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NBR Call Buyers Active This Morning


Here’s an update on our Nabors Industries post from yesterday, Bob von Halle has the details: 

Very heavy buying of short dated NBR calls on the brief pullback in the stock below $8.00 on the open today. Several thousand of the Jan 8.5 calls (expiring on Friday) were bought for 7 to 9 cents per contract. Those have more than doubled now with the stock recovering to $8.20, and are trading at 18 cents. Over 13,000 have traded on the day as of this writing (9:25 CST) and buyers looking for a short term bounce higher over $8.50 by end of the week.  Full disclosure I have been long NBR stock in all my accounts for several months.

Popping the Higher Education Bubble



The lede:  Nearly a decade ago, my then colleague Andrew Gillen suggested that one could say that higher education was in a bit of a “bubble”: over-exuberant “investors” in human capital, better known as students, were potentially misallocating their resources, becoming increasingly underemployed after graduation, leading to adverse financial consequences. In the private sector, bubbles, like those in the housing or stock markets, usually lead to “crashes” and sharp falls in prices along with diminished volumes of activity. In higher education, massive government subsidies mute the decline in volume (enrollment) and prevent big price (tuition fee) crashes, but some sort of correction is nonetheless observable.


Excellent stuff.  Read the whole thing:

Number One With A Bullet


This just in from what was once the best state in the Union:

Guess which state has the highest poverty rate in the country? Not Mississippi, New Mexico, or West Virginia, but California, where nearly one out of five residents is poor. That’s according to the Census Bureau’s Supplemental Poverty Measure, which factors in the cost of housing, food, utilities and clothing, and which includes noncash government assistance as a form of income.

Given robust job growth and the prosperity generated by several industries, it’s worth asking why California has fallen behind, especially when the state’s per-capita GDP increased approximately twice as much as the U.S. average over the five years ending in 2016 (12.5%, compared with 6.27%).

Read the whole thing:

Trump Earns High Marks


  • President Donald Trump deserves “high marks” for his pro-growth policies, including the recently passed tax code, UBS says
  • Trump’s tax reform and de-regulation plans could help to make the U.S. a friendlier place for investors, the bank says at its client gathering in Singapore
  • Despite that, a protectionist U.S. and any conflict the country has with North Korea could derail the current “Goldilocks” environment, says UBS

More:    Those efforts in making the U.S. a more business-friendly economy, which include the recently passed tax reform, are often under-appreciated, said Mike Ryan, UBS Wealth Management’s chief investment officer for Americas. But the president has “changed the perception of what’s possible in Washington,” he said at the bank’s client gathering in Singapore.

“I think prior to his election, the prospects of tax reform, of regulatory relief, or any sort of sensible approach to infrastructure were off the table,” said Ryan, who added that Trump defied those expectations by getting the new tax bill passed.

 The president deserves “high marks” for his economic achievements so far, Ryan added.

Before the bill was passed in December 2017, the U.S. tax code was “very inefficient,” he said. Heavy regulation in the U.S. that businesses faced was also not an environment that gives confidence to investors, he added.

The reform, which drastically cuts corporate tax rate to 21 percent from 35 percent, was therefore a positive development even as the new tax code is “not everything that we hoped for,” Ryan said.

Rollbacks Matter

Hat tip

Socialism Sucks


Great article from The FederalistWhy Socialism Fails

The lede:  As the collapse of the Soviet Union approached, Francis Fukuyama proclaimed the victory of liberal democracy over planned socialism in his 1989 essay, “The End of History?” More than a quarter century later, the USSR has indeed disintegrated. Its former east European empire lies inside the European Union. China has a market economy, though the nation is led by a single party. And the “socialist” states of North Korea, Cuba, and Venezuela are in economic ruin.  Few now advocate “back to the USSR.” At the same time, many people still consider socialism an appealing economic system. Consider, for example, that Bernie Sanders—an avowed supporter of a socialist United States—is America’s most popular politician—and that as many millennials favor socialism as capitalism.

Read the whole

‘The engine of the economy roared back to life’


  • The Small Business Optimism Index from the National Federation of Independent Businesses came in at 104.9 in December.
  • The average monthly reading for the index in 2017 was 104.8, the highest for any year in its history.
  • Both the NFIB’s CEO and chief economist attributed the boost in confidence to policy changes under the Trump administration.

The lede:  Small-business confidence hit a record high in 2017, according to the National Federation of Independent Businesses.

The National Federation of Independent Businesses on Tuesday released its Small Business Optimism Index for, capping “an all-time record setter” of a year in 2017, according to the right-leaning lobbying group.

The optimism index came in at 104.9 in December. According to the NFIB, the index’s average monthly level was 104.8 in 2017, the highest in the history of the the survey.

Juanita Duggan, the president and CEO of the NFIB, pinned the increase in optimism on policy changes from Washington under President Donald Trump.

“With a massive tax cut this year, accompanied by significant regulatory relief, we expect very strong growth, millions more jobs, and higher pay for Americans,” Duggan said in the release.

More:   NFIB Chief Economist Bill Dunkelberg also credited Trump’s election for the surge in optimism.

“The 2016 election was like a dam breaking,” Dunkelberg said. “Small business owners were waiting for better policies from Washington, suddenly they got them, and the engine of the economy roared back to life.”

Rollbacks matter…

Hat tip

December Employment Disappoints

The Lede: 

  • Nonfarm payrolls rose by 148,000 in December, according to the Labor Department, well below expectations of 190,000.
  • Biggest job gains by sector came from health care (31,000), construction (30,000) and manufacturing (25,000).
  • The retail sector, however, lost 20,000 jobs despite the holiday shopping season.

The Details:

 December jobs up 148,000, jobless rate at 4.1 percent   21 Mins Ago | 01:45

The U.S. economy added a disappointing 148,000 jobs in December while the unemployment rate held at 4.1 percent, according to a closely watched Labor Department report Friday.

Economists surveyed by Reuters had been expecting nonfarm payrolls to grow by 190,000. The total was well below the November pace of 252,000, which was revised up from the initially reported 228,000.

An unexpected loss of 20,000 retail positions during the holiday season held back the headline number. The unemployment rate for blacks fell to 6.8 percent, its lowest ever.

 “A little bit of a disappointment when you only get 2,000 jobs out of the government and get retail at the absolute busiest time of the year losing 20,000 jobs. It just goes to show the true struggle that traditional brick and mortar is having now,” said JJ Kinahan, chief market strategist at TD Ameritrade. “Outside of that I actually thought it was a good report.”

Biggest gains came from health care (31,000), construction (30,000) and manufacturing (25,000). Bars and restaurants added 25,000, while professional and business services grew by 19,000.

Average hourly earnings rose modestly to the same 2.5 percent annualized gain as in November.

Construction and manufacturing gained 55,000 jobs.  Impressive.  Rollbacks matter.

Hat tip

Job Cut Announcements Lowest Since 1990


The lede:   U.S. employers announced plans to cut 32,423 jobs in December, bringing the year’s total to a low not seen since 1990, global outplacement consultancy Challenger, Gray & Christmas reported Thursday.

“The tight labor market, coupled with uncertainty surrounding health care and tax legislation, possibly kept employers from making any long-term staffing decisions this year,” CEO John Challenger said in a statement. “However, 2018 may see an increase in job cut announcements, as companies realign with consumer demand.”

Cuts in 2017 totaled 418,770, 20 percent below 2016’s number. In 1990, companies announced plans to cut 316,047 jobs.

Rollbacks matter.

Read the whole thing:

Rose Bowl Flyover


What a fantastic Rose Bowl yesterday!(NFL who?) 

Doug and I were at the 2013 game between Stanford and Wisconsin.  We enjoyed the Stealth flyover then as well, but not from this angle. 


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