White House’s Hassett and Kudlow doing the 1-2 spin job after jobs report.

Both White House advisor is speaking


  • does not think contraction has fully run course
  • US jobs report full of heartbreak, hardships
  • reopening phase will be intimate, spill into June
  • jobs numbers will continue to deteriorate
  • appropriate policies can make roaring economy in 2021
  • will see positive numbers and 2nd half of year
  • providing for virus safety should be fully deductible
  • having meetings with lawmakers of both parties
  • Trump weighing making business expenditures to make changes for coronavirus safety tax deductible
  • three quarters of today’s numbers are temporary layoffs
  • people expect to go back to work
  • unemployment numbers are heartbreaking
  • almost all unemployed expect to be re-hired by employer
  • next report could show 25% unemployment
  • payroll tax cut would only be a part of next package
Clearly there is a coordinated effort to use the word “heartbreaking” (and rightfully so).  They are also aware and touting that the numbers will get worse before they get better. The spin job is less rah-rah than the usual.
Stocks are not worried. They are trading at session highs as the two men finish their interviews.
S&P up 32.65 points at 2913
Nasdaq is up 81 points at 9060.62

ICYMI – White House Kudlow says US and China may never reach a trade deal

White House chief economic adviser Larry Kudlow speaking Tuesday (US time) in an interview. In brief:

  • United States and China may never be able to reach a trade deal
  • Due to the difficulty in resolving the remaining issues
  • said he was an optimist by nature and still believed a deal was possible
I wonder what finally tipped Kudlow into this realisation?
White House chief economic adviser Larry Kudlow speaking Tuesday (US time) in an interview. In brief:

Don’t be a hero. Don’t have an ego

What does it mean to be a hero in trading?

In poker, a “hero call” is sometimes appropriate. It refers to the call of a very large river bet with medium strength — or even Ace-high — based on a strong read that your opponent whiffed on a draw and is representing a huge hand to steal the pot.

In markets and trading, there is no official definition, but we can more or less surmise being a “hero” looks like the following:

Putting your foot down and saying “markets will do X, I’m sure of it!”

Pointing to the sky like Babe Ruth — “this is where my profits on this trade are going to go!” (more…)

Book Review: No One Would Listen

This is a book about Harry Markopolos, who is the author of this book.  He talks about how he attempted  for years to expose the fraud that was Bernie Madoff.

The book takes the following form (from my view of how the author sees it):

  • How he came to a quick conclusion that Bernie Madoff was a fraud.
  • How he tried to convince others of that view, especially those that were feeding more money to Madoff.
  • Two journalists took his side and wrote about Madoff in 2001 or so, but to no avail.
  • Trying to come up with a similar strategy that would work, though it would return much less than Madoff’s supposed returns, and finding few would invest in it.
  • Fruitless wranglings with the clueless SEC.
  • Finally, in 2009, Madoff blows up.
  • Vindicated, he talks to the media, Congress, and anyone who will listen.
  • He excoriates the toothless SEC, and proposes better ways to root out financial fraud.

That’s the book in a nutshell.  But stylistically, the book harps on how no one would listen.  Well, duh.  No one did listen, or the book would have been over sooner.

People are not Vulcans.  They aren’t logical.  Most don’t think; instead, they mimic.  “If it works for him, it will work for me also.”

That was the case with Madoff.  He maneuvered many sheep into position to be fleeced, and worse, they begged for the privilege to be his clients.

There were many red flags flying:

  • No independent custodian
  • No independent Trustee
  • Small Auditor, incapable of auditing such an enterprise.
  • Returns were too smooth for being so high.
  • The asset size was to large for the markets supposedly employed.
  • Even front-running profits would not be enough, were Madoff to do that.
  • No profit motive.  Other managers with lesser track records charged more.
  • Marketing was by invitation.
  • Investors were sworn to secrecy.
  • And more, read the book. (more…)

Real Times News Will Not Increase Your Bankroll

Another explanation as to why real time news is useless:

Mike Bloomberg became the richest man in New York by selling traders just fifteen seconds head start on the data they needed. Fifteen seconds costs thousands of dollars a month per trader. But in most cases, what we get online is not actually in real-time and it’s not news, either.

Getting ever closer to the first moment is expensive in other ways. It might cost you in boredom, because watching an entire event just to see the good parts takes time, particularly if there’s no guarantee that there will even be good parts.

It might cost you in filtering, because the less you’re willing to wait, the more likely it is that you’ll see news that’s incorrect, out of context or not nearly as valuable as it appears.

When journalists, analysts and pundits are all racing to bring you the ‘news’ first, you get less actual news and more reflexive noise. Go watch an hour of cable news from a year ago… what were they yelling about that we actually care about today? (more…)

Livermore: Follow The Leaders

“For a new age of markets has been ushered in – an age that offers safer opportunities for the reasonable, studious, competent investor and speculator.” – Livermore

In the third chapter of How To Trade in Stocks, Livermore discusses the importance of following the leading stocks in the leading groups. He argues that a speculator needs to be in tune with the general trend of the market and to only follow leading stocks from leading groups so that he is not overwhelmed with unnecessary data.

The Trend Is Your Friend

“It is not good to be too curious about all the reasons behind price movements. You risk the danger of clouding your mind with non-essentials. Just recognize that the movement is there and take advantage of it by steering your speculative ship along with the tide. Do not argue with the condition, and most of all, do not try to combat it.” – Livermore


If you don’t understand what Livermore is talking about here, you can find an example on your TV almost around the clock. If you tune in to one of the business news cable channels at just about any time, day or night, you will find journalists and so-called experts breaking down even the slightest details of the global economy or an individual stock.

Livermore argues that this obsession with analyzing the reason behind a price movement is completely unnecessary. He says that we should simply recognize that there is, in fact, a price movement and align our investments to profit from that movement. This is pretty much the definition of trend following.

Focus Your Investments (more…)

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