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Monday Market Mayhem – Earnings Season Begins

And suddenly, it's earnings season!

Image

I hope everyone had a nice, restful weekend because it's all about to hit the fan as war and inflation are likely to have randomized earnings results for Q1 and we KNOW that our fellow traders are not mature enough to absorb a bad quarter and simply wait things out – so chaos is very likely to ensue – very quickly. 

Bank of America (BAC) joined most of its banking buddies from last week in reporting a drop in earnings of 12% from last year and last year we were still in the middle of Covid – so not good.  HOWEVER, that 12% decline still left them with a profit of $7Bn for the Quarter and that's just fine for a $300Bn bank – barely over 10x earnings, so it's nothing rational people should be upset about.  

BAC, along with most banks, has fallen almost 1/3 since the January highs and we should do some bargain-hunting as rising rates are to banks what rising oil prices are to refiners – they may sting initially but, over time, they get to increase the "crack spread" between what they borrow for and what they lend for,  In other words, if the Fed gives the bank money at 0.25% and the bank gives you a home loan of 3% and makes 2.5% but already we're seeing 5% plus mortgages after the Fed only raised rates to 0.5% – just like gas stations do when oil goes up a tiny bit – it's just an excuse to screw the Consumers.  

The last time the Federal Reserve started raising rates at the end of 2015, bank stocks sharply outperformed the S&P 500 over the next two years.  You want to stay away from banks that have too much tied up in bonds – like Community Banks and small Savings Banks – as the bond market is taking a huge hit this year but rising real estate prices have, so far, been good for the lenders – as it decreases their loan to value ratios.  

Part of preparing to take advantage of earnings season is knowing which sectors are undervalued or overvalued AND whether or not it is a fair perception.  Banks are always tricking to invest in as there are so many moving parts.  JP Morgan (JPM), for example, is now off about 30% after going even lower on earnings that I thought were pretty good – considering.  There was a $1Bn credit reserve (against bad loans) and a $5Bn write-off on Russian assets from the World's biggest bank but, without those, Q1 was about the same as Q4 and the bank is priced at about 11x earnings.  

Selling a put is a great way to remind us to keep our eye on a stock so, for our Earnings Portfolio, let's sell 5 JPM 2024 $120 puts for $15.50.  That will put $7,750 in our pocket in exchange for promising to buy 500 shares of JPM for $120 between now and January, 2024.  The current price is $126, so it only triggers if it goes lower and, of course, since we collected $15.50 up front – our net entry would be $104.50 – a 17% discount to the current price.  See our classic "How to Buy Stocks for a 15-20% Discount."

Since the only way we end up owning JPM is if the stock goes even lower – THAT would be a good time for us to buy long calls, using the money we just collected and giving us a "free" (if we don't get assigned) call spread over the next two years.  We think JPM is oversold now and the most likely reason they would go lower is a general Recession that would not be particular to JPM – so they would still make a good long-term investment – ESPECIALLY since the Recession is being caused by rising rates, which is something the Government can adjust, rather than an actual Global slowdown.  Quite the oposite – the Fed is raising rates BECAUSE the economy and inflation are running to hot.  

Anyway, that's the kind of stuff we look for in Earnings Season – discrepancies.  We find the flaws in the investing strategies of others and, when they leave perfectly good bargains laying around – we scoop them up.  

This is going to be a very boring data week and Russia hardly did anything terrible over the weekend so there won't be much to talk about other than earnings.  Covid cases are up 39% in April but, as usual, no one is going to talk about that until it's much too late

ONLY 511 people a day are dying in the US – that's only 186,515 per year – hardly a thing added to our Million-corpse pile.  Covid barely even made the list of concerns people have in the most recent Gallup Poll – dropping from 20% in January to just 3% in March:

So you can't blame the Government for not doing enough about Covid when the correct answer, according to the polls, is "What Covid?"  The same goes for Healthcare, Poverty, Inequality, Homelessness and the Deficit – it's amazing what you can keep people from thinking about if you keep it off the TV, right?  

Why Do Six Companies Control 90% of the Media? - CounterPunch.org

Brainwashed: Seven ways to reinvent yourself by Seth Godin

 


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  1. Phil / ARR-

    Good morning!  Do you still like ARR?  Its getting beat up like all the other mortgage REITs and nearing 15% dividend.  Thx!


  2. Good Morning.




  3. Americans are drowning in spam



  4. U.S., allies plan for long-term isolation of Russia


  5. The Battery That Flies


  6. ???? ???? Rivian’s “production hell”




  7. Good morning!

    It sucks that this is now a 5-day week – never feels right after a 3-day weekend.

    ARR/Emike – Still?  That's hard to say as I've lost track.  Probably not as they are a mortgage REIT but they operate more like a community bank, which I warned about above.  They just use the REIT designation to distribute the profits.  It's hard to say how tapering will affect them but they depend a lot on MBSs which the Fed used to buy – not clear who will step in and buy them now.   ARR has already taken a lot of impairment charges and more may lie ahead.  

    All the REITs face the same problems to some extent – it's going to be a rough year or two for that sector.

    Opca on Monday has cut cryptocurrency exchange Coinbase Global (NASDAQ:COIN) price target to $314 from $377 which still implies 116% upside from last Thursday's close.

    COIN shares are off slightly by 1.1% in early morning trading. And with Bitcoin (BTC-USD-35% slumping for the past six months, COIN is also falling more than 50% in the same time period and -56% Y/Y.

    Ongoing selling pressure experienced in COIN comes amid "1) increasing competition and fee compression; 2) COIN over-earns and will not be profitable this year; 3) COIN is overvalued; 4) low trading volume; 5) crypto winter; and 6) potential regulatory actions against crypto companies," according to a note written to clients.

    Meanwhile, Opca believes that those bearish narratives are "way overblown and that this creates an opportunity for long-term investors to get into one of the most disruptive companies in the market at what we see as a very attractive valuation," the note said.

    Note that SA's Quant Rating screened COIN at high risk of performing badly due to declining growth and decelerating momentum when compared with peers. The Quant Rating views COIN as a Sell, while Wall Street Analysts see it as a Buy (11 Strong Buy, 7 Buy, 4 Hold, 1 Sell, 1 Strong Sell).

    On April 11, Raymond James pointed to Coinbase's softer trading volumes.

    TWTR +2.93%Apr. 18, 2022 10:18 AM ET

    A new filing offers details on Twitter's (TWTR +3.3%shareholder rights plan from Friday - the "poison pill" it's implemented as a defense against a hostile takeover by billionaire Elon Musk.

    A minor trough in the opening half hour has been reversed and Twitter stock is up more than 3% on the day.

    The filing notes the company authorized and declared a dividend distribution consisting of one shareholder right for each common share held – and the right grants holders the ability to purchase one-thousandth of a share of preferred stock (a portion intended to approximate the value of one share of common stock).

    Poison pills allow existing shareholders to acquire new shares at a discount if a potential acquirer raises its stake beyond a certain threshold, in order to dilute the ownership of the acquiring party.

    In Twitter's particular case, the right has a flip-in trigger if an acquiring person (here, Musk) obtains beneficial ownership of more than a 15% stake. For an exercise price that's now set at $210, holders can purchase common shares with a then-current market value of twice the exercise price.

    In this case, that would be $420. The number 420 is a common marijuana joke reference (Among Musk's troubles with the SEC were that he once tweeted about potentially buying Tesla out at $420/share, and he is bidding $54.20/share for Twitter).

    Musk continues to tweet away about the potential Twitter deal. Responding on Twitter to the idea that boardmembers won't have comfortable jobs if his bid succeeds, Musk said "Board salary will be $0 if my bid succeeds, so that’s ~$3M/year saved right there."

    Musk hinted over the weekend at a potential tender offer for Twitter shares. And Wedbush's reaction to the latest news points the way to one of three paths for Musk to follow.

    TSLA +1.73%Apr. 18, 2022 10:17 AM ET

    The electric vehicle sector turned lower in early trading on Monday after COVID developments in China set off worries about more production halts and supply chain snarls that could impact production.

    The government in Shanghai has reportedly set a new target of zero cases at the community level by April 20, which means no new cases outside of quarantined zones. That may be a tough standard after 23,643 new local infections Shanghai were reported for April 16, of which 722 were from outside the quarantined areas. The city also reported 19,831 new daily asymptomatic COVID-19 cases on April 17, as well as three deaths to mark the first fatalities during the current COVID outbreak in the region

    Notable electric vehicle stock decliners included Mullen Automotive (MULN -11.6%), Volta Inc. (VLTA -6.3%), Aurora Innovation (AUR -4.5%), Electric Last Mile Solutions (ELMS -4.5%), QuantumScape (QS -4.9%), Rivian Automotive (NASDAQ:RIVN -5.9%), Proterra (PTRA -4.7%), XPeng (XPEV -2.9%), Volcon (NASDAQ:VLCN -5.1%) and Nio (NIO -2.8%).

    Tesla (NASDAQ:TSLA) is holding up better than most in the EV sector with a 0.05% tick higher to $985.33. Earlier on Monday, ARK Invest's Cathie Wood projected Tesla's (TSLA) share price could hit $4,600 per share by 2026. Piper Sandler also reminded investors that vertical integration is at the core of Tesla's (TSLA) EV advantage because the supply chain is said to be immature and cannot be relied upon to scale up quickly.

    Piper also spoke favorably about Rivian Automotive (RIVN). The electric vehicle upstart is said to be singularly aware of what it takes to be the Next Tesla.

    Analyst Alexander Potter: "Vertical integration is costly, and there are no shortcuts. In its early days, Tesla dealt with delays, quality problems, and staggering cash burn. Rivian must endure this period, just as Tesla did. But we think the payoff will be worth it, because Rivian has a chance to consolidate three large segments of the auto market before Tesla releases competing products. And RIVN is insulated from many of the near-term headwinds."

    ET +0.87%Apr. 18, 2022 10:10 AM ET16 Comments

    A Texas natural gas pipeline leaked so much methane in little more than an hour last month that by one estimate its climate impact equaled the annual emissions from ~16K cars, Bloomberg reported Monday.

    The leak came from a pipe that is a tiny part of a vast web of unregulated gathering lines across the U.S. that link production fields and other sites to bigger transmission lines.

    Energy Transfer (NYSE:ET), which operates the line where the leak occurred through its ETC Texas Pipeline unit, said an investigation into the cause of the event is ongoing and all appropriate regulatory notifications were made.

    ETC Texas Pipeline reported a line break occurred on March 17 on its Big Cowboy pipeline that is jointly owned with Kinder Morgan (KMI), according to a filing to the Texas Commission on Environmental Quality, which caused a release of 52,150 thousand standard cubic feet of natural gas.

    Energy Transfer "continues to generate strong fundamental performance and its prospects look favorable moving forward," Daniel Jones writes in a bullish analysis newly published on Seeking Alpha.

    FITB -0.33%Apr. 18, 2022 10:04 AM ET

    • Fifth Third Bancorp (FITB -0.2%) raises its minimum wage to $20 per hour beginning July 4.
    • Bank also will provide a wage adjustment for its first four job levels that are above the Bank’s new minimum wage.
    • In total, more than 40% of the Bank’s workforce will receive a midyear compensation increase.
    • In January 2018, the Bank raised its minimum hourly rate from $12 to $15; that was followed in October 2019 by an increase from $15 to $18 per hour.


  8. Phil/Reits/NLY – Phil, are you still in NLY? I have 10 Jan 23 $10 Puts that are taking a beating. Time to roll? Cut the losses?


  9. Apr. 18, 2022 10:01 AM ET

    • April NAHB Housing Market Index77 vs. 78 expected and 79 prior (unrevised).
    • “Despite low existing inventory, builders report sales traffic and current sales conditions have declined to their lowest points since last summer as a sharp jump in mortgage rates and persistent supply chain disruptions continue to unsettle the housing market,” said NAHB Chairman Jerry Konter, a builder and developer from Savannah, Ga.

    CORN +1.75%Apr. 18, 2022 9:55 AM ET4 Comments

    Corn futures (C_1:COM) in Chicago rose as much as 0.8% to $7.90 per bushel, the highest since September 2012 for a most-active contract, while wheat (W_1:COM) jumped as much as 2.2% to $11.28 1/2 a bushel and soybeans (S_1:COM) added 0.5% to $16.90 1/2, after the market was closed Friday for a holiday.

    ETFs: (NYSEARCA:CORN), (WEAT), (SOYB), (DBA), (MOO), (JJA), (JJGTF), (GRU), (TAGS)

    Ukraine's farm minister said ~1.25M metric tons of grains and oilseeds remain on commercial vessels blocked in the country's seaports due to Russia's invasion and part of the cargo may deteriorate in the near future.

    Fears of planting delays due to unfavorable weather in the U.S. Midwest also are supporting corn prices; the Department of Agriculture said the U.S. corn crop was 2% seeded as of April 10, behind the five-year average of 3%.

    Russia and Ukraine combined for more than 25% of the world's trade in wheat and ~20% of corn sales.

    Corn prices also have been climbing since President Biden said the U.S. would waive the 10% ethanol blending cap this summer, allowing retailers to blend 15% ethanol into the gasoline stock.

    VZ +0.15%Apr. 18, 2022 9:38 AM ET19 Comments

    • Verizon (VZ +0.5%) has boosted its minimum wage to $20 per hour for a large number of employees, part of a push for retention and hiring in a tough labor market.
    • The company says new employees in Customer Service will receive $20/hour, and new employees in Retail and Inside Sales will receive $20/hour when base salary plus target commission are combined.
    • Existing employees on any of those teams who make less than that $20/hour target will be raised to it automatically, Verizon says.
    • The company is also offering premium pay differentials for managers who work on holidays and Sundays, and for those who are bilingual, it says.
    • In many markets around the U.S., Verizon is also offering a sign-on bonus for retail specialist and assistant manager positions.
    • Earlier, Verizon took a near-10% stake in Casa Systems and set up a new multi-year purchase contract with the company for 5G core network functions.

    CL1:COM +0.96%Apr. 18, 2022 9:00 AM ET3 Comments

    Oil (CL1:COM) traded marginally higher ahead of the US equity market open Monday, as major production outages in Libya offset demand weakness related to China's pandemic response. The outages in Libya appear to be protest-related and the story is developing rapidly. While demand impacts from Chinese lockdowns are being exacerbated by policy-led oil product export restrictions.

    Saturday, Libya shut its largest onshore oil field, as political protestors gathered, preventing field workers from continuing production, according to the National Oil Company's Facebook page. By Sunday morning the Mellitah oil port was shut, and by Monday a series of protest-related outages across the country reduced production by 535kb/d (USO) (XLE). Protestors are demanding Prime Minister Abdul Hamid Dbeibah step down, according to Bloomberg.

    In China, the pandemic response has seen an easing of lockdowns in Shanghai; however, stricter controls have been imposed in Suzhou and Zhengzhou. The additional restrictions are sparking fears that China could see rolling lockdowns for months. Suzhou and Zhengzhou have a combined population of ~20m people.

    Interestingly, China released oil product export data Monday, indicating that gasoline and diesel exports have fallen 40% and 76% year to date, respectively. Falling domestic demand should lead to rising exports; suggesting that falling exports are a sign the government is using quotas to reduce refinery runs domestically. A measure that is sure to tighten global oil product markets and boost profitability for US and European refiners like Valero (VLO), Marathon (MPC) and Saras.

    SIRI -2.40%Apr. 18, 2022 8:51 AM ET

    Sirius XM Holdings (NASDAQ:SIRI) slipped in premarket trading on Monday as Morgan Stanley downgraded the broadcasting company, citing concerns over slowing subscriber growth due to a weaker auto market.

    Analyst Benjamin Swinburne downgraded Sirius XM (SIRI) to underweight and kept the firm's $7 price target, while also lowering earnings estimates both below the company's own guidance and Wall Street consensus.

    "While the cable/satellite industry can be appropriately characterized as offering investors relatively defensive business models, SiriusXM is the most cyclical in the group as a function of its exposure to US auto sales," Swinburne wrote in a note to clients.

    Sirius XM (SIRI) shares fell slightly more than 1.5% to $6.36 in premarket trading on Monday.

    The analyst lowered his estimate for self-pay net additions to just below 400,000 and 700,000 for 2022 and 2023, compared to the company's outlook of roughly 500,000 for 2022 and Wall Street estimates of 850,000 for 2023.

    In addition, Swinburne noted that advertising is now more important to Sirius XM (SIRI) since its 2019 acquisition of Pandora and factored into the downgrade.

    Lastly, Sirius has seen its premium compared to the cable industry nearly double, which Swinburne believes is likely to revert as earnings multiples come down and its valuation gets compressed.

    "A highly attractive business model, SiriusXM appears to nonetheless be maturing and organic growth is slowing," the analyst wrote, noting that compound annual growth is likely to slow to be between 3% and 4% over the next five years, down from 10% to 11% in the five years prior to the pandemic.



  10. REITs/Swamp – NLY/CIM and, to some extent TWO are REITs I don't mind riding out for a few years.   If they drop 50%, I'm happy to DD and another 50% and I'd buy 2x more.  That also works because they are already below $10 so selling NLY 2024 $7 puts for 0.60 against the $6.76 stock gives me a decent rate of return but if I pair that with the $7 puts at $1.80, the net drops to $4.36/5.60 so let's say I have 5,000 shares for $21,800 and it drops to $3, forcing me to have 10,000 shares at $56,000 so I buy 10,000 more (assuming no rolls) at $30,000 and then sell at least $10,000 more of put and calls to drop it to $20,000 for $10,000 more so now 20,000 shares at $76,000 is $3.80/share average and, if assigned 10,000 more at $3, then 30,000 shares at $3.53 is $105,900 after starting with 5,000 shares at $21,800.  I have no problem with that or ending up with 60,000 shares under $2 (not even $120,000) - therefore I don't really care what the PRICE of the stock is while I accumulate my shares in such an early allocation block.

    We have used this scaling strategy for close to 20 years now and, in all that time, even during a total collapse of the real estate market in 2008 – we never got to own our goals on these REITs because, over the course of 4-8 years – the upside eventually happens and we get called away with a nice profit.  

    Combine that with 10% dividends and you'll learn not to care about the current pricing very much…


  11. BTC-USD -2.50%Apr. 18, 2022 8:46 AM ET6 Comments

    Bitcoin (BTC-USD), Ethereum (ETH-USD) and a raft of major cryptocurrencies are facing more selling pressure Monday morning as investors' risk appetite narrows.

    As U.S. stock market index futures imply a weaker opening, bitcoin (BTC-USD -2.9%) is sliding to $39.31K and ether (ETH-USD -3.7%) is drifting down to $2.93K. On a technical basis, while Bitcoin (BTC-USD) has been trading in a six-month cyclical decline, it's “not close to an oversold reading,” and $35K support probably won't hold, said John Roque, technical analyst at 22V Research, in a note to clients Sunday, as reported by Bloomberg. “We continue to believe that it will get to the $30,000 level,” he highlighted.

    It appears that investors are shifting their focus to safe haven assets such as Gold (XAUUSD:CUR +1.0%) in a backdrop of tighter monetary policy and geopolitical tensions. Gold is approaching $2K per ounce again, recently changing hands around $60 below its all-time high of $2,089 in Aug. 2020.

    Over the past year, it's clear that Gold (XAUUSD:CUR+12% has been outpacing Bitcoin (BTC-USD-30%, the stock market (SP500+8%, and headline consumer price inflation +8.5% Y/Y, implying that the precious metal is acting as an efficient store of value amid economic uncertainty and recession risks. In an effort to tame inflationary pressures, the Federal Reserve is pivoting to hawkish policy, with expectations that the Fed will hike the policy rate aggressively throughout this year and next.

    DAL +0.72%Apr. 18, 2022 8:37 AM ET1 Comment

    UBS upgraded Delta Air Lines (DAL) to Buy from Neutral after taking in the airline company's strong earnings report and guidance update.

    Delta's (DAL) much better than expected Q2 unit revenue trends drove the UBS upgrade.

    The firm thinks the restrained capacity and solid operations at Delta (DAL) set the stage for share gains and pricing power.

    Analyst Myles Walton: "DAL has been slower than peers to restore capacity by choice as latest schedules suggest -16% vs 2019 in 2Q while our coverage avg ex-DAL is -7%, but that restraint has allowed for consistent solid operating performance and we suspect share pick-ups as others struggle. 2Q CASM-ex is a touch higher but the company's unique refinery asset provided a bit more hedging benefit given blown-out crack spreads than would be usually the case"

    Looking ahead, Delta's (DAL) premium travel and AMEX growth are seen being more permanent than just a pandemic trend.

    UBS set a price target on DAL of $53 based on a 50-50 blend of 6.5X EV/EBITDAR and 8.3X PE off the 2023 estimates.

    Shares of Delta Air Lines (DAL) fell 0.33% premarket on Monday amid general weakness in the airline sector following more COVID developments in China.

    Dig into the Delta Air Lines earnings call transcript.

    Told you so!  

    Top Trades for Mon, 29 Nov 2021 11:42 – BNTX and DAL

    Also, I don't know if you noticed it but people have been flying all year without any major incidents yet you can buy Delta Airlines (DAL) for $24Bn at $37.50 and Delta made almost $5Bn in 2019.  They lost $12.4Bn in 2020 and they are losing $3Bn this year but next year should be back to profits and, long-term, we're not going to stop flying – even if we all have to wear space suits on the plane.  

    Let's take a poke at DAL in our Future is Now Portfolio:

    • Sell 5 DAL 2024 $40 puts for $10 ($5,000) 
    • Buy 20 DAL 2024 $40 calls for $8.40 ($16,800)
    • Sell 20 DAL 2024 $55 calls for $5 ($10,000) 

    I'm being aggressive with the short puts because this trade will either begin working by Q1 or we're out anyway.  It's a $30,000 spread at net $1,800 so there's a $28,200 (1,566%) upside potential at $55.  Worst case is we're forced to own 500 shares of DAL at net $43.60 but we'll pull the plug long before that happens.

    DAL Long Call 2024 19-JAN 40.00 CALL [DAL @ $42.77 $0.41] 40 11/29/2021 (641) $30,000 $7.50 $3.83 $7.50     $11.33 $0.32 $15,300 51.0% $45,300
    DAL Short Call 2024 19-JAN 55.00 CALL [DAL @ $42.77 $0.41] -40 12/6/2021 (641) $-15,520 $3.88 $1.75     $5.63 $0.23 $-6,980 -45.0% $-22,500
    DAL Short Put 2024 19-JAN 40.00 PUT [DAL @ $42.77 $0.41] -10 11/29/2021 (641) $-11,000 $11.00 $-4.00     $7.00 $-0.10 $4,000 36.4% $-7,000

    Still only net $18,000 on a $60,000 spread (it got cheaper and we doubled down along the way).


  12. SPY +0.27%Apr. 18, 2022 8:19 AM ET26 Comments

    Signs are emerging that Q1 earnings season will be more disappointing than expected, especially with regards to forward estimates and guidance, Morgan Stanley says.

    "Earnings revisions breadth for the S&P 500 (SP500) (NYSEARCA:SPY) has resumed its downtrend over the past 2 weeks and is once again approaching negative territory (which would mean more downward than upward out-year EPS revisions)," chief equity strategist Mike Wilson wrote in a note Monday.

    "This is largely being driven by declining revisions in cyclical industries where we've been more negative – Consumer (XLY), Industrials (XLI), Tech Hardware (XLK) and Semis (SOXX) (SMH)," Wilson said. "Negative revisions are often an indication that forward EPS estimates are going to flatten out or even fall."

    With cost pressures, payback risk in consumer demand and the Russia/Ukraine war, a "downward move in revisions should play out again into 1Q reporting season," he added.

    "The difference this time is that we think the downtrend is likely to take revisions breadth outright negative, and potentially well into negative territory. While this is no guarantee of a collapse of forward EPS, it is typically a sign that forward earnings estimates are going to decelerate or at least consolidate sideways."

    Inflation now an earnings headwind

    The positive effects of inflation on earnings have reached their peak and will now be a headwind to growth, especially with a hawkish Fed, Wilson said.

    The "de-rating has been most severe in the expensive and/or economically sensitive areas of the market while defensive areas have actually seen multiples expand," he noted. "This suggests the market is worrying about higher rates and slower growth even as the overall index remains expensive."

    That's classic late cycle, according to Wilson.

    The forward P/E for the S&P 500 has dropped 11% from November 15, 2021 to April 13.

    In comparison by sector:

    • Energy (XLE-7%
    • Materials (XLB-7%
    • Industrials (XLI): capital goods -10%, commercial and professional services -12%, transportation (IYT-19%
    • Consumer Discretionary (XLY): autos and components (CARZ-18%, consumer durables and apparel -29%, consumer services -38%, retailing (XRT-18%
    • Consumer Staples (XLP): food and staples retail +4%, food beverage and tobacco (PBJ+10%, household and personal products +2%
    • Healthcare (XLV): HC equipment and services 0%, pharma, biotech and life sciences -2%
    • Financials (XLF): banks (KBE-17%, diversified financials -5%, insurance (IAK+7%
    • Tech (XLK): semis and semi equipment (SOXX) (SMH-28%, software and services (XSW-20%, tech hardware and equipment 0%
    • Communication Services (XLC): communication services -19%, media & entertainment -23%, telecom (IYZ+8%
    • Utilities (XLU+12%
    • Real Estate (XLRE-4%

    Goldman Sachs said there is now a 35% chance of a U.S. recession over the next two years.

    RIVN -4.48%Apr. 18, 2022 8:17 AM ET6 Comments

    • Rivian Automotive (RIVN) CEO R.J. Scaringe believes that the auto industry is likely to face EV battery supplies shortage which could surpass the current computer chip shortage, as cited by Wall Street Journal.
    • Industry trends reveal that car companies are trying to lock up limited supplies of raw materials like cobalt, lithium and nickel that are key to battery making, and many are constructing their own battery plants to put more battery-powered models in showrooms.
    • Graphite, a critical mineral used in EV batteries, could see a shortage in supply amid surging demand for EVs; analyst from London-based battery materials data and intelligence provider Benchmark Mineral Intelligence said that with EV sales expected to reach up to 11M units in 2022, there could be a deficit of around 40K tonnes of graphite this year as cited by South China Morning Post.
    • In a January Baird technology conference, MP Materials CEO James Litinsky said that automakers, anxious to avoid a replay of the production halts forced by the chip shortage, are in a quiet mad rush to line up lithium, permanent magnets and other key materials for EVs.
    • Traditional automakers have hastily announced plans to build 13 lithium-ion battery plants in the U.S. by mid-decade.
    • During a tour of Rivian's Illinois factory lines, Scaringe said that chip suppliers are skeptical of the young electric vehicle company's capability to hit promised production numbers and they are instead allocating more chips to established customers based on the numbers of vehicles they have built in the past.
    • The company produced 2,553 vehicles for the Mar.31 quarter ending which is in line with company expectations; the company had cut its 2022 production forecast by half to just 25K vehicles.
    • Tesla CEO Elon Musk tweets at Rivian, "I'd recommend they get their first plant working. It’s insanely difficult to reach volume production at affordable unit cost."
    • Reuters cited Scaringe, "We expect pricing to remain pressurized, where it will continue to increase over time. More price increases are inevitable, and not just at Rivian, due to the combination of scarce parts and rising raw materials."

    ARKK -2.56%Apr. 18, 2022 8:15 AM ET77 Comments

    Cathie Wood and ARK Invest updated their expected value for Tesla (NASDAQ:TSLA), predicting that shares of Elon Musk's electric vehicle maker would top $4,600 by 2026.

    The innovation-focused investment firm remained bullish on TSLA as Wood and her team previously outlined an expected target of $3,000 in 2025. The projection was based on an open-source model.

    Wood also provided additional bull and bear cases towards the EV leader that are tuned to the 75th and 25th percentile Monte Carlo outcomes. The bull-bear range for TSLA comes in at $5,800 on the high end and $2,900 on the low end.

    Detailing its bull-bear predictions, ARK stated: “We believe that there is a 25% probability that Tesla could be worth $5,800 per share or more in 2026,” and “we believe that there is a 25% probability that Tesla could be worth $2,900 per share or less in 2026.”

    If ARK’s research and forecasts about TSLA are correct, it will then support the firm's flagship actively managed exchange traded fund, ARK Innovation ETF (NYSEARCA:ARKK), which has a top position in TSLA.

    ARKK has a 10.07% weighting towards Tesla and the fund has provided investors previous returns of +145.9% over five years, -51% over a one-year period, and a -39.2% return in 2022.

    In related ARK Invest news, Cathie Wood recently made a case that benchmark indices don’t offer “true innovation.”

    Shes A Nut GIFs - Get the best GIF on GIPHY


  13. SBUX +0.25%Apr. 18, 2022 8:09 AM ET9 Comments

    Starbucks Corporation (NASDAQ:SBUX) interim Chief Executive Officer Howard Schultz told employees in a video made available on Monday that there were a lot of false promises made over the last few years, but he pledged to them that those days are over.

    Schultz told the SBUX employees that he plans to focus on issues raised by employees in their co-creation sessions such as need for more training, guaranteed hours, as well as store maintenance and repair issues.

    "I have realized there have been many short term decisions that have had an adverse affect. We are going to reverse that," Schultz stated.

    As part of a strategy to prevent more stores from voting for unionization, Schultz also stated that he is reviewing the benefit packages for employees with an aim at making them more attractive.

    The list of Starbucks Corporation (SBUX) stores that have asked the NLRB to hold union elections now includes more than 170 locations.

    Starbucks Corporation (SBUX) is expected to post its earnings report during the first week of May. The coffee giant has missed revenue expectations in three of the last five quarterly reports.

    File:Union-busting-machine-graph.gif


  14. BK -3.21%Apr. 18, 2022 8:03 AM ET

    Bank of New York Mellon's (NYSE:BK) Q1 earnings, excluding notable items, beat the average analyst estimate, in a quarter where the company dealt with rising interest rates and saw fee revenue reduced from exiting Russia.

    "Throughout the quarter, we took actions in the investment securities portfolio to temper the immediate impact to capital from higher interest rates," said CEO Todd Gibbons. "And we expect higher interest rates to be a positive for both fee and net interest revenue going forward."

    Total revenue of $3.9B for the quarter was unchanged Y/Y, or increased 2% when excluding a reduction related to Russia.

    Q1 EPS of $0.94, when excluding $0.08 for notable items, beat the average analyst estimate of $0.86, and slipped from $1.05 in Q4 2021 and $0.98 in Q1 2021.

    BNY Mellon (BK) stock is rising 1.0% in Monday premarket trading.

    Q1 net interest revenue on fully taxable equivalent basis was $701M, vs. $681M in Q4 and $655M in Q1 2021; net interest margin on FTE basis was 0.76% vs. 0.71% in Q4 and 0.67% in the year-ago quarter.

    BNY Mellon's (BK) Q1 revenue of $3.93B slipped 2% Q/Q and 3% Y/Y. Excluding

    Q1 total fee revenue in $3.16B fell from $3.23B in Q4 and $3.26B in Q1 2021. Excluding an $88M reduction related to Russia, fee revenue would have been flat Y/Y.

    Provision for credit losses was $2M vs. a benefit of $17M in Q4 and a benefit of $83M in the year-ago quarter.

    Noninterest expense of $3.01B rose from $2.97B in Q4 and $2.85B in Q1 2021; staff expense of $1.70B increased from $1.63B in the prior quarter and $1.60B in the year-ago quarter.

    Securities Services total revenue of $1.78B fell 3% Q/Q and was roughly unchanged from a year ago; pretax operating margin of 16% fell from 19% in Q4 and 23% in Q1 2021.

    Market and Wealth Services total revenue of $1.20B increased 2% Q/Q and was essentially flat from the year-ago quarter; adjusted pretax operating margin of 41% vs. 43% in Q4 and 46% in Q1 2021.

    Conference call at 8:00 AM ET.

    Earlier, Bank of New York Mellon (BK) GAAP EPS of $0.86 beats by $0.01, revenue of $3.93B misses by $10M

    BYDDF -2.30%Apr. 18, 2022 8:01 AM ET2 Comments

    • BYD Company (OTCPK:BYDDFexpects Q1 net income to be in the range of RMB650M to RMB950M, up 174% to 300% Y/Y.
    • Basic EPS to range between RMB0.22 to RMB0.33 vs. RMB0.08 year ago.
    • Despite the adverse impact of macroeconomic downturn and Covid epidemic outbreaks, the company sold 286,329 NEVs in the first quarter, up 423% Y/Y.
    • Read the most recent analysis on the stock here.

    WEN -2.80%Apr. 18, 2022 7:49 AM ET1 Comment

    BMO Capital Markets lowered its rating on Wendy's Company (NASDAQ:WEN) to Market Perform after having the restaurant stock set at Outperform.

    The firm took the view that Wendy's (WEN) is less well positioned for a tighter U.S. consumer spending environment relative to some quick service peers against the tough macro backdrop. It was highlighted that comparable sales for Wendy's lagged quick-service peers during the recession period in 2008-2009. BMO is also increasingly concerned about a trade-down effect within Wendy's (WEN) menu as price-sensitive consumer latch on to value items and lower order add-ons.

    Analyst Andrew Strelzik: "As a result, we see greater risk to comp/margin expectations and temper our 2022/2023 EBITDA outlook below consensus. Valuation is undemanding, but it will be difficult to argue for multiple expansion if estimates are moving lower."

    BMO assigned a price target to Wendy's (WEN) of $22, which works out to 13X the 2023 EBITDA estimate.

    Shares of Wendy's (WEN) fell 1.87% to $20.50 in premarket action on Monday,

    See all the valuation metrics on Wendy's.

    PFE -2.18%Apr. 18, 2022 7:28 AM ET5 Comments

    With two well-documented cases of recovery following its use, the antiviral Paxlovid developed by Pfizer (NYSE:PFE) for coronavirus provides evidence supporting its potential in long COVID, a condition impacting an estimated 100 million people globally.

    With no cure, long COVID affects up to 30% of those infected with the coronavirus. It is characterized by hundreds of different symptoms such as fatigue, chest pain, and brain fog lasting more than three months.

    In one of the cases, a previously healthy and vaccinated 47-year-old woman who was experiencing long COVID symptoms was prescribed a five-day course of Paxlovid after she was reinfected, likely with the virus. On day 3, she reported a swift improvement of long COVID symptoms, according to Reuters.

    "She's back to normal," remarked Dr. Linda Geng, co-director of Stanford Health Care's long COVID clinic and author of the case report, posted on Research Square ahead of peer review.

    In another case, Lavanya Visvabharathy, 37, who works as an immunologist at Northwestern Medicine's long COVID clinic, tried Paxlovid on herself after experiencing long-term symptoms of COVID.

    Towards the end of the five-day course of the therapy, she witnessed an improvement in fatigue and insomnia, and her headaches were less common. Two weeks after the completion of the therapy, the fatigue was gone. "That's 100% fixed," Visvabharathy said.

    However, she added that carefully controlled clinical trials would be required to generate definite proof that the drug — authorized in the U.S. to prevent severe disease in high-risk COVID-19 patients — provides that kind of relief.

    Read more on other drugmakers in the hunt for therapies against long COVID.

    Apr. 18, 2022 7:00 AM ET1 Comment

    Macau casino stocks are on watch again this week with investors looking to see how far the zero-tolerance policy in China can extend.

    The government in Shanghai has reportedly set a new target of zero cases at the community level by April 20, which means no new cases outside of quarantined zones. That may be a tough standard after 23,643 new local infections Shanghai were reported for April 16, of which 722 were from outside the quarantined areas. The city also reported 19,831 new daily asymptomatic COVID-19 cases on April 17, as well as three deaths to mark the first fatalities during the current COVID outbreak in the region. Separately, local authorities in Zhengzhou placed some areas in the Zhengzhou Airport Economy Zone under quarantine.

    Jefferies analyst David Katz noted that the Macau near-term remains bleak due to the Shanghai Lockdown.

    Katz' breakdown on Las Vegas Sands (LVS) and Wynn Resorts (WYNN): "The key issue of discussion with investors is whether the current valuation levels of LVS and WYNN at 10X-11X 2023E EBITDA present a valuation bottom. Regarding LVS, the absence of US presence coupled with the Singapore asset that could be worth an estimated $30/sh., although the continued financial pressure on Macau is a negative offset. In WYNN's case, the Las Vegas and Boston assets should benefit from the US recovery, while establishing a long-term value for Macau remains more challenging. In either case, we view the risk profiles for both names as elevated."

    Macau casino stocks: Wynn Macau (OTCPK:WYNMFOTCPK:WYNMY), Wynn Resorts (WYNN), Sands China (OTCPK:SCHYYOTCPK:SCHYF), Las Vegas Sands (LVS), MGM China (OTCPK:MCHVFOTCPK:MCHVY). MGM Resorts (MGM), Galaxy Entertainment (OTCPK:GXYEF), SJM Holdings (OTCPK:SJMHFOTCPK:SJMHY), Melco Resorts & Entertainment (MLCO), and Studio City International (MSC).

    Outside of China, the casino sector is setting up for a strong 2022 after Delta Air Lines' earnings tipped off a potential boom in summer travel.

    Top Trades for Mon, 30 Aug 2021 12:56 – BYD


  15. ARR / Phil — Much appreciated!


  16. I gave up on mortgage reits. I got suckered in by the high yields and decided not to do all that rolling and doubling down.  I'm happy to collect the income for stock I already own, even if its underwater. Nothing wrong against how Phil shows you can make it a good trade, personally I just dont want to do all the work and would rather concentrate elsewhere. 


  17. Apr. 18, 2022 4:50 AM ET63 Comments

    Here are the latest updates on the war in Ukraine:

    Six dead as Russia strikes Lviv

    Lviv Mayor Andriy Sadovyi said six people were killed and another 11, including a child, were wounded by Russian strikes in the western Ukrainian city. Plumes of thick black smoke could be seen rising over the city as multiple explosions believed to be caused by missiles struck, according to AP staff Lviv.

    Ukrainians defy Mariupol surrender deadline

    The battered port city of Mariupol appeared on the brink of falling to Russian forces after seven weeks under siege, a development that what would give Moscow a crucial success in Ukraine following Russia's failure to storm the capital and the loss of its Black Sea flagship.

    Zelenskyy asks world to respond to torture

    Ukrainian President Volodymyr Zelenskyy said Russian troops in southern Ukraine have been carrying out torture and kidnappings, and he called on the world Sunday to respond.

    SPY -0.17%Apr. 18, 2022 4:14 AM ET32 Comments

    The Goldman Sachs economics team says that there is now a 35% chance of a U.S recession over the next two years, with the labor market a particular problem for the Federal Reserve.

    The large gap between jobs and workers keeping wage growth elevated has historically only declined during periods of economic contraction, chief economist Jan Hatzius and team wrote in a note out on Sunday.

    Predictions for a recession have been growing as the Fed tries to negotiate a soft landing for the economy at a time when inflation is at a level not seen in four decades.

    Deutsche Bank was the first big Wall Street bank to forecast a recession, saying in the first week of April a recession in late 2023 is now their base case.

    Quotes: “Taken at face value, these historical patterns suggest the Fed faces a hard path to a soft landing,” Hatzius said, according to Bloomberg.

    But other strategists are more cautious.

    Wells Fargo stock strategist Chris Harvey said in a note last week that despite "daily calls for a recession from anyone with a megaphone, we do not expect one of the next 12 months."

    "Rather, stagflation (high inflation/slower growth) likely will prevail."

    Credit Suisse says it is not underweight equities (NYSEARCA:SPY) (QQQ) because: "i) equities are fair value (not overvalued) with equities being an inflation hedge compared to bonds; ii) monetary conditions are very loose; iii) we only tend to get recessions 9 months after 3-month money inverts relative to 10-year."

    Go deeper on yields: The Fed's hawkish signaling, with 50-basis-point rate hikes expected over the next few meetings has sent Treasury yields sharply higher.

    An inversion in the 2-year and 10-year Treasury yield curve was pointed to as a signal of an upcoming recession. But the inversion was short-lived and that curve has started steepening again.

    Yields are up again and the 2s10s is steepening again this morning. The 10-year Treasury yield (NYSEARCA:TBT) (TLT) is up 6 basis points to 2.87% and the 2-year (SHY) is up 5 basis points to 2.49%.

    Real rates, which the Fed also wants to see rise, are climbing as well, with the 10-year inflation-protected yield about 10 basis points away from positive territory.

    "Despite the embarrassing panic about the wrong yield curve measures flattening/inverting earlier this year, the curves that actually forecast recessions remain steep and have been steepening," MKM's Michael Darda said in a note. "The long Treasury rate (or 10-year Treasury yield) minus the 3-month Treasury bill yield has inverted before every recession since the mid-1950s."

    That spread is now around 200 basis points.

    Still, traders see little respite from the bond selloff in the near term.

    “We’re coming out of one of the worst quarters in history … and the big bear market in bonds continues,” Thanos Bardas, global co-head of investment grade at Neuberger Berman, told The Wall Street Journal.

    SA contributor Brad Thomas said that when a recession hits, it's time to buy more REITs.

    DAL +0.32%Apr. 17, 2022 10:50 PM ET7 Comments

    Starting Monday (April 18), the CDC is changing its Travel Health Notice System for COVID-19 with the biggest impact being that fewer countries will end up classified under the highest level.

    Countries listed under Level 4 — the highest level — are deemed by the CDC to have a very high level of COVID incidence and should be avoided by all travelers, even if fully vaccinated and boosted.

    The agency said that Level 4 will be be reserved for "special circumstances, such as rapidly escalating case trajectory or extremely high case counts, emergence of a new variant of concern, or healthcare infrastructure collapse."

    Levels 1, 2, and 3 (low, moderate, and high) will continue to be based upon 28-day incidence or case counts.

    As of Sunday, 89 countries were on the CDC's Level 4 list, including much of Europe.

    The agency said the change was being done "to help the public understand when the highest level of concern is most urgent."

    Airline stocks: Delta Air Lines (NYSE:DAL), American Airlines (NASDAQ:AAL), Southwest Airlines (NYSE:LUV), United Airlines (NASDAQ:UAL), Alaska Air Group (ALK), JetBlue Airways (JBLU), Spirit Airlines (SAVE), and Hawaiian Holdings (HA).

    The CDC's decision comes as international air travel is starting to pick up and airlines are adding more capacity in anticipation of the summer travel season.

    BA -1.72%Apr. 17, 2022 8:50 PM ET14 Comments

    China Eastern Airlines (CEA) said Sunday it returned its Boeing (NYSE:BA) 737-800 jetliners back to the skies for commercial flights, less than a month since the fatal crash that led the company to ground 223 of the aircraft.

    Data from Flightradar24 showed China Eastern flight MU5843, operated by a three-year-old Boeing 737-800 aircraft, took off from the city of Kunming on Sunday morning and landed roughly an hour later in Chengdu.

    China Eastern said it conducted systematic tests, structural checkups and verified airworthiness data for each of the aircraft, and test flights would be carried out on all planes before they resumed commercial services.

    A China Eastern flight from Kunming to Guangzhou crashed on March 21, killing 123 passengers and nine crew members.


  18. IRS    its tax day, and I underestimated how much I owe, thanks to some good trades here.  Its always frustrating when your CPA calls and says bring me a check made out the United States Treasury for $xxxxxxxx.  ( not the actual number of digits, lol )   The tv had a story about how the IRS was so understaffed.  That they are having job fares, hiring on the spot and offering $15/ hr. The story continued saying Amazon was offering $18 plus $3000 bonus and Target offering $24/ hr.    All this is funny, because my son is trying to hire a nanny to watch his kids, offering up to $25 / hr in cash plus benefits that would make David Solomon  ( CEO of GS ) happy and still no takers. 


  19. Hi Phil, Any thoughts on playing UNG? Looks like it is going crazy




  20. Bitcoin Prices Fall as Investors Shun Risk-Sensitive Assets

    am I missing something?  I just appears that crypto doesnt appear to be a hedge on inflation or fear.  It looks like it just goes up and down with the market.  However my investments in WPM, GOLD, and AEM look to be doing exactly as intentioned.  


  21. like Phil said,  this war is not going away anytime soon and its also drawing attention away from some serious supply chain issues in China. I even saw this, saying they might be intentional:   Note its  from zerohedge and they always try to stir thing up- but this is getting passed around mainstream today 

     “What if China is purposely shutting down its country to wreak havoc on the global supply chain even further to exert its power over the quality of lives of the western world?”

      https://www.zerohedge.com/markets/something-rotten-state-shanghais-latest-covid-lockdowns


  22. Crypto/Stockbern- I guess I am missing something also having done some research and I still do not get the premise. Still open to some reasonable explanation but for now, I am left with the notion that crypto is more fashion statement than currency alternative. 


  23. Follow up, the only washing machine and matching dryer set ( not a combo machine, just a set ) available for immediate delivery was an Electrolux.  All the others were backordered 3 to 6 months.  I was also helping a friend find a nice road bike for $1500 or less.  Same story there, unless you want to spend more than double. 

    ( oops bad english on my crypto post.  Last night was like one of Phils, only got 4 hrs sleep, but now posting like the 10 cups of coffee I drank )


  24. REITs/Stock – The nice things, if you get that far, is when you get your basis to zero and it's still paying a dividend.  Then the REIT becomes your favorite Uncle…

    Nanny/Stock – Yes, these companies are still offering $20/hr ($800/week, $550 after taxes) for jobs that require $40 of dry cleaning and $100 in gas + lunches, etc. just to attend and they wonder why they can't find people. 

    I was a waiter in a catering hall in 1980 and we made $100 for 8 hours plus occasional tips and a decent used car was $3-4,000 and $600 rent could get you a nice apartment and $100 was a full shopping cart.  When I got out of college in 1985, my first job paid $35,000 and I promptly went out and bought a $28,000 new car (Mazda RX-7 Convertible) as I could easily afford it with the rent and all – including my NYC clubbing lifestyle.  People making half as much money lived OK back then. 

    None of that has kept up with 40 years of inflation in the slightest – it's terrible what they've done to the labor force.  Oh yes, and if something was wrong with you back then – you went to the doctor (any doctor) and had it fixed – we didn't even think about health care being an issue.  

    Oh, and we didn't come out of college $200,000 in debt either!  

    See just how much a minimum wage job increasingly falls short of paying for  college these days: That's Rich! - cleveland.com

    Minimum Wage vs. Cost of Living. Recently, the Democratic Party… | by Aaron  H | Medium

    The blue line on that chart could say "Percentage of People who are NOT slaves"  

    UNG/Harip – This must be the day of the week where I have to explain why it's unplayable?

    Submitted on 2022/03/31 at 1:24 pm

    This is a crazy situation but $6 should be hard to hold for now but, if this war drags on or if Europe actually tells Russia to shove their Ruble payments for /NG – $6 could seem like a bargain.  When we had all that nonsense 20 years ago, /NG hit $13 twice and this situation is potentially more dire.

    If you think inflation is bad now, try $12 /NG:

    /NG/Tully – Stopped playing them a while ago as they can rip your face off in either direction.  Being long at $4.50 was easy since I thought there were lots of reasons we could be over $5 when the war started but now, up past $6 – I remember it being $13 and $14 back in 2005 and again in 2008 so I sure wouldn't bet against it but, without the war – it can drop back below $5 very quickly.  Not worth the risk.  

    /NG – The war isn't even close to over.  Probably pricing in it will keep going and inventories will keep dwindling.  /NG supply in Europe is always tight and now we're part of the Global market prices due to LNG shipments.  See the LNG companies make a fortune sending the gas you used to buy cheaply to other countries, who pay much more and, as a bonus, you get to pay much more money for the gas that's still in this country.  It's a win-win! 

    BitCoin/Stock – On the other hand, my Beanie Babies are holding up well this week….  Who'd have thought a made-up currency wouldn't provide comfort to people in an actual catastrophe?  

    How Ty Warner Created the Great Beanie Baby Bubble

    And what Pstas said!  

    If anyone is interested – I know people selling BitCoin in large quantities for a 6% discount and people buying for a 10% discount.  Sometimes they get together at 8% but usually both sides hold out for their price.  

    China/Stock – I doubt it.  All they are both doing is forcing us to realign and get on without them.  

    Electrolux/Stock – Once upon a time, they were pretty much the only choice.  Certainly in vacuums, them or Hoover when I was a kid.  

    Beanie Babies and Tulips. A bubble occurs when the valuation of… | by ANG  Traders | Medium

    https://ang-traders.medium.com/beanie-babies-and-tulips-bdbc14c2a578

    Some bubbles, like the Beanie baby bubble and the last housing bubble, have wide mainstream participation, while bubbles like the present bond and equity bubbles have a more limited and technically sophisticated participation. It is a narrower slice of the population that can participate in these latest bubbles, mainly because the QE funds that are being used to inflate them are only available to the top of the pyramid. The group-think and greed, however, remain constant.

    This narrower participation, may mean that the bursting of the bubble could happen without the characteristic public mania phase that normally occurs just prior to the ‘pop’; the public just can’t afford to attend this FED-fest.

    While this game of financial musical-chairs is a consequence of central bank monetary largess, one has to understand that it was unintended and unanticipated by the FED et. al. Even though the FED wants the world to think that they can do amazing things such as: rescue the real economy, create jobs, and increase inflation; the truth is that the FED can do none of those things.

    What the FED Can Do:

    • It can control the lending rate between banks.
    • It can buy and sell Treasury bonds along with other securities, thereby affecting money supply (but not velocity).
    • It can provide the financial industry with funds; in 2008, the FED gave the industry $16 trillion which is equal to the entire GDP of the U.S.

    What the Fed Can’t Do:

    • It cannot force anyone to borrow more money
    • It cannot determine which are value-creating investments, and which are financial speculation.
    • It cannot deliver money to the base of the economic pyramid where it would increase the velocity of money and create value; all it can do is provide liquidity to banks. (http://www.financialsense.com)

  25. Thanks, I hate non-risen Pillsbury Doughboy : r/TIHI


  26. Good article about Bitcoin, Twitter, etc.

    The debate that Dorsey and Andreessen began in late 2021 and continue to engage in via proxies today is the most important one facing the exploding crypto industry, which has a market cap of roughly $2 trillion. Where this economic kinetic energy should be directed is open for argument—often angry argument. “Like with Bernie bros and Tesla longs, there isn’t a rational conversation about this stuff,” said Scott Galloway, New York University business school professor and host of CNN+’s “No Mercy, No Malice.” He likens the online commentators to “this extremist crypto Taliban community that dominates [the] conversation,” lacing it with “aggressive, angry, ad hominem attacks.” It’s just that, until now, people like Dorsey and Andreessen usually stayed out of the fray. No longer.

    Besides being annoyed that Andreessen Horowitz is investing heavily in crypto products that he thinks aren’t as pure as Bitcoin, Dorsey is furious that the firm is co-opting Bitcoin’s foundational philosophy of decentralization, the idea that decision power is distributed and that no single entity dictates terms to the community. If Bitcoin was teaching the world to sing in perfect harmony, Andreessen was using the song to sell sugar water.


  27.      And so while crypto may go down the chute following disco, platform shoes and bell bottoms, as past Beanie Babies and recent investment fund action demonstrates, there are still many opportunities to profit from crypto fever. As the annoying TV crypto commercial concludes, "fortune favors the brave" is applicable there as well as in Vegas and Santa Anita.


  28. A ‘Wild West’ of Marijuana Shops Grows in Toronto





  29. Credit-Card Spending Soars, Easing Concern About Consumer Health



  30. Dead as disco/Pstas – I never thought most things would last but Rock and Roll is sadly on life support.  I decided that after watching Coachella this weekend – made me very depressed about the state of music these days.  Speaking of which, the time loop has now closed and Robert Plant looks exactly like the guy on the Zep 4 cover:

    Robert Plant Says He's Now the Guy on 'Led Zeppelin IV' Cover

    To me, the problem is that musicians generally had classical training all the way through Rock and Roll – this was music that had been refined through human experience for about 200 years and even that grew from a steady progression from Medieval music that started around 500 AD – plenty of time for people to see what was pleasant and unpleasant.  While experimental – rock musicians almost all learned to play proper instruments as children and, of course, listened to the classics – they knew what music was.   

    I just don't see that anymore.  These kids can't read music or tell stories – they think any words that rhyme are genius lyrics – even if it's stupid.  Maybe I'm just old and cranky but I think we're losing something important.  I also think the tone of music has changed so much – we used to have happy, hopeful songs – where are those?  

    1972:

    1 "The First Time Ever I Saw Your Face" Roberta Flack
    2 "Alone Again (Naturally)" Gilbert O'Sullivan
    3 "American Pie" Don McLean
    4 "Without You" Harry Nilsson
    5 "The Candy Man" Sammy Davis Jr.
    6 "I Gotcha" Joe Tex
    7 "Lean on Me" Bill Withers
    8 "Baby, Don't Get Hooked on Me" Mac Davis
    9 "Brand New Key" Melanie
    10 "Daddy Don't You Walk So Fast" Wayne Newton
    11 "Let's Stay Together" Al Green
    12 "Brandy (You're a Fine Girl)" Looking Glass

    1982:

    1 "Physical" Olivia Newton-John
    2 "Eye of the Tiger" Survivor
    3 "I Love Rock 'n Roll" Joan Jett & The Blackhearts
    4 "Ebony and Ivory" Paul McCartney and Stevie Wonder
    5 "Centerfold" The J. Geils Band
    6 "Don't You Want Me" The Human League
    7 "Jack & Diane" John Cougar
    8 "Hurts So Good" John Cougar
    9 "Abracadabra" Steve Miller Band
    10 "Hard to Say I'm Sorry" Chicago
    11 "Tainted Love" Soft Cell
    12 "Chariots of Fire" Vangelis

    Now they don't even have a proper list as everything is streaming.  That's another problem in the World – lack of common experience.

    • 10. “ Woman,” Doja Cat.
    • 9. “ Wilder Days,” Morgan Wade.
    • 8. “ La Mama de La Mama,” El Alfa.
    • 7. “ Good 4 U,” Olivia Rodrigo.
    • 6. “ Twerkulator,” City Girls.
    • 5. “ Monster,” Yoasobi.
    • 4. “ VBS,” Lucy Dacus.
    • 3. “ All Too Well (Taylor's Version),” Taylor Swift.

    I like that Chariots of Fire was a top hit in 1982 – my kids would spend the whole song asking when the song was going to start….


  31. Phil – The embecta spin off from BDX was completed Apr 1 (EMBC is trading separately). Should we consider re-entering BDX for the butterfly portfolio?


  32. Phil/Inflation – We are totally screwed because the Fed only considers rising wages inflation and nothing else. That ensure that wages will continue to fall behind. Looks like NG is going to continue to $12 as you suggested.


  33. BDX/Rn – As with all spin-offs, I very much prefer to read the separated financial report first.  May 5th, apparently.

    /NG/Seer – Our exports are saving Europe but we're sharing their pain now.  

    OK, this one is actually funny.  Not saying I like it but amusing:


  34. Ukraine Is Sitting on 15 Million Tons of Grain it Can’t Move


  35. Thanks for the video El Alfa " El Jefe" or whatever its called.  I would have never, ever stumbled upon that on my own.  That being said, I can guarantee it will never find its way into any hall of fame, regardless of what genre this is.