Yes. If the market collapsed between now and the end of June, I will be fabulously wealthy.
And I was doing fine living out this delusion until three things happened Wednesday:
1. The Fed took a middle road.
2. The Peoplenomics.com Trading Model was back in bullish mode this week
3. I ran out of Tums
When all three things stack up like this, I buy the most highly levered insurance policy I can find. In this case (one minute before the Wednesday close) I bound a put option on a triple levered downside (bear) ETF product. That way, if there is a melt-up, the ETF bear product will drop like a free-falling safe and my put option will protect me from losing my shirt.
I might have just gone to cash, but it I wanted to do that, what’s the point of gambling?
With that, Personal Incomes are just out:
Personal income increased $78.4 billion, or 0.5 percent, and disposable personal income (DPI) increased $68.0 billion, or 0.5 percent, in March, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $107.2 billion, or 0.9 percent. In February, personal income increased $54.3 billion, or 0.4 percent, DPI increased $47.6 billion, or 0.4 percent, and PCE increased $54.7 billion, or 0.5 percent, based on revised estimates. Real DPI increased 0.3 percent in March, the same increase as in February. Real PCE increased 0.7 percent in March, compared with an increase of 0.4 percent in February.
And the choice parts:
Personal outlays — PCE, personal interest payments, and personal current transfer payments — increased $109.7 billion in March, compared with an increase of $57.2 billion in February. PCE increased $107.2 billion, compared with an increase of $54.7 billion.
Personal saving — DPI less personal outlays — was $487.7 billion in March, compared with $529.4 billion in February. The personal saving rate — personal saving as a percentage of disposable personal income — was 3.8 percent in March, compared with 4.2 percent in February.
The market looks to open about flat, though gold is down. But the real thing to watch is the Baltic Dry Index which continues to decline and is now down to 943 in this morning’s reading. Which means choppy to down more often than not.
Still, I one a put on a put (which is like a call, but without having to give up being a bear to do it) because…well…either money in that or in Tums.
Waiting on War
Notice how since pro-Russians are taking more real estate the story has been driven from lead item in most media outlets?
Ethics of state death penalty and the Dow closing at a record high (not accompanied by the S&P or NASDAQ, so it reeks of painting the tape) displace it.
You’re not supposed to think through the implications of China becoming the world’s largest economy, either.
Nope, nothing to see here, move along, citizen…
Hey, Al! Department
Dear former vice president Gore;
Did you see what the National Weather Service delivered this morning? A frost advisory for parts of Texas. Here it is MAY and where is our you-know-what?
Here Come the Drones
Quietly released as a safety advisory to pilots:
April 21, 2014, the FAA announced that the first of six selected test site for performing unmanned aircraft system (UAS) research is now operational in North Dakota.
The FAA granted the North Dakota Department of Commerce team a Certificate of Waiver or Authorization (COA) to begin using a Draganflyer X4ES small UAS at its Northern Plains Unmanned Aircraft Systems Test Site. The COA is effective for two years. The team plans to begin flight operations during the week of May 5.
“North Dakota has really taken the lead in supporting the growing unmanned aircraft industry,” said Transportation Secretary Anthony Foxx. “We look forward to the contributions they and the other test sites will make toward our efforts to ensure the safe and efficient integration of UAS into our nation’s skies.”
The only “safe” way to integrate drones into the national airspace is to ground them. For some reason, so far as I know, no one asked AOPA or the EAA about this. But then again, why would government ask the boss (e.g. We the People)? How about we’re not in control anymore?
They Lost Track of How Much?
I haven’t balanced my checkbook for years. I just keep a grand of “cushion” and it’s been the best money I ever spent. Oh, sure, I take a quick look to see if anyone is cheating me by looking at the online check register daily.
But how about misplacing $4-BILLION? B of A outed this week by the NY Times Dealbook.
I’d say heads would role, but it’s bound to be the classis “He went thataway…”
Why Texas Beats California
Word that Toyota would be moving some of its operations from California to Texas brought a vigorous defense from Golden State readers. Quick to point out the move won’t be happening for a couple of years.
But we really like the graphic that accompanied a report from The Tax Foundation on which states have the highest and lowest corporate tax rates.
In Washington, Texas, Nevada, Wyoming, South Dakota, and Ohio, all shown in gray, there is no corporate income tax which goes a long ways toward explaining which states have bright economic prospects and which ones are driving business out of their states.
The folks in DC hose corps with a 9.975% corporate tax rate. But that doesn’t apply, apparently, to the biggest corporation of all, the United States of America.