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Malware Monday – Cyber Attack Cuts off 45% of East Cost Fuel

Uh oh.  

Colonial Pipeline, whose system transports fuel across the East Coast said Saturday that it had been victimized by a ransomware attack and that it had halted all pipeline operations to deal with the threat.  Colonial did not say what was demanded or by whom, but ransomware attacks are typically carried out by criminal hackers who seize data and demand a large payment in order to release it.

This presents a new challenge for an administration still grappling with its response to major hacks from months ago, including a massive breach of government agencies and corporations for which the U.S. sanctioned Russia last month.  While there have long been fears about U.S. adversaries disrupting American energy suppliers, ransomware attacks by criminal syndicates are much more common and have been soaring lately.

Cybersecurity is going to become a much bigger long-term cost for businesses.  Just like Rent-A-Rebel is often used to jack up oil prices by bombing a pipleline or pirating an oil tanker – hackers are now added to the arsenal of market manipulators, who can knock entire companies off-line for days.  Brian Bethune, a professor of applied economics at Boston College, also said the impact on consumer prices should be short-lived as long as the shutdown does not last for more than a week or two. “But it is an indication of how vulnerable our infrastructure is to these kinds of cyberattacks,” he said.

Speaking of market manipulation, Elon Musk was on Saturday Night Live this weekend and people were betting he was going to promote Dogecoin and the price of the "coins" went flying higher in anticipation of the event but Musk is always one step ahead and there was more money to be made shorting so instead he took the opportunity on several occasions during the show to poke fun at Dogecoin, pointing out that it started as a joke and going as far as to call the whole thing "a hustle":

While this all may be hysterical to Elon Musk, a 40% drop over the weekend is going to have a lot of traders waking up to margin calls so get ready for a wild ride this week.  And, of course, Elon Musk will get no more than a slap on the wrist for manipulating the market – maybe nothing at all because no one is really in charge of Crypto and Musk seems to get away with everything he does – even that over-valued car company of his

When he brought his mom Maye on stage during the opening, she got in a Dogecoin joke. "I'm excited for my Mother's Day gift. I just hope it's not dogecoin," Musk's mother said

Hahaha, very funny.  Even funnier was Elon Musk manipulating Dogecoin back up last night with this tweet, stating that SpaceX will launch a mission paid for in Dogecoin.  These are the fun kind of games you can play when you are one of the World's richest men (and don't care who gets drowned in your wake).

Speaking of rich guys Jeff Bezos, who is everyone's hero for having $191Bn AFTER getting divorced just spent 0.26% of it on a $500M, 417 foot-long yacht.  And that doesn't count the cost of the support yacht that has to follow it around – which has it's own helipad.   

In total, there are about 50 boats longer than 100 meters currently under construction.  If anything, demand for extravagantly high-end yachts has outstripped supply. “It’s impossible to get a slot in a new-build yard,”  said Sam Tucker, head of superyacht research at London-based VesselsValue. “They’re totally booked.”  With galas canceled and land borders closed, yachting suddenly seemed the best option for private, socially distanced leisure and a good way to escape from the prying eyes of the public that might look askance at wealthy overindulgence during difficult times.

  

The pandemic put new value on so-called explorer yachts, some of which can cruise for 9,000 nautical miles without needing to refuel, said Aino Grapin, chief executive officer of superyacht-interiors studio Winch Design.  “Clients can enjoy life at sea for long periods of time without having to go mix with others,” she said.  As business closures rendered millions unemployed and global GDP slumped, the world’s richest people added $1.8 trillion to their collective fortune, according to the Bloomberg Billionaires Index.

Meanwhile, as the rich got richer, 75M people in India were plunged into poverty.  Do you know how you could get them out of poverty?  Well if we gave them all $10,000 that would cost $750Bn which is still $50Bn less than the extra $0.8Tn the Top 0.000000005% (400 people) gained last year on top of their first $1Tn ($2.5Bn each).  They say it's a zero-sum game, but try explaining that to the people on the losing side of the equation….

A drawn-out Covid-19 outbreak will impede India’s economic recovery,” Singapore-based Roache said. “The country already faces a permanent loss of output versus its pre-pandemic path, suggesting a long-term production deficit equivalent to about 10% of GDP.”  With the latest surge caused by a new coronavirus strain, total infections in India have risen to 21.89 million, a third of which were added just in the past three weeks alone. Daily death count hit a record at 4,187 on Saturday. Experts have warned the crisis has the potential to worsen in the coming weeks, with one model predicting as many as 1,018,879 deaths by the end of July, quadrupling from the current official count of 238,270.

A study by the Azim Premji University in Bangalore showed even more alarming numbers. About 230 million individuals slid below the national daily minimum wage threshold of 375 rupees during the pandemic, it said.  375 Rupees, by the way, is $5 and $5 x 365 is $1,825 so call it $2,000 to save these people from poverty and that means we only really need $150Bn, less than 10% of what the top 0.000000005% (400 people) made, to balance the scales – just a little.   

There may be 300 less yachts in the World, though – is that really worth it?  

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  1. Good Morning.


  2. Phil, Dave,

    Trying to update my credit card info on my account page several times over the last 3 days, but no luck so far.  I emailed admin@philstockworld.com Thursday last week, but have not heard back yet and it is still not working this morning.

    Here is the content of the email:

     

    I have been trying several times today to update my credit card information, but every time I hit the ‘Update Info’ button, the request to the credit card company just times out.

    Strangely enough, the status bar on Firefox says ‘Sending request to Facebook.com’, not sure why that would be.

    Regards,


  3. lotter, similar experience here.  try and place a new order and then update 


  4. Lotter= I had similar problems. Went over two weeks changing cards etc. When I finally got it resolved they claimed it wasn't "their fault," it was MY computer! Still can't log in unless I sidetrack them by going to comments and log in that way. My fee went up 3X too. Interesting since many other participants have had the same problems.


  5. Phil / All,
    I have 10 SSSS 7.5/15 BCS with SSSS just declaring a $2.5/share dividend (possibly up to 50% in cash though, the rest is in stock). It seems smart to exercise the long calls and get $2500 in cash and/or stock, but am I missing anything here? The stock is @$15, the short calls are around $1.75, which is less than the divvy…
    TIA


  6. SSSS has no $ and loads of debt for the past two years. Looks like the only $ they have is borrowed and about 1M insider shares were sold. I would say get out.. The "special" div is just another ploy to sucker people in. IMHO.


  7. Good morning!

    CC/Lotter, Stock, Pirate - Sorry about that, Andy will look into it.

    SSS/Hwtdr – They invest in pre-IPO companies and that's been a great bet in an up market but you don't know how they'll do in a down market so be careful.  The whole company is $360M at $15.  You'd be buying the stock for $7.5 and collecting the dividend so it can't really hurt you but you could just buy the stock and keep the spread too since the stock is $15 and the short Jan??? $15s are $1.75, it's a 10% discount and you collect your dividend and sell the long calls ($7.50+) rather than exercise.


  8. Phil/SSSS,
    What are the chances of short Jan 22 $15 calls being exercised with the stock @ around $15, ~$1.75 premium and a $2.50 dividend? Does it make sense to cover? The stock goes ex-dividend on May 17 with the dividend payable to shrhlrds of record on May 18, when is the best time to buy the stock then assuming that it stays within the current range? When it goes ex-dividend or it would be too late to become the shareholder of record?


  9. Is there a special dividend coming?  If the dividend is more than the premium, it makes sense for your caller to exercise but if not, then why would they do it?  You want to be a holder on the 17th, so there is no doubt and whenever it dips is a good time, of course.  Looks like they have strong support at $14 but, if people are expecting a pay-off soon – $15 is likely to hold.


  10. Tea-growing areas to be badly hit if global heating intensifies


  11. Phil/SSSS,

    The Co pays semi-annual dividend, I did not see that it was a special one this time, although quite a large one compared to prior periods. I agree with your assessment on the Co's merits, Phil, that is why I was thinking of exercising the long calls rather than increasing exposure by purchasing the stock to receive this dividend and keeping the BCS. I have just covered the short calls just in case. Thanks for your thoughts (and pirate). 


  12. There's a lot of money sloshing around the wild-west $2.5T crypto universe. I think Dogecoin is yesterday's news with the kids right now.


  13. 1/4 of all Dogecoins traded in the last 24 hours.  

    Dogecoin is a cryptocurrency that was created as a joke — its name is a reference to a popular Internet meme. It shares many features with Litecoin. However, unlike Litecoin, there is no hard cap on the number of Dogecoins that can be produced.

    Wow, Elon was right, it is a hustle!  

    This will be my re-pick for Money Talk on Wednesday:

    • ViacomCBS (VIAC +0.7%VIACA +0.5%) is higher today after yet another firm has upgraded shares in the new valuation world of the company's post-Archegos collapse.
    • After hitting a 52-week high of $101.97 in March, shares have fallen to $39.65 today.
    • But an upgrade to Outperform by Barrington Research, from Market Perform, means nearly a dozen analysts have upgraded the stock since its late-March tumble.
    • The company's streaming efforts with Paramount Plus and Showtime offer a "compelling" collection of products, while its recent capital raise gives the company flexibility to make that push into subscription VOD and ad-supported VOD, Barrington says.
    • The firm has a $50 price target now implying 26% upside.

    Last update was Dec, when we exited our VIAC position:

    • VIAC – This is a $14,000 spread also almost 200% in the money but, at net $12,690, there's only about 10% left to gain and we can certainly do better than that with $12,690 in CASH!!!, so we're going to kill this one, sadly.  

    Wasn't worth the risk but now, starting from scratch, we can go with:

    • Sell 5 VIAC 2023 $40 puts for $10 ($5,000) 
    • Buy 10 VIAC 2023 $30 calls for $14.50 ($14,500) 
    • Sell 10 VIAC 2023 $45 calls for $7.40 ($7,400)

    That's net $2,100 on the $15,000 spread with $12,900 upside potential at $45 and we're $10,000 in the money to start.  Worst-case is owning 500 shares at $44.20 so it's an aggressive put sale but I feel good about it.

    Money Talk Portfolio is, of course, untouched other than INTC being added last time on the show and we're up $33,127 (21.8%) since then, even though 2/3 of our buying power is on the sidelines.


  14. TSLA taking a nice hit today too. 

    Nas taking a big hit all around:

    • Chicago Federal Reserve President Charles Evans says inflation and employment will have to improve substantially before he adjusts his stance on monetary policy.
    • The Fed has been keeping monetary policy very accommodative by holding its benchmark interest rate near zero and by buying up $120B of bonds per month.
    • And Friday's big miss on April's jobs report shows how complicated the picture can be. "We're restarting the economy. A lot of sectors are experiencing growth pains," Evans told CNBC in an interview.
    • Both employment and inflation remain under the Fed's targets, and it will take time for improvements to show up in the data, he said.
    • "Inflation rates of 2.5% don't bother me as long as it's consistent with averaging 2% over some time," he told CNBC.
    • On Friday, the Labor Department reported that 266K jobs were added in April, far fewer than the almost 1M new jobs economists and traders were expecting.
    • Economists and traders aren't the only ones with expectations that inflation is picking up.
    • Consumers are expecting inflation to rise in the short-term, but their medium-term expectations are unchanged, according to the New York Fed's Survey of Consumer Expectations.
    • Median year-ahead inflation expectations climb to 3.4%, its highest since September 2013, according to the April survey, up from 3.2% in the March tally. The median three-year expectation stays unchanged at 3.1%.
    • Median home price change expectations surged to 5.5% in April vs. 4.8% in March, continuing the upward climb from a series low of 0.0% in April 2020.
    • Median on-year ahead expected change in gas prices eased off its series high of 9.9% in March to 9.2% in April.
    • Increase for rent growth expectations rose for the fifth straight month, reaching a new series high.
    • Meanwhile, the median expected household income growth declined to 2.4% in April from 2.8% in March, but is still above it trailing 12-month average of 2.2%. Median one-year ahead earnings growth, though, edged up to 2.1% in April from 2.0% in March and stays well below its February 2020 level of 2.6%.
    • The big miss in non-farm payrolls expectations for April has put increased pressure on the dollar since Friday as the greenback recorded its biggest one-day slide in five months. In fact, the U.S. Dollar Index has fallen decisively below its 2021 uptrend, putting it back to little changed for the year, and has recorded a decline of 10% since March 2020 (just prior to the pandemic). A relief rally starting in 2021 saw Goldman Sachs cancel its short call on the dollar – as many scrambled to cover positions – but the recent downtrend is leaving other Wall Street bears feeling vindicated.
    • "We continue to see the 'peaking U.S. exceptionalism’ narrative playing out through a weaker dollar over time due to a dovish Fed, benign risk appetite and a global recovery," wrote analysts at Citigroup. Last month, the group said the greenback could fall another 20%, and J.P. Morgan and T. Rowe Price are among others predicting more losses ahead. "We expect the dollar to weaken further, given its diminishing appeal as a safe-haven currency as long as the global economic picture and risk appetite improve further," UniCredit strategists added in a research note.
    • Some statistics: Aggregate net short positions in the dollar vs. major peers hit $10B last week from $4B in mid-April, according to data from the Commodity Futures Trading Commission. Bearish bets totaled about $31B in January.
    • Outlook: The next move for the greenback could depend on whether the Fed will let the economy run hot. Last month, policymakers signaled expectations for interest rates that be kept at near zero through 2023, but some money markets are positioning for a rate rise sooner than that. Others suggest that even if the Fed would move early, the relationship has changed, as well as the currency's traditional role with equities. Once upon a time, a weaker dollar was seen as a boon for U.S. equities, but a stronger buck didn't prevent the continuous stock market highs that were notched in the first quarter.

    • Live Nation (NYSE:LYV) has risen 5.2% after an upgrade to Buy at Jefferies, which sees a compelling entry point after a recent decline.
    • The shares slipped 13% since March 2, vs. an 11% gain for the broader market, the firm points out.
    • And it joins some other analyst positivity in reaction to the company's earnings report.
    • That report showed narrower than expected losses but the current results are less relevant than the longer-term picture, Jefferies says. The company noted concerts in the U.S. and UK are showing pent-up demand.
    • But more important, management said the pipeline and sponsorship commitments in 2022 are up double digits from 2019; "In addition, considerable incremental ticketing clients have been added for over 5M new net fee-bearing tickets YTD. These elements bolster our bullish stance."
    • "We believe the recent pullback prices in the more gradual return to profitability in 2021 – herein lies the opportunity. For us, valuation is most relevant on the 2022 onwards timeframe," the firm says.
    • It's boosting its price target to $96 from $88, implying 14% upside.
    • While Street analysts are Bullish on the stock, Seeking Alpha authors are Neutral, and it has a Quant Rating of Bearish.
    • The Philadelphia Semiconductor Index is down 3% versus the 1.3% decline for the broader tech sector (NYSEARCA:XLK) with Qorvo (QRVO -7.8%) leading the laggards.
    • Apple suppliers are dropping after noted analyst Ming-Chi Kuo predicted the tech giant would debut an in-house 5G modem by the 2023 iPhone lineup at the earliest, which would push aside Qualcomm.
    • Other Apple suppliers seeing red include Broadcom (AVGO -2.3%), II-VI (IIVI -1.2%), and Skyworks Solutions (SWKS -4.1%).
    • Semi equipment stocks are pushing lower after foundry giant TSMC reported a month-over-month revenue decline of 14% in April. Movers include Lam Research (LRCX -5.0%), KLA (KLAC -3.9%), and Applied Materials (AMAT -4.3%).
    • Background: TSMC reports revenue growth of 16% in April.
    • Value has outperformed growth on the year, and at the start of this week, it appears there is no difference except for further accelerated moves. Early into the Monday morning trading session and value related exchange traded funds have outperformed growth names across the board.
    • Market participants can see that since the beginning of May, the divergence between value and growth has taken off. In examining six ETFs, investors can see the growing inverse correlation between the two sides. Below is a chart of three large, mid, and small-cap value ETFs and three large, mid, and small-cap growth ETFs. Since the beginning of the month, the two sides have fast-tracked their splitting performance.
    • Additionally, see below a performance breakdown of the six exchange traded funds on a five-day and year-to-date performance.
    • On the day so far VTV: +1.16%, VOE: +1.12%, VBR +0.68%, VUG: -1.19%, VOT: -0.66%, and VBK: -1.35%.
    • Vanguard put out a recent report for market participants going over the outlook of both value and growth-related investments and what the future potentially holds for both.
    • Harley-Davidson (HOG -1.1%) formally announces the launch of LiveWire as an all-electric motorcycle brand.
    • The company says the all-electric brand will seize the opportunity to lead and define the market in EV motorcycles. LiveWire also plans to innovate and develop technology that will be applicable to Harley-Davidson electric motorcycles in the future.
    • LiveWire will work with dealers from the Harley-Davidson network as an independent brand. The company says an innovative go-to-market model will blend digital and physical retail formats, tailoring the experience to the local market and allowing customers to discover LiveWire on their own terms.
    • The first LiveWire branded motorcycle is scheduled to launch on July 8 and will be premiered at the International Motorcycle Show on July 9.
    • Read more details about the LiveWire brand.

  15. W- unfortunately recovering from recent drawdown. Don't see any news. What gives?


  16. pstas / W : wonder if this is a short squeeze. earnings were much better than I expected, but the move since last week has been really strong. 


  17. rick2006- W- yep, smells like it. Still, triple digit P/E. Euphoric markets are tough to short. 


  18. W/Pstas, Rick – People seem happy with the earnings.  That's why we bought back the short calls – almost time to sell again.

    • Submitted on 2021/04/15 at 11:32 am
    • W – So silly at this price.  Back on track and short April calls will make us $5-8,100 as the last $5 of premium wears out.  Earnings are May 6th and we're only in for net $1,400 if they expire worthless so why risk selling more short calls ahead of earnings?  Let's just see what happens.

    So all according to plan – despite the exciting fall and rise.  

    RUT as bad as the Nas into the close.


  19. HYT yields 7.8% and five year chart it practically looks like a money market