suppose i should only be focusing on these hedges if we enter a real downturn or make a major rally?


  7. Potter/SDS – The options have almost no volume and a bid/ask spread of about $4-5. The prices you are seeing aren't real. They are (probably) using the mid-price. I get a shock every morning when I look at the prices of my hedges until I realize they aren't actual prices anyone paid for. 

  8. SDS/Potter – As Daveo says, the prices you see are not real, they are a snapshot of an auction at some random points in the process and have little to do with the final settlements.  The Jan $20/30 bull call spread has a Delta spread of 0.74/0.53 so you should gain or lose roughly 0.21 for each $1 SDS moves up or down but, as SDS goes up, the Delta of the $30 calls will go up and that will exaggerate their gains while, on the way down, the Delta will go down and they will lose less than the $20s. 

    NONE of that matters if this is a hedge because the hedge is simply an insurance contract that says you will be paid $1 for every $1 SDS is over $20 on Jan 21st of 2021 up to $30, at which point you will owe the short $30 caller as much as you make.  That's it – that's the contract.   No matter how much you stare at it every day – that's what's going to happen in the end.  

    And, don't forget, ideally the contract will lose all it's money because that will mean the S&P is over 2,850 at the end of the year and your longs (the things you were insuring) are doing well.

  9. And there it is ; USCF announced today that it will execute a one-for-eight reverse share split that will be effective for shareholders of the United States Oil Fund, LP (NYSE Arca: USO) after the close of the markets on April 28, 2020.  Shares of USO will trade at their post-split prices on April 29, 2020.  

    Will it be below $2 then ?

  10. LB halted —Sycamore trying to get out of Victoria Secret deal

  11. USO split was expected.  

    LB/Savi – Oh that would be very bad!

  12. Syc cancels plan to buy LB….booo

  13. Another 20Mb build this week:

    • EIA Petroleum Inventories: Crude +15.0M barrels vs. +15.1M consensus, +19.2M last week.
    • Gasoline +1.0M barrels vs. +3.6M consensus, +4.9M last week.
    • Distillates +7.9M barrels vs. +2.8M consensus, +6.3M last week.
    • Futures (CL1:COM +43.2%)
    • Wells Fargo tackles the question if rail cars can be used to store excess crude oil with about 100K cars sitting idle in the U.S.
    • "The answer is technically, yes. Railcars can store crude for up to 5 years in a controlled temperature environment. However, as expected with the shipping and storage of hazardous materials, it must follow strict regulatory guidelines. Given the excess railcar capacity, inquiries surrounding this potential storage option have been understandably high and while a seemingly great idea, we believe that those inquiries underestimate the cost and complexity of the storage requirements. With the expected short-term aspect of the need coupled with the current economics we would expect little to no incremental benefit for the railroads, equipment manufacturers, and larger leasing companies."
    • In particular, the firm notes the significant liability issues of storing crude on private tracks.
    • Within the rail supply sector, WF has Overweight ratings on Canadian Pacific Railway (NYSE:CP), GATX (NYSE:GATX), Kansas City Southern (NYSE:KSU), Norfolk Southern (NYSE:NSC) and Westinghouse Air Brake Technologies (NYSE:WAB). Neutral ratings are lined up on Canadian National Railway (NYSE:CNI), Union Pacific (NYSE:UNP) and CSX (NASDAQ:CSX). Underperform ratings are set on Greenbrier (NYSE:GBX) and Trinity Industries (NYSE:TRN).

    You can see why we're running out of storage!  

    • Shares of L Brands (NYSE:LB) have been halted on reports that Sycamore Partners wants to terminate its transaction with Victoria's Secret.
    • Women's Wear Daily reported over three weeks ago that the deal was at risk due to the pandemic.
    • L Brands peeled off 20.73% before the trading halt hit.

    That's what we get for not reading Women's Wear Daily! 

    This is why TOT is my favorite:

    • Total (TOT +4.6%) says it was awarded solar power generation projects with ~135 MW total capacity in France's latest round of tenders awarded by energy market regulator CRE.
    • The largest project in the group is a 50 MW ground-mounted solar project at the site of Total's former refinery in Valenciennes in France; it is expected to be completed in 2022.
    • Another 25 MW capacity project, also expected to be completed in 2022, will be constructed near the company's Grandpuits refinery in the Paris region.
    • Data from JPMorgan Chase (JPM +2.0%) suggests that in the rush to get a loan from the $349B Paycheck Protection Program, which was set up to help small businesses during the COVID-19 pandemic, the bank's largest customers had an advantage over smaller ones.
    • At JPMorgan's business banking unit, which serves smaller firms, only about 6% of 300,000 customers that applied for the PPP loans managed to get one, Bloomberg reports.
    • But almost all of the 5,500 larger customers of its commercial banking business that applied for the loans received them.
    • JPMorgan said it provided 26,500 loans to small businesses through it small-business and commercial units, with more than 60% going to companies with fewer than 25 employees.
    • Restaurant chains including Shake Shack, Ruth's Hospitality, and Potbelly received loans through JPMorgan; Shake Shack, though, on Monday said it's returning the money.
    • Treasury Secretary Steven Mnuchin, at last night's White House coronavirus briefing, said the PPP loans aren't intended for publicly traded companies that have access to capital.
    • “We prioritized getting these loans to as many small businesses as possible,” JPMorgan spokeswoman Anne Pace told Bloomberg.
    • Previously: JPMorgan, BofA are sued over SBA payroll loan program – Bloomberg (April 20)
    • The industrial property segment showed the strongest rent collection in April, with REITs receiving an average of 99% of their typical rents, according to a NAREIT survey of 54 listed equity REITs.
    • Not surprisingly, the retail sector was the weakest. Shopping center REITs, which typically own grocery-anchored strip centers, collected 46% of their typical rent in April; mall rent collections were less than half of shopping centers and free-standing retail was somewhat higher than shopping centers.
    • Office sector rent collection for April was 89% of typical rents.
    • Health care REITs collected 86% of typical rents, with medical office buildings experiencing declines in April rent payments and senior housing and skilled nursing rent payments being relatively stable.
    • The REITs responded during the survey between April 8-15.
    • Data center, diversified, infrastructure, and specialty sectors weren't included because their survey participation wasn't sufficient.
    • "If there's no revenue incoming and there's no money investing, the company is basically insolvent and out of business," says Sherwood Partners co-founder Martin Pichinson. "We basically come in and clean up the messes."
    • Pinchinson says his firm usually does two-to-four of start-up wind-downs per week, but is now doing two-to-five per day.
    • "This is the great unwinding," says Pichinson. "We don't know what's happening, but we do know everything we believed in is changing. Everything we thought to be true may not be true."
    • Pichinson doesn't reveal what sorts of companies he's working with at the moment, but businesses which rely on folks leaving their home are in trouble, while those such as food delivery, remote conferencing, and telemedicine are in high cotton.
    • Cannabis Global (OTCPK:MCTC +42.9%announces the licensing of several patent-pending technologies to Sacramento-based BudCars Cannabis Delivery Services, in conjunction with Sugarmade (OTCQB:SGMD +10.0%), for use in cannabis edibles.
    • Under the terms of the licensing agreement, Cannabis Global will supply technology and licensing rights to BudCars, which will be responsible for the manufacturing and distribution of cannabis edible products to its delivery customer base.
    • Additionally, BudCars is being granted rights to manufacture and distribute products, within the state of California, under BudCars' existing cannabis licenses.
    • Broadcom (NASDAQ:AVGO) has again boosted the size of its debt tender offers after announcing early results.
    • It's raised the maximum tender cap to $4.06B from a previous $3.75B, tendered for 3% senior notes due January 2022; 3.125% senior notes due April 2021; and 2.2% senior notes due January 2021.
    • Of that $4.06B, $351M may be used to purchase the 2.2% 2021 notes (up from a previous 2021 cap of $250M).
    • As of the early tender deadline yesterday evening, about $3.986B in tender offer notes were tendered and not withdrawn, and no further notes will be accepted for purchase.
    • Shares are up 3% premarket.
    • Citing a long-term monetization opportunity, Oppenheimer upgrades Snap (NYSE:SNAP) to an Outperform rating from Market Perform.
    • "While we previously expected 2Q revenue growth to remain nicely positive (+12% estimate vs. +15% through April 19), pre-COVID-19 revenue +58% y/y in Jan/Feb suggests SNAP has overcome its monetization issues. Moreover, SNAP's revenue/hour gap vs. peers remains ~55%, suggesting a multi-year tailwind if user metrics remain stable," updates Oppenheimer.
    • Snap Select video ads are also called promising.
    • The firm sets a 12-month to 18-month price target of $18 to rep huge upside potential.
    • Previously: Snap +13% as Q1 revenues beat easily, users grow 20% (April 21)
    • SNAP +20.75% premarket to $15.02.
    • Tyson Foods (NYSE:TSN) says it plans to indefinitely suspend operations at its Waterloo, Iowa pork plant this week due to COVID-19 cases (source: press release).
    • The facility has been running at reduced levels of production due to worker absenteeism and will stop production mid-week until further notice.
    • The facility’s 2.8K employees will be invited to come to the plant later this week for COVID-19 testing.
    • "The closure has significant ramifications beyond our company, since the plant is part of a larger supply chain that includes hundreds of independent farmers, truckers, distributors and customers, including grocers," notes the company.
    • TSN +2.18% premarket to $63.26
    • Earlier this month, the CEO of pork producer Smithfield warned about the impact of plant closures on the US food supply.

  14. June and July CL contracts are both closing transactions only  along with associated options

  15. Hi Phil, I'm still struggling with this CMG strangle that I'm in.  Right now I'm short 2 2021 $580 puts, and 2 2021 $800 Calls, and 1 2021 $900 call.  And need to essentially have all of the premium expire worthless to break even.  I was short 3 puts, but I closed one out a week ago, thinking that the rally was beyond overdone, so I could pick up some ground on a retrace, but then CMG beat earnings and pulled guidance, and the stock is up 80 points, 10%.  WTF!   They reported $3 per share in earnings, on what is now an $867 stock, with a 72x trailing PE!!, ahead of a year that will likely result in a significant loss.  Who say's trading is hard?  Should I reposition?

  16. BDC / Pharm / Dawg / (Phil) 

    I took a hit yesterday on my fun smaller portfolio (thanks USO!) so I'm all ears if you have any cheeky gamble plays in mind ;)

    (I know, I know) 

  17. Short puts on story stocks (TSLA CMG etc) do not balance out short calls

    short calls can go to infinity (and take your margin with them)

    Especially since you (I) end up thinking a rally is overdone and then it runs up another 100 points in a day and maybe another 100 the day after


  18. Bertll, I heard, thats nuts. GS wants 5m in your trading acc to trade CL im sure thats the case with most bro. now. IBKR took a nice hit too.

  19. Us and the Virus:

    Yesterday I was looking at a graphic, and suddenly I realized that the U.S is much better in comparison, yes the U.S has 46,000 deaths but it has most of the problem concentrated in 3% of the country territory, also if you compare deaths with Europe case, having a bit smaller population than UE, America has the deaths and infected equivalent of Spain and Italy ONLY.

    If we assume that the peak of the curve is already passed in TX and Alaska and many others states, the situation at the end simply by this will be much better than Europe, without taking in the picture the massive amounts of cash being injected.

  20. Virus dings AT&T results, telecom withdraws year guidance

  21. Many small businesses say loans won’t get them to rehire

  22. Why we can’t build

  23. Senate panel backs assessment that Russia interfered in 2016

  24. ‘Shake Shack Loophole’ Stays Open, Spawns a Washington Whodunit

  25. CMG/Palotay – Crazy moves on them – almost fully recovered.  I guess the virus is even better than no virus for CMG, right?  Wow, this market is F'd up!  Short strangles are a nightmare when they go wrong – that's why we hardly ever do them.  The $580 puts are probably good, the short $800 puts are probably good (I think CMG is way over-priced above $650) and so the $900s are probably good too.  Still, nothing is off track so what can you do other than wait and see how it settles out.  You should be thrilled its trading here – this is right in your zone after earnings – what more could you want? 

    You can't play 1-year options and freak out when the stock goes to the top or bottom of it's trading channel.  If that's what's going to happen – certainly you shouldn't be making these kinds of trades in the first place.  

    Gamble/Potter – I don't like gambles but I do like VLO, who report on the 29th and are being paid to take oil and selling it for $2 per gallon (x 42 gallons/barrel) at their gas stations.  Not that there's a lot of gas sales going on but our build today suggests that 20Mb out of 120Mb is not being used and that's only down 20% so if VLO is selling 20% less gas but making 20% more on the spread – they could be doing a lot better than expected.  I like them long-term anyway:

    For the LTP, let's:

    • Sell 5 VLO 2022 $25 puts for $4 ($2,000) 
    • Buy 10 VLO 2022 $50 calls for $13 ($13,000) 
    • Sell 10 VLO 2022 $70 calls for $7 ($7,000)

    That's net $4,000 on a $20,000 spread that's $2,000 in the money with an upside potential of $16,000 (400%).  I'll be very happy to DD on the puts and roll the $50s to the $30s (now $24) for less than $10 to widen the spread if it goes lower.  This is just our first poke.

    Oil/Kustomz, Bert – Imaging how many people were long /CL around $20 and were forced by their broker to liquidate around -$20 with a $40,000 per contract loss and the next day it was at $10.  

    Situation/Advill – We have too many open cases to have a handle of deaths.  Same goes for Europe.  I don't know why people insist on rushing to conclusions based on so little data.  Also, saying "most of the problem is concentrated in 3% of the country" is like Trump saying things were under control when we only had 15 cases in the US.  Now we have 826,248 and that's after testing just 1% of the population.

    China didn't look mostly red the first day or the first month – it began to get out of hand.  Every single dot on that map is a potential hot spot that could explode if we don't PATIENTLY wait out the virus and make sure it is essentially eradicated AND we take safety measures (testing, masks, limited gatherings) to make sure it's 100% eliminated before we jump back into stadiums, concert halls and theaters.  

  26. Oh, and by the way, the virus map is essentially the Population Density Map – nowhere is untouched:

    Map of the US showing population density by county

    This goes back to that huge flaw in the Senate, where states with low populations don't see the pressing need to help the states with high populations.

  27. And that brings us to:  Webinar Time!

  28. Webinar is starting shortly. Phil had to reboot.

  29. Sorry, technical glitch on the Webinar and Windows is forcing an update so hopefully 1:15.

  30. /RTY isn't buying this rally, a sign?

  31. rally, its just bot driven low volume meltup. My /ES target of 2797 reached, difficult to find something bullish to cling onto. Look at TWTR trading from 1:28 till 2:21, now I ask,  does that seem like normal trading?

  32. Today's volume is like 1/2 of yesterday's, and most stocks moved similar %… (an indication of bots?)

  33. mitomeio - "similar %" -> RUT is up only half as much as SPY and NAS, thus my post. Seems like poor bot orchestration or a tell of something…

  34. Thanks for the webinar Phil – It was a perfect time to listen while trimming Kurapia in the yard!  :)


  35. Nasdaq  down all day, SQQQ also down all day .. what gives? 

  36. Nasdaq/wingwalker — not sure what you're looking at, it's been up all day (QQQ over +3%).

  37. Not sure if it means anything, the indexes have been herky-jerky up and down with each other.  

    TWTR/Kustomz – That is strange.

    Bots/Mito – Same bot volume all the time but when the people stop trading around them, the bots become more obvious.

    Glad to be a gardening tool for you, 1020.

    NAS/Wing – You must be watching a different day than I was.  The day I'm watching saw the Nas go up 2.5%, which is pretty much the exact opposite of yesterday so, on the whole nothing has happened.

    Yep, it's a big nothing all around but still down from Monday's open at the moment.  

  38. AMZN earnings 4/30. 3000 soon??

  39. Image

    Anderson's expression says it all!  It's painful to watch but, if you can bear it:


    "During the first three weeks of April, new counties showing a high prevalence of COVID-19 cases are more suburban, whiter, and voted more strongly for Donald Trump than counties the virus hit first."

    Fig 1

    Exactly what I was saying during the Webinar.  How nice they have a study already! 

    While we continue to wait for a coherent national plan to navigate this pandemic, states like Massachusetts are beginning to adopt their own public health plans to combat this virus––before it's too late.

    The Federal Reserve can stay irrational longer than short sellers can stay solvent.



    Actually that was my idea.  I think there's no point in downgrading companies during a crisis – give them a chance to sort things out and then re-rate them.  

    I never thought we'd be in a market in which the Dow being up 500 points made for a boring day.


    This can lead to a catastrophe for USO – I might change my mind and get out.  The bargain-hunters buy USO and that forces USO to buy oil contracts which has NOTHING To do with the fundamentals of oil but drives up the price of oil briefly but USO MUST dump the contracts (as they don't take delivery) by the end of the month at any price and that dump has rules and those rules can then be taken advantage of by traders who profit off the rollover.  Given the situation – I think we'll have to dump out of USO for the duration.

  40. Phil / CARR

    just wanted to drop this back in your ear about Carrier Global Corp -

  41. Good Bloomberg article from a writer who tried to buy a barrel of oil.

    News: The doctor who led the federal agency involved in developing a coronavirus vaccine said on Wednesday that he was removed from his post after he pressed for a rigorous vetting of a coronavirus treatment embraced by President Trump.

    Cinema owners that are allowed to reopen later this month may stay closed anyway

    Here’s the latest on why the testing problem has not been solved yet

    The anti-quarantine protest movement is masquerading as a grassroots initiative, but it’s being funded by shadowy conservative groups. Most prominent is the Convention of States, which is tied to Erik O’Keefe, who has long-term ties with the Koch brothers.

    Wuhan's 11 million people are free to dine out. But they aren't


    Coronavirus threatens $500bn hole in US state budgets – typically excellent piece on the huge financial stress on the budgets of US states. On the ground this matters at least as much as anything decided in DC.

  42. Good morning!

    Nice and quiet so far.  

    CARR/Potter – I didn't know they broke out of UTX, that's why I was confused.  That means I like OTIS too but both are very hard to value as stand-alones.  CARR looks like a huge winner but UTX also spun off a lot of debt, which would not bother me in good times but you never know in times like these when that can become a bigger problem and CARR has negative cash-flow, despite the $2Bn net income – that's a bit of a concern.   They only have short-terrm, thinly traded options so, interesting though they may be – it's one I'd have to pass on as there are too many unknowns.