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Free Lunch Thursday – Powell Scheduled to Boost Confidence at Noon

MacroView: 2021 - A Disappointment Of Growth And Disinflation | Seeking  AlphaWhat inflation?

That's been the Fed's consistent message as they like to pretend they can print $9Tn in a single year – adding 25% to the money supply – and it will have no effect on inflation (so we should keep pretending that less than 1.5% for a 10-year note is a fair rate of return).  Any child who's played Monopoly knows that, as more money is put into the game by the banker – more money is spent on things like properties and hotels.  This is toddler economics.  

President Toddler owns a lot of hotels and he was well aware that if, we pumped $9Tn into the economy, some of it would trickle down into his organization.  President T's pals also did very well, with America's 660 Billionaires getting over 1,000 Billion Dollars (1Tn) richer during the pandemic.  A 38.6% gain in their fortunes since March of 2020.  In fact, before the pandemic there were only 614 Billionaries – 46 people became Billionaires in the past year!

The chasm between those at the very top of America's economic ladder and those in the middle and at the bottom was immense before the damage inflicted by the pandemic on the U.S. economy. That divide has widened. According to a study released Monday by economists Bruce Meyer from the University of Chicago and James Sullivan of the University of Notre Dame, America’s poverty rate increased by 2.4 percentage points over the final six months of 2020. That’s the largest increase since the 1960s and is nearly double the largest annual increase in poverty over the last 50 years.  We truly are Great Again for the 666 that are taking in all the wealth.  All hail the ruling class!  

An additional 8 million people nationwide are now considered poor – and that makes sense because you have to take $5,000 away from 8M people in order to give $1Bn to 40 people – that's just math, folks!  Black Americans (5.4% increase) representing a disproportionate share of those thrust into poverty. More than 70 million individuals (or roughly 40% of the labor force) have filed unemployment claims in the U.S. since the start of the pandemic.  10M more people are still unemployed than there were last March.

“U.S. billionaires are delinking from the rest of the society, an extreme form of social distancing. Their fortunes soar while most Americans are facing unprecedented health and economic challenges,” said Chuck Collins, director of the IPS Program on Inequality, in an email to Forbes. “We are further eroding our social fabric—the sense of solidarity that binds us together.

According to an IPS and ATF press release, the gains made by America’s billionaires during the pandemic could “pay for all the relief for working families” in President Joe Biden's $1.9Tn stimulus package, “while leaving the nation’s richest households no worse off than they were before” the arrival of the coronavirus.  All of the other 165M taxpayers combined have a total of $2.4Tn while the top 666 have over $4Tn.  Most of them can give up half of their wealth and still be multi-Billionaires and that money would DOUBLE the wealth of EVERY OTHER PERSON IN AMERICA.  That's what insane, unsustainable inequality looks like – it's like when the banker cheats in Monopoly – ordinary players don't stand a chance…

This is the game that only a few of us are playing but, rather than revile that, we just elected one of the winners President, didn't we?  This is our problem, America, we are economic masochists – we like to be in financial pain!  How else do you explain how we put up with this insanity and vilify people like Elizabeth Warren, who is simply trying to look out for the 165Bn of us who aren't sitting on over $1Bn in our bank accounts?  But don't worry, you'll get your $1,400 soon and all will be well, right?  666 special Americans got 1,000,000 times more than you but don't try to fix that – it's unAmerican.  


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  1. Good Morning.

  2. someone must be worried bnn spinning buy the tech dip all for the past hour.

  3. Good morning!

    Quite the up and down action already.  

    Rumor-driven market. 

  4. Americans who purchased new homes or refinanced their current ones over the past few months may have done so at just the right moment

    Credit Suisse knew since 2019 that supply-chain finance funds it ran with Greensill were too reliant on a small group of insurers to protect investors against default and failed to remedy the situation, according to people familiar with the funds.

    How Much Does the Federal Minimum Wage Buy You? Now vs. Then.

    Inside an Overrun Funeral Home, Where Every Day Is a ‘Nightmare’

    A reporter and a photographer documented the inner workings of Continental Funeral Home in Los Angeles, and the heartache of funeral after funeral.

  5. Mark L. Wolf House anti-corruption and Supreme Court ethics vote helps restore U.S. credibility

  6. Hi, Phil.  Some help please:  I own 500 shares of Roku with a very low basis as I have been writing against it.  Will be long term March 16.  The stock has been very bouncy, now very low, and the premiums are large.    Jan 400 P & C about $180 total. Ideas?

  7. Phil…………thoughts on oil after this pump up today?  

  8. Here is the replay of this week's webinar

  9. Oil blasted off as OPEC held steady on production.

    ROKU/Npaul – I'd sell the June $300s for $135 as that's paying you $435 to call you away after March 16th but also protecting you from a 30% drop from here.  If you REALLY want to own more of the stock, then you can sell some puts but if the market corrects 20%, ROKU will drop $60-100 very fast and I doubt a company not making money is going to be the exception – especially with a now-$47.5Bn valuation on $2.5Bn in sales.  I'm dumbfounded you didn't cash out at $450 but now $368 and at least you didn't have to pay extra tax on the gains you would have had at $450, right? 

    Oil/Ult – I don't see how OPEC keeping the current pace is going to be a big help but people thought they were going to raise 1.5Bn, so it's getting them pumped up for the day.  I'm starting to short again at $65 on /CL.

  10. npaul Not sure what price you pd for the stock but Mar 20 it was 66 and now we are at 366  was already up where you should have sold the stock. I never like to hold stocks which do not pay a div, at least 3.5% So at best I would convert the stock or even part of it in to a poor man's trade. Buy the Jan 23 300 call for 152 and start selling short term calls against it. Your idea to actually sell a 400 put is for me absolutely a no no. as it is about 40 ITM I would start by sell a may 21 strangle 300/400 p/c for about 63 $ to start with. Say if you would have 10 Jan 23  leap calls I would start with sell 5 strangle to start and see how it goes. I do not know the stock so you might have a better feel of it than I do, by setting the strangle. 

  11. Productivity down 4.2%, largest decline in nearly 40 years

  12. Eager to act, Biden and Democrats leave Republicans behind

  13. CMG hit 415 the week of 3/16/20

  14. ROKU FMV 150 max

    garbage like TSLA already correcting, don't get burned holding these pigs

  15. worthless art becomes worthless digital token. Has the idiocy come full circle yet?

  16. Thx Phil.  Of course, you are correct. I had a short March 440 call for $33, thought it sufficient downside protection…but, what do I know?

    Thx, Yodi.

  17. Phil, this is where I feel unsure of my exit plan.  20 SDS Mar 11 calls I bought for $0.62 now $1.325 with today's drop to protect a $146,000 portfolio so that's 10% half of the initial protection sought of 20%.  At what point do I exit for a different hedge, raise my stop, or close out entirely?  Friday, Jan 31st was a huge sell-off day and I want to be protected.



  18. Yikes, what happened?  

    I guess Powell wasn't reassuring enough.  

    The S&P 500 fell and bond yields rose as investors digested the Fed chair’s comments on inflation prospects and the economy.3 minutes ago

    Gee, who could have guessed that would happen?

    CMG/BDC – I guess they had a good year. 

    ROKU/Npaul – That's OK, if it were me, I would have been out at just over $100.  Any time I get a double, I get very protective.

    Speaking of doubles, look at the new TZA fly:

  19. SDS/Rperi – 20 calls aren't going to protect a $146,000 portfolio anyway.  Not sure what the question is.  SDS is a 2x short ETF so if the S&P drops 20%, SDS goes up 40%(ish) and that's $12.28 to $17.20, which would be $6.20 per contract on the $11 calls and $12,400 – so that's about your protection.  So far, the S&P has pulled back about 5%.  The point of the hedge is to back up your longs so, if you end up holding them in a downturn, you don't get destroyed.  If you still have your longs, you still need your hedges and if this is only a 5% correction and we bounce back – then you will lose $1,240 and that's the cost of your insurance that allowed you to ride out the dip.  If we keep going lower, you will most likely want to cash out some longs and then, eventually, you'll cash out the SDS calls.  

  20. Phil / TZA – Please suggest an effective rollout for my old TZA spread. I have June TZA1 $4 – $11 spread.

  21. Okay, thank you.  Gives me a good perspective.  Sorry, I also hold SQQQ long calls to hedge as well.  But you answered my question on how long to hold.

  22. Hi Phil,

    So with the air coming out of the balloon, what are you eyeing as prices come down?  WBA, T, IBM are stuck in the mud.  Looking for a few new positions when the time/price is right.

  23. Phil, 

    Been out for a bit. Do you have bounce lines you're watching for?

  24. TZA/JIJ – I'd leave the $11s (now $88s) to die and just roll the $4s (now $32s at $11) along to the July $35 ($11)/$55 ($7) bull call spread.  Those are $4 so let's say you had 40 at $1.20 ($4,800) and now you can buy 10 at $4 ($4,000) with $20,000 protection at $55.  The original $4/11 spread would have paid 40 x 7 or $28,000 so you could spend a bit more for 15 ($6,000), which would then pay $30,000,

    When/Rperi – As Roger Rabbit would say "Only when it's funny".  

    What/Jeddah – I'm looking to see who comes down more than they should.  I'm not going to distract myself looking for certain things to come down – like the 4 short puts we sold this week – I'm just looking in the value bin for something I like every day.  Huge amounts of research and reading going on.  Of course if our favorites get cheap, we want those too.  

    Hey Jeff – welcome back!  No bounce lines right now, market is too silly.  Looking for a 20% drop is more the case. 

    That would only take us down to about 320.

  25. npaul-Don't feel alone. I learned some hard lessons in the last month. Had AMYZF bought 4K shares at >08 and sat on it. Started moving up and when it got to almost a dollar I sold. Guess what in the nest two weeks it went to 2.00. Then if that weren't  eye opening enough I had a 23X PLUG at 2.5 which I hedged. BIIIGGG mistake. It took off like a rocket and I tried to cover and hedged again. Did the same with FCEL went to the moon. AOK. VEry expensive lessons learned. My hunches were spot on BUT I had looked at ROKU too but it was at 100.00 and not making money. UNbelievable the market movements in the last few months. Figure I lost at least 40K because I didn't sit on my hands and NOT hedged. NFLX was not profitable for years and went ballistic and most of the QQQ stocks. Negative earnings, borrowed money all went to the moon The paradigm has obviously changed and so have I.

  26. Pirate/Npaul…………..feel you pain.  So many times that I've hedged to later on regret as it.  Especially over the past year as the market has been very irrational it feels like.  Been a good learning year.  

  27. Insanity everywhere it seems. And I won't even get into my FIT trade and what TD did!!

  28. Pirate/Ulty-  Same for me, big learning experience…but not sure what I learned… What did you learn?

  29. Npaul – I learned to be more patient around hedging.  Also don't fully hedge and just like scaling into purchases, can scale into hedges as well.  Also play both sides of the market.  My bias, especially in the past 6 months has been to the downside and the market has done the exact opposite which took a bite out of my wallet as I was playing for a downside with 2/3x leveraged products.  

  30. The Icelandic Startup Transforming Carbon Dioxide Into Stone