Had been thinking about the HS thing and I was more inclined to see him stay also. He could be PO'd about the way the sub lawsuit went in 2012 and he didn't get his extra 200 million. But the judge dismissed it so that BS never really flyed. He'll be 62 in about a month same as Ben Bernanke, does he really want to go into a new business venture at this point in time? Hum maybe you could say Ben did. Not saying he couldn't but he calls Jim Meyers a sweetheart also so I think SIRIUS is where he wants to stay. Where else will he get all that artistic freedom?
We'll see if the market can hang over 2100 for any length of time. I think it can get there to that new marginal high. I just don't think it can hang there very long. I am more in the bearish camp, oil keeps heading lower, $ keeps getting stronger, 1st Q 2016 GDP as usual will be poor, multinational earnings will continue to decline, Fed IMO will do the small increase. If not they lose too much credibility. We are closer to end of the business cycle than starting up a new one, the SH Composite just lost 5.5% in one day last week and is only 10% or so above the low of 8/24.
Still we can climb that wall of worry but it seems to me we are more climbing the wall of negativity that looks very similar to early August. How much more can the market bid up those 8-10 stocks?
Duke you must have had a rough night last night. It does look like SIRI wants to hit a new level higher. Longest over $4 now since this long story has played out. Don't know about the S&P thing, been a year now and nowhere. So the rate hike and the bully with the chips gets us there? Maybe so. Maybe 8/24 was a fluke. I don't think it all was, but all the Tom Lees and talking TINAS don't care.
I think the opts guy cashes his chips in on the opts. Maybe he owns those 12/18 ones as well.
Hey WWT, there is something always else up with SIRI it seems. Just a wild guess on my part for JM's later plans. I still think the spectrum has value and somehow you find a way to tap into it on the cheap. Looks like the Tom Lee forces are taking control of the market along with the talking TINA's. I still think it can not make much more of a new high from here. And if it does, like before every time the S&P goes over 2100 it's coming back down under. Do you bid more for declining earnings and a higher dollar. I see more comparisons to 2007 here lately. Makes more sense if you think about where we are at in the business and market cycle.
What the guy with the Nov 20th options is doing if it was me I think I'd sell them pretty soon and take that profit and keep my short on. I have to wonder what those 12/18 about 50K of the same type of calls are doing. More collateral available with the tracking stock so if SIRI goes down a bit big deal right?
Ok I get where the collateral is coming from. Was a little dense here. Somebody should outlaw these tracking stocks BS.
Kasier, no. I'm just saying after the spin off (if happens) with SIRI in debt trouble he comes to rescue again at some point once again and bails them out. Just a funny guess. But there has to be some value. there is still value in that spectrum if it is run right. It is a real monopoly if it can be done better.
Some well thought out articles. You have to admit it's a pretty nifty plan by JM. I do have some questions. So what happens to JM using SIRI for collateral? Just less collateral cause it’s not as needed. There are more $4 Call options open interest for the 12/18 than the 11/20? More married calls?
Ya I see the debt to equity ratio is getting up there and only higher back in Sept 2009. WW’s call on the tracking stock risk arb. situation was a good call.
JM part 2, could it be we see a grey knight come to the spin off’s rescue one more time and look like a good guy down the road bailing them out again?
Hey WWT, I would like to hear more about your theory here to. What is the contract to the discount you think may play out. Just makes sense and the next logical step to spin SIRI off with the boatload of debt they are building up.
Well it sounds like he is going to let them expire by 11/20 for one. And it sounds like he is going to hold his short going forward into December for another. Not much open interest for any of the Puts in that range.
I thought Mel's comments were interesting and on the TINA principle to from the clips I heard. I guess he is not going along with Tom Lee here. Still for all that is said and done with six + years into the recovery we look to print around a 2% annual 2015 GDP and compared to last year cumulative around 2.4%. This has got to be one of the longest business cycles or market cycles in history whatever you want to call it.
For what it is worth good luck and have some fun! If I get a chance I will watch. The main reason I started reading you and still do even though at first I doubted your blogs especially the part about the phantom computer guy way back. I thought you knew what you were talking about, made good arguments and points and over time you have made sense. LR
It's funny you can't see the 12/4 and 12/11 options on yahoo, but you can on a service. And yah not much activity going on there. I thought it was interesting in the past week someone bought (12500) or $500K of January 2017 $4.00 Puts on SIRI and at the ASK for .40. You would have thought this person might have put in a bit of a lower bid. This seems like pure protection. Market focus seems bullish by many this weekend. But the leadership continues to be very narrow and even with the beats these big companies are announcing layoffs now instead of more buy backs.
WWT, well to reveal some cards, no not necessarily. Not sure of the reaction I will admit and not betting on it. And of course the big plus day. Isn’t that the Fed’s third or fourth mandate? The aggressive trickle down. I would have preferred Duke’s number 2 door, but that does not appear to be the one playing out. I think we are off to new highs sense or cents able not. I will admit I am much more in line with the bear camp right now than in the bull, but I don’t want my confirmation bias to cloud my view any more than it has to. Hey I’m very happy Boehner was able to work out a debt ceiling agreement, and hope that means no 12/11 shut down either. Just plain stupid. Don’t care how many constitutional lawyers think it’s great.
I think the strong dollar, oil going down again, commodities hurting, retail consumer in the doldrums even with cheap gas for awhile now and multinational co.’s earnings declining are not reasons for a big up market. I don’t think the rally can last. Now its five week and maybe a week more. Someplace soon there are going to be cash outs and this is robbing from a Christmas rally too early. Hey I’m very happy KC won last night in a long game. I’m not against the Fed. I just think they went too far and now they can’t find their way back home and they are as clear as mud currently. For SIRI to B/O and stay there it will have to be like June 2012 and I don’t think it is. LR
Hey WWT, I'm calling this the Bad News Bears rally. Since it started out on the bad job August numbers and hope CB’s could do more. I sure hope our more is not negative rates. And since too many were leaning soo bearish the longs just had to use the CB card. Looking at SIRI and last time they had a good B/O was back in October 2013 got me to thinking how did they keep this thing under $4 in 2014? JM’s cheap bid mostly.
For the first time in awhile I did not renew even though they keep sending me those $25 for six month offers. I could see 4.17-4.20 area hit, but ii never seems to stick. Just watching the dollar, Oil and the Small Caps and wondering if it’s possible to get an 8/24 Part 2. Why did the market drop almost 200 points in two days then? It’s kind of a blur to me with the 11% up October? AAPL & FB should be interesting.
Also nice W-S-J article today on Regulator Raises Red Flag on Auto Lending worth looking at for those who care.
Well not exactly the October 2013 rally that saw SIRI go to 4.18 a few years ago. Wow that was two years ago already, but possibly this rally has more legs. What strikes me as funny is that old tech INTC and MSFT doing better today than SIRI and those two have been rallying now since the 8/24 event. The 50 & 200 DMA DC is looming on the stock at 3.84 and not a big deal, but is showing the nowhere momentum even with all the new car sales going on over the last few years. GM slightly down today and F a modest up. Got the nice Barrons article-check, the nice CC-check, great market today-check & up 1.8% on all that. Hum-ok-fine
Well I don't know about 11/27 but I do know for the 12/18 Opts $4 Calls, someone bought around 87K of them between 9/15 and 10/16 which seems very bullish to me. Maybe it's to cover for a short play but it's a lot. Those might do well either way depending if you are holding the stock. Market seems pretty complacent to me right now regardless of the real concerns. Just going sideways in an overbought area. It's all very complicated though.
I see what you are saying "The mispricing comes on 11/20 comes on 11/20 where the bid is 10 but on 11/27 it is 6 11/20 was the date of the big option buy. Some thing does not make sense" ... but these look like new opts as there is No open interest in any yet for 11/27 and the bid/ask is pretty wide there to, so I am not sure how relevant they are. But somebody really likes the 11/20 $4. at 10 cents.
Getting closer to $4 already & maybe before earnings if they don't pull the rug out on it again. I read somewhere that...
Falling profits and increased borrowing at U.S. companies are rattling debt markets, a sign the six-year-long economic recovery could be under threat.
Credit-rating firms are downgrading more U.S. companies than at any other time since the financial crisis, and measures of debt relative to cash flow are rising. Analysts expect profits at large companies to decline for a second straight quarter for the first time since 2009.
The market for riskier debt has become snarled, raising fears that companies could have trouble repaying their obligations following several years of record debt issuance, low corporate defaults and persistently low interest rates. Reflecting those concerns, investors are now demanding more yield to own corporate bonds relative to benchmark U.S. Treasury securities.
But oh well that's just noise...in front of the more important stuff.
Duke, looks like somebody did not like your last Sunday 10/4 posts. Did not see any comments that merited a boot. Watching for the retest and think that area is coming soon one way or the other.
The market decided to pick Door 1 and went for the immediate drop in the S&P to 1871 and then the V shaped rally. It was a possibility but I got it wrong. Thought we were headed to 1815 first, but these thought are free, and you get what you pay for, so we aren't going to get it right every time. On the other hand, when the futures are up 200 on WEN, it isn't hard to buy SIRI on the open and ride it up. I'm opinionated but not totally stupid. The next play will be to short the stock but you already knew that.
The guy said he didn't know who Flabby was. I am referring to the Fibonacci numbers, Anyway, Flabby says we could have a 61.8% retrace which would take us to 2034 where you might want to think of the dark side.
While the market was doing HAPPY DAYS, the spreads on JUNK BONDS AND INVESTMENT GRADE corporate bonds blew out. The credit default swaps CDS hit numbers not seen since 2009. No one noticed because no one understands what it means. We have a liquidity crisis in the system. In stocks we saw it on 8/24 when no one stepped in to buy until after the carnage. In the banking system there aren't enough dollars to pay back all the dollar denominated loans in the EM. Soon corps will have to sell their local currency and buy the dollar. This will cause a massive imbalance in currencies and further kill our export business as the dollar increases in value. At some point the FED will actually figure out what the bond market is saying, but probably not soon enough. LR