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Testy Tuesday – Infections Up, Markets Down Ahead of the Fed

Food pantries in New York City are turning people away.  

While we have been marveling at the returns from the S&P 500 and the Nasdaq in the past few months, more and more peoplle are starving and less and less assistance is available to help them as the virus people no longer believ in continues to rage out of control.

I don't want to be your Cassandra, my "gloomy" outlook costs us the subscribers who like to hear BUYBUYBUY to confirm their bullish bias and, these days – there's a lot of them!  Still, like the prophet, I am cursed to utter truths, yet I am rarely believed.   

One reason for that is that I operate on a longer time-frame than most people.  I'm always looking at the Future but the Future is a muky place and it's very hard to judge distance – even when the direction is very clear.  With the virus it's all been about the numbers and we could tell by those numbers that the lockdowns were ending too early.  How early?  Who knows?  Just early and then how damaging?  Also don't know – but we are now finding out the hard way.

The Food Banks, for example, are 39% closed due to lack of funding, lack of food or lack of workers in a city that has been devastated by the virus.  In the Bronx (Black Neighborhood) 87 of 174 Food Banks were forced to shut down – HALF!  When you lose a food bank you lose their donor base but you don't lose the NEED for food and people from the Bronx then have to travel to other places to get it and that puts more pressure on those Food Banks – a very bad cycle. 

New York The Food Bank provides 21M meals per quarter and the US Government has dropped $2.7Tn (so far) in direct stimulus which has (so far) made the World's top 400 Billionaires $565Bn richer since the pandemic began.  As I mentioned above, I do a lot of math and $5 x 20M = $100M and there are 27 THOUSAND $100Ms in $2.7Tn so it would take 1/27,000th of the aid (or 1/5,650th of the Billionaires' gains) to COMPLETELY solve the food problem for the poor in New York City, which has 20% of the nation's virus cases – yet they do nothing…  

Can you PLEASE write to your Congresspeople and tell them to DO THEIR F'ING JOBS!!!!  Thank you.

FloridaBut this isn't about how callous we are towards the suffering of others – this is America!  This is about our callous attitude towards human life as we throw our wives and children back on the streets long before this virus is under control to "save" the economy but, as a Florida resident, I'm not sure I find this chart very encouraging as we HAD gotten our new infections down below 500 in May and so we opened back up (with restrictions) and now we're back to 1,000 per day just two weeks later.

Is our plan to wait until we are at 2,000 per day before the Government admits it was a mistake?  This is simply not rational behavior people – not from people who want to live.  And, if it were possible that the people who want to go out and risk their lives could do so without endangering everyone – I'd have no problem with that because I don't run around knocking cigarettes out of people's mouths either and, if I were younger and thinner – I'd be happy to risk it as well BUT, what is the reality of lifting the lockdown?

TexasLast month, NO ONE was going to my local restaurant so I (a shut-in) could order food knowing that the Chef and the people in the restaurant were tested and my risk level was very low and the delivery person was probably the most dangerous point of contact – as he visited many homes.  Now, with the lockdown lifted, even limited at half-capacity, the restaurant seats over 100 people per day so there are 100 chances for the staff to become infected and pass it on – EVERY DAY and now I can't trust the whole process.  

That goes for grocery stores and everything else as well and I am not a germaphobe or terribly paraniod about the virus but I can SEE the statistics forming and they are NOT favorable at all!  

ArizonaOf course the shut-down is terrible and expensive but it wouldn't be if the $6.7Tn that's been pushed out by the Government and the Fed had actually gone to the people who needed it.  Our entire US GDP is $19Tn so $4.5Tn per quarter and we took a 50% hit by shutting things down for 3 months (we didn't even make it to 3 months) so that's $2.25Tn in real damage that could have been funded for 6 months had it been distributed properly and, by then, the virus could have been completely eradicated.  

Instead, we squandered $6.7Tn, didn't fix anything or cure anything and now we are recklessly re-exposing ourselves in an economy that is only 1/2 open BECAUSE WE DIDN'T REALLY FIX ANYTHING and, at some point, the death toll will become so great that we'll have to shut everything down again.  Yes, I'm pissed off!!! 

Coronavirus cartoons: Trump's ratings jump amid big job lossesThe stock market is rallying because $6,700,000,000,000 is a LOT of money and BECAUSE it's not going to the people who do need it – it's going to the people who DON'T need it and those people are the kind of people that put excess money into the markets, which causes the market to go higher.  It has nothing at all to do with the Fundamentals of running a business during a Recession/Depression.  

That's right, this economy is still miles away from "normal" and it's going to be a lot harder to get back to normal when 2,000 people a day are being infected in Texas and Florida and 1,000 people a day in Arizona (all above), etc.  Nationwide, we had 30,000 new infections yesterday, that's running at a rate of 7.3M more infections in a year but that's WITH lock-down protocols still in place. 

113,125 Americans are dead already and we passed our 2,000,000th infection this morning and only 773,509 people have recovered, only about 1/3 of the people infected so far have had outcomes and, out of those people, 14.6% are dead.  With 2,027,438 total infections that's 1,253,929 people who are still infected and, potentially, 200,000 more deaths at the current rate and that's going to double in 12 months – even if the infection rate stays flat but, as we can see from the charts above and from the national count – it's not going to stay flat.  

Without the PPE and without simply saying to certain businesses like Amusement Parks, Movies, Sporting Events, ect (sorry DIS) - we are NOT going to get on top of this virus and, ultimately, that is NOT going to be good for our economy.  What it will do is give Mr. Trump a chance to get his hands on more aid money and make himself (#72 on that list of Billionaires who got $565Bn richer during the crisis) and his friends even more money while everyone else gets much, much poorer.  

And the debt for all that stimulus?  Well that's going to be your problem – not his…

 

 


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  1. Good Morning.


  2. Good Morning.


  3. CHK = uh oh. The ugly side of pennystalkings


  4. I cant imagine why anyone would be worried trump is currently testing his plan for America in brazil.

    Reporting of cases and deaths is cancelled and hes making lots of money selling hydroxine cloroquine every thing is great.


  5. I don;t doubt that cases are going up due to relaxed restrictions. How much more testing has been happening though? Is a part of the increase in daily cases due to more testing "discovering" more cases that otherwise would not have been known? 

    I thought the whole premise was that this virus is so infectious nearly everyone will be getting it eventually we just wanted to "flatten the curve" so hospitals don't get overwhelmed, so really the metric we should be looking at is some measure of whether hospitals are becoming increasingly overwhelmed or not? 

    Just my thoughts, could be wrong and more than happy to be corrected on that! 


  6. TheBug/crs101010 – yes, the denominator (ie the amount of testing) is a part of it. This (https://covidtracking.com/data/us-daily) is currently the best data resource. The proportion positive out of those tested is currently settled at 4 – 5% – but at the onset it was around 45%, and during the April peak, 25%.


  7. there was a right way to handle the virus – Iceland, New Zealand, Taiwan, low total cases and 0 new cases.  US +19000 yesterday. It's not like we needed to invent the way forward, instead simply look at what worked.


  8. CRS . Virus – The premise was that we would flatten the curve, and yes many would be infected but less would die because we were taking the  time to prepare…..  We have not prepared – testing really needs to be at 2 to 3 million per day with a turn around of 24 hours or less.  Contact tracing needs to have at in the order of 150K to 250K people trained and PPE should be readily available.  Instead Trump has managed to fail at implementing any of the above…. PPE still not readily available.  testing at 500K a day is not adequate, contact testers are still not out in full force …..  He is now resorting too lying about the numbers – undercounting deaths ( by probably 30 to 45 K) .  He will ram through a virus before November wether it;'s ready or not and the consequences will probably not be felt for years….   


  9. Iceland, New Zealand, Taiwan – Complete cooperation from its citizens…. :(


  10. Got a note from Bayfield County that nonresident people should not come here ie summer residents because the rural hospitals cannot handle the influx of new cases "that they are bringing with them." However, there are not stop out of state license plates here and I have had bookings for our lake place through Airbnb. They are mostly Mpls people escaping the hassles there. Our food banks are getting loads of donations and we are still serving people who need help no questions asked. Our stores are very generous with close to outdated bake goods etc. So far living in the sticks has been helpful.


  11. 1020 Don't forget tracking. They have trackers who contact people who have been exposed. As far as I know nothing close to that has been started here.


  12. Hi pirate – that is an All American…non starter….. :(


  13. 1020-They did it with AIDS. Remember when Bush SR. sat on his hands and did nothing? They got on the bandwagon late, but once the hospitals got under pressure they had no choice but start tracking. Where there is a will, which is missing here now.


  14. Phil – I know you get lots of AAPL questions but…

    I have 6 2021 180/220 spreads which I feel like I should roll up (can close for $36.70/40) — but I also have 3 2021 short 360 calls which I feel like I am just being stubborn by holding still.  Now that it's at 340 — should I roll those? close out? hold? thanks for any insight


  15. Tracking/pirate – yes, but tracking an STD is a lot different from tracking a fast-moving virus. But the US seems to be using the STD technique with covid19.


  16. "But the US seems to be using the STD technique with covid19"

     

    Best line of the day!    

    :)


  17. Good morning! 

    Well the Nasdaq is green already, /ES holding 3,200 so not a big deal of a downturn. 

    CHK/BDC – Damn, why did we not buy puts yesterday?  

    Fools and money…

    Testing/CRS – No significant increase in testing.  Numbers are what they are.  Yes, hospitals are getting overwhelmed again in some places.  In the US, we are still mostly identifying new cases BECAUSE people show up at the hospital – that's when we find out someone is infected so we're a bit late out of the gate in treatment.  That's why we lead the World in deaths – lack of adequate health care and none at all for 10% of our population.  

    Lack of PPE and unwillingness to enforce restrictions is why we lead the World in infections.  Here's Trump's "Asian" virus:


  18. How many here traded during the dot com bubble, this feeling is awfully familiar. Important question, is it 95 or 2000.


  19. HanesBrands appoints 25-year industry veteran as new CEO

    HanesBrands (HBI +0.2%) appointed Stephen B. Bratspies as CEO, effective Aug. 3, 2020, post Gerald W. Evans Jr. announced retirement to his 37-year career.

    Mr. Bratspies has an experience of more than 25 years in retail, digital and consumer product leadership with latest being the chief merchandising officer at Walmart (NYSE: WMT) where he managed $330B in sales.

     

     


  20. Phil from your work with 3M on masks any idea when they may actually start to show up in hardware etc stores again so civilians can get them?


  21. I started trading in the dot com bubble and didn't have a clue what I was doing. I'd have to call TD to figure out what I had done and how to get out of trades. I even made mistakes on the symbols and end up making  money. It ended up I made so much that it blew my spouses bonus he got for paying taxes! Boy talk about upset. Anyways, I was making more on the stocks than I was working and this was in Fla. I had a stock broker I worked with and he was new and was very helpful. He never called me to sell a stock when it was tanking so I got all over him for that. It was a good reminder to keep your eye on the ball and TAKE PROFITS. They fought with me when I'd say sell, "NO you don't want to do that." But I was persistent and sold when I made enough. :o ts of lessons learned. Then I found Phil and Happy Trades. Anyone been with Phil that long ago?


  22. Sorry guys, swamped at work this morning! From our point of view, we can see business picking up from our existing customers so that's a decent sign.

    On the other hand, plenty of signs that our policy in the US which lacks coherence is leading to an increase in cases and projections for deaths are no looking good. This is what happens when the response lacks coherence for lack of leadership! Look at New Zealand – great prime minister who is not afraid to tackle big problems!


  23. Markets / Phil – Someone tweeted yesterday that the Fed is now basically destroying fundamental analysis. Money is flowing to companies that are basically bankrupt or should be bankrupt. As you mentioned, money is not going to the people who need it and fail to see how that works in the long run – sure it helps the markets now but earnings will still suck in coming quarters so what's next then to boost markets – another $6T? 

    Looks like someone will inherit a mess in the next election! History repeats itself except that it took only 4 years to mess up the previous work instead of 8.


  24. Virus…From a hospital admission standpoint the situation is variable. But, it does seem that things are picking up. Our census has doubled in the last 16 hours!!  Not everyone here is dying, but they are ill enough to warrant admission. 

    Arizona enacting emergency plans as they are filling ICU's and maxing out use of ECMO machines. 

    We aren't done with this yet. 


  25. SPG/Phil      Have 500sh SPG (@$68) and short 5 '22 $75 calls (@ $19) in registered account (no puts). SPG hit 95, now 86. Looks as if I could roll the $75s up to $95s for about $7, good idea?

    Thx!


  26. "Happy Trades"? Phil, are you a Roy Rogers fan? Even better, a fan of Trigger? (https://en.wikipedia.org/wiki/Trigger_(horse))


  27. Why is AAPL up $11 today? Any news on them?  Thanks.


  28. wingwalker / Phil / SPG

    I did the same trade. I am short $70 calls. Thinking of rolling to $100 for $11.70.

    I also had $45 puts. I rolled it to $60 collecting additional premium based on Phil's suggestion earlier. 

    I wonder it's better to roll if the stock is trading at $90 or $70.

    sk


  29. AAPL, FAANNG at near all time highs. The whole group is dragging the market higher otherwise….

     


  30. Testing/Snow – Well it's picking up a bit but May 1-9 was 1M tests and June 1-8 is 3.3M – still very inadequate if there are 330M of us to be tested, don't you think?  We're currently pacing on testing people once every 2 years – may as well get it done with your protstate exam…

    AAPL/Coulter – Keeping the Nas green today and keeping the whole market from disaster adding 85 Dow points.  Jan $180/220 is $165/127 so $38 ($22,800) out of possible $40 – surely you can do something better with $38 than make $2 in 6 months, right?  Gotta cover the short $360s but the June 2022 $350 ($53)/450 ($21) bull call spreads are $32 so $9,600 for 3 of those to cover the 3 short $360s at $23 ($6,900) and whatever is left over when the short calls expire is your profit.  If AAPL pops $400, then you can talk about rolling or put selling but, otherwise, it's a good spread that you can sell another $6,900 against in Jan.  

    Dot Com/Kustomz – A little different because those were 100x stocks making no money and this is 30-40x stocks that are real companies but not enough growth to justify the multiple.  Doug (our Hedge Fund Manager) made a good point that Robin Hood encourages this kind of nonsense by telling people what the hottest stocks are and that puts more people in chasing them constantly – like CHK yesterday.  

    HBI/Batman – Already made a very nice move.

    NAK still groovin' 

    Masks/Tangled – Forget it.  They just turned down 35M from one of my buyers as too small.  3M only giving masks to Governments, Health Care Organizations and Charities and only 50M+ masks at a time – they don't have the staff to deal with smaller.  The glove business is nuts too – I think I just sold 40M boxes this morning to a guy I met last night.

    Good lessons Pirate.  I doesn't mean a thing if you don't take the profits.  

    Inherit the mess/StJ – At this point I think that's the GOP strategy.  They know they are going to be out so they are going to hand Biden and the Dems a flaming sack of crap to deal with and then, within 2 years, the GOP will blame the Biden Administration for failing to address the crisis.   It's a good plan!  

    Not done/Jeff – I get a very bad felling…

    SPG/Wing – Took a big hit today but we knew they were getting silly towards $100.  I would not be greedy and keep the protection – you don't know what the Fed is going to do.  Just put this in the win column as you are net $49 and will sell for $75 in 2022 so be happy with 50% in the hand and find another bush!   

    You are essentially saying:  "I have an almost sure-thing 50% gain on SPG but how about I spend $7 to make it much riskier in exchange for MAYBE $13 more upside (2 in the bush) and I'll sacrifice the current $19 in protection that I do have."  

    Happy Trades/Snow – I used to have a guy on this site who had a "Happy Trading" section.  Not sure what he watched in the 50s.  


  31. Testing/Snow – no, the throat/nose test is only needed for symptomatic people to confirm a diagnosis so they can be isolated and their contacts checked. Also, research is really backing off the story about spread with no symptoms.

    The serum testing technically isn't needed at all except for us epidemiologists who want to get a handle on describing the outbreak sort of post hoc.


  32. They really want all time highs on the Nasdaq… not to mention round numbers. FB pals are giving stock tips … that's got to be a market too red flag? Well it would be in non Zombie Company land. 


  33. Few new biotech plays:

    ARNA, butterfly July 65/70/75…try it for a buck.  Not many, just a play on the Stock incentive for employees that is at $70! I am also slowly accumulating the Jan 21 70/75 BCS…no more than $1.70.

    GOSS, few shares.  Did an offering at 13.25.  Once above that, sell calls against or get rid of it.

    RMED – disclosure…I co-founded this company.  Penny stock. If they can get a hold of something for PAD, they should be over a buck. Otherwise, go to Robinhood Traders and talk it up.  :) >:::


  34. anyone see IMRN—up 1000% today—crazy


  35. Nasdaq 10,000. W.T.F.????


  36. I guess Nasdaq 10,000 is the headline they want to create, that's why they drive up the FAANG?


  37. CHK is LOL big time. Wish I didn't hold half overnight (it closed at 70!). Oops. If they ever stop with this ridiculous halting nonsense I'll buy puts. How are the front week 20 puts not $10? 


  38. It looks like I'm off the hook for lunch. My CHK experiment cost me -$700 and is now over. What a weird almost-win though.


  39. Speaking of DOTCOM bubble, it took 20 years to go from 5k to 10k. I predict 5 years to get to 20k. Lets party!!


  40. Pharm-what do you know about FATE? Hitting the rounds it seems.


  41. Go Nasdaq!  

    Gotta short that 10,000 line on /NQ – tight stops above, of course. 

    Where's my party hat?  

    SPG/SK - Same note as to Wing, I am not a fan of chasing and adding risk.  There will always be something else to trade that hasn't already doubled.

    IMRN/Savi – WOW!

     

    Well, at least all of Wednesday's annoyance wasn't for nothing:

    I'm telling you guys – find me buyers!  I have 3M masks, Chinese masks, gloves, gowns, booties, testing kits….  A penny on 40M is a nice commission!  

    CHK/BDC – You can still buy me lunch…  Though my poke bowl place never came back.  angry


  42. Oh thermometers – very hot item out of China now!  At some point the US will have to start testing people who are going into shops and malls and restaurants – this madness can't go on!


  43. Phil / PPE – do you have a product list and pricing? Are they all on soil and available?  I can PM you


  44. Thermometers/all – you better believe it! My karate gym has already bought, I think, four in anticipation of reopening, and my Quaker Meeting the same deal. Sadly, my choir is going to hang back as singing in groups indoors is a good way to pass the bug around.


  45. PPP/Mito – Ah, there's the rub.  On the ground is very expensive, on ships cheaper, in factories even cheaper so "it depends".  Changes a lot too but I will get you some basics a bit later.  Is the GMail we have good?


  46. Phil – who are buyers? hospitals? who else?


  47. What is that glove post saying Phil? Did you broker a $480M sale?


  48. PPE/Phil – Is it available for Canada too (i know someone who works at ministry of health)?  Can you also send me the list you're sending Mito?  Thanks!


  49. PHARM/ RMED – always looking for interesting penny stock opportunities especially especially as related to elderly patients/ (a growing market base). Not an expert by any means but eximer lasers have been around for a while so what is the premise for RMED? What is, if anything, unique to their product? Thx


  50. Seems like you should be contacting every state senator and governor.


  51. Buyers/Coulter – I have a deal with LA City, one with a charity sending them around the World (took no fee on that one), the one above is a group of hospitals…  

    Gloves/Tangled – Yep, that's what we were screaming about last Weds during the webinar – just finalized today.  That market is crazy, like the wild west.  Fun for me as I am very good at supply chain management.

    As to contacts, after we close a few (demand exceeds supply for the most part) I might put a team together and start going after stuff but this group right here can probably network a few Billion in sales.

    PPE/Bai – Worldwide!  Yes I will.  

    Elderly patients/Pstas – I don't know, they are going to be dropping like flies in Covid-20.


  52. Do you have a link or URL or whatever to which we can point potential buyers?


  53. No, it's not a catalog site.  These are massive purchases so we don't know exactly what type or what price is available at any given time.  Once someone provides an LOI AND Proof of Funds, we can go out and get what they need in mass quantities.  I have some general items to give you an idea of equipment and pricing but pro buyers know how crazy things are – the service we provide is access to major allocations.  


  54. I work in a bank branch in Canada. I have to test every employee every day before they start work and then go to website and confirm how many people were tested and if any had a temperature >38 degrees C. International bank but 150 branches in Canada but that is going on everyday at every branch.


  55. My Dem Veepstakes prediction is Keisha Lance Bottoms 


  56. She would be a great choice….


  57. BDC – Interesting pick and would put Georgia in play! Was thinking of Val Demings which could help Florida and losing Florida would mean bye-bye Donnie! The police experience could be a plus (or a minus depending on what could be dug out I guess).


  58. Phil/PPE – yes info to my email on profile will work, thanks very much


  59. Gundlach sees stocks falling, gold rising despite 'Superman' Powell's heavy lifting

    Jeffrey Gundlach's "Superman" presentation – the latest of his regular live webcasts, this time it seems with Fed Chairman Jay Powell in the role of protector of Truth, Justice and the American Way – comes just before tomorrow's Fed policy statement update from the Chair of Steel himself. (slides here)

    And Gundlach invested some time in the contentious issue of whether the dollar's headed for a decline, an issue that's also near and dear to gold investors. Earlier, Goldman Sachs said that a pause in gold's rally (XAUUSD:CURmay just be a waypoint on the way to $2,000/ounce, if a strong consumer combines with expansionary policy to create above-target inflation.

    Gundlach says he's bearish on the dollar, even if stocks decline – and that will mean new highs for gold in the long term.

    And he expects stocks to pull back from their current "lofty" heights. Traders believe Powell is Superman, marshaling extreme powers to support the market, and that rates will stay near zero for the next couple of years, he notes.

    U.S. equity prices are now at a huge multiple compared to the rest of the world, and that's largely due to the heavy footprint of big tech on the market, he says: A "FAAANM super 6" of Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL), Alphabet (GOOGGOOGL), Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX) and Microsoft (NASDAQ:MSFT) explains the vast majority of that gap.

    Notably, he says the rally is taking place mainly without institutional money, and "I'm happy to watch other people push it higher." Retail trading accounts have surged in the wake of the zero-commission movement.

    And he returns to a recent talking point by suggesting Powell's "kryptonite" would be negative rates, which Gundlach has said would be "fatal," even with pressure to go negative building as short-term borrowing explodes.

    Can stocks reverse and take out their March low? Gundlach wraps his call by giving that prospect an unusually specific 76.8% chance.

     


  60. Phil / AAPL – This is kind of strange – AVGO said on its earnings call last week that a Apple ( 'Major US based phone customer) was pushing back new product in Q3 – it even  also provided light 3Q guidance and said Q3 would be the trough this year…. Do you believe them or digital times

    Apple's iPhones set to start July production – report

    Apple (AAPL +3.1%) looks set to begin production of iPhone 12 in July, following a report that it's nearing the end of a key testing stage.

    DigiTimes is saying that phase 2 of its Engineering Validation and Testing stage will be completed at June's end, suggesting that all models would start production in July, though higher-end 5G models are said to face more challenges and a possibly longer timeline.

    Earlier, it was reported that Apple is set to announce its move to internally made chips, a shift away from Intel before new Macs launch in 2021.