[CNBCfix Fast Money Review Archive — May 2019]
See what we mean by
‘Pack of momentum traders’?
This page often criticizes Halftime Report and Fast Money panelists for NOT adhering to the show's premise — suggesting ways to make fast money — so when they actually do, we should probably applaud.
Um, no.
At least not at what went down on Friday's (5/31) Halftime Report.
Steve Weiss, who's trying to guess the daily direction of the stock market, informed Judge and viewers at the top of the show, "Today I bought a lot of stocks this morning ... but only because of the rebalancing that's going to occur at the end of the day."
Basically, even if this ludicrous trade works (buy Friday morning, sell at the end of the day), by noon Eastern, it's already too late for any viewers to try it.
Weiss overstated things when stating, "I think what Trump did with, with Mexico and tariffs is uh, forget about the lunacy of it, it just doubles down on the negative impact on the economy and the instability in the market. It's an impossible environment to invest in."
It's the same "impossible environment" of the last 2½ years. Remember when it was "Chauncey Gardner"?
Weiss decided to backfill a market move he must've underestimated, stating, "I don't think we shed- should've ever been at 17, 17 and a half, because the economy was flattening if not declining at that point. So it was undeserved."
Then, "I still think the direction of the market is down," Weiss said.
Likewise, Jim Lebenthal was asked by Judge why he's not buying his favorite stocks.
"The stock market is going down," Jim said, urging those who want to buy to "just wait until next week, folks."
The weird thing about those calls is that if Weiss and Jim are so sure stocks are going lower before going higher, how come no one was recommending shorts on Friday? And how come Judge didn't ask that very question?
Judge asked Jim how to know when the bottom is in for favored stocks. "You wait for it to start going up," was Jim's answer.
Judge, like us, was dumbfounded that Jim said he'd buy AAPL at 180 but not 177. "Hey Scott, it's still going down ... I don't know if I have to say that a 6th time instead of a 5th time." So why isn't Jim shorting AAPL until it's time to buy? (Translation: Jim really doesn't know whether it's going down or up; he's responding to the day's momentum.)
Weiss kept referring to Donald Trump as the "bad CEO" of the S&P 500. Asked by Judge to explain the S&P's recent all-time high, Weiss pointed to Chain Saw Al.
In a fair point, Weiss claimed China is actually in the "poll position" in the trade dispute. That's different than what Jon Najarian has said on this topic, but Doc was quiet as a mouse Friday.
If Weiss is correct, then this is going to end worse for Donald Trump than the Charlottesville debacle in which both Weiss and Jim said Trump should resign.
Josh Brown drew a distinction between the stock market and the "climate" and the "weather," suggesting the climate is good, weather's bad. Weiss said he disagrees that the climate's good.
Brown's analogy is fine, but the problem is, the "climate" isn't predictable for investors, whereas, it's a pretty safe bet that Southern California will have nicer weather than Buffalo for the next amount of gigayears.
Weiss somehow claimed he sees complacency "everywhere" (snicker).
Josh Brown said he's really not seeing it at all.
Weiss at one point explained, "What determines what your returns are are your point of entry." Doesn't the point of sale also determine the return?
Judge opined on the rationale for Donald Trump's Mexico tariffs. "I think this whole thing was a change-of-subject deal to begin with in what was a bad 24 hours that was threatening to become a bad 48 hours," Judge said.
Not done with yearly parallels, Jim Lebenthal said, "This reminds me of Bill Clinton in 1998." If so, that means a couple years of great returns.
Weiss didn't mention Chauncey Gardner but did offer this: "The scariest thing is that he's listening to Steve Miller. I advise our listeners to read about Steve Miller. I mean this guy- may- he's out there." And what will it accomplish if "listeners" (thought it was a TV show, not a podcast) read about Steve Miller? More people will demand Donald Trump's impeachment?
Learning the definition of ‘miasma’ (a/k/a learning that bitcoin is ‘sound money’ and an ‘asset class’)
It was a crisp, informative Halftime Report on Friday (5/31), even if most people made lunk-headed comments while Josh Brown and, of all people, Judge served as the voice of reason.
The star guest was Mark Yusko, the guy who pronounced himself part of the "Truth Trio" last October and now actually says he believes "We think we're in 2001. Just like 2019 is 2001."
In October, Yusko said, "We made the case that the bear market started last September," explaining that there was only a "reflexive rebound" in the "first quarter" (sic ignored April) while conveniently ignoring that stocks just recently blew through all-time highs.
Josh Brown pointed out, "We're up 10% this year, sir."
Yusko said, "It's only May 31st," insisting that by year-end, he has predicted, "We'd be down double digits. ... By the end of the year, bonds will outperform stocks."
It's been a while, but Judge finally showed some brass for a change, telling Yusko, "Let's be fair, you didn't foresee stocks hitting new highs the way- the way they have."
Yusko sort of admitted he didn't see what he described as a very brief high, then stated, "There's a difference between bear markets and bull markets. Bear markets, the markets go down most days and they go up sharply on good news or perceived good news. Bull markets go up most days and go down sharply on bad news or perceived bad news. ... I think we've been in a bear market since September."
Actually we did the math (snicker) (careful) for 2019, and by Yusko's own definition, it's a ... bull market. The S&P 500 has risen 60 days and declined 44 days. It's collectively higher year to date.
Yusko then tried to argue there's a "really serious credit stress" in the Russell 2000.
"Mark, those companies are tiny," Brown said.
After the 2001 reference, we were wondering when we might get a "walk in the park" analogy. Yusko didn't disappoint, stating, "The credit crisis that we're gonna have in 2020 is gonna make look- 2002 look like a walk in the park."
Things got wackier when Judge asked about the "Trump put" and "Fed put." Yusko grumbled, "They always expire worthless ... It's going to expire worthless."
We're just amateurs, but if a put expires worthless, doesn't that mean the underlying security did not fall?
Shouldn't the Najarians (Jon was present) have presented a little Trade School after this discussion?
Yusko added that this is the "largest margin debt in history." Josh Brown said the number has no "denominator."
Yusko also claimed, "a 1-3% position in bitcoin has increased the value of your portfolio by 200 basis points per year over the last 5 years" and said he wanted to talk about bitcoin more.
Brown said, "You think we'll have a financial crisis in 2019, and emerging markets and bitcoin will be a safe haven?"
"Yeah, absolutely. Because they're priced for it," Yusko said.
Steve Weiss, who had his own troubles Friday, asked Yusko if he really thinks bitcoin is a "safe haven." Yusko affirmed, "Absolutely, it's a safe haven. It's sound money."
Judge actually called bitcoin an "asset class."
Yusko's wrong, but he's a fine guest and doesn't talk over other people.
Judge flips on and off between Goldilocks and Q4 2018 like a light switch (a/k/a Doc keeps calling Weiss ‘Stephen’)
Wednesday's (5/29) Halftime Report, in which Joe Terranova barely got a word in, produced some healthy conversation on the prospect of a rate cut.
Grandpa Steve Weiss, who spoke like people probably talked in 1930, stated, "I'll dispute the notion that the Fed's gonna wake up and say 'Wow, we got a 10-year that's 2%, let's cut rates further,' that's just not gonna happen."
"Oh yes it will," said Jon Najarian.
"No, they- they're not gonna do-" Weiss said.
"We're on record for this one," Najarian said.
"OK, well, that may be what happens, but it's not because the 10-year is down to 2%, it's gonna be because the economy is so baaaaaad (sic pronunciation) that they cut," Weiss said.
Weiss also claimed that if there's a rare earth (snicker) fight, "That's going to impact your S&P earnings, right."
Najarian shrugged at that too, mentioning "Albermare" (sic omitted last "l") and Afghanistan and stating, "They'll find the supply somewhere else."
According to Judge, the Najarians celebrated when Chris Hyzy, on the phone, said a rate cut is coming.
Grandpa Judge keeps suggesting there may be nothing left in equities in 2019 (a/k/a Karen says ‘valuation’ 3 times in one Google soundbite)
Judge way overstocked the panel for Friday's (5/24) Halftime Report, then kept force-feeding the panel with the notion that 2019 could be like 2018.
See, every time the stock market encounters a rough patch (and even when it doesn't), we hear about how the current trouble looks a lot like 1929/1937/1987/1998/2000/2008/and now 2018.
It's never a new stumble. Every pullback is just like some other famous stumble.
Jon Najarian made some observation about how some options gambler pushed back his S&P put position to later in the summer, oh joy. Collectively, panelists still sounded bullish on the market while acknowledging foreign headwinds.
Josh Brown brought up the whole diversified-portfolio thing, which has no business being talked about on the show because that excellent approach (which people should heed) is easily accomplished by an S&P 500 index fund and is a much different strategy than the Halftime Report's stated purpose, which is to identify fast money for people who like to put a little money into actively playing the markets.
Judge asked Meghan Shue a viewer's question about the best consumer-staples stock.
"Um, well, I don't pick stocks," Meghan said.
Judge then asked for other takers and didn't get any.
On Friday's 5 p.m. Fast Money, which was also hosted by Judge in the absence of Mel, Karen Finerman mentioned (again) how much she likes Alphabet and its valuation, even though "I wish it traded better." 1) Valuation is not a catalyst, and 2) If valuation stays the same forever, why does it matter?
Gary Kaminsky: ‘Makes a lot of sense politically’ for China trade war ‘to continue for some time’
Longtime CNBC fixture Gary Kaminsky, who's been away from the channel for a few years (they sorta forgot how to spell his name, based on the graphic above), returned for some crisp commentary for the full hour of Tuesday's (5/21) Halftime Report.
But someone forgot to tell Josh Brown to roll out the welcome mat.
Right off the bat, Kaminsky and Brown tangled over whether low interest rates can sustain a growing or Goldilocks stock market.
Brown indicated they can, given the amount of earnings growth.
Kaminsky offered, "It is about interest rates," but then countered, "Rates shouldn't be this low Josh if we are in this continued earnings-growth scenario."
"Sure they should," Brown retorted. "The economy is a global economy, and our rates are being anchored by what's happening in the rest of the world."
Kaminsky started to draw an either-or scenario but got interrupted before concluding, stating, "If we are gonna continue to grow the economy here ... either the stock market is gonna have a completely different balance with interest rates, like we've never had before."
Or else, perhaps, rates will have to resume their normal relationship, whatever that might be.
Later, Kaminsky emphasized that if you don't believe in interest rates' long-term impact on stock prices, "then what you're saying is the paradigm that's existed for a hundred years doesn't exist anymore."
Gary added, "The long term, interest rates are always right."
It took until the 24th minute for Kaminsky to mention "closet indexers," which prompted Judge, demonstrating a short memory, to bring up what's known around critical circles as Carl's Folly.
Judge signaled that Kaminsky has concerns about the "proliferation of indexing, ETF investing" and then invoked Carl's Folly: "I can say OK, you know, Carl Icahn talked about this in that, you know, his now sort of famous 'Danger ahead' video, some, I don't know whether it was 5 years ago or however long it's been at this point."
Well, we can clue in Judge. The "Danger ahead" was September 2015 (less than 4 years ago, not 5), then there was the "Day of reckoning" in April 2016 and then another follow-up in August 2016 about Carl being the most defensive he's been in a long, long time.
Gary's argument was nowhere near as theatrical as Carl's, though the screen text ominously blared "KAMINSKY'S MARKET WARNING." Gary suggested the proliferation of indexes and ETFs creates an unknown about the response to the next bear market: "What are they gonna do in terms of the price discovery when they go to sell these indexes and there's not natural buyers on the other side," Kaminsky said.
Brown claimed, "You actually refute your own argument. You're 100% right about closet indexers ... the difference is, what's changed is the public now realizes that ... it's money moving from the left pocket out of the right. The only thing that's changed is that now, these people aren't getting fees anymore."
Brown added that people blindly investing in index funds "has actually served as a volatility damper for the markets."
Gary said, "I agree with everything you said, except for one thing: We don't know how individual investors are gonna act."
"I actually think price discovery is better than ever," Brown insisted.
Judge for some reason asked Stephanie Link to wrap up the conversation: "December was horrible ... it was really, really horrible," Stephanie said, which may be true, but she's taking it way too seriously; the truth is that December was stooooopid, one of the dumbest selloffs ever driven by chuckleheads who listen to Fed complaints on business television.
Meanwhile, Judge said Adam "Transfer of Wealth From Insurers to Houston Car Owners" Jonas is supposedly floating a $10 price on TSLA. Pete Najarian said that's a "headline-grabber" and just Jonas' "worst-case scenario."
Josh Brown scoffed that Jonas' move is a "clowngrade" and "absolutely a bit of hyperbole."
Jon Najarian said there's "zero" chance TSLA goes to 10 "because it gets taken out way before that!"
Judge told Najarian, "I agree with you a thousand percent."
Those who would like to see a quick end to the U.S.-China trade dispute may be disappointed, according to what Kaminsky said.
"I think it makes a lot of sense politically for this to continue for some time," Kaminsky said. We're not so sure, unless Donald Trump plans a tax cut to pay for the tariffs, in which case China can buy the bonds and then receive the proceeds from the American consumer and get paid twice.
We figured Judge would ask Gary about the New York Jets' acquisition of Le'Veon Bell, but that didn't happen.
Weiss correctly notices Jim’s precedent argument is loopy
It was just a week ago that Jim Lebenthal made a cogent comment about the nature of the U.S.-China trade negotiations.
Unfortunately, on Monday's (5/20) Halftime, Jim tried to double down but only ended up making a ludicrous observation that should've been howled at by Judge and the other panelists.
On Monday, Jim said, "Strangely, I feel OK right now Scott, because, there's times- and this is one of those rare times where history has given us an immediate precedent in my opinion. If you look at what happened in the 4th quarter, the decline in the markets, obviously not all China, but China was a huge part of it. And then you look at that recovery in January and February, which was because both sides were talking, because both sides realized they had a lot to lose, that historical precedent in the immediate past gives me comfort that both sides will start talking again and that there will be a deal by the end of the summer."
Actually, both sides realized that so far, this isn't as big of a deal as people first thought.
Jim added, "History has given us a precedent here."
Skeptical of this line of reasoning, Steve Weiss said, "I disagree; there is no precedent."
A week ago, Jim very astutely suggested that the talks were in "late-stage negotiations," a term questioned on 5/20 but is true in terms of how long the investing public and farmers have been hearing about this; we're guessing this economic equivalent of the Iranian hostage situation is more likely to blow over than anchor down both economies.
Ron "25th Amendment" Insana tried to warn that the U.S.-China dispute isn't really about trade but ... hush hush ... military secreets.
Steve Grasso suggests the market’s getting bored by trade war like it’s bored by Brexit
It took a whole 7 minutes on Friday's (5/17) Halftime Report to hear the term "path to profitability" in regard to a certain IPO.
But the show was otherwise crisp and informative, as Josh Brown announced a long position in UBER.
Brown insisted it's a "trade" rather than "investment" and said that after the IPO, when the stock breached 40, it was "accumulated very quickly."
Brown says he has a stop "just below" 40.
Steve Weiss, who easily leads the league in candidate for Bust of the Year for buying more LYFT (after getting IPO shares) at 87 on the first day of trading, said he has no problem with Brown's trade, saying "I think it's bottomed here," but Weiss stated that TSLA, UBER and LYFT represent the "Greater Fool Theory."
Jon Najarian said he questions if Uber can win any market outside North America.
In a half-sentence that went unnoticed by everyone else, Weiss made the most interesting argument for an UBER bull case, which is that it's able to find drivers in a record-low-unemployment market. We would add that Uber will probably find itself in a stronger labor position if unemployment ever rises (not that we want that to happen). (This writer has no position in UBER or LYFT.)
Basically, Mark Cuban is right in stating Uber "waited too long" to go public, in terms of the excitement of owning the stock; another way to say what Cuban said is that public-market investors thankfully got a break here, because if it had gone public years ago, it might've been like GoPro/Twitter in the first year.
Weiss admitted "I violated my discipline" in jumping into LYFT.
Weiss also said he bought more FB on Thursday, in part because of "maximum negativity" toward the company. At some point, maybe years from now, people are going to wonder how this company came to be the scapegoat for Donald Trump's election (it used to be James Comey, but he's not publicly traded) and start boosting the multiple of one of the 3 or 4 greatest companies of all time to something slightly above paltry. (This writer is long FB.)
Brian Belski said value stocks look like a buy, but last week, he had a "great meeting" with a Midwestern client who's a value manager who is "lookin' over his shoulder, waitin' for the guy to walk through the door with the severance package."
On Friday's 5 p.m. Fast Money, Steve Grasso challenged Guy Adami's gloom about the trade war, asking, "Doesn't it feel like Brexit to you. ... A lot of times we're selling off on these headlines, and it's not grabbing the market anymore."
Karen doesn’t really ‘get’ Donald Trump’s strategy of ‘spraying gunfire’
President Donald Trump is taking aim at China with various maneuvers.
And CNBC's Karen Finerman doesn't sound terribly impressed.
In the process, Finerman inadvertently illustrated a problem for 2020 Democratic presidential candidates.
But we'll get to that in a moment.
"I'm not opposed to the general 'Play hardball with China.' I'm opposed to the, the seeming lack of any, you know, strategy that's thought out several steps in advance," Finerman said on Wednesday's (5/15) Fast Money.
But Karen wasn't done. Later in the show, she added, "I don't really get the strategy here of what seems to be, just kind of, spraying gunfire, and then, trying to pull it back. I don't really get it."
Here's the thing. We totally "get" Karen's point. But other than disgruntled tape-watchers (and some farmers), we don't see a political disadvantage to what Trump/Navarro are doing. Are these Democratic candidates going to start trumpeting, "We want to restore all the benefits China has been getting out of our trading relationship"?
Didn't think so.
We were semi-surprised, but not totally surprised, that "tariffs" even resurfaced in headlines, given that typically in politics, the decision in December should've meant the subject was over.
It's kinda like, if we suddenly started talking about re-shutting the government again, people would be throwing cream pies at their TV sets. (When's that temporary deal end again?)
So, he went to the well again, but as bumbling as it looks to the informed, it's probably not a political liability and somehow might even be an asset. And within a short time, the market is going to stop caring about China tariffs.
Hopefully somebody on his side will pull him aside and tell him, "You look like you don't know which end is up. Declare victory and move on."
On other matters, Finerman on Wednesday even mentioned a rate cut. "I used to think the Fed has left the building. Now I think they're creeping back in as a dove," Karen said.
Last we checked, December was basically considered ‘holiday season’: Joe gets run over after curious claim about consumer spending
Mr. New Land, Joe Terranova, did his darnedest on Tuesday's (5/14) Halftime Report to make ... some kind of point about consumer resiliency ... only to take incoming from all sides.
Joe stated, "The wealth effect is real, OK. But what was the consumer behavior when we had the worst Christmas Eve, the S&P was at 2,350, it looked like the end of the world was coming into January, consumer spending was fine. So, the behavior has not changed."
"But Joe it was not," said Jim Lebenthal.
"No, it was not," agreed Erin Browne.
"It was terrible," Jim added.
"Consumer actually it was weak, in January it was a little bit better in February, and it was the best in March," explained Stephanie Link.
But Joe had an answer. "It was weather-related. It was weather-related!" Joe said.
"No it was not weather," Stephanie shrugged.
"No, no, it was genuinely weak," Erin agreed.
"It wasn't a good holiday season," Jim said, and that next-to-last word ended up gumming up the works even more.
"Jimmy, I'm not talking about the holiday season," Joe shot back.
"You just said the holiday season," Judge offered.
"I'm talking about the behavior that rolled into January. No-no-no-no-no. I NEVER said the holiday season. Don't put words in my mouth," Joe bristled.
"OK, all right, I'm sorry, you said December, I forgot," Judge said, except Joe didn't say "December" up to that point, as far as we can tell.
"I said December in the market, the S&P was 2,350, that did not impact in January and February, consumer spending. It did not!" Joe insisted.
"We had a negative retail sales number in January," Stephanie said.
"You did! And it was weather-related!" Joe claimed.
"No it was not weather-related!" Stephanie said. "It's totally the market-related."
At that point, Judge stopped the fight. Probably a good call. Joe's time would've been better spent on examining why Jim weeks ago was bailing from ROKU in the low 60s and stating on-air that once it goes down, it just keeps going down.
Was Jeffrey asking 2 weeks ago, 4 weeks ago, 8 weeks ago, 12 weeks ago if this ‘looks’ like a bull market?
It was a crisp Halftime Report that Judge delivered Monday (5/13), though a few parts of the commercial-lite program (#lostrevenue) did creep along a little too slowly.
Mostly, we were a bit surprised by the collective shrugging at the trade war.
Yes, several panelists cautioned that the slide probably continues, and Kevin O'Leary said "it gets worse for sure" and the "peak rhetoric" is probably actually a month away.
Joe Terranova said "there's a lot still out there" and "this is not going away anytime soon," but he only posed further questions rather than taking a stand.
But the key comment that got our attention was Jim Lebenthal's contention that the U.S.-China trade dispute (or whatever it is) is in "late-stage negotiations."
It's entirely possible this is true and that the 25% tariff is like the storm clouds being darkest just before they rumble out of the area.
Jim stated that yes, it's possible the whole thing collapses, but "the more likely outcome" is that both sides figure a way to get a "win-win."
The gut here is that there still might be time for shorting, but the window figures to close in a hurry.
Jim says he got "dry powder" by selling SBUX on Friday; he thinks BA is a "gift" at 340, but he's not ready to buy until it stops going down.
Judge said Jeffrey Gundlach emailed, "Is this what a bull market looks like?!? (the punctuation was read aloud by Judge)." Later this week, we're sure we'll be hearing about how Mike Wilson nailed this selloff.
In a nice boost for standards, Kevin O'Leary pined for the days when a company such as Uber wouldn't even be allowed to go public at the NYSE.
Joe Terranova said UBER holders are paying for the company's "poor culture" of the last couple of years. Judge kept interrupting Joe, "What's Lyft paying? They didn't have a poor culture."
Karen Finerman on the 5 p.m. Fast Money kind of waffled on whether Monday was a day to buy. "So now, we just are sort of floating around waiting for some sort of big macro event," Finerman opined.
Lee Cooperman stands up for capitalism, American Way: ‘You don’t make poor people rich by making rich people poor’
On Thursday's (5/9) Halftime Report, Scott Wapner hosted a pair of Wall Street greats — Lee Cooperman and Mario Gabelli. Each offered cogent assessments of the state of the financial markets. But it wasn't until the very end of the program when Cooperman lit up the show with this spectacular statement about American freedom:
"I don't like the fact that billionaires are apologizing for their success. And I don't know why the progressives call themselves progressive. I think they're retrogressive. They don't understand what's made America great. What's made America great is our capitalistic system. We're the most prosperous economy in the world, and they're constantly criticizing us. OK, and so, uh, I'm very mindful of this whole shift to the left, that's concerning me. I quote, paraphrase, I won't say it's a direct quote, Winston Churchill, OK, what he said was, The main disadvantage of capitalism is the unequal distribution of prosperity. The main advantage of socialism is the equal distribution of misery. You don't make rich peo- you don't make poor people rich by making rich people poor. ... I believe in my brother's keeper ... I intend to give away all of my money back to society. But I wanna basically control it. I don't want the government to control it. ... I don't think that the government has done a great job of running things. Let the free market run things ... We have to be capitalist, but we have to have a heart ... I think that this leftward-leaning stuff, they don't have a clue ... The Cubans are very hard-working, industrious people, very productive. They're doing very nicely in Miami. You go to Cuba, and this was 3 years ago, and I don't think it's changed, they get 1 quarter of a chicken once a month for their protein rationing. It takes 2 hours to get from the suburbs to downtown Havana to get to work because they don't have an organized transportation system. It's $3.85 a minute for a cellphone. So they can't afford cellphones. They don't have satellite service. They don't have newspapers. And that is socialism, or communism, vs. capitalism."
God bless this gentleman.
Judge suddenly knows the mindset of early Facebook investors who haven’t even been on the show
If not for Lee Cooperman's eloquent statement, the highlight of Thursday's (5/9) Halftime Report almost certainly would've been
Divya Narendra's demolition of Chris Hughes' lunk-headed, self-serving op-ed on Facebook. (This writer is long FB.)
"It sounds a little bit like a Liz Warren campaign speech," Narendra observed, before later adding, "These are also early investors who I think sold out uh well before they should have. I mean he admits he sold his shares in 2012. Could've been up, I don't know, 8x or something on that."
Judge, who quite frankly was kind of a weenie on this subject, played the schoolmarm role, chiding Narendra, "Sure, but, let- let's not suggest though that their motivation for doing all this is, is they're angry they sold their shares too early. They're far from the, the um the minority of people who have said that there's potential issues to deal with here."
Oh sure, Judge. And if Hughes still had billions in FB shares, he clearly would be making these arguments for the supposed good of society.
Has Hughes ever heard of GOOGLE? Talk about a company that controls what news people see.
Guy Adami on the 5 p.m. Fast Money made an exceptional observation about how Facebook would be broken up like Standard Oil, AT&T; would you have Facebook Nebraska, Facebook Guam, etc. Oh, and then everyone chimes in, "Well they'd sell Instagram and WhatsApp." OK. So someone controls the billion Facebook accounts, and someone else controls the billion Instagram accounts. That's quite a breakup. And Donald Trump still gets elected, so it's Facebook AND Instagram's fault and not Google's nor Apple's nor Amazon's and definitely not Hillary Clinton's. (How come Hughes didn't mention James Comey's reopened investigation?)
Facebook controls the VFL (voluntary free labor) market, not the world's oil supply.
Funny how control of Instagram is the new boogeyman according to Hughes and others. When it was bought for $1 billion, a lot of people on CNBC scoffed. Now it's apparently a threat to national security. How or why a free service needs to be broken up, who knows.
The supposed outrage toward this company is downright bizarre. It's like these folks who want to give Lori Loughlin 40 years for donating $500,000 to USC women's sports. If D.C. folks spent as much time on cancer and heart disease as they do on Facebook, we might actually start curing some people.
There IS an alternative. We can have Liz Warren, Bernie Sanders and folks like the judge from Alabama who nearly got elected overseeing Facebook/Instagram content. Or we could just air phony outrage and collect a $5 billion fine.
Wait till Uber and Lyft start streaming movies and original TV series; valuations will go through the roof
Karen Finerman, whose college-bound daughter was apparently on the set of Thursday's (5/9) 5 p.m. Fast Money (who in the world believes Karen has a daughter old enough to be attending college), once again brought her exceptional A game to the conversation, this time over Uber's IPO, which coincidentally brought CNBC superfox Dee Bosa to Midtown Manhattan.
"I don't get it; I don't get the model," Finerman said. "We were talking in the green room, how- what do they really own. What is this- is this- it's not drivers, it's not- it's the network, which they share with a lot of people overlapping, uh, with- with Lyft. And so I don't- I really don't get it."
That's a great observation, but this bit of research was even better. "You know, I looked at Amazon ... when they did 11 billion of revenue, which is where Uber did last year. Amazon actually made money that year. They had positive cash flow, they made money, they traded, their enterprise value was 14 or 15 billion dollars. And they made money. Here Uber is, losing tons of money at 83 billion dollars," Finerman said. "I don't know, I don't get the math."
We will, however, toss out one caveat: $11 billion of revenue is a huge deal. It's true that the path to profitability is murky, but that is a boatload of customers and is definitely worth something.
Someone jumps on Jeffrey’s loopy GDP prediction, but there’s an even simpler argument
On Thursday's (5/9) Halftime Report, Josh Brown, who joined Steve Weiss alongside Lee Cooperman and Mario Gabelli, expertly took down Jeffrey Gundlach's contention on the show this week that the NYSE Composite (snicker) is suddenly the index to guide us.
"The reason why you don't use the New York Stock Exchange, and this is no disrespect to, to Jeff, of course, is that it's loaded with bond funds. The New York Stock Exchange Composite compri- is comprised of all these closed-end funds that trade there and a lot of things that have nothing to do with the equity market."
We hadn't even thought about that; rather, we just figured that because this index hasn't been cited on the show in years, if ever, it sounds like another Wilson-esque reach for some kind of supporting data for a bad public call that someone refuses to let go of.
‘Very few people are even 51% right. I’m usually about 70% right’ (Also: Karen’s 2009 shorts)
Judge on Tuesday's (5/7) Halftime welcomed to his curious rooftop-garden studio Jeffrey Gundlach, one of those fellows Judge interviews regularly who is basically always right about every prediction.
Oops, maybe not always right. Gundlach at one point explained, "Very few people are even 51% right. I'm usually about 70% right."
We wondered, "Will Judge ask for clarification here?" For example, "What is the denominator in this '70%' calculation?" Does this mean calling everything from whether the stoplight will change to whether it will rain today to whether red or black will come up at the roulette wheel in Vegas, or is this an annual 3-call parlay of 1) the 10-year yield, 2) who will win the presidential race and 3) the Barron's roundtable.
Also, what about this "51%" ... does Jeffrey have an audit of everyone else's calls? Can he share so that we can publicize the results?
Shouldn't someone who's at 70% when most are below 50% be curing cancer rather than tracking Citibank's "data-change indicator"?
Unfortunately, instead of calling the Q4 stock market selloff the stooooopid anomaly that it was, Jeffrey, like another of Judge's favorite guests, has doubled down on the permabear routine and in the process missed (in terms of verbal calls) one of the greatest 4-month runs in stock history.
Kinda insisting he's still right about this being a "bear market" without really using the term, Gundlach insisted a couple of times, "The market hasn't gone up in 15 months." (Except he called it a "bear market" at the very bottom.) (It's like guys in June 2009 insisting the worst is yet to come.) (Karen Finerman was long BAC preferreds and short BAC common on June 2, 2009; the common was $11 and change then and was over $13 in 2 weeks.) (She had the same play with WFC; that common was up 20% within 2 months.)
Gundlach's new tool is what he called Citibank's "data-change indicator" (snicker).
He said it "leads" GDP.
And he said comparing the Citibank data-change indicator to GDP, "We haven't seen a divergence like this since '05, '06."
Ah. We were wondering what year this is reminiscent of and figured it had to be 1999 or 2007 or 1987.
But it's actually 2006.
Tip: Buy Research in Motion (RIMM).
That reminds us of Jan. 19, 2018, when Mike Wilson cited the AAII bull-bear spread as his top indicator of "euphoria" and hasn't mentioned it since.
Gundlach even played from the David Stockman deck: "The deficit and the national debt are totally out of control."
On the 5 p.m. Fast Money, Karen Finerman, striking in fuchsia, seemed to suggest that the worst of this trade flare-up might about be over.
"The time to buy protection I think has passed, right," Finerman said. "If we open up, you know, down tomorrow, I'm inclined to just sell that protection."
"I do think ultimately, it gets resolved," Finerman added, indicating that bigwigs might not let those tariffs happen.
"I wonder, you know, a lot of CEOs are probably calling president (sic no 'the'), pretty nervous. I, I think he's probably feeling a lot of pressure," Finerman said.
Joe says he has a ‘problem’ with derivative speculation on the Halftime Report
Early in Monday's (5/6) Halftime Report, Joe Terranova referred to the "Goldilock (sic no 's') formation" of the economy.
Turns out, Joe was only getting warmed up.
He said it would be a "foolish move to sell actual equities," then uncorked this jaw-dropper:
"So I'm gonna utilize the derivatives market for what they should be utilized for. Which is a hedging mechanism, not a speculation mechanism. I have a problem when we're using the derivative markets for that."
Hmmmm. "A problem"?
Is Joe aware that this "speculation mechanism" is touted on his program daily?
And that no one ever says after the segment, "Gee, that's really bad advice for viewers"?
So people are still trading Donald Trump tweets. Grandpa Steve Weiss seemed to think the market would've been down a lot more after the tariff eruption. He said if the tariffs take effect Friday, the market will see a "major downdraft."
How much does Ruth Porat make for running 4 conference calls a year?
Certainly, jaws had to be dropping when Joe Terranova took a turn at-bat on Thursday's (5/2) Halftime Report.
Joe said, "I think the market does care about one thing: The market cares about Powell!"
Oh my.
Joe even said that Powell might've been communicating that if numbers are stronger, "maybe the return to normalizing (snicker) rates is sooner than we originally thought."
Jay Powell's words and statements are meaningless, he can and will turn on a dime in less than a day, and anyone trading the stock market based on Federal Reserve comments/statements is a chucklehead who was undoubtedly selling during the stoooooopid meltdown in Q4 2018.
Meanwhile, Josh Brown said "a lot of people" are drawing comparisons to ... yes, try to guess the year ... 1998-99 because of "the pace of IPOs that are now coming out."
Joe said, "In '99, I was one of those people who lost money in the private market."
Brown explained why today's IPOs aren't as dubious as pets.com. But Brown missed the point — which is, so many people are so sure there's going to be another 1999-00 and they're so sure they're not going to fall for it this time that hot Nasdaq stocks, in general, are never going to remotely approach the valuations of Y2K, not for at least another generation.
Jon Najarian bragged about buying SQ at 66 and change. (That's better than Steve Weiss buying more LYFT at 87 to impress some underwriter.)
Judge said he was on a panel Wednesday night with Jeremy Siegel.
On Thursday's (5/2) 5 p.m. Fast Money, Karen Finerman, in stunning light gray, said Alphabet had the "worst conference call of the season" and ... once again ... for the 5,000th time ... complained about the lack of buybacks. (Tip: Alphabet wants a pile of money available to play around with.)
Karen said she gets the BYND movement but that Thursday's move is "beyond gravity, it is beyond fundamentals ... good for them." She said the amount of the gain above the road show valuation is "astounding."
Jeffrey Gundlach on Dec. 17 insisted 3 times that this is a ‘bear market,’ defended call on March 14
Judge on Wednesday's (5/1) Halftime Report put together a sleepy conversation on the most over-discussed stock on the program, of course, AAPL.
It was phenomenal from about 2003 through about 2011. Though successful, it hasn't been an exciting stock for years, but Judge spends oceans more time on this name and endless, directionless conversations with Toni Sacconaghi than far more interesting stocks such as AMZN, NFLX, FB and GOOGL. He and the show remain stuck in 2007, or perhaps 2011, if we're talking about the whole Tim Cook innovation thing. (This writer is long FB.)
Joe Terranova somehow clashed with 2 colleagues on separate matters, haggling with Steve Weiss over the impact of GOOGL results on the overall market and then chiding Jim Lebenthal for stating what Joe had just said about semiconductors, that you can simply get out of the stocks without taking the risk of shorting.
Jenny Harrington was stunning.
Guy Adami on Wednesday's (5/1) 5 p.m. Fast Money said he's tired of the Fed and somehow wants it out of there so that the stock market can find its own "price discovery."
A day earlier, on the 4/30 5 p.m. Fast Money, Karen Finerman reiterated that she thinks the Fed is "gone" and has "absolutely left the building." Karen sounded a little unenthusiastic about AAPL but suggested it's still a buy. Karen, however, said banks have "room to run."