General Options Blog

Be A Loser and Win Big In the USA – Buy A House You Can’t Afford, Stop Paying Your Mortgage, Get $150,000

News today from Bank Of America epitomizes all that is wrong with the United States.  Bank Of America is forgiving the principal on mortgages by an average of $150,000. If this doesn't make you puke, then you must be one of those getting the handouts. There is zero wonder why we are turning into a fat, lazy country. Can't find a job? The government will pay you to sit at home for two years and pick your nose. Don't make enough money to buy food? The government will give you a card to buy your food, and has been issuing these "food stamps" in record numbers. The government offers little reason to get off your couch these days. Is it any wonder why the job market isn't improving?

If your neighbor is at his, haven't made a mortgage payment in two years, $450,000 home on his $4,000 couch, doing nothing but collecting his free checks and food from the government while scratching his ass and watching the NBA playoffs on the 50 inch LCD he bought with the second mortgage his bank forgave, why the heck am I going to bust my ass in this messed up country? If I didn't have kids or a family and after reading about all the free handouts everyone else is getting, I'd have a tough time staying the course. I have always worked hard, and with my family to take care of, I will always work hard. But now not only am I supporting my family I am supporting every bloodsucker out there. If I don't pay my taxes who else is going to fund the losers? I hate to put it that way, but there isn't a much softer way to put it.

The government seems hell bent on breast feeding the losers and milking the hard working winners dry. How many people planned for this day when Bank of America decided to hand out at least $150k to the most irresponsible people in this country? How many people purposely stopped paying their mortgage so they would qualify for this hand out?

I saved up my money. I made an honest downpayment. I bought a house I could afford, through thick and thin. I have never been late on a payment. I'm a winner, why do I feel like such a loser? How can someone who saves his money and does the right thing feel like a dumb schmuck? This is why we are f*&^ed as a country.

This has to be good for the market…

With the employment numbers from last week still weighing on the market, people have overlooked the news piece that will be a catalyst for the rest of the summer. Obama and Romney are now in a virtual dead heat in the polls. 

 

As you read the press, there continues to be a glaring trend:

Two new polls find that although the candidates are tied for overall support, Obama remains the more well-liked candidate and Romney is considered the more apt at handling the economy.

 

Now if the economy was still on the mend with the unemployment numbers going down, Obama was a lock for re-election. But with the increased concern about the U.S. economic recovery, Romney's background makes this race a tight one.  Do I think Romney has a shot come October? No way. We still feel the same way we did in January and April... the market will be Obama's ticket to re-election.

Of course besides the countless tools and instruments this government can deploy to continue to inflate equities, they also have history on their side. Election years tend to be extremely bullish, unless your name is George W.

S&P 500 Stock Market Returns
During Election Years
Year Return Candidates
1928 43.6% Hoover vs. Smith
1932 -8.2% Roosevelt vs. Hoover
1936 33.9% Roosevelt vs. Landon
1940 -9.8% Roosevelt vs. Willkie
1944 19.7% Roosevelt vs. Dewey
1948 5.5% Truman vs. Dewey
1952 18.4% Eisenhower vs. Stevenson
1956 6.6% Eisenhower vs. Stevenson
1960 .50% Kennedy vs. Nixon
1964 16.5% Johnson vs. Goldwater
1968 11.1% Nixon vs. Humphrey
1972 19.0% Nixon vs. McGovern
1976 23.8% Carter vs. Ford
1980 32.4% Reagan vs. Carter
1984 6.3% Reagan vs. Mondale
1988 16.8% Bush vs. Dukakis
1992 7.6% Clinton vs. Bush
1996 23% Clinton vs. Dole
2000 -9.1% Bush vs. Gore
2004 10.9% Bush vs. Kerry
2008 -37% Obama vs. McCain
2012 ? Obama vs. ?

I will be playing any dip on the call side, as this market will not break into correction territory until the fall.

Par Pharmaceuticals (PRX) into earnings

I have been following Par Pharmaceuticals (PRX) for 4+ years now, and have watched it move from $8.57 in 2008 to $42.80 last week. I quite honestly think the stock is just starting to get traction. I wrote about Par Pharmaceuticals (PRX) on April 24th, when the stock was trading at $40.94, and gave quite a few reasons for my bullish sentiment. Earnings are out pre-market tomorrow. Here is what we were buying today:

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This weeks Earnings Preview: WYNN, MAKO, PRX, FOSL, PCLN, SODA

Earnings plays can be very rewarding for those who are on the right side of the trade via options. Apple (AAPL) and Amazon (AMZN) catapulted 10%+ on their earnings report the last two weeks, while Green Mountain Coffee Roasters (GMCR) fell 50% on theirs. Which will be the one to bring option players the 1000%+ gain in the coming week? Here are a few we have on radar for next week, and my thoughts.

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