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  • Pres. Obama says he'll ask Harry Reid to put a "basic package" on the floor for an "up-or-down vote," should Congress fail to reach a deal. Congressional leaders suggest an afternoon meeting with Obama went well, but Wall Street isn't convinced the fiscal cliff will be avoided. Equity futures have added to their losses following the close. [View news story]
    It seems like the discussion here mirrors the quagmire in Congress. Supposedly reasonable, intelligent people who've become paranoid and irrational. The end of the world is not coming. Big deal if we go back to pre-Bush tax cut rates. 3-4% increase--BFD! For those concerned about our deficit, it will be a start. We will meaningfully trim our expenses once our economic recovery is more sure-footed, unemployment is lower, and middle-class tax revenue is up. Don't forget that austerity only delayed the recovery during the Great Depression. We are only in year 4 of getting out of the hole. It took more than a decade to return to prosperity back then, and it required massive, massive government stimulus in the form of WW2 to get us out. And don't forget that private business back then was extremely stingy with hiring and investment, just like now. Corporations won't do anything with their cash until the government socializes more risk. The more we punish the middle class, the slower the recovery will be. The more we kill the safety net for the poor, the more costly and chaotic our future will be going forward. Study what happened during the Great Depression, as Bernanke has, and you will see that a return to prosperity takes time and lots and lots of government stimulus. Things are getting better. Relax.
    Dec 29 01:56 PM | 6 Likes Like |Link to Comment
  • The Start Of The 2012 End Game Is Upon Us [View article]
    I agree with much of the logic of the author and share his pessimistic global outlook. But one factor which may buoy U.S. equities is that the smart money overseas will have to go somewhere and the U.S. is the most likely destination. There's an enormous amount of cash out there and if real estate is still way overpriced, U.S. equities will appear a much safer longterm bet. And I'd bet that overseas money is much more bullish than bearish on U.S. equities, enough to keep us racing to the bottom.
    Jun 25 11:03 AM | 5 Likes Like |Link to Comment
  • Bernanke press conference: Should projections hold, Bernanke sees QE ending "around mid-year" 2014 and the unemployment rate being about 7% at that time. Responding to a question, he says the FOMC stands ready to quickly adjust - i.e. fire purchases back up - should it prove to have made a mistaken forecast. Stocks (SPY -0.5%) and Treasurys (TLT -1.2%) are at session lows. [View news story]
    Good point, gsterling. It is very fashionable to hate Bernanke and Fed policy. Bears have been very disappointed that we haven't had a market crash since 2008. Sure plenty of people would have made lots of money betting on our market and economy crashing, but does anyone really want to live through such a global debacle? It would have made the Great Depression look like a vacation. While we are in uncharted waters and things are still going to be difficult going forward, we are a helluva lot better off with the Bernanke put.
    Jun 19 04:13 PM | 4 Likes Like |Link to Comment
  • 2013: More To Worry About Than Just The Fiscal Cliff [View article]
    Here's a very educational presentation by economist Steve Keen, given to Congress, on why going over the fiscal cliff and concentrating on draconian deficit reduction will most likely destroy the economy:

    http://bit.ly/XM7vv2

    The bottom line is private debt is much greater than public debt, and a big cut in government spending will likely cause private deleveraging and much worse unemployment and therefore a deeper recession.
    Dec 10 10:46 PM | 4 Likes Like |Link to Comment
  • Volatility ETFs In A Free Fall: How To Profit [View article]
    tamsh,
    My opinion is that you will NEVER get it back. UVXY is designed to go to zero by nature, but it reverse splits every 4-6 months so it can continue to make money for ProShares. Volatility is a losing trade as long as Bernanke and QE live. Sure UVXY will occasionally have 10% up days (5% down for XIV/SVXY), but it always quickly reverts to mean. So the only profitable longterm strategy is to short VXX and UVXY or go long the inverse ETF/ETNs, XIV and SVXY. Shorting UVXY is the most profitable, but it requires strong nerves and lots of cash and margin and the ability to accumulate shares; there will be draw downs, but it will always eventually lose, especially with QE and an improving economy.

    Almost everyone who is making $ in reverse VIX proxies started out dreaming of hitting it big with UVXY. It usually takes losses of $5-100K in UVXY ($24K for me) to wise up and join the short VIX crowd. UVXY is useful a few times a year and only for day trading. Never hold it!

    Macro's article is sound and I believe the math is basically right--though I'm no expert. There are, however, lots of websites dedicated to the VIX so you can learn more about the nature of VIX futures etfs; here are two valuable resources:

    http://vixcentral.com
    http://bit.ly/ezb4Eb

    There are many strategies on how to time short VIX investing so as to avoid the rare times when the VIX futures curve goes into backwardation. Most of these strategies use the ratio VIX:VXV and enter and exit trades when the value is in a certain range. Google around and/or read the enormous resources on vixandmore.

    It's a pity that there are no options on XIV, because it is much more liquid than SVXY. Options on SVXY are alright, but the spreads are quite wide. Best to just buy VXX puts since there is like 100x more open interest.

    Finally, tamsh, I think you can make your $ back. You just have to be disciplined and stay away from UVXY, though definitely sell some calls because they are way-overpriced.

    Remember: timing a VIX spike is very hard, but shorting one is fairly easy. Much easier to jump in short as fear is dissipating than to remain solvent through contango and fee drag trying to time a spike.
    Jul 23 10:54 PM | 3 Likes Like |Link to Comment
  • Apple (AAPL): FQ1 EPS of $13.81 beats by $0.37. Revenue of $54.51B (+18% Y/Y) misses by $220M. 47.8M iPhones, 22.9M iPads, 4.1M Macs, 12.7M iPods. Expects FQ2 revenue of $41B-$43B, below $45.6B consensus. Shares -4.3% AH. (PR[View news story]
    Most people are applying fundamentals to Apple stock, when in reality its price is manipulated by hedge fund algorithms. If you watched the tape after hours, it moved down quickly as if scripted. In fact, most of the movement in the stock over the last year, especially after its high, has defied logic. With a market cap that competes with the GDP of many nations, Apple is a market manipulator's dream. The amount of money being made on Apple options alone is staggering. While the 10% price drop seems a total "overreaction," my bet is that the big guys will play on this expectation and bring it down below $450 tomorrow. While it doesn't seem logical, my bet is that we'll see $400 before we see $600 again. My worry is that the manipulators may bring on market panic, as Apple is so broadly owned and so heavily weighted in indices.
    Jan 23 07:45 PM | 3 Likes Like |Link to Comment
  • How Apple Gets To $400 A Share [View article]
    I appreciate the author's take on Apple's possible descent to $400. Fundamentally, I don't see how that is possible, but I wouldn't be surprised, as I've come to believe that Apple's stock price is mostly manipulated by big hedge funds. Being such a high-priced and well-loved stock which has already had a meteoric rise, the only real way for speculators to make lots of money short term is to move the price around and play the expensive options. The biggest easy money is in contrarian bets, like a drop to $400, because the majority of the crowd is so bullish. While I'm extremely bullish on Apple, I wouldn't be surprised to see it drop to $400 before rising to $800--or vice versa.
    Jan 13 08:26 AM | 3 Likes Like |Link to Comment
  • The chances for a fiscal cliff deal in the next 48 hours are "exceedingly good," says Senator Lindsey Graham, appearing on Fox News. "Hats off to the President, he won," Graham adds. "The President campaigned on raising rates and he's going to get a rate increase." [View news story]
    What I'm finding so interesting about the right and left divide on the fiscal cliff is the paranoia on both sides, mostly on the right, I have to say. I can't help feeling that some of the racist undertones of Fox News have even permeated the intellectual right. The conflation of black, Marxism, and wealth redistribution. The philistine denigration of college professor vs. business owner. The endless abortion, gender, LBGT, welfare, food stamp tropes. Rove and Norquist and the whole fifth column Teabag contingency have, it seems, even made pawns of educated, upper-middle class Republicans. Most of the U.S. population is being used by these selfish, people-hating manipulators. The debate about taxes is about reverting to the tax rate from 10 years ago--a 3-4% increase. FRIGHTENING, CRIPPLING, THE END OF THE WORLD! And the right is acting like when that happens, all the dark people with dozens of out of wedlock babies and millions of illegal immigrants on foodstamps will start dining on lobster and filet mignon and malt liquor three times a day and be eligible for cosmetic surgery and two sex change operations a month on Obamacare while they sit home and play with their free iPads while waiting for their $10K weekly unemployment checks.

    I hate to be the bearer of good news, but the frightening truth is that we have a black President who generally cares about the middle class and who won the election fair and square two times. And, oh, that after the previous two-term president drove our economy and the world's off a real cliff, we are in the midst of a recovery. When the market opens tomorrow, I'm going to go long big pharma stocks because I think the anti-depression medication market is going to skyrocket through the roof.
    Dec 30 04:06 PM | 3 Likes Like |Link to Comment
  • 7.8T reasons dividend tax increases won’t crush stocks: That's the estimated value of all equity assets held by retirement investors that are not tax sensitive. Though it seems counterintuitive, Lucas Kawa thinks an increase on dividend tax rates might actually benefit the millions who hold high-yield dividend stocks in their IRAs and are able to buy into a potential sell without being impacted by the rising tax rate. [View news story]
    Good grief, the sky is not falling, the Bush tax cuts have been on the books for all of a decade, four of those years under Obama. Our nation did fine with the old level of taxation. While overdue, now is the time to repeal them, which is at most all the Democrats and Republicans will agree to. Bush gave a gift to the American people, a gift that significantly benefited the wealthy and has significantly impacted our deficit. I'm sure we will all get used to the new normal.
    Nov 25 08:16 PM | 3 Likes Like |Link to Comment
  • Almost flat earnings and a disappointing forecast from Apple (AAPL) leave a few casualties in Japanese trading today: Softbank (SFTBY.PK) - a Japanese carrier of the iPhone - is down 0.9%, Sharp (SHCAY.PK) and Foster Electric - both of which make parts for the phone - dropped 1.5% and 1%, respectively. [View news story]
    Logic would suggest that this dive in Apple's price is just overreaction. But I think the smart money is betting (pushing/manipulating?) the price much further down to shake out retail investors. My cynical side sees a drop to $400 before a rise to $600.
    Jan 23 10:30 PM | 2 Likes Like |Link to Comment
  • Pres. Obama says he'll ask Harry Reid to put a "basic package" on the floor for an "up-or-down vote," should Congress fail to reach a deal. Congressional leaders suggest an afternoon meeting with Obama went well, but Wall Street isn't convinced the fiscal cliff will be avoided. Equity futures have added to their losses following the close. [View news story]
    Thank you, MI.

    I have to say after being initially hostile to Bernanke's strategy, I have come to appreciate its brilliance. I think history will conclude that he was instrumental in saving our sinking ship, a ship that might sink a bit deeper thanks to Tea Party intransigence. But no matter how badly the right wing arm of the Republican party wants the economy to stay depressed (January 21, 2017, perhaps?), we will pull out of this, fiscal cliff plunge or not.
    Dec 30 01:34 AM | 2 Likes Like |Link to Comment
  • Apple beats estimates, but guidance disappoints [View news story]
    I think you are right as well--<$500 during conference call. Retail and the man on the street are long Apple and Wall Street could not resist selling expensive calls to us. Perhaps after the big boys cash out their puts tomorrow, the stock will slowly begin to rise again. The complicating factor is that since the Nasdaq is so heavily weighted with AAPL, the broad market selloff could continue bringing all stocks down, keeping AAPL down as well. We shall see.
    Jan 27 05:07 PM | 1 Like Like |Link to Comment
  • Stocks snap five-day losing streak, S&P closes shy of 1700 [View news story]
    I assume the run up was algo-controlled with low volume so shorts can be in place for tomorrow morning. The VIX and its futures haven't risen either. Nor has there been large put activity on SPY. These days the big boys have no reason to go long volatility ahead of time as they can front run at cheaper prices. I can't believe this complacency over debt ceiling can last much longer. You'd think the big boys would want to sell overpriced VIX calls so they can crush volatility on Monday afternoon when a deal comes through. Perhaps gold will be the hedge instead of puts and VIX products. We shall see.
    Sep 26 11:19 PM | 1 Like Like |Link to Comment
  • Apple: Reality Bites, So Time To Sell [View article]
    I've heard that, too, but out in Mountain View. Of course googlers are given android phones and chromebooks, but they don't necessarily prefer to use them.

    Anyway, your point is taken. I live in Brooklyn and everyday I am out and about on the streets and I see just about 90% iphones and ipads everywhere--parents, hipsters, middle-aged people, and even kids. While it may be true that galaxy now has more bells and whistles, they just don't have the loyalty and investment of the apple community. Between itunes, apps, and computer hardware, the user-friendly ecosystem makes everything easy. People don't just have phones, they have music, movies, books, podcasts, calendars, contacts, apps, and software, and they continue to buy more and deepen their ties to the Apple, virtually guaranteeing future revenue streams.
    Aug 11 09:14 PM | 1 Like Like |Link to Comment
  • Finance minister Michael Sarris orders all Cypriot banks to remain closed until Thursday, AP reports. Reuters originally indicated only Bank of Cyprus and Cyprus Popular would not reopen Tuesday morning. [View news story]
    @Chris DMJr, thanks for the link. Directly addressed what I was already thinking.

    I feel there must be some other dimension to the whole story (Russia, the whole offshore tax haven industry?) than what we are being told. While I wouldn't rule out stupid arrogance as the reason why Merkel and the rest of the Troika insisted on a draconian deposit tax, I don't understand why they didn't see the risk of bank-runs and an enormous global backlash. All for $10B Euros! The damage now is many, many orders of magnitude worse. The cost of rebuilding confidence will be very, very expensive; in the U.S., it's currently about $1T a year.
    Mar 25 11:31 PM | 1 Like Like |Link to Comment
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