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  • ISM Non-Manufacturing Index at 56.0 [View news story]
    Yes-and people loading up on zirpy bonds.
    'Once upon a time, in a land far, far away,
    An economic experiment, called ZIRP
    Haunted the good people day after day,
    Until the fat lady did sing and burp.'
    Jul 6, 2015. 12:12 PM | Likes Like |Link to Comment
  • A New Deal For Greece [View article]
    I thought humanity figured out centuries ago that debtor's prisons are counter-productive. No? Feed them brats!
    So, Zorba should have been a corporate executive-history would be different.
    What say you Plato?
    Jul 6, 2015. 11:56 AM | Likes Like |Link to Comment
  • Is The Fed Making A Bad Bet Right Now With Zero Rates? [View article]
    Jimmy got a discount on "Billy Beer" so he wasn't really attuned to inflation. Besides, he had to contend with 'lust in his heart' and the Iranian hostages. But, despite the cosmic malaise that seemed to represent his four years upon the stage, college grads could still expect to find decent employment opportunities. There was still an innate confidence and even vibrancy across the political spectrum-and the people. I mean, a society can't feel too gloomy if it invents 'Disco Duck' and '...breaker, breaker, we got a convoy.' Alvin proved to be the prophetic voice, and "Future Shock" has shaken traditional perspectives and opportunities. The global economy has demanded central planning from banks-not statesmen. We see that today-in spades. Big banks that owe their existence to the people now demand punitive reparations from... the people. We've allowed our politicians to pick winners and losers-anathema to the very core beliefs so eloquently expressed in "Wealth of nations" and "The Declaration of Independence." So, we now have a mutated gene within the double helix of free enterprise and basic fairness.
    Perhaps we should commission the Fed and ECB to rewrite Jefferson's masterpiece: "When in the course of a financial crisis (created by large banks), we should endeavor to provide funding for Goldman Sachs and General Motors..Notwithstanding the pain and suffering of small business..."
    It doesn't quite resonate, does it? Well, Jefferson also noted that 'the price of liberty is eternal vigilance.'
    Jul 6, 2015. 10:59 AM | Likes Like |Link to Comment
  • Thinking About Small Business Perceptions [View article]
    You must be old enough to recall a really vibrant Main Street. In the time before WMT, HD, TGT, MCD etc family- owned small business thrived. Bill's Meat Market, Jones Hardware, Goodson's Drugs- now just a memory.
    This has played out millions of times throughout thousands of small towns. The damage has been done- the repercussions are next.
    Jul 5, 2015. 10:53 PM | Likes Like |Link to Comment
  • Has Deceleration Returned To Home Prices? [View article]
    I have consistently advocated shorting ITB (not XHB) at 27.50 and doubling down at increments above that point. All one has to do is scan my comments on the subject.
    What confuses people ( I guess) is that there are geographical pockets of high performance. But, remember that one can drown in a stream with an average depth of 6 inches. Further, there are tectonic changes, which are easy to gloss over, but refuse to go away. One of the obvious is that an economy can't sound the clarion call of recovery where median income has declined from post-war levels. Despite the lollipop and rainbow purveyors of the evening news, one can move all the deck chairs from the boiler room up to the top deck, but the gaping hole is still gushing water.
    Jul 3, 2015. 01:33 PM | 1 Like Like |Link to Comment
  • Why I Think World Acceptance Will Go Bankrupt [View article]
    The mere fact that loan sharking lite has proliferated is an indictment against the economy as it is. If an average citizen can't go to an average bank with the reasonable expectation of being treated in a professional manner, what conclusions can we derive as to the current state of the economy?
    When I was 16 years old, I set up a checking and savings account in one of those big marble, high-ceiling, museum looking banks-I even got a car loan, and repaid the loan ($16/week).
    When traditional education and values are discounted as 'so yesterday' we can expect extended battles between the cobra and the mongoose.
    Jul 3, 2015. 12:51 PM | Likes Like |Link to Comment
  • Guts of jobs report weaker than the headlnes [View news story]
    Our government is so astute with its central planning that I'm confident that by July 4th, 2018 the unemployment rate will be the same percentage as the 30 year bond.
    The economy, of course, will continue to 'recover', hell will freeze over and political correctness will be an amendment to the US Constitution. Brave New World indeed.
    Jul 2, 2015. 03:27 PM | 3 Likes Like |Link to Comment
  • Volatility Surges 35% On Grexit Fears: It's Time To (Start) Shorting The VIX [View article]
    Well, I closed the shorts when the market opened on my 'don't be a little piggy' philosophy. Now, I'm using iron condors to 'trap' volatility within a bottle-that's the 'time in a bottle' concept.
    Rationale: Volatility fluctuates at this point as it seeks a slightly higher equilibrium. Option premium rich enough for time decay gains.
    I agree with TBT referenced above-all you need to know is how low will rates go?
    And, this game will never get away-I use TBT short put spreads with width a function of recent price. Monday, for instance, was a day for wide spreads (again, rates can't drop below zilch). Furthermore, it's easy to roll the short puts out, or take assignment and sell calls-or just double down (or both).
    Some of you seem to be waiting for ebola and avian flu to mutate into some kind of conjoined DNA strand before you short volatility. You don't have to plunge into the deep end of the pool-just get in the wading pool and put on your water wings.
    Jul 1, 2015. 01:05 PM | 4 Likes Like |Link to Comment
  • Whipsaw Wednesday: Greece Up, China Down [View article]
    China should let Steve and Sheldon operate their stock market for them.
    Jul 1, 2015. 10:32 AM | Likes Like |Link to Comment
  • Volatility Surges 35% On Grexit Fears: It's Time To (Start) Shorting The VIX [View article]
    Sold UVXY calls before close on Monday- did the DD ( double down) Tuesday morning. Futures indicate large gains.
    I don't know what's easier- shorting volatility or buying NFLX on dips.
    Jul 1, 2015. 08:49 AM | Likes Like |Link to Comment
  • Partying Like It Is 2007 [View article]
    I think the game will continue, only the players will come and go.
    Jun 29, 2015. 06:50 PM | 2 Likes Like |Link to Comment
  • Greece threatens to sue Europe [View news story]
    "Consult how we may henceforth most offend
    Our enemy, our own loss how repair,
    How overcome this dire calamity,
    What reinforcement we may gain from hope,
    If not, what resolution from despair."

    Paradise Lost
    John Milton
    Jun 29, 2015. 06:43 PM | 2 Likes Like |Link to Comment
  • Is All Hell About To Break Loose? [View article]
    For quite a while now I've suggested using put ratio back spreads as a low risk play for an event like Greece. Today was the big payoff.
    Now consider call ratio back spreads to profit from a rebound.
    Don't just wait to pick a bottom- that's much too difficult AND you give up the present value of the gains derived from playing the down draft.
    If this is new to you, just try a very small SPY position- selling one in the money call to buy two or more long calls. A sharp rebound will be profitable, and a continued drop in the market will be marginally profitable. A very small uptick in the market might create a very small or marginal loss- much depends on the set up.
    Jun 29, 2015. 06:32 PM | Likes Like |Link to Comment
  • Adoption Of VXUP As A Hedging Instrument Could Transform Investment Management [View article]
    Good point about time decay (synthetic time decay) with basic puts or contango infested ETFs.
    Here's another facet to think about, and it might appeal to some. If I sell a put spread on VXX or UVXY, e.g., (and I'm thinking more of LEAP positions) I know the exact amount of possible premium I could collect, and I put time decay on my side. A downside long put caps risk, but I don't really concern myself with that because I'm making far more money on the long portfolio. The disadvantage is that a drastic drop in the market isn't totally insured, but then again, don't the brave step in and average down? But wouldn't it have been better to have simply bought the long put? Perhaps-but when do most people exercise their long puts? At the first sign of adversity or when the put returns 500%? And as to the brave souls that want to average down, why not sell one or more puts well below the 500% gainer? Now, you either keep the 500% gainer thru expiration or make a faster return on the otm puts (while the first long one remains entrenched in the money).
    Jun 27, 2015. 01:41 PM | Likes Like |Link to Comment
  • Are HFTs Responsible For Low Market Volatility? [View article]
    And another area to examine is the extraordinary number of inverse and leveraged ETFs over the past few years. Consider the number of transactions required to balance this zoo. This is Newton's law on massive steroids.
    Suppose that everyone on the planet that has an account decided to take a course on delta neutral trading-or just decided to create nothing but a gigantic LEAP iron condor on the SPY, and simply let it play out.
    Frankly, a lot of my 'trading' these days is to just set up offsetting spreads and collect option premium. At inception, the downside is simply that I don't lose. The challenge is quite Bayesian: make simple adjustments which change the odds to conform with revised observations.
    Machines seek to optimize a decision; most of our fellow humans would prefer to gamble and speculate. And so, a big question is simply how much capital is under the control of mini-max regret, delta neutral, fully hedged philosophers vs. gamblers, speculators and adrenaline junkies? To the extent most capital is managed by the former, we should also expect less volatility.
    Jun 27, 2015. 01:01 PM | 6 Likes Like |Link to Comment