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  • Why The Public Is Suffering While Wall Street Booms [View article]
    "Judgment at Nuremberg" was about trials for judges who turned the other way when the conscience of a nation cried out for the rule of law. Too big to prosecute? Sealed settlements with banks to avoid adverse publicity?
    Mar 12, 2013. 09:42 PM | 1 Like Like |Link to Comment
  • The U.S. Debt Through A Lens Concavely [View article]
    Yes, what about the rate of change of the rate of change of interest rates-and what would constitute a 'tipping point' if there is such a thing where one controls the game? Of course, this would be a hypothetical exercise.
    But, isn't the Fed concerned about telegraphing interest rate changes to avoid market disruptions? So, is there a type of potential fragility? Seems to me we have quite the paradox in markets. Clowns and mirrors, hiding in the smoke perhaps. Well, don't lose your timing-interesting years ahead-as always.
    Mar 12, 2013. 08:53 PM | Likes Like |Link to Comment
  • The Lopsided Economic Recovery [View article]
    The economic state of affairs should be no surprise. Organizations, like living organisms, will seek to maximize efficiency. Technology has a long history of allowing this quest to materialize.
    Corporate reorganizations were well underway prior to the financial collapse-perhaps layoffs were accelerated, but said collapse was not the underlying cause.
    Technology cuts both ways. Winners will increasingly see greater returns to capital. Those with only units of labor to offer will not fare so well-unless they play professional sports.
    It is not the role of government to provide for one's 'self-actualization.' So, it is to be expected that the recovery will be uneven. In fact, one would be better served by thinking not of 'recovery'but of 'metamorphosis.' Or 'evolution.'
    Mar 12, 2013. 09:09 AM | Likes Like |Link to Comment
  • VIX - Options Volatility And Market Sonar: Monday Recap [View article]
    Ok, thanks. I'll look at bear call spreads.
    Mar 11, 2013. 09:22 PM | Likes Like |Link to Comment
  • VIX - Options Volatility And Market Sonar: Monday Recap [View article]
    The 10:1 BIDU split was a short-seller's dream. I commented to an article pushing BIDU several months ago that I was short that stock and several Chinese internet stocks. But, having shorted BIDU at close to 160, I've bailed weeks ago. How much meat left on the bone?
    Mar 11, 2013. 08:19 PM | Likes Like |Link to Comment
  • Here's What Investors Need To Realize After The Terrific Jobs Report [View article]
    Do you doubt the infallible wisdom of 'the market'? The holy sanctity of government reports? Surely you don't think the Fed would leak a little cash into the DOW? If that were the case, then could the 'markets' really represent free will? Or, could the market really be...a market?
    So, we nudge a little bit here and fudge a little bit there-but isn't it all for the good of the people?
    Coming soon to a theater near you, you and you..."Pollyanna"-star... Haley Mills.
    Mar 9, 2013. 09:52 PM | Likes Like |Link to Comment
  • BP Undervalued And Primed For Future Growth [View article]
    It's Sat night, and I'm gleaning through various scraps of info. AP reports that BP can't nail down costs to damaged businesses. The key term that caught my attention was 'open-ended.' The judiciary not at all helpful to BP.
    Don't know if this was priced in Friday, but stock was down slightly on an up day for the market.
    Yes, tangible book value should be an intrinsic or implied put. But, it would be insane to hold this stock without 'real' puts.
    Mar 9, 2013. 09:28 PM | Likes Like |Link to Comment
  • Ben Bernanke's Diabolical Plan To Turn Mortgage-Backed Securities Into Pristine Collateral [View article]
    The single most important piece of the economy is 'real estate'-construction, appliances, materials, professional services, etc. Thousands of people that can do nothing but 'real estate' will suffer and languish if that multi-faceted phenomenon can't be resurrected. The Fed or government lack the ability to spawn new and creative industries. The obvious move (from their perspective) is to rely on the past. The tried and true solution is to find solace in the dirt-it's worked so many times before-and the blueprints are readily available.
    The median income situation is, IMO, the 'sine qua non'-the without which not- where sustained low interest rates are like oxygen to a fire. So, the sparks in housing we observe would quickly become dying embers, without an increase in median income to otherwise mitigate real rates. The other piece is that the mortgage function is basically contained within the province and under the auspices of the federal government. It's comical that the ballyhoo about getting the government out of the mortgage business is now nothing more than a faint whisper.
    But why buy real estate when you can go North to Alaska and prospect for gold? Could you imagine The Duke owning a couple of rentals and sending collection letters out on his Sec 8 housing? Nope.
    Mar 9, 2013. 09:17 PM | Likes Like |Link to Comment
  • The Art Of Trading Volatility [View article]
    Yes, we want to solve for 'x' but those pesky animal spirits create an indeterminacy, and send us off spinning and careening down that dim tunnel. We seek to tame that 'x' by invoking "ceteris paribus" (all things equal)-but, alas, the gods roar with laughter.
    Mar 9, 2013. 08:23 PM | Likes Like |Link to Comment
  • BP Undervalued And Primed For Future Growth [View article]
    Yes, I think both the quantification and finality are the inter-related variables. A value player would pursue a minimax strategy by utilizing bull call spreads. This would reduce the cost of the options, but cap any upside gain. However, it doesn't have to be inflexible. For example, I have some longer-dated calls, which have been subsidized by selling OTM calls. BUT, I closed several short calls yesterday, after holding them for only 3 days. In other words, the short calls can be traded and re-configured to (a)offset premium outlay on the long calls, and (b)shift short calls to a higher strike position to better capture a settlement announcement. Now, this does take some management, but very little compared to cost/benefit. In my case, I have captured enough premium to wholly subsidize the long options, so I'm going to let them ride. But, as I indicated above, I have various other strategies in play as well. I mention this one because I think most folks could benefit from just a simple bull call spread. As the trial continues, we know that some decision is increasingly closer. On the other hand, a judgment indicates a settlement couldn't be reached, and appeals would be likely. Again, though, we would at least know the downside.
    Good luck to all!
    Mar 9, 2013. 08:16 AM | 1 Like Like |Link to Comment
  • Household Net Worth: The 'Real' Story [View article]
    And what about Ward and June. June has to work now, while the Beaver is shuttled off to special ed programs. Wally's allowance has been cut, and he can't find a part-time job. Plus, he's really having a problem with college costs.
    Mar 8, 2013. 09:10 PM | Likes Like |Link to Comment
  • BP Undervalued And Primed For Future Growth [View article]
    I have so many different option configurations on this stock that it takes almost two screens to review. I agree with the quick financial review, except that I think the immediate upside would be 20%. The downside is somewhat priced in, as almost all legal situations copy the same playbook.
    Day to day moves can be interesting-sometimes up (after a sustained drop) and then another dip. If you check the price action for the past few days, it is almost uneventful.
    I think though that if I wanted to just be long and hedge with puts, the monthly premium is quite cheap. In the near future, the 'x' factor will be quantified, and the move will likely be swift. I have 'hedged risk reversals'/ short LEAP put spreads hedged with shorter-term bear call spreads/ odd assortment of other plays that have accumulated over a longer time period. In essence, I really won't make any significant gains from a negative, but will gain with a positive outcome.
    I was in Florida recently and the lawyers are still trying to shake the last dollar out of BP. Hardly 5 minutes would go by without some law firm beating the drum on TV. With 60 Minutes reporting that some 40 million Americans have serious mistakes on their credit reports, I'm surprised there isn't a flurry of litigation per the Fair Credit Reporting statutes. Well, one day soon, the BP saga will come to a resolution. Be ready.
    Mar 8, 2013. 08:54 PM | 5 Likes Like |Link to Comment
  • Indicators Show Dumb Money Buying Stock Rally While Others Take Profits [View article]
    I think to assert that the most recent market activity is a 'hated bull market' reflects a shallow perspective. Of course, I fully recognize that this description has been propagated by various media pundits-so it must be true-right?
    And, of course, when Joe Pundit affirmatively exclaims that 'it is the most hated bull market in history' most listeners would not stop to think that the history of man and the history of stock markets call into question any reliance upon the term "history."In the full dimension of man's numerous accomplishments and disappointments, a paltry few decades of data is insignificant.
    If one seeks to make a living from the 'market' (as opposed to a casual or mostly passive participant), I would suggest that emotional symbols and connotations be stricken from your mind and permanently consigned to the cosmic waste bin. If you lose at poker or golf, do you hate the people you play with? Do you hate the golf course? Undoubtedly some do just that. But, listen closely: that's why they lose.
    Mar 8, 2013. 09:03 AM | 2 Likes Like |Link to Comment
  • Indicators Show Dumb Money Buying Stock Rally While Others Take Profits [View article]
    Low volume would be corroborative evidence of corporate buy-backs. Note that these transactions would be accomplished thru put sales to further lower the basis.
    Once the allotment is complete, buying activity would taper off. Of course, this activity would not be simultaneous, but could have been expedited as the overall activity pushed prices higher. This could account for some dip buying.
    Low borrowing costs foster a unique opportunity by which to allow most public companies to reshuffle their balance sheets. Some companies with no other need for cash, sold 100 year bonds. So, the old Miller-Modigliani analysis must have entered the minds of a lot of CFOs.
    Mar 8, 2013. 08:35 AM | Likes Like |Link to Comment
  • Trading VXX And XIV Against Each Other: Taking Advantage Of Quasi-Correlated VIX ETNs [View article]
    As to the recent comments, note that the world was very chaotic. The time periods in question may not occur again for a long time. It's worth understanding what happened, of course, and to think about strategy, from an academic perspective. But,going forward, i.e. making money this week, requires understanding far more moderate spikes. The VIX in some sense represents human propensity, and the humans are just tired of bad news. There is an immunity -perhaps a delusion-to the current state of the economic world and the future. Same thing with the Great Depression. People adapted to the new reality; but, of course, WWll was a once in a millennium change.
    We don't have that scenario. We just have people that are tired, frustrated and worn out. There is no national leadership. Society is just drifting from one non-event to the next boring and contrived mini-fiasco. The promise and allure of technology may be the real devil in disguise. But that's another tale.
    Certainly the potential exists for a revival of instability-I think it lurks just below the surface-perhaps in a far more sinister form than people realize. But, at the moment, the system has pre-empted riots and alleviated surface anxiety.
    As a trader, the game changes constantly. There are no rules, except one: don't lose money. So, spreads and various arbitrage strategies are the music of the night.
    Mar 7, 2013. 07:59 PM | 1 Like Like |Link to Comment