ERICOPOLY

Bagholding? Have they put you on a respirator yet? Got your fill of tangible book equity bank stocks before a depression? Ahh. What we've got here is a gloater.

I'm wondering whether WFC can actually fall LESS than SPY today. I've got SPY down 10% and WFC down 9% at present.

Bagholding? Have they put you on a respirator yet?

I don't know what the name of this strategy is... if anyone knows a name for it that's all I'm after. Hypothetical trading behavior as follows: You begin with enough cash to buy the common without margin, but instead you expect volatility and don't care about potentially losing $5.50 per share between now and 2022. So you begin by purchasing enough LEAPS calls to represent the notional value of the amount of common you could otherwise purchase with your remaining cash. You keep doing that every time the stock drops $10. WFC at $50. Pay $5.50 for 2022 at-the-money leaps. WFC at $40. Pay another $5.50 for 2022 at-the-money leaps. WFC at $30. Pay another $5.50 for 2022 at-the-money leaps WFC at $20. Pay another $5.50 for 2022 at-the-money leaps WFC at $10. Pay another $5.50 for 2022 at-the-money leaps etc.. etc... You just keep accumulating calls. 2022 is on the other side of an estimated timeline for a vaccine to be widely available (12-18 months) Jokes aside, is there a name for this kind of a trading strategy?

I think most definitely a recession has already begun and the market knows it.

WFC at-the-money calls (slightly out of, actually)

All the schools around Sacramento shut down today for 3 weeks, my kids' school included. Even my step-son's ONLINE school shut down. You've got to be kidding!!! It's a friggin' online school!

The signs point to Nicki Haley being Trump’s running mate. It was speculated back in November. Then set up to fail and be replaced. If the market recovers by the election, it would be really hard for Trump to let Pence go since he's now the guy "in charge" of the virus fight. It would also hurt his evangelical support. I don't see that happening unless virus gets worse and Trump needs a fall guy. He'll choose Haley to recruit the vote of suburban moms. Pence is holding the coronavirus bag. Trump is NEVER responsible for his failures. Never. He was raised spoiled and cannot handle blame because of it.

The signs point to Nicki Haley being Trump’s running mate. It was speculated back in November. Then set up to fail and be replaced.

Don't inflation expectations drive interest rates down? Don't inflation expectations also drive P/E for the markets? P/E of 15x == 6.67% earnings yield P/E of 20x == 5% earnings yield So if future inflation expectations are (hypothetically) 167 basis points lower, then isn't a 15x multiple the same as a 20x multiple in real terms?

Yes, but I've hammered on and on again about how low interest rates do NOT support high multiples b/c they also imply low growth. Just like Europe and Japan weren't trading @ 20x earnings even with lower rates. But people were allowed to conveniently ignore that b/c U.S. stocks kept rising and we had to find a way to justify it. Every bubble has a grain of truth - me thinks the "low interest rates = higher equity multiples" will be the main contributor to this one. Japan has traded above P/E 20 for a very long time: https://www.ceicdata.com/en/indicator/japan/pe-ratio

What is your address?

Reports are that Trump still won't talk with Pelosi. His personal wounds are paramount. https://theweek.com/speedreads/901409/trump-reportedly-wont-meet-pelosi-coronavirus-bill-reason-because-hes-mad "You know, Bill Clinton built part of his political narrative by saying 'I feel your pain,'" former Rep. David Jolly (R-Fla.) told Wallace on Tuesday. "Donald Trump is asking the nation to feel his, and it is a weird leadership quality in a moment of crisis."

S&P500 is down 25% now since Feb 19th.

Fascinating. Do Americans even eat that shit? If you have Covid-19, do you want to spend 45 minute boiling chickpeas, or do you want to throw a frozen lasagna or frozen pizza into the oven? Brown rice, lol. SJ I cook channa masala in my crockpot — need dried chickpeas for it so they draw in the flavor as they rehydrate. I don’t eat dairy so no frozen lasagna/pizza. I always eat brown rice — prefer the texture and flavor.

Was at Costco in Roseville, CA today. No paper towels, no toilet paper, no pasta, no rice, no canned tomatoes/sauce. Went to Walmart next and grabbed the last bag of lentils off the shelf and a few of the last remaining bags of brown rice. They had lots of canned tomatoes. All of the TopRamen was gone, so I went to the asian foods aisle and stocked up on Sapporo Ichiban. Walmart still had pasta. Walmart was completely out of dried chickpeas, dried pinto beans, dried kidney beans. The trouble with telling everyone to keep two weeks' of food on hand is that the stores don't have it on the shelves when everyone wants it all at once.

Scharf testified in front of the House Financial Services Committee yesterday. Warren is in the Senate. It's early. Aaarggghhhh. Yes, good point. Doh! The WSJ quoted nobody except for a few Democrats saying things like they'd like minimum wages to be even higher -- completely unrelated to the matter at hand. They were not quoted with anything negative about Scharff or his strategy.

Yesterday's 'meeting' with lawmakers appears to have gone well for Wells Fargo. Elizabeth Warren wasn't even quoted in the WSJ.

While that is a good point, as presumably the go forward economic effects are similar, I think the starting valuation matters as well. The US markets were considerably more euphoric than the Italian ones, so a larger fall doesn't necessarily seem disproportionate. I thought of that, but then which economy is more tolerant of shocks? I thought the US had a stronger economy and that should count for something.

Oh come on, you're just saying that because you don't want Trump to be reelected. This is just another Impeachment hoax. What, you mean that didn't make you optimistic? What's wrong with you?

Have you looked at the Chinese and Italian stock markets to see how much of a dive they have taken since November when nobody had heard of COVAD-19? Italy's market is down 25% over the past month which covers their history, and China's is down by far less since early December. Unless I am getting it very wrong due to exchange rates or something.

The solutions are now going into place. The senior leadership is no longer claiming this is a Democratic hoax. Once they realized they won't get reelected if they let everyone get laid off over the next few months, they took action and they're talking bailouts. That's the financial side. They can no longer spin this as a hoax and they are now taking action on the human side. New York just quarantined a huge area.

I wonder if spotting sarcasm is a generational thing.

Stop eating animals. I'm vegan and if you were all like me then nobody would be dying.

Priced in.