Author Archive for ilene

Ensuring the minimum wage keeps up with economic growth would be the best way to help workers and preserve FDR’s legacy

 

Ensuring the minimum wage keeps up with economic growth would be the best way to help workers and preserve FDR's legacy

It may seem like a lot, but it’s not the most important change in the bill. AP Photo/J. Scott Applewhite

Courtesy of Felix Koenig, Carnegie Mellon University

The US$1.9 trillion pandemic relief bill that the House just passed includes a gradual increase in the federal minimum wage to $15 per hour by 2025. While its chances in the Senate appear slim, the proposal has brought national attention to the minimum wage, which has been stuck at $7.25 since 2009.

Supporters argue a higher minimum wage would translate into higher incomes for millions of low-wage employees, such as restaurant waiters, retail salespeople and child care workers, and thereby lift a lot of people out of poverty. Opponents claim it would hurt businesses and lead to a lot of job losses.

As an economist who studies labor markets and income inequality, I believe both claims exaggerate the impact and miss a key point of what the minimum wage is meant to achieve. The current debate offers a perfect opportunity to restore the wage floor’s original purpose, as laid out by FDR over 70 years ago.

Preventing employer abuses

The federal minimum wage was first implemented under the Fair Labor Standards Act in 1938 at a very modest 25 cents an hour – about $4.61 today – and applied only to “employees engaged in interstate commerce or in the production of goods for interstate commerce.” Think manufacturing workers, miners and truck drivers.

It took 18 years before Congress raised it to a buck, and the wage was soon expanded to include lots of other workers, such as retail employees, gas station attendants and nursing home aides. The latest increase, in 2009, set the wage at $7.25. It now applies to almost all workers except the self-empoyed, small-farm laborers, teenagers and those who receive tips, as well as a handful of other exempted groups.

But the principal intention was not to provide a “living wage”…
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What’s really driving coal power’s demise?

 

What's really driving coal power's demise?

The use of coal for electric power has been declining fast in the U.S. AP Photo/J. David Ake

Courtesy of David Drake, University of Colorado Boulder and Jeffrey York, University of Colorado Boulder

The Research Brief is a short take about interesting academic work.

The big idea

People often point to plunging natural gas prices as the reason U.S. coal-fired power plants have been shutting down at a faster pace in recent years. However, new research shows two other forces had a much larger effect: federal regulation and a well-funded activist campaign that launched in 2011 with the goal of ending coal power.

We studied the retirement of U.S. coal-fired units from January 2008 to September 2016 and compared the effects of various market factors, regulations and activism on their early closure. In all, 348 coal-fired units either retired or switched to natural gas during that time.

Among the many pressures on coal power that we reviewed, a federal regulation implemented in 2015 had the biggest overall effect. The Cross State Air Pollution Rule requires states to reduce soot and smog pollution that blows across states lines, including from power plants. We estimate that it was responsible for reducing the expected production life of the coal power units that it affected by a total of 1,170 years.

Looking at coal units individually, however, we found that the Sierra Club’s Beyond Coal campaign, backed by over US$174 million to date from Bloomberg Philanthropies, had the most impact per targeted plant.

The campaign works by generating public pressure on utilities and state and local politicians to close down coal-fired units, often through targeted lawsuits. When the Beyond Coal campaign targeted a coal-fired unit, we found that the unit’s life expectancy, normally 50-60 years, was reduced by an average of just over two years.

The Cross State Air Pollution Rule was the second-biggest factor per individual plant, though it affected more plants. It reduced the expected life span of each coal-fired generating unit that it affected by an estimated average of about 21 months.

We were surprised…
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Senator Ossoff Drops a Bombshell: “The 12 or 13 Largest Banks” Got the Trillions from the Fed’s Repo Loans Last Year

Courtesy of Pam Martens

Senator Jon Ossoff, Democrat of Georgia

Senator Jon Ossoff, Democrat of Georgia

The new, 34-year old Democratic Senator from Georgia, Jon Ossoff, let a very big cat out of the bag at yesterday’s Senate Banking hearing. For at least a year, from September 17, 2019 through at least September 30, 2020, the New York Fed, acting as an agent for the Federal Reserve, doled out a cumulative $9 trillion or more in repo loans. The Fed would say only that the money was going to some of its 24 Primary Dealers on Wall Street, without naming any specific bank receiving the money. In June of 2020, the New York Fed abruptly stopped reporting the dollar amounts it was pumping out each day. (See Watchdog Report: Fed’s Billions in Emergency Repo Loans to Wall Street Didn’t Go Away in June; They Just Went Dark.)

The emergency repo loans by the Fed began months before there was any case of COVID-19 reported anywhere in the world.

It would now appear that the Senate Banking Committee knows where that money actually went. As a new member of that Committee, Senator Ossoff would be entitled to access that information.

The purpose of yesterday’s Senate hearing was to confirm two of President Joe Biden’s watchdog nominees – Gary Gensler for Securities and Exchange Commission Chair and Rohit Chopra for Director of the Consumer Financial Protection Bureau. Ossoff revealed the previously undisclosed information in this exchange with Chopra:

Ossoff: “Mr. Chopra, the largest investment banks are very heavily subsidized. And many would argue these massive financial institutions are dominant not because they’re efficient at capital allocation or risk management or because they offer the best products to consumers, but instead because they receive trillions in government bailouts, low interest loans, and quantitative easing. Do you agree with this assessment and is this in your view a form of regulatory capture?”

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The Texas blackouts showed how climate extremes threaten energy systems across the US

 

The Texas blackouts showed how climate extremes threaten energy systems across the US

Electric service trucks line up after a snow storm in Fort Worth, Texas, on Feb. 16, 2021. Ron Jenkins/Getty Images

Courtesy of Roshanak (Roshi) Nateghi, Purdue University

Pundits and politicians have been quick to point fingers over the debacle in Texas that left millions without power or clean water during February’s deep freeze. Many have blamed the state’s deregulated electricity market, arguing that Texas prioritized cheap power over reliability.

But climate extremes are wreaking increasing havoc on energy systems across the U.S., regardless of local politics or the particulars of regional grids. For example, conservatives argued that over-regulation caused widespread outages in California amid extreme heat and wildfires in the summer of 2020.

As an engineering professor studying infrastructure resilience under climate change, I worry about the rising risk of climate-triggered outages nationwide. In my view, the events in Texas offer three important lessons for energy planners across the U.S.

Extreme weather poses a growing threat to power systems across the U.S.

Not enough attention to climate extremes

Experts widely agree that the Electric Reliability Council of Texas, or ERCOT, the nonprofit corporation that manages the power grid for most of the state, failed to anticipate how sharply demand would spike prior to the February cold wave. ERCOT has a record of lacking capacity to meet winter demand surges. The state grid nearly collapsed during a 2011 winter storm and experienced another close call in 2014, narrowly avoiding rolling blackouts.

But grid operators elsewhere have also underestimated how climate extremes can influence electricity demand. I see many similarities between California’s summer 2020 power crisis and recent events in Texas.

In both cases, extreme weather caused an unexpected increase in demand and reduced generation capacity at the same time. Because energy operators did not foresee these effects, they had to resort to rolling blackouts to avert even bigger disasters.

?


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COVID-19 revealed how sick the US health care delivery system really is

 

COVID-19 revealed how sick the US health care delivery system really is

Many U.S. hospitals and clinics are behind when it comes to sharing information. Teera Konakan/Moment via Getty Images

Courtesy of Elizabeth A. Regan, University of South Carolina

If you got the COVID-19 shot, you likely received a little paper card that shows you’ve been vaccinated. Make sure you keep that card in a safe place. There is no coordinated way to share information about who has been vaccinated and who has not.

That is just one of the glaring flaws that COVID-19 has revealed about the U.S. health care system: It does not share health information well. Coordination between public health agencies and medical providers is lacking. Technical and regulatory restrictions impede use of digital technologies. To put it bluntly, our health care delivery system is failing patients. Prolonged disputes about the Affordable Care Act and rising health care costs have done little to help; the problems go beyond insurance and access.

I have spent most of my career within the domain of information technology and IT-based innovation and systems engineering. As a professor of health informatics, I have focused on health care transformation. For two years, I served on the Health Innovation Committee at HIMSS, the preeminent global health information and technology organization. In short, I have studied these problems for decades, and I can tell you that most of them aren’t about medicine or technology. Rather, they are about the inability of our delivery system to meet the evolving needs of patients.

We need a high-performance system

In reality, the U.S. health care sector is not a system at all. Instead, it is an underperforming conglomerate of independent entities: hospitals, clinics, community health and urgent care centers, individual practitioners, small group practices, pharmacy and retail outlets, and more, most of which compete for profits and in some cases pay sky-high salaries to executives.

A nurse making a computerized medical report.

The U.S. transition to a high-performing health care delivery system has been a slow one. Maskot via Getty Images

These…
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Housing, We Have a Problem

 

Housing, We Have a Problem

Courtesy of 

If you want to listen to me read this blog post, you can do so below. Otherwise, jump to the text.

 

There are three main stories in the housing market.*

  1. People are moving out of apartments and into houses.
  2. People who are already in houses are staying put.
  3. People who haven’t already bought a house are getting priced out.

Interwoven into all three of these are demographics. The largest segment of the U.S. population is people in their late 20s and early 30s. These are the people most likely to be first-time home buyers.

When Covid hit, people who were planning to move out of the city and into the suburbs did so in a hurry. This drove rents down…

…And home prices way up, as you can see in this chart from Len Kiefer. The median sale for an existing home rose 14% in January.

US 12 month percent change in MSA house price index

Demand is not the only factor that’s driving prices higher. As you can see in the chart below, a lack of supply is the oxygen for this fire, and low-interest rates are the jet fuel.

The…
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Of Course This Ends Badly

 

Of Course This Ends Badly

Courtesy of The Reformed Broker

Join Downtown Josh Brown and Michael Batnick for another round of What Are Your Thoughts? On this week’s episode, Josh and Michael discuss the biggest topics in investing and finance, including:

  • Magic # for Rates – Is 1.5% the level where 10-year Treasury rates become competitive with stocks? How about 1.75%? How about 2%?
  • Weak Balance Sheets – Stocks with weak balance sheets are now outperforming the strongest companies.
  • Berkshire Letter – Warren Buffett published his 2020 annual letter to shareholders this weekend, Michael and Josh react!
  • This Ends Badly – “Everything ends badly otherwise it wouldn’t end!” – Tom Cruise, Cocktail (1988)
  • WandaVision – Seriously how f***ing good was this show?
  • The Next Amazon – With billion dollar valuations out of the gates for hundreds of SPACs, doesn’t this increase the likelihood of a new Amazon emerging from this year’s new listings?
  • Is Josh a Fed Apologist? – Why aren’t the Compound boys more critical of the central bank?
  • Bond ETFs – If rates have nowhere to go but up, why own a bond ETF right now?

And much more!

Standard disclaimer

Check out the Goldmine podcast to hear more from Ben, Josh and the rest of the Ritholtz Mafia.

Join Josh for a new round of The Boiler Room on Clubhouse. Come prepared to raise your hand and pitch us your favorite stock if you’d like. We’re ready for you!





The Web’s Missing Interoperability

 

The Web’s Missing Interoperability

Courtesy of Ben Thompson, Stratechery

It was 2004, and Tim O’Reilly needed a name for his new conference, and so “Web 2.0” was hatched in a brainstorming session devoted to finding a name. A year later O’Reilly would flesh the concept out with his definitive 2005 post What is Web 2.0, but given the fact so many Web 2.0 applications were about creating platforms that were then made valuable with user-generated content, it feels appropriate that O’Reilly made a name first and added the content to justify it later. And, in the spirit of Web 2.0, I’m not going to quote O’Reilly’s article but rather the Wikipedia entry for a definition:

Web 2.0…refers to websites that emphasize user-generated content, ease of use, participatory culture and interoperability (i.e., compatible with other products, systems, and devices) for end users.

Seventeen years on and there is more user-generated content than ever, in part because it is so easy to generate: you can type an update on Facebook, post a photo on Instagram, make a video on TikTok, or have a conversation on Clubhouse. That, though, points to Web 2.0’s failure: interoperability is nowhere to be found. Twitter, which has awoken from its years-long stupor to launch or announce whole host of new products, provides an excellent lens with which to examine the drivers of this centralization.

Super Follows and the Content-Creation Loop

While the specific details of Super Follows are still hazy, the idea of Twitter users being able to charge followers for special access makes all kinds of sense for Twitter the company. First, the items of value, particularly exclusive tweets or the ability to interact, are by definition exclusive to Twitter; only Twitter has tweets! Second, the best place to find Super Follows will be amongst your regular followers; access to the ideal user acquisition channel is built in. Third, Twitter will be able to make money coming and going: the obvious advertising mechanism for finding new Super Follows would be Twitter’s own ad products; Twitter could even make advertising “free”, collecting its payment from future subscription revenue.

This points to the first factor driving centralization: as I explained two weeks ago in Clubhouse’s Inevitability, the


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Will Senator Toomey Engage in Koch-Speak at Today’s Senate Confirmation Hearing?

Courtesy of Pam Martens

Senator Pat Toomey

Senator Pat Toomey

The Senate Banking Committee will convene today to conduct confirmation hearings for President Joe Biden’s nominees to fill two key Wall Street watchdog posts: Gary Gensler to Chair the Securities and Exchange Commission (SEC) and Rohit Chopra as Director of the Consumer Financial Protection Bureau (CFPB).

As a result of Democrats taking control of the Senate, Sherrod Brown, a Democrat from Ohio, is the new Chair of the Senate Banking Committee. Curiously, however, the prior Republican Chair of the Senate Banking Committee, the mild-mannered Mike Crapo of Idaho, is not the Ranking Member of the Committee. He has been replaced by a man far more likely to engage in aggressive Koch-speak, Republican Senator Pat Toomey of Pennsylvania. (Toomey was all set to become the new Chair of the Senate Banking Committee but then things went south in Georgia and Democrats picked up two additional seats in the Senate.)

What exactly is Koch-speak? It’s the manner in which politicians form their sentences in public when they are beholding to corporate money from the Koch network of billionaires and assorted grifters. Koch-speak is an acquired art. Crapo didn’t master it so he’s out; Toomey is in.

Koch-speak requires the ability to cloak one’s fealty to corporate greed and their lobbyists’ demands for de-regulation by sprinkling one’s sentences with words like “free markets,” “liberty,” and “limited government.”

According to the Center for Responsive Politics, over the course of his political career, Toomey’s largest donor to either his Campaign Committee and/or Leadership PAC has been the Club for Growth, which has provided more than $1.26 million to Toomey’s coffers. That’s more than 7 times the amount of Toomey’s second and third largest donors, the hedge fund Elliott Management and Goldman Sachs. Toomey served as the President of Club for Growth from 2005 to 2009.

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Only took 12 years, but Wall Street has finally gotten bullish enough

 

Only took 12 years, but Wall Street has finally gotten bullish enough

Courtesy of 

One of the most interesting things that happens after a big, nasty, protracted bear market is that no one wants to be accused of being bullish or upbeat about anything. In the aftermath of a crash, the bulls always look and sound dopey or complacent.

Wall Street strategists are only human. And as markets trade higher, they gradually get more and more comfortable sounding positive on stocks. The trauma of having been bullish and wrong ahead of the last crisis fades away and the recency bias takes over. Individual investors’ risk tolerances work this way too, but that’s another discussion.

Anyway, my friend Savita Subramanian has been showing us the Sell Side Indicator that she keeps for BofA and, over all this time, The Street hadn’t really gotten up to a place where the rally might be threatened by excess bullishness – until now:

Wall Street is just 1ppt shy of ‘Sell” signal

Wall Street strategists continued to increase their recommended equity allocations in February. The Sell Side Indicator (SSI), which is the average recommended equity allocation by sell-side strategists, rose by nearly 1ppt to 59.2% from 58.4%. It’s the second month in a row of an almost 1ppt jump, bringing recommended equity allocation to almost a 10 year high and just 1.1ppt shy of a “Sell” signal. The last time the indicator was this close to “Sell” was June 2007 after which we generally saw 12-month returns of -13%. We’ve found Wall Street bullishness to be a reliable contrarian indicator.

Savita notes that we’re still in Neutral territory based on the model’s inputs, and we’ve been in the Neutral zone since December of 2016. And with the indicator still at Neutral (as opposed to Bullish), we’re still looking at positive forward returns based on the historical relationship holding (which, who knows if it will).

It only took about 20,000 Dow points, a quadruple in the S&P 500 and a 500% Nasdaq rally to get The Street’s experts up to the upper end of Neutral sentiment. That’s pretty funny, in and of itself, regardless of what happens from here.

Source:

Approaching “Sell” signal
Bank of America Securities – March 1st, 2021





 
 
 

Phil's Favorites

Hold on for one more day

 

Hold on for one more day

Courtesy of 

Yes I’m quoting a Wilson Phillips song. I don’t know why.

But I talked about holding on for one more day at the end of February at a moment where it felt hopeless to be a responsible, diversified investor while everyone around you is getting insanely rich buying the craziest shit imaginable.

Feb 22nd:

It seems like the world is moving a thousand miles a minute and you’re missing out on everything. Everyone seems to be whooshing by!  It’s like you’re always stuck in second gear…

Take a deep breath.

...

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Zero Hedge

"Days Away From A Crisis": 100,000 Illegal Immigrants Arrested At US Mexico Border; Most For February In 15 Years

Courtesy of ZeroHedge View original post here.

Rep. Henry Cuellar (D-Texas), whose Congressional district lies near the U.S.-Mexico border, warned that more than 10,000 illegal immigrants have been apprehended in a single border sector in Texas in about a week, with Reuters adding that a stunning 100,000 migrants were detained at the border in February, the highest arrest total for the month of February since 2006.

“We are weeks, maybe even days, away from a crisis on the southern border. Inaction i...



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Biotech/COVID-19

88% Of COVID Deaths Occurred In Countries Where Over Half Of Population Overweight

Courtesy of ZeroHedge View original post here.

A new report by the World Obesity Federation found that 88% of deaths in the first year of the pandemic occurred in countries where over half of the population is classified as overweight - which is defined as having a body mass index (BMI) above 25. Of note, BMI values above 30 - considered obese - are associated with 'particularly severe outcomes,' accor...



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Kimble Charting Solutions

Tech Indicator Peaking Again At Dot.com Highs? Joe Friday Says Watch This Index!

Courtesy of Chris Kimble

Technology is at the heart of our economy… the same way that industrials were 100 years ago.

And that leadership has been present in the stock market for the past two decades. Today’s chart illustrates this… as well as a potential “pause” in that leadership vacuum.

Below is a long-term “monthly” ratio chart of the Nasdaq Composite versus the S&P 500 Index. Here you can see how technology stocks...



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ValueWalk

Steve Wolosky Just Won His First Case Against Williams

By ActivistInsight. Originally published at ValueWalk.

Steve Wolosky has long defended the legal rights of shareholders but having just won his first case as a plaintiff, he hopes boards will be reminded of their duties as guardians of corporate democracy – even in a crisis.

Q4 2020 hedge fund letters, conferences and more

Steve Wolosky's Case Against Williams Companies' Unusual Poison Pill

Steve Wolosky, the doyen of activism lawyers, sued Williams Companies Inc (NYSE:WMB) last year in response to a highly unusual poison pill. ...



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Politics

Why repressive Saudi Arabia remains a US ally

 

Why repressive Saudi Arabia remains a US ally

A demonstrator dressed as Saudi Arabian Crown Prince Mohammed bin Salman with blood on his hands protests outside the Saudi Embassy in Washington, D.C., on Oct. 8, 2018. Jim Watson/AFP via Getty Images

Courtesy of Jeffrey Fields, USC Dornsife College of Letters, Arts and Sciences

Saudi Crown Prince Mohammad bin Salman “approved an operation … to capture or kill Saudi journalist Jamal Khashoggi,” according to a...



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Mapping The Market

Which Governments Ordered Johnson & Johnson's Vaccine?

 

Which Governments Ordered Johnson & Johnson's Vaccine?

Courtesy of Niall McCarthy, Statista

On Wednesday, U.S. regulators announced that Johnson & Johnson's Covid-19 vaccine being developed by its subsidiary Janssen Pharmaceuticals in Belgium is effective at preventing moderate to severe cases of the disease. The jab has been deemed safe with 66 percent efficacy and the FDA is likely to approve it for use in the U.S. within days.

The Ad26.COV2.S vaccine can be stored for up to three months in a refrigerator and requires a single shot, ...



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Digital Currencies

Crypto - It Is Different This Time

 

Crypto – It Is Different This Time

Courtesy of Howard Lindzon

?I have been astonished as you know by the growth of crypto.

I remember back in 2017 when I noticed that Stocktwits message volume on Bitcoin ($BTC.X) surpassed that of $SPY. I knew Bitcoin was here to stay and Bitcoin went on to $19,000 before heading into its bear market.

Today Bitcoin is near $50,000.

Back in November of 2020, something new started to happen on Stocktwits with respect to crypto.

After the close on Friday until the open of the futures on Sunday, all Stocktwits trending tickers turned crypto. The weekend messages on Stocktwits have increased 400 percent.

That has continued each weekend...



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Chart School

The Fastest Money

Courtesy of Read the Ticker

The fast money happens near the end of the long trend.

Securities which attract a popular following by both the public and professionals investors tend to repeat the same sentiment over their bull phase. The chart below is the map of said sentiment.
 


 

Video on the subject.


 

Charts in the video



 



 



Changes in the world is the source of all market moves, to ...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

http://www.insidercow.com/ more from Insider

Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.