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TGIF – Europe’s Stocks Plunge as Nuclear Catastrophe is Inches Away

Missed It By That Much GIFs - Get the best GIF on GIPHYMissed it by that much.

The Russian Liberators (may as well start calling them that as the history books will be re-written that way) either have excellent aim or terrible aim and we hope it's excellent for our future safety as their bombing caused a fire at Europe's largest nuclear power plant in Enerhodar, Ukraine.  The fire erupted at the Zaporizhzhia power plant’s training facility that is adjacent to its six nuclear reactors and has been put out this morning, narrowly missing a disaster that would have made Chernobyl look like a minor mishap.

Russia attacks Ukraine nuclear plant as invasion advances, prompting  Zelensky to plea for 'urgent action' - The Boston Globe

Ukrainian President Volodymyr Zelensky told journalists on Friday that the attack was an act of terror that put all of Europe at risk.

“We survived the night that could have put an end to history,” he said, adding that an explosion of the plant would have caused six times the damage of the 1986 meltdown at Ukraine’s Chernobyl power plant, which sent radioactive clouds across Europe.

“Russian tankmen knew what they were shelling. Directly shooting at the power plant is unprecedented terror,” he said, reiterating his call on the West to establish a no-fly zone over Ukraine.

Putin addressed the nation yesterday and said all this is going according to plan and now we get to see what, if anything, NATO and the UN do about a guy who is on the verge of causing either a nuclear war or a nuclear catastrophe.  More sanctions?   European investors are not too convinced that's going to work and their stocks are down 3.7% this morning and the VIX is flying higher so our indexes may follow suit:



If the Russell (/RTY) falls below the 2,000 line, you can use that for a short with very tight stops above.  

We checked our hedges in the Short-Term Portfolio yesterday and we thought we had enough protection into the weekend but that may be put to the test early if Russia doesn't at least agree not to bomb the nuclear power plants.  This is all fantastic for Gold and Silver, of course and wheat got tired of just moving higher during the day, so now it's gapping up 6% overnight.  That's because over 10% of the World's wheat almost got irradiated yesterday – and that's not something you can make up for next harvest!  


This is the move that hasn't shown up in any inflation reports yet and the ones coming out only cover February and March is already so much worse – we won't get those reports until April.  The Fed has no choice but to raise rates at the same time the war is going to be hampering liquidity – this can all turn very ugly very quickly – be very careful!  

8:30 Update:  678,000 new jobs in February, not bad for a short month!  That is way over the 400,000 jobs generally expected and, even better (for our Corporate Masters), average hourly earnings were flat for a change – even as overall Unemployment dropped from 4% to 3.8% and the average workweek moved up to 34.7 hours from 34.6.  So all positives for Corporations and all negatives for Workers but we invest in the corporations, not the workers, right?  

Keep that in mind, when you are in the investing class, workers are a commodity and you want to reduce the cost of labor which is why we should be firmly against worker's rights, birth control and abortion – because nothing is better for us than cheap labor so forcing poor people to have more children and then denying them the opportunity to properly educate those children (less they become a threat to our own) is right in the Capitalist's sweet spot.  

Laughing Putin GIF - Laughing Putin Lol - Discover & Share GIFsThat's why we're not doing what needs to be done to fight Putin – it might hurt the economy and what's morally right takes a firm back seat to what makes money in this World, doesn't it?  Some would say our economy is obviously strong enough to withstand a little pain and we should get serious and mobilize our forces and kick Putin out of Ukraine but no – we're just going to impose sanctions – because we now believe that hurting someone's economy is the worst thing we can do to them. 

What have we become?  

Have a great weekend, 

- Phil


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  1. Good Morning.

  2. Donald Trump cuts off his nose to spite his face in Arizona

  3. New evidence shows Trump was told many times there was no voter fraud — but he kept saying it anyway

  4. Good morning!

    After nine days of fighting, Russia’s primary effort remains capturing Kyiv, the capital. But Russian forces continued to attack Ukraine on several other fronts, laying siege to cities and trying to control vital ports.

    In the south, Russia appears to be intent on capturing Ukraine’s entire Black Sea coast in southern Ukraine, in an apparent attempt to cut it off from shipping. Russian troops pushing north from Crimea on Wednesday seized the strategically important southern port city of Kherson, the first major city to fall to the Russian military. Those troops are continuing to push west to another port city, Mykolaiv, and then are expected to target Odessa, according to an analysis from the Institute for the Study of War, a Washington research group.

    Russia seized the largest nuclear power plant in Europe, near Zaporizhzhia, after intense fighting between Russian and Ukrainian forces. A fire that had broken out there was extinguished, and radiation does not appear to have leaked, international monitors said.

    Russian troops have also encircled the Ukrainian port city of Mariupol, a key point between the Donbas region, controlled by Russian-backed separatists, and the Russia-controlled Crimean Peninsula. If Russian forces take over the area, Ukraine’s army east of the Dnieper River could face encirclement, and Russia would be able to take control of the Sea of Azov and its industrial infrastructure. The bombardment in Mariupol has cut power, water and heat to the people, the local mayor, Vadym Boichenko, said in a statement on Facebook.

    In Kyiv, Russian forces pushing in from the western outskirts of the city have been met with strong Ukrainian resistance. Additional forces east of Kyiv are advancing toward the capital, according to the institute.

    The second-largest city, Kharkiv, has been the site of heavy bombardment, with several civilian structures hit as Russians attempt to encircle the city. Videos of the city center verified by The New York Times show large buildings and storefronts with severe structural damage, as well as damage to residential buildings and schools on the outskirts of the city.

    Keep in mind Russia occupied and held Crimea since 2014 and he doesn't have to hold the whole Ukraine – just Kyiv and there would be a Government in Exile, at best, to oppose him going forward. 

    I see a lot of "Military Experts" saying Russia can't hold the whole country of 40M (39M now with 1M having left so far) but they don't have to do that.  The major cities are on the map and the rest are scattered and small so it's like taking over both coasts of the US and leaving the middle.  Once Russia is entrenched in the major cities, good luck getting them out.   Kyiv has 3M people (probably 2.5M now) and Russia has 40 MILES of armored troops heading towards it.  2 cars per side each 40 feet and let's say 10 people per 2 cars is 132 sets x 40 = 5,280, so about 10,000 vehicles and 50,000 troops heading towards the city.  

    Let's say your plan is to attack them with conventional weapons – how many people will it take to take out 10 well-armed men with a tank and a humvee?  100?  50?  How many thousands of people are going to really do that?  We see these very determined people in Kyiv who say they will fight to the end but what percentage of the population is that?  If taking out 1,000 vehicles (10%) and 5,000 Russian troops costs Kyiv 25,000 of their most determined fighters – how many will be left to oppose the other 45,000 troops while reinforcements arrive?  

    Meanwhile, Russia is likely planning on starving the 2.5M remaining people out.   Once Russia controls the roads the city will run out of food in a couple of weeks.  Do we think there are tactics Putin will avoid?  Doesn't seem like it so far.  The tools we have in place are meant to deal with modern politicians – Putin is an old-school thug.

    Meanwhile, I'm not seeing a lot of enthusiasm from the NFP Report.  To some extent, it guarantees a rate hike – but that was already in the cards and I doubt it's enough to push the Fed back to 0.5% right after Powell promised not to.  It's better to do the wrong thing and look decisive – as Bush Jr used to say….

    The Russian invasion of Ukraine strains the long-held idea that shared interests around business and commerce can deflect military conflict.

    I just said that…

    Russia is the world’s largest exporter of oil and wheat. The European Union was its biggest trading partner, receiving 40 percent of its natural gas, 25 percent of its oil and a hefty portion of its coal from Russia. Russia also supplies other countries with raw materials like palladium, titanium, neon and aluminum that are used in everything from semiconductors to car manufacturing.

    From the start, part of Germany’s argument for the pipeline — the second to connect Russia and Germany — was that it would more closely align Russia’s interests with Europe’s. Germany also built its climate policy around Russian oil and gas, assuming it would provide energy as Germany developed more renewable sources and closed its nuclear power plants.

    Globalization rescued Russia from a financial meltdown and staggering inflation in 1998 — and ultimately smoothed the way for the rise to power of Vladimir V. Putin, Russia’s president. Money earned from energy exports accounted for a quarter of Russia’s gross domestic product last year.

    In the weeks leading up to the invasion, many European leaders demurred from joining what they viewed as the United States’ overhyped warnings. One by one, French President Emmanuel Macron, German Chancellor Olaf Scholz and Italian Prime Minister Mario Draghi talked or met with Mr. Putin, hopeful that a diplomatic settlement would prevail.

    “The idea was that if you knit together the French and German economies, they wouldn’t be able to go to war,” Mr. Haass said. The aim was to prevent World War III.


    In terms of the current crisis, Mr. Haass argued, in some ways the economic benefits were not mutual enough. “The Germans needed Russian gas much more than Russia needs exports, because they can make up for lost revenue with higher prices,” he said.

    “That’s where Europe handled the relationship all wrong,” Mr. Haass added. “The leverage wasn’t reciprocal.”

    Despite its huge land mass, nuclear arsenal and energy exports, Russia is otherwise relatively insulated from the global economy, accounting for 1.7 percent of global output. And since Russia’s invasion of Crimea in 2014, Mr. Putin has moved to isolate the economy even more to protect against retaliation.

  5. Washington’s Newest Worry: The Dangers of Cornering Putin

  6. 13,850 on /NQ is NOT GOOD.

    Right on the 2,000 line on /RTY along with 4,300 and 33,300.

    This is not a good way to end the week:


    Maybe it will ease up a bit once Europe closes but they are off 4% at the moment with relentless selling.

    /NG heading back to $5! 

    Oil heading back to $115! 


    Gasoline in CA back to $5!

    Mar. 04, 2022 9:47 AM ET47 Comments

    Jobs growth jumped more than expected in February, led by gains in leisure and hospitality, professional business services, health care, and construction. That helped push the unemployment rate close its prepandemic level.

    February nonfarm payrolls:+678 K vs. +390K expected and +481K prior (revised from +467K).

    Unemployment rate: 3.8% vs. 3.9% expected and 4.0% prior. The unemployment rate for adult men (3.5%) and Hispanics (4.4%) improved, while the jobless rates for adult women (3.6%), teenager (10.3%), whites (3.3%), Blacks (6.6%) and Asians (3.1%) showed little or no change from the previous month.

    Economist Mohammed El-Erian calls the number a "strong upside beat", "which together with favorable revisions, confirm the strength of the labor market."

    Average hourly earnings at $31.58 slipped slightly from $31.63 in January, and the average workweek rose by 0.1 hour to 34.7 hours in February.

    The strong job growth and lower unemployment rate continues to support the Fed's intention to raise rates in March. The complicating factor is the economic uncertainty posed by the Ukraine war.

    Update at 9:13 AM ET: "The labor market is in a very solid position," Chicago Fed President Charles Evans said on CNBC. "It's good news."

    The numbers don't change the picture that Fed Chair Jerome Powell painted earlier this week, he added. "We're at effective lower bound… obviously we need to be moving more toward a neutral policy towards the end of the year."

    RSM US Chief Economist Joseph Brusuelas points out that average hourly earnings are still up 5.1% Y/Y.

    Updated at 9:40 AM ET: The Y/Y wage increase is still less than inflation, points out Mark Hamrick, senior economic analyst at Bankrate. "Wages are up 5.1% over the past year, which is trailing the pace of inflation at the retail level. Indeed, surging prices are stealing the show on the minds of consumers."

    For context, core consumer inflation increased 5.2% in January.

    The total nonfarm payroll employment number for December was revised up by 78K to +588K and for January was revised up by 14K to +481K.

    On Thursday, Richmond Fed President Tom Barkin dug into what's causing labor market tightness

  7. JNJ -0.69%Mar. 04, 2022 9:09 AM ET23 Comments

    • More than 90% of U.S. counties are now at low or medium COVID-19 Community Levels, a measure of spread of the disease, according to the CDC.
    • The Community Levels are important as they are an indicator of COVID case trends across the country.
    • They are also used by the CDC to determine mask guidelines. In late February, the agency changed guidelines to base them on new metrics. In areas with low and medium levels, most people do not have to wear a mask indoors.
    • Vaccine makers: Pfizer (NYSE:PFE), BioNTech (NASDAQ:BNTX), Moderna (NASDAQ:MRNA), Johnson & Johnson (NYSE:JNJ), AstraZeneca (NASDAQ:AZN), and Novavax (NASDAQ:NVAX)
    • Mask manufacturers: Alpha Pro Tech (NYSE:APT), Allied Healthcare Products (NASDAQ:AHPI), 3M (NYSE:MMM), and Ulta Beauty (NASDAQ:ULTA).
    • On Wednesday, the White House unveiled a new pandemic plan that seeks a return to normalcy.

    Only 90% – crisis over then?

    Mar. 04, 2022 9:07 AM ET1 Comment

    "I think the string of jobs numbers has been quite good for some time," Chicago Fed President Charles Evans said in commenting on the February jobs report in an interview on CNBC. "The labor market is in a very solid position."

    "It's good news, it doesn't really change anything" that Chairman Jerome Powell was positioning for earlier this week, Evans said.

    Regarding monetary policy: "We're at effective lower bound.. obviously we need to be moving more toward a neutral policy towards the end of the year," he said.

    "If we were to do 25 bps at each meeting we'll end the year at 1.5%-2%, which will be close enough to neutral…That may be too much," Evans elaborated later in the interview.

    Still, there's "tremendous amount of concern" from the geopolitical situation, Evans said. For one thing it's having an effect on food prices with wheat and fertilizer prices rising.

    "I still think a lot of these supply shocks — they're not of a permanent nature," he said. When interest rates get closer to neutral, "we'll get a better picture by the end of the year."

    He pointed out that inflation developed differently this time around than it did in the 1970s. This time it was much quicker with January 2021 Y/Y inflation at under 2%. By April 2021, it had jumped. "It's not the 1970s story," he said.

    Earlier, Job growth strengthens in February, unemployment falls to 3.8%

    Going to be hard to get there with 0.25% increases.

    NUE -1.42%Mar. 04, 2022 8:59 AM ET26 Comments

    • Electricity throughout Western Europe traded ~€360/MWh Friday, as sky high thermal coal and natural gas prices raised feedstock costs for utilities across the continent.
    • In the US, where natural gas continues to trade near historically low levels, and coal price volatility has been blunted by long-term contracts below spot market prices, electricity traded ~€113/MWh Friday.
    • Consumers in both jurisdictions are largely insulated from short-term volatility in power prices; however, Europe's energy intensive industries are seeing costs rise in real time, lifting global prices for energy-intensive commodities like aluminum and steel.
    • US metals producers benefitting from relatively cheap power feedstocks, like Alcoa (NYSE:AA), Century (NASDAQ:CENX), and Nucor (NYSE:NUE), should see higher earnings as Europe struggles to manage the war in Ukraine and resulting energy crisis.

  8. There goes 2,000 on /RTY!

  9. Mar. 04, 2022 8:46 AM ET17 Comments

    Russian exchange traded funds fell again in premarket trading on Friday, amid ongoing fighting in Ukraine. Meanwhile, the iShares MSCI Russia ETF (NYSEARCA:ERUS) suspended trading as news broke that the largest nuclear power plant in Europe, located in Enerhodar, Ukraine, was attacked by Russian bombing.

    The assault on the nuclear power plant had ignited a fire that generated concerns of a nuclear disaster. According to Reuters, the fire has since been put out, and radiation levels remain unchanged, an official at Energoatom stated.

    Following the continued fighting and volatility of the region, ERUS has suspended trading. BlackRock said it supports the NYSE’s decision to halt trading on the ETF, stating that it is devoted to defending the best interests of ERUS shareholders.

    Due to the fact ERUS has a concentrated exposure to Russian equities, the closure of the Russian stock market, and MSCI’s decision to remove Russian securities from its Emerging Markets Indexes, BlackRock declared that it is on board with the decision.

    Looking at an index still undergoing trading, the VanEck Vectors Russia ETF (BATS:RSX) was -2.5% before the opening bell. The less liquid VanEck Vectors Russia Small-Cap ETF (BATS:RSXJ) and the Franklin FTSE Russia ETF (NYSEARCA:FLRU) have not posted premarket moves.

    Moreover, the soon to be de-listed Direxion Daily Russia Bull 2X Shares (NYSEARCA:RUSL) also trades slightly lower on Friday, -0.5%.

    Russia has now kept the Moscow Exchange closed for a fifth straight day on Friday, trying to shield stocks from a potentially brutal selloff.

    SAFM -0.85%Mar. 04, 2022 8:39 AM ET

    • The U.S. Justice Dept. is said to probing whether poultry producers may have engaged in alleged anticompetitive sharing about employment practices that may have hurt workers wages.
    • The civil investigation is looking at several poultry companies, according to a WSJ report, which cited people familiar. The probe is said to be in a preliminary stage.
    • Pilgrim's Pride (NASDAQ:PPC) disclosed last month in a 10-K filing that on Feb. 9 the company learned that the DOJ has opened a civil investigation into human resources antitrust matters. A spokesman for Perdue told the WSJ that the company received a similar notice. Tyson Foods (NYSE:TSN) and Sanderson Farms (NASDAQ:SAFM) declined to comment to the WSJ.
    • The report comes as Sen. Elizabeth Warren (D-MA) and others last month renewed a call for DOJ to scrutinize Sanderson Farms planned sale to Continental Grain and Cargill because it raises "significant" antitrust concerns.
    • Warren in November urged the DOJ to investigate how alleged "anticompetitive practices" in the poultry industry are causing price increases. Warren asked the DOJ to "consider the extensive history of price fixing" in the poultry industry in evaluating the announced sale of Sanderson Farms (SAFM) to Continental Grain and Cargill.

    AVGO +3.50%Mar. 04, 2022 7:48 AM ET

    Broadcom (NASDAQ:AVGO) shares were higher in premarket trading on Friday after the semiconductor company posted first-quarter results that beat expectations, prompting Morgan Stanley to highlight strong cloud and enterprise spending.

    Analyst Joseph Moore, who has an overweight rating but lowered the price target to $703 from $723 on a lower multiple, noted that despite some investor anxiety, the enterprise is "on fire" and customers are booking into 2023, as the demand for cloud remains "robust" and software and smartphone are coming in-line with estimates.

    This comes "even from a management team that expresses skepticism about higher long term growth rates in served markets, and acknowledges that there will eventually be a slowdown, but with extended backlog there is no pause in sight," Moore wrote in a note to clients.

    Broadcom shares gained more than 3% to $598.07 in premarket trading.

    In addition, Moore pointed out that the broadband end market accounts for 16% of sales, a segment that grew 23% year-over-year, due to rollouts of WiFi6 and fiber-PON chips. Networking accounted for 32% of semiconductor revenue, a unit that grew 33% year-over-year.

    Broadcom also expects to see strength in the networking end-market, with a forecast for more than 30% year-over-year growth in the April quarter.

    "We continue to see value in the stock on a free cash flow basis, and the company's clarity around the cyclicality of the business gives them credibility in their comments that they are booking out into [2023]," Moore explained.

    "The M&A front has been quiet, and we think the market will respond favorably to the valuation discipline shown in buying back stock if software opportunities are not what they hoped for."

    Last month, a U.S. Appeals court threw out a $1.1 billion judgement against Apple (NASDAQ:AAPL) and Broadcom (AVGO) for patent infringement.

    COST -3.65%Mar. 04, 2022 7:47 AM ET18 Comments

    Costco Wholesale Corporation (NASDAQ:COST) impressed again with comparable sales growth of 11.1% in Q4 excluding the impact of fuel and currency fluctuations to easily beat the consensus mark estimate of 8.74%.

    Wells Fargo reiterated an Overweight rating on Costco (COST) following the report.

    Analyst Edward Kelly: "While sales were generally known, it's notable that February comps accelerated when compared to 2019 levels as product cost inflation continued to ramp to new highs. Membership also continued to gain momentum… Costs were somewhat better than we expected. Overall, the company delivered another good quarter, and we remain Overweight. The stock is expensive, but we see no reason for that to change given that it's one of the highest quality companies in consumer."

    Elsewhere on Wall Street, Telsey Advisory Group raised its price target on Costco (COST) to $615.

    During the Costco (COST) earnings call, Richard Galanti said the company is considering a membership fee price increase, although no final decision has been made. The retailer last raised fees in 2017.

    Shares of Costco (COST) fell 2.14% in premarket trading.

    Costco earnings call transcript.

    FXI -2.05%Mar. 04, 2022 6:29 AM ET11 Comments

    China's National People's Congress will convene its annual parliamentary gathering on Saturday, setting economic and political priorities for 2022. Nearly 3,000 lawmakers will descend on Beijing, where the nation's rubber-stamp parliament will lay out targets for spending, employment, inflation and other growth goals. In recent years, President Xi has also used the NPC to further legitimize governance decisions, like the lifting of presidential term limits in 2018 and Hong Kong's sweeping national security law in 2020. Could this year's conference make a reference to Taiwan?

    Snapshot: The fiscal and economic projections of the NPC are the most anticipated indicators on the direction of China's economy. This year, the Communist Party leadership is expected to lay out its lowest economic growth goal in more than three decades, adopting a GDP target of between 5% and 5.5%, according to analysts at BNP Paribas. That would be the first time since 1991 that the figure fell below 6%, so watch for a possible release of additional tax cuts and stimulus measures.

    "Infrastructure seems to be the only sector that policy makers can boost," added Nomura economists led by Lu Ting. "But this would only fill a small part of the gap left by slowing export growth, the large property sector contraction and the rising costs of China's zero-Covid strategy." During the Central Economic Working Conference in December, Chinese leaders also expressed the need to tackle a "contraction of demand, supply shocks and weaker expectations."

    Outlook: Beijing is unlikely to ditch its coronavirus policy based on lockdowns, but policymakers might call for less severe restrictions as the world adjusts to a post-pandemic environment. Some even expect further rate cuts or another reduction of the bank reserve ratio after similar measures in 2021 saw GDP growth expand by 8.1% (if the numbers can be believed). Other topics that may be addressed include the country's tumbling birth rate and tighter tech regulation that has wiped out billions of dollars in stock market value.

  10. China is as bad as it was when Covid first broke out and this is only the beginning of the builder crisis.  This Russian disruption sure isn't helping. 

  11. What would Europe do if Russia cuts off natural gas? – Marketplace

  12. Russian ETF's- as the crypto's promo goes- "fortune favors the brave" so can some bottom fishing be not far behind now that the Ukraine situation becomes clearer? The initial root for the underdog hype will likely fade as Russians solidify control and any remaining opposition will get the old fashioned KGB treatment (poof-gone). Energy will continue to flow westward and the sanctions will slowly decay and the Germans/EU's can slowly return to normal activity of expanding their industrial base and generous welfare state under the NATO disguise. 

  13. ETrade is not allowing opening trades on RSX options

  14. Hi Phil,

    Is it worthwhile doing bottom fishing on German/French stocks? Mainly tech and commodities and avoiding banks/financial institutions. 

  15. BABA – hit 100……   what's next?

  16. Crox down 11.00in 2 days

  17. Crox looks like we on the wrong train here.

  18. Pstas/Russia – And they'll have all that agricultural and whatever other assets haven't been blown up!

  19. UL is down to 45 now. We have it in the butterfly portfolio. I would like to roll the long $50s down, but have a 30 day holding minimum requirement in my account. But this seems like an opportunity to do something – sell some more puts maybe?

  20. CNBC is baffled at how the markets can be down on such a good jobs report.  Our media is ridiculously US-centric.  More than that as you have to actively go out of your way to make ignorant statements like that.  Our financial propaganda rivals anything in Russia.  A guy was just on saying how he's moving all in on equities given this great opportunity.  MADNESS!

    Well, /RTY was fun while it lasted.

    Left one on so I won't regret it if we dive on Monday.

    Dollar might have topped off – that's helping the indexes get traction back:

    Euro below $1.10 is where they start supporting

    Limit up on Wheat (again):

    Copper going crazy:

    Brave/Pstas – I don't think this thing is going away soon.

    Etrade/Mike – Very wise, protect the dip crowd from themselves.

    Bottom-Fishing/Harip – Last night, we came about 500 feet from a nuclear meltdown that would have been worse for Europe than Fukishima was for Japan and you think this is a good time to jump in?  Did the bombs stop?  Maybe I'm too cautious and, of course, it's 85% certain that the worst case won't happen and things do bounce back one day – but there's also a 15% chance it could be a disaster so why play things that have even a 15% chance of ending so badly?  At the moment, this is like trying to pick which Banks, Brokers and Realtors would survive in 2008 – most of them did – but if you picked wrong you never got to benefit from the others. 

    ERG is the German ETF – down 5% today if you want to catch the knife (I don't):

    As I pointed out before – China (FXI) is back at the 2020 lows – THAT is where I might get interested in Europe (assuming the war doesn't get worse).  

    BABA/Batman – Can't find buyers anywhere.

    CROX/Bert, Yodi - Yikes!  That's why all we did was roll our calls lower – we weren't ready to commit to more than that yet.  

    February 22nd, 2022 at 10:58 am | (Unlocked) | Permalink

    CROX/Stock – Insider buying doesn't matter unless it's significant.  You have to look at how many shares someone already has and see if they are adding or subtracting more than 10% of their holdings.  Even then it could be just normal diversification if that's a significant chunk of their wealth in one place.  Most insider buying is theatrical, although sometime a stock is just stupidly cheap but if they "know something" then it's illegal to buy ahead of the public.  That's why Buffett announces his support prices at each meeting – no surprises.

    So now we check the 2024 $75 calls and they are $30 and the $65 calls are $34 and we're not going to regret that so, in the Earnings Portfolio, let's roll the 10 CROX 2024 $75 calls down to the $65 calls for net $4 ($4,000) and that puts us in for $11,000 and we're $17,500 in the money on what is now a $60,000 spread.   

    I don't have any particular problem with the spread and it's still pretty small.  

    CROX Short Call 2024 19-JAN 125.00 CALL [CROX @ $72.01 $-5.02] -10 2/16/2022 (686) $-21,000 $21.00 $-10.95 $-10.50     $10.05 $-1.45 $10,950 52.1% $-10,050
    CROX Short Put 2024 19-JAN 65.00 PUT [CROX @ $72.01 $-5.02] -10 2/16/2022 (686) $-12,000 $12.00 $4.90     $16.90 $1.60 $-4,900 -40.8% $-16,900
    CROX Long Call 2024 19-JAN 65.00 CALL [CROX @ $72.01 $-5.02] 10 2/22/2022 (686) $33,400 $33.40 $-6.45     $26.95 $-3.30 $-6,450 -19.3% $26,950

    The next move would be to buy back the short calls if we feel more bullish – they are already up 50%.  The short puts are out of the money and, of course, can be rolled lower in 2025.  Currently, the 2023 $65 puts are $13 and the 2024 $55 puts are $13 so, if we can roll the short puts down $10 per year and CROX fails to go BK – we should eventually work it out.

    UL/Rn – You have to stick with each leg for 30 days?

    UL Long Call 2024 19-JAN 50.00 CALL [UL @ $45.48 $-2.23] 20 2/7/2022 (686) $12,000 $6.00 $-2.60 $6.00     $3.40 $-0.50 $-5,200 -43.3% $6,800
    UL Short Call 2024 19-JAN 60.00 CALL [UL @ $45.48 $-2.23] -15 2/7/2022 (686) $-3,525 $2.35 $-1.05     $1.30 $-0.46 $1,575 44.7% $-1,950
    UL Short Put 2024 19-JAN 45.00 PUT [UL @ $45.48 $-2.23] -10 2/8/2022 (686) $-3,800 $3.80 $2.85     $6.65 $1.45 $-2,850 -75.0% $-6,650
    UL Short Call 2022 20-MAY 55.00 CALL [UL @ $45.48 $-2.23] -10 2/7/2022 (77) $-1,150 $1.15 $-0.95     $0.20 $-0.10 $950 82.6% $-200

    I don't like rushing to make adjustments – especially when you are in a fluid situation.  Fortunately, we sold 25 calls against 20 longs so no big deal.  The May $55 calls are dead but, if you can't put a stop on them it's hard to sell more May calls but 5 of the May $45 calls at $2.60 are not a bad sale.  That's another $1,300 towards rolling the 2024 $55s to the $45s (now $5.50) for net $2.10 so $4,200 to make the roll and we are making $1,150 on the short May $55 calls so $2,450 is the roll down half paid for – even if you have to wait to do it.

    Personally, we do our reviews in 2 weeks and that will be your 30-day mark anyway so maybe just be patient.

     “Berkshire’s current 20%-or-so position in cash is a consequence of my failure to find entire companies or small portions thereof (that is, marketable stocks) which meet our criteria for long-term holding,” – Buffett, last weekend!  

    The criteria Buffett refers to — the basis of his investing philosophy — hinges on the idea of buying good companies at an attractive value. If you have a diversified portfolio, chances are you already own some “value” investments. 

    Berkshire always has at least some cash on hand, Buffett notes in the letter: He and partner Charlie Munger have pledged to always keep at least $30 billion in reserve.


  21. That was rolling the $50s to the $40s – I got mixed up.

  22. Yes, my wife works for a bank, so I need pre-approval before each trade, and cannot close out any position within 30 days of opening it (long or short; even for individual legs). I'll wait for 2 more weeks. 

  23. GOLD/ G’day Phil, should we start covering our 2024 long calls? 2024 30s are over $3

  24. the way this market refuses to go down is enuf to make a grown man cry

  25. us considering ban on russian oil that shouldnt help markets

  26. GOLD/Lionel – I think Gold (/GC) should be over $2,000 by now so we should have more room to run.  Gold was $2,050 in Aug of 2020 so it's not like there's a lot of resistance that has to be tested so I think give it a chance.  GOLD was testing $30 at the time so $25 is only on the way.  If I thought we were topping out here I'd sell $25s, not $30s.  Why sell $30s if you think $25 is going to be all we get out of it?   And, if you don't think $25 is all we're going to get – why sell the $30s now?  

    Won't back down/Tommy – It's a good thing for those of us who want to have long-term investments.

    Oil/Timmy – And back to $115 we go!  

  27. im only talking about futures lol

  28. GOLD/ Sharp rationale as always! I share your views on the stock $30 target hence 30 calls. Patience is key…

  29. We have a problem in that Biden doesn't seem to know how to use the SPR.  It's all about perception and, last week, he released 2Mb, which is nothing and had no affect on the report.  Even worse, he SAID he was releasing oil like it was a big deal – if you are going to say it's a big deal – you have to have an impact so they need to time a 10Mb release ahead of the count and then, next Wednesday, we'd have a massive build despite the Russia crisis and everyone would calm down for a few weeks – and then you do it again.  There has to be a purpose to a release if you want to have an actual effect on the market.

    We imported 700,000b/d less last week, that's 4.9Mb for the week and we still only had a 2Mb draw – there is no supply demand imbalance but you have to make headlines to get people to believe it.

    And, of course, Florida will be leading the Revolution:


    I have no idea what it is – either a scam or chaos – fun either way!

    Last night, the Republican-controlled Florida legislature passed a dangerous bill that will severely restrict women’s access to reproductive health care. My Administration will not stand for the continued erosion of women’s constitutional rights.


    Fox News host Tucker Carlson was featured on Russian state TV once again after Kremlin speakers told Ukraine to listen to Fox's pro-Russia talking points and surrender to Russian President Vladimir Putin.

    Kremlin-funded media outlets ran translated clips from Fox News' conversation between Carlson and retired Colonel Douglas Macgregor, who has consistently urged Ukraine to retreat and give in to Putin. Russian TV ran the clips pushing Kremlin propaganda.

    This isn't the first time Carlson and one of his guests were highlighted on Russian news outlets for their pro-Russia statements. On February 22, Carlson questioned why so many Americans have a negative opinion of Putin.


    "Has Putin ever called me a racist?" Carlson asked. "Has he threatened to get me fired for disagreeing with him?" Carlson rhetorically asked. "Has he shipped every middle-class job in my town to Russia? Did he manufacture a worldwide pandemic?"

    "Vladimir Putin didn't do any of that, so why does permanent Washington hate him so much?" Carlson asked.

    The clip was picked up by RT, an international television network controlled and funded by the Russian government. After RT aired Carlson's segment, the speech was picked up by a number of other Russian news services.


    In 10 says of #war we learned not to worry about the air raid sirens. We still hiding, but this is just a normal part of life now.

    Amazing how people adapt to anything.

    And now this:

  30. Hey, Bob! Are you rejoining the group?

  31. Image

    Good cover.

    The average price of gasoline jumped 11 cents Friday to nearly $3.84 per gallon, marking the highest level since March 2012, an AAA spokesperson confirmed to Forbes.

    Prices have risen nearly 27 cents amid the intensifying conflict in Ukraine over the past week, with the highest prices in California, Oregon and Washington, where people are paying average gas prices of $5.07, $4.28 and $4.22, respectively.

    New York City will end many indoor vaccine requirements and school mask mandates, Mayor Adams announced Friday. "We have become so boring as a city," he said. "It is time for us to enjoy our city again"

    One nurse is caring for ten sick babies on her own. Her colleagues have either fled or can’t get to work.

    steps inside Ukraine’s largest paediatric unit

    Bob/Snow – He's still a Member but he never participates.  frown

  32. An unidentified woman's dismembered torso was found stuffed in a shopping cart in Brooklyn early Thursday. The grisly discovery was made in a large bag that was inside the cart, the police said.

    I can't believe the Mayor says we're getting boring!


    In total, almost a quarter of Ukraine’s population may be rendered homeless by the war, making it the biggest single-country disruption after the Syrian refugee crisis of the past decade.


    That groundhog was right.

    Another reason to love /NG!


  33. Homeless in Ukraine/Phil – so those Russian soldiers that Ukraine is offering 5 million rubles to quit and come live in Ukraine can get into the construction business once the shooting stops.

  34. Well, I have to admit that if Jackie were sitting in the basement with her cat and her gun, I would want it to be the finest assault rifle available and not some wimpy semi automatic BS.   

  35. Phil/Mayor – Adams is desperate. NYC is going down the tubes under the new paradigm of remote work. He's like a buggy whip manufacturer arguing against cars.

  36. Good point. New York is very good at reinventing itself but this is a major overhaul.  


    Have a great weekend everybody,

    - Phil

  37. From the "things that make you go HMMM dept.:

      Germany’s Scholz Puts Schröder on the Russia Spot

    That is the person of Gerhard Schröder, former chancellor. Mr. Schröder, like Mr. Scholz a member of the center-left Social Democratic Party (SPD), has spent the years since leaving office in 2005 as a highly paid political fixer and brand ambassador for Russian energy companies. He is chairman of Rosneft, was appointed last month to the board of Gazprom, and holds senior posts with companies responsible for the Nord Stream 1 and 2 natural-gas pipelines.

    Those lucrative jobs mark Mr. Schröder as the highest-profile Putinversteher (roughly, “Putin whisperer”) in the Russophile SPD, and in German politics broadly. For a former leader to adopt such a role is a national, party and personal disgrace.

  38. Noted Russia historian opines on Ukraine/Putin"

    The Two Blunders That Caused the Ukraine War

    Robert Service, a leading historian of Russia, says Moscow will win the war but will lose the peace and fail to subjugate Ukraine. How Putin could be deposed.

  39. So Mr. Reich, interesting to note that rising inflation and federal deficits expanding is just a coincidence? 

    Also, inflation rate running well under 2% for most of the past decade and now running 7%+ must imply those greedy corporations just now discovered the benefits of price gouging? 

  40. I think prices have risen well ahead of inflation for a long time – it's something I've said for ages as the CPI has been manipulated to mask true inflation.  Corporate profits have skyrocketed in the past decade and yes, they've taken full advantage of this inflation spike to pass along to consumers the whole next decade's worth of price increases in one pre-emptive strike.   Is it gouging or war profiteering or just good Capitalism – hard to tell them apart these days.  

    Corporate Profits Are Huge | Seeking Alpha

    Visualize How Enormous U.S. Corporate Profits Are

    F Yeah!

  41. what do you think of /ng long here at 5 dollars with this pop in oil 

    is it too late in the heating season?